Not to be a total downer here at the start of the year, but there are some issues we need to pay attention to. Mish gives a quick list:
Global Imbalances Mount
* Global imbalances are cropping up like weeds in places like Greece, Iceland, Vietnam, Latvia, and Lithuania.
* There are massive property bubbles in China, Canada, the UK, and Australia.
* Japan is in a foolish fight against deflation and sinking further in debt
* Commercial real estate in the US is on the verge of bringing down hundreds of regional banks.
* Cities in the US are under massive pressure because of unsustainable pension plan promises.
* Global terrorism is on the rise
How long this mess hangs together without a huge crisis in a major currency is the question everyone should be asking. Sadly, most are oblivious to the widening structural cracks.
I’ve heard it said that some are predicting that fourth quarter 2009 GDP growth will be about 4%. If we see such a number, it is because the government is flat out lying to us about what is going on in the economy.
This economy is so bad that Nevada has lost 1% of its population – which is unheard of for us. Once upon a time, 6,000 people a month were moving in to the Las Vegas area. I’d guess that thousands are moving out, now. The school district had a shortage of teachers two years ago – now we’re sitting with empty class rooms. My commute time has gotten faster.
There’s just nothing here – to no fanfare at all, our final monument to profligacy (City Center) opened up in December and I’m wondering if anyone is making book on when it will file for bankruptcy (my guess: by June). A family in my neighborhood has been trying to short sale their house for 8 months – they’ve sold it three times, but each time the appraisal has come in lower…and the bank appears to prefer non-paying residents to selling the house at an ever increasing loss. My guess is that my one-time $400,000.00 house is worth $110,000.00, at best. I’m betting its just as bad in California, Florida and Arizona and heading that way just about everywhere else.
The structural problems all stem from fiat money and usury-based finance. The whole world has bought this poop sandwich and now everyone’s going to have to take a bite. The longer our government and governments around the world put off the day of reckoning, the worse it will be when it finally arrives. And it will arrive, sooner or later.
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