I responded to James at another Blog; but felt maybe it may be of interest to others, I find to nerve racking that in a time of crisis the most popular Blogs are about Obama and whether or not he’s American, or Muslim, or Arab, or Christian or any other number of silly right wing lies. So James felt that our government has no affect on our economy and that everything would be okay.
James, it is ironic about the dollar and its gains as temporary as it may be. Our money is not backed by anything anymore, simply put it is dependent on debt, and spending. That would probably be the main reason why after 9/11 we were told to go shopping by our fearless leader W.
When gas went over $4 and many Americans figured out that they were a $1 bill away from bankruptcy, they put their credit cards back in their wallets. The excessive driving has stopped, eating out everyday has stopped, and people are tightening their belt everywhere. We are an economy based on spending, borrowing, and consumption. We do not manufacture anymore, except for housing, we do like a nice big home.
A lot of people just found out that they never could afford the home they live in and with values going backwards are faced with a decision; stay or not. Their homes no longer being an asset, but a liability; so there will be those that walk away and others that do not, it will probably depend on how upside down they have become; by borrowing against it and banks being so willing to loan.
The more people that walk away the deeper the financial crisis will become and since most homeowners pay their property taxes here in Oregon and other states with their payments, the States tax dollars will decrease, the money for roads and schools and every other State sponsored function is going to have less money. This will cause our local taxes to rise; I believe they want to increase it 21% here in Washington County at least that was the last number I heard.
It has everything to do with a government that chooses for one reason or another to not pay attention to the products that the banks were selling to its Citizens. Mr. Greenspan testified on Thursday and said the error that was made in economic plan and the deregulation of the free market, was that no one accounted for the injection of greed. I keep a smile on my face every time a Pundit comes along and says in front of a judicial committee the things I have been talking about for a few weeks.
You and others may dismiss what I am saying as if I knew nothing on the topic. That is fine I have no issue with that, those who know me well typically will listen as they have known me to be right in the past. Mark my words the storm is coming, the writing is on the wall. If you can get debt free I would highly recommend it. If not hold on tight because most credit cards have clauses that allow companies to raise your interest rates to whatever they like with no notification and little if any cause.