simply random

January 31, 2006


Filed under: simple — simplyrandom @ 11:00 pm

all praise alan greenspan. he directed the united states economy (and therefore the world economy) for nearly twenty years. he kept inflation down and the economy up. he kept our recessions down and our booms up. hip hip hooray for him.
yeah, right. sure he did all that good stuff, but what about the state he left us in. sure he embraced technology and helped advance our nation and the world and the bay area, but what about the bust afterwards? i think there are two huge problems with the world greenspan has left us with.

  • first, we are in a real estate boom. greenspan has effectively made plenty of middleclass white color homeowners into millionaires, but how long will it last? the prices of houses and land have been skyrocketing all around the country. from the district of columbia to seattle, from metro-detroit to orange county, from the desert surrounding vegas to the salt lake city-orem stretch of i-fifteen. while prices in the city have continued to go up as usual, the cost to buy a house in suburbia has increased significantly. what happens when people start retiring? they will move to florida or arizona or an assisted living center. sometime soon, lots of people will be selling houses in suburbia. because prices are so high right now many young couples are opting for apartments or deciding not to live in suburbia at all. many older couples are staying in their starter homes, unable to afford the down payment on a decent sized house in suburbia. one of these days, everything is going to hit at the same time and the value of land will drop drastically. millions of people are going to lose lots of money on their homes and realize they won’t be able to retire. if you moved into orange county ten years ago you could buy a very nice house for three hundred thousand dollars, now it is worth one point three million dollars. the owners see their houses as an investment and are excited that when they retire they can move somewhere cheap and have a million bucks to live on. now with the prices of medicaid and medicare skyrocketing, very soon people are going to be very much out of luck.
  • that is the first problem. the second deals with the international system. the united states is trillions of dollars in debt to countries around the world and that debt is increasing billions of dollars every day. out of all the money the united states borrows, most of it comes from china. sure it is awesome we are helping them develop their economy, but not when their economy is slowly beginning to take over ours. already they have taken most of our manufacturing jobs, leaving few jobs for the american low class to break the poverty line, let alone work their way up and live the american dream. america was built on immigration, but it can no longer support immigrants unless they come here with a university education and a decent knowledge of the english language. but back to the problem at hand, with the united states going further and further in to debt every day, the dollar loses more and more of its value. because american power is based largely on its economy, as the value of the dollar degrades, so does american power and influence. all that power has to go somewhere and right now it is going straight into the hands of the chinese. i can think of plenty of other places i would rather have the power go, a communist country who disagrees with international opinions of civil rights and nuclear proliferation is not one of them. once the chinese figure out how to feed their people and advance their military, the rest of the world is in for a ride. gone is friedman’s mcdonalds theory and nice lexus. gone is westernized, modernized, globalized, democratic power. simply put, the world is sliding; sometimes fast and sometimes slow, but always down. watch ben bernanke closely, but watch trends in america even more closely. be smart.

1 Comment »

  1. […] randomsimply random […]

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