Wednesday, February 8, 2012

Why You Didn’t Have A Clue, And Why You Probably Still Don’t.

Because you are not meant to. The American governance structure has no interest in keeping you in the loop. You are useful idiots as long as you are walking in circles wondering “what in the world is happening?” all while hitched to an economy. You are the new mule that is grinding the grain, to be fed to your children, to fatten them for the slaughter, so the elites can feed off both you and your children. Think that is dire?

What had you heard of the coming “Baby Bust” throughout the early 2000’s? Or were your ears just overrun with Britney Spears and Paris Hilton “Bimbo Eruptions”? It is my contention that a lack of leadership in dealing with what were clearly known cliff edge predictions were never planned for, communicated clearly to the masses, or dealt with in any responsible or reasonable fashion by the leadership of the world’s leading economic engine, its media partners, or the business world that supports them – simply because it was not in their interest to do so, and they were protecting themselves at your expense.

You see as early as the mid-1990’s, and to a lesser extent as early as the mid-1980’s the trended effects of the Baby Bust generation had been forecasted by economists of the coming deflation of the years after the baby boom when parents slowed the rate of birthing of children dramatically. This period which began in the late 1980’s and early 1990’s were caused by both demographically observable and economically understandable data.

The net result was going to be that the basis of the American and world economic engine which has always been building more to accommodate the growth, was now going to be building less to accommodate the decline in demand. This includes everything that HAD been the basis of young couples forming households as they left the family nest and formed their own family home – buying a house, and new cars - and furnishing it, all on credit and mortgages, etc. With the inevitable dramatic drop off in the demand for housing and furnishings predicted to begin around the year 2010 and to remain in sharp crisis for at least 5 years, we find ourselves in 2012 well into this cycle, and only a political debate happening as to why housing won’t come out of its price falling depths, and why the Dow continues to hover in a range level it has been at for almost 15 years.

The reality is that while Wall Street has been vilified in the public’s eye, and on the world stage for killing housing and the economy by bundling and selling the rest of the world our bad mortgages, the truth is that they were simply unloading toxic waste that they knew would have a decreasing value in a few short years because when you understand markets, you also understand that declining demand means declining values for the homes that these mortgages were attached to.

Armed with this knowledge in the early 2000’s the responsible thing for Wall Street and Congress to do would have been to come together, and start anticipating the effects on their business and making the purchasing of homes, and qualifying for mortgages more difficult while housing prices were still relatively reasonable, with the goal of easing credit requirements later to offset the otherwise certain slipping of demand for housing by getting more of the population into the market when the market began to show its anticipated glut of housing.

But no - the greed of the banks, combined with the idiotic agenda of a social engineering lobbied Congress took the approach to the cliff with the Thelma and Louise approach, and simply gunned it. The engine of housing roared right up until the tank went empty and the traction beneath it disappeared, and then the great careen began toward the new low – all kamikaze style. Then conveniently, Congress did its final work and bailed out their buddies at the banks at the expense of the people that keep voting for them, and conveniently all went off to retire with the most cushy pensions and retirement benefits on earth securely in place for the rest of Chris Dodd and Barney Frank’s likely natural lives.

Add to this a sensationalism driven irresponsible media feeding an ignorant and increasingly uneducated American population their chosen diet of Twinkies over meals, and it is little wonder you don’t have a clue, and probably never will.

The reality is that there is a new normal to be defined in the next few years and we are not yet there. It is nothing like it was, and is a whole lot more like the rest of the world is and has been – because our new normal will be on the same level as the rest of the worlds.

You want to dream about a better future? America will likely not recover from the adjustment to its new normal for decades. So unless your future includes a plan to ride it out and start enjoying life after about 2025-2030, I would suggest that much of the rest of the world has not put itself into the mess America, and Europe have, and are in a much better position to provide future opportunity for development, stable economies, and the benefits of an interconnected internet world that had been the basis of the American experience for generations prior to the last 30 years.

So if you want a clue, do your homework and plan accordingly! And good luck.

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