PsychoticDan
23-05-2006, 17:48
Love this guy's sarcasm. He's a little bleak, but just because it's bleak doesn't mean it's not true.
Summer Fun (http://jameshowardkunstler.typepad.com/clusterfuck_nation/2006/05/summer_fun.html)
May 22, 2004
The summer driving season officially kicks off Friday with the Memorial Day weekend and, as gasoline prices prompt more families to stay home, a lot of Americans will be stuck in their oppressively boring suburbs wondering about the meaning of it all. The failures and disconnections of the living arrangement most Americans have been induced to choose will at last become manifest.
They will discover that a luxurious private realm, with more bathrooms per inhabitant than any other society, will not compensate for a public realm that has been reduced and impoverished into a universal automobile slum. The children will be relegated to their TVs and video game terminals. The only other option will be trips to the mall -- except that credit cards maxed out on gasoline fill-ups will put the kibosh on recreational shopping, too, and the public will make the additional discovery that malls have little else to offer non-spenders, except a keener awareness of their hopeless debt levels. The adults will blame George W. Bush.
It seems to me that as the weeks advance into the hardcore vacation zone, the price of gasoline is only likely to go higher. (Duh. . . .) It will be a strange interplay between increased competition (or growing scarcity) of global oil resources and weakness in the US dollar itself -- and it may not be so easy to tell which is the chicken or the egg. The dollar's loss of value against other currencies will force the federal reserve to keep bumping up interest rates so that all the foreign holders of US debt paper will not dump it.
Higher interest rates would be good news to savers -- except that there are none in America. They will be bad news to the millions who bought their suburban houses using "creative" adjustable rate mortgages when interest rates were at rock bottom. So, on top of being bored out of their minds being stuck at home in suburbia all summer, many will face the even greater trauma of default, foreclosure, and having no place to live at all. Of course, selling the house would be an option, but not a good one when everybody else is selling and few people are buying and the seller is left in the uncomfortable position of offering a house for less than he paid for it.
All this discontent and difficulty may not show up in the stock markets right away, because out of the minority of Americans who own stocks, many of these are retirees or pension institutions who are not in a position to go to all cash. But by the traditional crash season, fall, it will be apparent that the hallucinated US economy of credit-and-mortgages is going up in a vapor. Then the real fun may begin. I think it will be initially a near-hyperinflationary wave that breaks as we enter winter into a deflationary trough of frenzied asset liquidation. There will be lots of "pre-owned" stuff to buy, cheap.
Summer Fun (http://jameshowardkunstler.typepad.com/clusterfuck_nation/2006/05/summer_fun.html)
May 22, 2004
The summer driving season officially kicks off Friday with the Memorial Day weekend and, as gasoline prices prompt more families to stay home, a lot of Americans will be stuck in their oppressively boring suburbs wondering about the meaning of it all. The failures and disconnections of the living arrangement most Americans have been induced to choose will at last become manifest.
They will discover that a luxurious private realm, with more bathrooms per inhabitant than any other society, will not compensate for a public realm that has been reduced and impoverished into a universal automobile slum. The children will be relegated to their TVs and video game terminals. The only other option will be trips to the mall -- except that credit cards maxed out on gasoline fill-ups will put the kibosh on recreational shopping, too, and the public will make the additional discovery that malls have little else to offer non-spenders, except a keener awareness of their hopeless debt levels. The adults will blame George W. Bush.
It seems to me that as the weeks advance into the hardcore vacation zone, the price of gasoline is only likely to go higher. (Duh. . . .) It will be a strange interplay between increased competition (or growing scarcity) of global oil resources and weakness in the US dollar itself -- and it may not be so easy to tell which is the chicken or the egg. The dollar's loss of value against other currencies will force the federal reserve to keep bumping up interest rates so that all the foreign holders of US debt paper will not dump it.
Higher interest rates would be good news to savers -- except that there are none in America. They will be bad news to the millions who bought their suburban houses using "creative" adjustable rate mortgages when interest rates were at rock bottom. So, on top of being bored out of their minds being stuck at home in suburbia all summer, many will face the even greater trauma of default, foreclosure, and having no place to live at all. Of course, selling the house would be an option, but not a good one when everybody else is selling and few people are buying and the seller is left in the uncomfortable position of offering a house for less than he paid for it.
All this discontent and difficulty may not show up in the stock markets right away, because out of the minority of Americans who own stocks, many of these are retirees or pension institutions who are not in a position to go to all cash. But by the traditional crash season, fall, it will be apparent that the hallucinated US economy of credit-and-mortgages is going up in a vapor. Then the real fun may begin. I think it will be initially a near-hyperinflationary wave that breaks as we enter winter into a deflationary trough of frenzied asset liquidation. There will be lots of "pre-owned" stuff to buy, cheap.