On the lower right-hand side of this page, you will see that WhatComesNext.net supports Ron Paul for President in 2008. There is no better justification for this, than this short video during the testimony of Fed Chairman Ben Bernanke before the Congressional Joint Economic Committee on November 8th.
I suggest you watch it, and when you do, you’ll see that Ron Paul has a precise grasp on the problems in our system right now. It’s a grasp that none of the other candidates for the White House seem to want to talk about, and whether that reluctance is because they don’t understand the situation, or because they don’t believe there’s anything they can do about it, their refusal to address the issue is a litmus test that takes them out of the running for my vote.
Now that Tony Blair’s gone, Nicolas Sarkozy, the new French President is George W. Bush’s favorite trans-Atlantic friend. It’s not that we’re on the outs with the Brits, it’s just that the new pro-American French President is saying the things Bush wants to hear, mainly that Iran cannot be allowed to develop a nuclear weapon. Sure, they say, peaceful nuclear energy is fine, just no bombs. To which Iran will continue to say:
"Screw you."
But that’s not going to happen, because when it comes right down to it, the West doesn’t want to be friends with Iran. We’re willing to tolerate them if they seem to clearly understand their "place," but we don’t want to be friends. The embassy takeover is still way too fresh in our minds, it was unresolved and there are large segments of the population that can, when it comes to Iran easily go from "live and let live" to "bomb the crap out of them." The fuse for many Americans is short.
At the same time, while we’re basking in the warm camaraderie of the new American-Franco lovefest, we have to remember that for the past several hundred years, one of France’s priorities has always been the tweaking of British noses, and vice-versa. The two countries, separated by a fairly narrow channel, and vastly different languages, have a seriously neurotic relationship. While Bush and Sarkozy were playing footsie at the White House today, all I could think was jeesh, W, didn’t you attend any history classes? Don’t you understand the French don’t consider us equal, they’re just always using us to get at the Brits? God, I wish you’d learned something in one of the eight grades you finished.
The speeches today contained references to how the French had been instrumental in helping us secure our independence. Yea! From Britain! Think that had anything to do with it? In fact, the first recognition of the United States’ new flag came in 1789, when a French warship, the Bonhomme Richard fired her guns in salute to the American warship Ranger, commanded by John Paul Jones. Believe me, that was as much to tweak the Brits as it was to honor the Americans. But, in this day of religious and cultural warfare, we should take what help and support we can get, so it’s Viva le France!
If you still doubt there’s a serious problem with the Real Estate industry, this posting from The Housing Doom Bubble Blog should give you pause. This is truly a "preview of Housing Armageddon."
El Mirage is a new, "suburb" of the Phoenix market, a community built on cheap oil/gas and 50+ mile round-trip work commutes. It’s a community that cut the ribbon at the top of the market, and now is suffering the consequences of the ridiculous hyper-confidence of buyers paying more for homes than they can afford, and lenders lending more than can be repaid.
Follow the link and look at all the gavels.
I live in the Phoenix area, but we bought our real estate before the excessive inflation of the prices, and in fact could have (read should probably have) sold our house 18 months or so later for over twice what we paid for it. We could still take a tidy profit, if we wanted to sit with the for-sale sign out front for long enough. But as I occasionally navigate the southern and western "suburbs" that stretch half-way to Tucson or Yuma, I just shake my head and say to myself that’s a really nice Bed, Bath and Beyond and a pretty big Starbucks, but when gas hits $5 a gallon and the layoffs hit, wave after wave, again and again, how will people make money to buy the stuff in the stores? Or even keep these houses?
As Jim Kunstler says in The Long Emergency, places like Phoenix and Las Vegas in the near future will "dry up and blow away," since their very existence is made possible by cheap fossil fuels, commodities which are becoming a thing of the past. I believe that, and even though I own real estate in what may possibly be a future wasteland, we have the ability and the plan to escape it when the time comes.
First, he laughs at the absurd notion that there is any question why the price of oil is rising. He laughs at the New York Times, a news organization of the mainstream variety that simply refuse to believe things won’t continue just like they have for years and years.
