We are all going to die, but I hope not in the “extended period” of our current low-interest-rate environment. On the subject of a financial crisis ahead, I pull out this old prediction of crisis to boast about its obvious stunning acumen and to mark its 2-year April Fools’ Day anniversary (see image below). I also call attention to a secondary use of this ancient document: Does it predict a new crisis on top of the old crisis? Is it like predicting a bimbo eruption of Tiger textings?
The short answer is the probability of a new gargantuan crisis is far more obvious now than it was April 1, 2008. We now can see with confident clarity the explosive panic creators which promise a new crisis, if it should erupt, that it will be of far greater severity than our recent explosion of financial destruction. What are those obvious signs?
The housing market is exhibit A. Less than 1% of 1% of 1% of 1% of the people in the world slightly understands that the housing market in the United States is dead, but that government intervention is pumping formaldehyde into the body and painting blue lips with liquid white out. Everything is fine if you live in a wax museum and enjoy sex with blow up dolls.
The data prove that the bubble must exhale more. Is this scary? Does it scare you that housing prices would fall by 50% to 75% tomorrow should we close Uncle Sam’s Mortgage Shop (Read that last sentence five times, then go on.)?
Our USA-today real estate market bubble is two or three times any previous bubble of the last 120 years, but many of the rest of the world’s housing markets are psychedelic free-verse manic mombos following a guitar-line-in-their-head of Jerry Garcia on his day of 10,000 hits. God rest his soul.
These Europeans and others make us into little quiet wall flowers. Since our 30% property fall is a bank buster their psychedelia ain’t nothing. A bigger housing bubble leads to a bigger bank crisis. What if the United States has the conservative mortgage market? The thought that this could be true makes me seriously consider a future in Scientology.
What else? Add to toil and trouble reckless government spending at home and abroad, new awful exploding fecal colonies of sovereign debt, high unemployment, and it is ridiculous to deny the possibility of a gargantuan fall. Last by not least? Our governors do not comprehend that killing a credit crisis requires fantastic debt destruction. They are running in the wrong direction.
If Ben and Tim don’t know about destroying debt in a credit crisis, then the recent crisis hasn’t been managed. And if you don’t manage a crisis, is that a negative indicator?
At least we have a president who left graduate school a callow vain fellow yet when thrown into the blood sweat and tears of business and politics, he erased a lifelong petty jealousy of majoritarians with a deep respect for capital and free markets. He embraced the American project. In the history of the world we have contributed a thousand parts good for every one part bad in the ancient war on poverty and ignorance.
With his medical reform, President Obama has reversed what was an inevitable national bankruptcy via exploding medical costs. He has now forced creative and destructive competition among insurers. We will see their numbers fall from one thousand to perhaps 20 or 10.
My prediction is cut-throat competition will cut medical care costs by half. Everybody can be covered easily. Radical competition drives prices down radically. Huge new wealth will be available for education and investment. Even the 100-year-flood in our housing bubble and its massive wealth destruction cannot stop us.
April Fools’ Day Fool you fool! Your president hates markets and free enterprise because he can't stand to be less important than any person, place, or thing. President Obama’s medical reform merely speeds our journey into national bankruptcy. April Fools’ Day you pedantic narcissistic sycophantic weasel. You and the president are one and the same. The destruction of civilization bows down and falls before your adolescent amoral psychopathic vanity.