The wheels are coming off the wagon and it looks as if it will get a lot worse before it gets better. "What seems to spook people now is the possibility that everybody in charge of everything is a fraud or a crook. Legitimacy has left the system. In dollar terms, the numbers being applied to the various problems are so colossal -- trillions! -- that the death of our currency seems assured. And in defiance of congress's express intentions, none of the TARP "money" has been applied to its targeted purpose of buying up "toxic" (i.e. fraudulent) securities hidden in the vaults of banks, pension funds, and municipal portfolios."
"Unfortunately, the legal system, and probably the legislative system, will be so buried in procedural bullshit from the unwind of countless enterprises and institutions, and the sorting out of the remnants, that it remains to be seen whether this generation of people-in-charge can even embark on a fresh start of anything connected to real everyday life in America. All this is starting to alarm the tattered residue of the middle classes, and from here it's a very short path to them being really pissed off.
"When legitimacy erodes, anything goes. Nothing is respected including rules and personalities. The center doesn't hold and the new vacuum there is a tumultuous place. The same crisis of authority and legitimacy is spreading from nation to nation now.
"We could retain our federal ties if the federal government can scale back appropriately from the bloated, feckless enterprise it has become. Otherwise, it might only get in the way and make matters worse, and the public in one region or another of North America might reach a decision that they are better off without it. That would be what's called a revolution."
http://jameshowardkunstler.typepad.com/
about this at the family xmas party. The idiots in DC have no comprehension of what they are doing and you know what, this next bill will be highly political. If Obama had a clue he would stop it because he will be blamed for the hyperinflation. Buy what you can now.
Hyperinflation is impossible. They can't fill a hole tens of trillions in size with a few trillion in bailouts. What's really happening is that money is disappearing. All this highly artificial money creation can't keep up.
About the only way that deflation can be stopped, is if the government summarily nationalizes many of the organs of private economy. The U.S. government would have to fully nationalize BOTH the banks AND every domicile in the nation. The government would have to fully take over all your credit cards. That's just not what's happening, and there's no way the Congress would allow their wealthy supporters to be summarily removed from owning and operating their huge businesses.
Your dinner-table conversations really seem to require people who know real economics, or those less involved with the current propaganda system. Honestly. You can't have hyperinflation or even inflation when it's all supply-sider. How can you actually take that wheel-barrow of currency to the grocery if your boss REFUSES to pay you any more money?
Sure, there will be price exceptions with things like gasoline and milk, which people will always buy regardless of price, since they can just buy and consume less to adapt to high prices. But houses are DONE, forever. They will NEVER return to their 2002-2007 highs, EVER. The Florida land boom in the 1920s never returned to their highs, even today, when 80 years of inflation are taken into account. So even in the year 2086, the price of your house in Toledo will never return to the inflation-adjusted high of 2006. EVER.
Housing is done. I myself bought a large-square-foot property for cash, and I will never make a rent payment again. Heck, Chris, around YOUR area, I was scouting out $20K-$30K houses in perfectly acceptable shape. Cash, cash, cash. Cash is always king, but on great occasion, the king goes into exile for a few years while the supply-side inflationistas go apeshit, and the demand-side credit agencies support it.
I will happily engage you all in a frank discussion of what the f*** INFLATION really is. Many people don't know. The hyperinflation advocates are just delusional. They want to continue to con the public into buying into the Western Myth of Constant Growth. Well, we already had our hyperinflation, much enabled by banks making absurd and wholly unpayable loans. IT'S OVER. Now we're in deflation ... where the prices of labor and goods/services will drop precipitously. It's called the Greater Depression, folks. We've put off this sort of adjustment since the 1980s, and having so long delayed it, it's just hitting 4 times harder than it ever needed to. And that's the sad example of modern American thinking. Put off until tomorrow what you really needed to take care of today.
Why would you want to stop deflation? Housing prices are merely being readjusted to reasonable levels, no more nor less, as are the prices of other durable goods. The only thing the government should be doing is softening the landing a little bit.