After laughing, he points out that the price of oil is rising because the demand line has crossed the supply line (remember freshman Econ – I do) and so the dollars are chasing the oil. I realize that, as a trained economist, I may have a sensitivity to certain concepts of the field that others find mystifying, but jeesh, how simple can it be? I am astounded at the number of otherwise intelligent, wise and experienced people who believe that economic value can inflate endlessly with everyone getting richer and richer, and no one ever (save the occasional unlucky, greedy soul) having to pay the piper. Trust me, whether it’s the plummeting dollar or the skyrocketing price of housing, nothing continues unchecked forever.
When historians glance back at 2007 through the haze of their coal-fired stoves, they will mark this year as the onset of the Long Emergency – or whatever they choose to call the unraveling of industrial economies and the complex systems that constituted them. And if they retain any sense of humor – which is very likely since, as wise Sam Beckett once averred, nothing is funnier than unhappiness – they will chuckle at the assumptions that drove the doings and mental operations of those in charge back then (i.e. now).
He’s right. Whether or not we’ll be using coal-fired stoves (a distinct possibility), we’re clearly in for a rude awakening. That awakening is going to be the realization that the rest of the world neither lives like we do, nor is terribly concerned with us maintaining our gluttenous ways. If you have the stomach for it, I’d recommend reading Kunstler’s upcoming World Made by Hand, and Kim Stanley Robinson’s California Trilogy, saving Pacific Edge for last, to give yourself a little hope that the future may not be so bleak.
Save your money, buy your gold (closed at over $810 an ounce today and headed, according to Sinclair to $1,050 in the near future), pay off your debts, stock up on supplies and have a plan. Don’t buy crap you don’t need, and sell the crap you’ve already bought but don’t need. That’s what eBay is for.
Are we nuts? An already nuclear nation is having to put troops in the streets to hold back its Islamic foes from taking the country over, and the biggest bank in the world is starting to show signs of terrible financial problems, yet we’re actually concerned with neat new ways to connect with friends on MySpace and Facebook.
Bad, bad things are coming, and they’re moving toward us fast.
The economic forces that shape the world we live in are changing so rapidly, that even many insiders who think they’re part of the "real" situation (as opposed to what the rest of us "dumb little people" think is the real world) are going to get fleeced. Again, bad, bad things are coming to the economy, and that will spawn bad, bad things politically and socially. Now is the time to prepare for it all.
As I suggested in the most recent post on WhatComesNext.net, this blog is done talking about what could happen, and is now talking about what I believe will happen, and the consequences of those events. It’s not pretty.
Over the past couple weeks, Jim Sinclair, a very smart, very experienced financial mentor (who does what he writes about, rather than just pontificating about interesting investing ideas while keeping his money in a passbook savings account), has gotten even more focused on his message.
On Monday start to protect yourself to the degree it can be accomplished by removing people and institutions between you and your assets. This is the real thing. This is what was discussed in the 1970s but did not happen. It was discussed by many in 2000 but it is happening here and now. There is no functional tool to stop a derivative meltdown. It will like the grim reaper clean out many financial institutions and start a domino effect that I do not want you to be caught up in.
Sinclair’s message is clear. Now is the time prepare for really bad things. Not next month, not over the next 18 months. Do it on Monday.
I’ve followed him for quite some time, and on reading the last week’s postings, called a long-time reader/subscriber and asked "has he been this way before? Has Sinclair talked this directly and on such a short timeline before this week?"
The answer: Never. I believe Jim Sinclair when he says "THIS IS IT." (Bold mine, CAPS his)
While Sinclair is telling his readers to "prepare themselves," news is breaking about an emergency meeting of the Citicorp Board this weekend at which CEO Charles Prince is expected to resign. Citicorp is having trouble after billions of dollars in writedowns, and many are saying (Sinclair included) that this is just the beginning. If Citigroup has to write down another 100 billion or so, it could spark a run on banks that kicks off a major depression.
, places like Phoenix and Las Vegas in the near future will "dry up and blow away," since their very existence is made possible by cheap fossil fuels, commodities which are becoming a thing of the past. I believe that, and even though I own real estate in what may possibly be a future wasteland, we have the ability and the plan to escape it when the time comes.