Economy in 2009

July/16/2008 22:08PM
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The mortgage/financial crisis will not end in 2009. The housing market will not bounce back in 2009. Billions of your tax dollars will be invested in Freddie and Fannie. All tax payers will be shareholders. GM will fail. Banks will fail. The government will churn out more and more money making your money worth less. It is very possible that the credit rating of the United States will fall below prime. That will mean our country will pay more interest to the Chinese or whomever we borrow from to cover our deficit. That means the dollar will fall lower and lower. Maybe below the peso. At some point the international community will have serious discussions about the dollar remaining the standard for commodities. Hence, oil and all commodities will go up to us. We will pay $200 a barrel for oil regardless of the supply/demand situation. We will have rampant inflation and high unemployment.

We will have a new president. One who finished 5th from last in his class at the Naval Academy or one who has no experience doing anything but speaking with great style and campaigning. Whoever gets the short straw at GM to bring it back from bankruptcy will be imminently more qualified than the man who will lead the country in 2009. Neither man can fix the problem he will inherit. The last man was intellectually challenged and look what he did the last seven years.

Congress hit a new low approval rating of 9% this year. It should be even lower. They play politics with each other and do nothing but block all progress or place blame.

Let’s take one simple example. Oil. Obama wants us to put all our faith in some yet unknown substitute for oil that will be financed by a windfall profits tax on Big Oil. McCain’s oil strategy is so confusing he can’t keep it straight. But, let’s follow through with Obama’s plan. It totally ignores all the goods in our every day life that come from petroleum. Where will we get food? You get diesel for the tractor from oil. You get fertilizer from oil. You don’t get either from wind. Where will we get our Styrofoam cups. Our paint. It’s oil to chemicals stupid. That’s why the plants are next to each other in many cases. It’s long odds that we will get an economic substitute for oil. Not is the quantifies we need to sustain our economy. It’s even longer odds that anything will be done in Washington to break down the bureaucratic snafus that stop progress.

So, settle in for the long haul. This nation was built on petroleum. This nation will not do well without it. Eventually, this will get resolved but not without lots of good people losing jobs, losing wealth, losing faith, and getting angry. Really angry. 

Things will get better in Washington because the citizens of the country will demand it must. Lot’s of new faces. A different perspective about what is expected of them. The stranglehold the environmentalists have on Washington will be broken. A 9% approval rating can’t be sustained.

There are ways to survive this storm, but you may have to think out of the box. Conventional thinking will not work. You have to accept that we are in a deep recession, maybe a deep depression. People made money in the 1929 Great Depression. Most did because they accepted the fact that they were in one and it wasn’t going away. They departed the Herd Mentality.

Our oil problems are not going to get fixed until we start trying. So far no progress. Every day that goes by makes the timeline for remedy more remote. How bad it gets depends on how fast we demand we get started. You get a chance to influence that.  

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