A very close friend of mine bought a home near the start of the housing bubble and sold it near the end - he was leaving Toledo for a better job. Anyway, he couldn't decide what he was going to do with the profit, and so put it in what amounted to a high interest savings account. That didn't look to be very attractive at the time, but he left it there, and now it's looking pretty good.
My friends and family haven't been hurt too badly by the depression, mainly because they always live within their means and tend to invest very conservatively. A house, for instance, is a place to live. Like me, they don't have credit card debt.
Follow a few simple rules and you'll come through this depression in fair shape. Borrow and spend, and you'll starve.
Mad Jack
Mad Jack's Shack
hyperinflation? $50 Billion wiped out. All that fake money gone. He's a hero.
Old South End Broadway
By the way, folks, nearly everything that Bush and Bernanke and Paulson and the newscasters tell you are 100% lies. Pure fabrications. We're in a Greater Depression. Your job and retirement are either gone or under great threat. If you're not saving money, you're a damned fool. If you're under mountain of debt, you're also a damned fool. Bankrupt. Walk away from that unpayable mortgage. Do it now before you get in so deep that even a Socialist like Obama can't dig you out! I really don't want to see you folks in the soup lines which must open up in Toledo.
By the way, the unemployment rate in the city of Detroit just reached 21%, and the average house price (assuming that said houses can even be sold, and many can't, hence the figure is probably too high) there is almost $19K. That is Toledo's future. If you can't see that, you're just not looking.
Here's a good quote from the Housing Bubble Blog, which every American should read to understand what the fuck just happened to them. I fixed some spelling errors. The truth is IN THE BLOGS, not in any official media element (with rare exceptions from the mouths of people like Ron Paul and Peter Schiff):
Comment by wmbz 2008-12-24 12:13:43 :
" No one should doubt that central planning will really be pouring on the coals this upcoming year to try and ’stabilize’ the housing market. They have said they will, with no budget limit. However it can not work on many levels. To have a housing reflation would require going back to the lending practices that got us in to this present situation, and that can not be done, period. The strawberry picker is NOT going to be ‘buying’ another $600,000.00 house. Millions of people lied and cheated their way into the market, and it will take a long, long time to shake that out of the market.
Stopping foreclosures, or slowing them down does nothing to re-inflate either. Too great a number of people have been living off of their houses, a point never brought up by the powers that be. Politicians are by nature dishonest, so why anyone with just plain common sense would in their wildest dreams believe ‘they’ can fix anything is lunacy. This is about control nothing more, nothing less.
The good news for the pols is that Americans in general have been dumbed down a sufficient amount that they are not capable of reason to the degree necessary to grasp what is happening.
The bottom line is that we are in for a long slow grind to the bottom over all IMO. "
Our so-called leaders are ALL lying to us. They will lie and lie until you stand in that soup line, wondering if your "loan modification" paperwork (under some "Save Our Mortgages" act) a year ago was REALLY just "lost" or if they just shit-canned it with the rest of the sad sacks like you. Then the answer will suddenly dawn on you, and then, perhaps, just maybe, you'll remember this posting.
From GZ:the unemployment rate in the city of Detroit just reached 21%, and the average house price (assuming that said houses can even be sold, and many can't, hence the figure is probably too high) there is almost $19K.
I don't believe the unemployment figures published by the government. The real unemployment figure is probably closer to 25% and maybe as high as 30%. Consider that real unemployment represents everyone who wants a job, is able bodied and can't find a job. Naturally, unemployment in large cities is going to be higher than in rural areas.
The average home price quoted is also questionable. The length of time a home has been on the market is significant, as are the selling prices of homes in recent history - say, the last 30 days. $19,000 might be a little high, as GZ points out that some of these homes won't sell for $19,000 and will remain on the market.
What I find particularly appalling is the amount of greed evidenced by corporations, political leaders and labor unions.
Mad Jack
Mad Jack's Shack