No matter how bad things have become during the past year, the permabulls have loved to mock the idea that the American consumer is on the edge. Never mind foreclosure rates, credit card debt, food/energy inflation, retail sales data, unemployment rates… just keep repeating that bears have been wrong about the consumer being tapped out for many years.
Here’s the way I see it: If a $600 check from the government is needed to keep consumers spending, we are on the edge. If $4 gasoline hurts consumers while $3 was just annoying, we are on the edge. If mortgage payment increases of a few hundred dollars per month cannot be sustained by homeborrowers and results in a wave of foreclosures, we are on the edge.
In my opinion, there is no margin for error left. Even if things don’t get worse with home prices (good luck), or even if inflation does not continue (good luck), or even if gas prices don’t return to $4 or even if unemployment doesn’t get worse - that doesn’t mean that the consumer will get better.
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Except that is too optimistic, as the oil establishment has been lying about resources, and it fossil fuels from now on will be ever more expensive and scarce.
So bankruptcy as the debt is not payable, the collapse of credit consequent on that, and many years of toil to reposition what production remains to infrastructure including chiefly energy projects and railway are the best that can be hoped for over the next 20 years of contraction.
In this ever changing and increasingly perplexing world, many Americans peer into their future with uncertainty and confusion. I am convinced that a widespread deception is at the core of this confusion. Modern day Americans have been duped and are in dire need of clear teaching and leadership about the times we live in.
We in America have been led to believe that Americans will escape suffering and hard times. Where does this belief come from? To begin with, it evolves from “life as we have always known it.” Our generation has experienced one of the most prosperous eras of any nation in history. As a whole, we don’t have a clue as to what real suffering and difficulties are; we just know the “good life.” Additionally, the popularity of all the “super success books” focusing on easy wealth accumulation, have diverted Americans from observing the events unfolding right before our eyes. We have been fooled into thinking that America guarantees us a soft life because we are # 1. But this deception leaves Americans confused, asking, “Where is the good life?” Why is this happening to me? This isn’t what I’ve been promised!” As a whole, the American people of today have bought into the American Dream & the Gordon Gecko entitlement philosophy, hook, line, and sinker. However, neither history nor reality gives credence to this popular “easy times for life” gospel of today. It is not consistent with current trends, or history itself.
And what does history demonstrate? In 1900, Great Britain ruled the world, fully convinced she would forever retain her supremacy. However, gradually over the next hundred years, her standard of living fell by 50% compared to the rest of the developing world. Meanwhile, due to our nation’s industrial productivity and military might, America’s standard of living surpassed Great Britain, more than tenfold. By 2000, Great Britain and America had merely swapped places as world rulers. Do we really have any reason to believe we will maintain our preeminent position? Or will America, like Great Britain, fall to the wayside and become a far lesser entity in the world? All current indications point to America falling from the top, and falling hard.
It behooves us to contemplate the fast-approaching storm that will soon hit all of America, especially families and the poor. Out of the East, China and India are fast becoming economic superpowers, soon to claim America’s status as world leader (as America once did to Great Britain). China’s GDP (gross domestic production) is currently running at about 12% -15% a year. At this rate, China will add approximately 300-400 million middle class consumers over the next ten years, all with surplus money to spend. This scenario will create enormous upward pressure on commodity prices such as gasoline, wheat, corn, cotton, lumber, steel etc. Furthermore, India is on track to add another 100 million middle class consumers to the planet and on top of that, there are over one hundred smaller, but expanding, economies in nations such as Russia and Brazil with a current GDP of at least 3% - 4%. Collectively, we’re looking at close to one billion consumers poised and ready to purchase our precious commodities. At the same time, globally, we are losing approximately 38,000 acres of arable land a year while adding approximately 100 million people per year. What will the end result be? The “pinch” Americans now feel at the check stand will escalate into an “economic tsunami.” Our nation will suffer hardship never thought possible in America.
To further confuse people, politician after politician, President after President, keeps promising Americans a better future, a future they cannot produce. And Americans, so used to good times, desperately cling to the promises, not wanting to face a life of less that seems to be inevitable.
Now more than ever my fellow Americans, we need to live wisely, build community, save and invest our recourses, and adjust quickly to the global changes of our world.
will the next president do any good?
I hope so it dont look any good !