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JUNE 19, 2005
– It is about a
year since I wrote this
article, pointing out that while everyone on both sides of the
aisle were talking about a "recovery," that no such thing existed.
Long before that, when people first
started talking about a supposed "recovery" because of improving
corporate profits, I pointed out that the increase in profits were
not a recovery but the equivalent of a toilet bowl filling up with
lots of water when the handle is pulled. Lots of dollars that
we didn't have were sent to corporations through Bush's two rounds
of tax cuts, and so sure a lot of cash was showing up with
corporations. But, none of it was going toward job creations,
since the tax cuts were not targeted, and none of it was money we
actually had; it was all just creating a massive deficit - an empty
toilet tank, if you will.
And so it was clear that what people
were calling a recovery was just the whirling surge of water, and
that the vacating flush would follow.
This has been the state for the past few
years. The non-Moderate Independent media has fought and
fought to try and keep the fake recovery as the storyline. But
now they are starting to have to admit things are not actually
looking so good.
Well, for the first time in years we at
M/I actually have news to report about the economy. The
swirling surge of the tax cuts before the flush is over.
Ladies and gentlemen, the flush has begun. Take your money and
hide it now. A massive collapse that will pass recession and
border on depression is about to come.
As if the deficits weren't enough, as if
the lack of direction for the economy wasn't enough, there are even
more factors now involved.
First, oil prices. The non-M/I
media that lambasted Gore for letting oil get to $25 a barrel may be
ignoring the fact that $60 a barrel oil is sucking the life out of
the economy, but it doesn't make it any less real.
Second, America's economy has been so
good because we've led, particularly in the area of technological
advances. If Europe came up with Windows, the best computer
chips, etc., we would not be what we are today. But it was
IBM, Microsoft, Intel, America's embrace and leading the way in this
field and medicine and energy and others that has made our economy
the top in the world.
But the GOP has forced America into a
dark age. Europe is moving ahead rapidly in the areas of
renewable energy and biotech research, while America is still at the
starting gate with regard to both due only to the fact that the GOP
worships oil and stands in the way of biotech progress by opposing
things like stem cells and the funding of research.
And so Europe and other nations are set
to lead the way in the wave of economic growth, while America - even
without a deficit and oil price drain - is set to lag.
Thirdly, make no mistake, the housing
market will collapse - not necessarily because it is straight out
overinflated, but because of something called ARMs. You see,
one of the way housing prices have gotten so high has been the
proliferation of people taking out interest only loans and ARMS
loans. ARM loans are actually second loans on top of the
actual mortgage. The way they work is that people borrow far
more money than they can afford to pay on. But the ARM loan is
set so for the first 5 years there is ultra-low payment - interest
only. The sales point on these was, "If you plan to sell your
house within five years, this loan is perfect for you." And
with prices rising so quickly, many people said, sure, I'll likely
be selling my house by then anyway and make a lot of money.
Now to be clear: people have taken
out these mortgages knowing they can not even remotely begin to
afford the massive "balloon payments" that begin usually at year
five. They must sell.
Well, it is about year 3 now since these
loans began proliferating. See where this is leading?
Yes, within the next couple of years, these people will all be
forced to sell their homes. With the economy taking a dive, a
price bubble waiting to pop, and a sudden surge in houses onto the
market from the ARM-loan people, it will not bode well for the
housing market.
You can pretend the deficit does not
exist, but it doesn't change the fact it just set another new
record. You can pretend long-term unemployment is not breaking
records. You can pretend oil and Iraq are not sucking us dry.
Hollywood maybe has convinced Americans
that everything always works out in the end. Historical
reality check: virtually every great empire or nation has
collapsed due to entering into stupid wars that bled them dry and
gluttonous economic thievery on the part of the rich and powerful of
the nation. America has both things happening at the moment,
combined with a stifling of the economy by Dark Age religious
fundamentalism.
It is no joke: an all out economic
collapse has begun for America. Take your money and stick it
in your pillow now.
Yes, we have been doom and gloom for
years now while the rest have been more upbeat.
You tell me, has the news followed their
storyline or ours.
Get out now, and save, save, save.
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