This is the year that things happen.
The housing bubble can now be seen to have turned over this past autumn. Prices are no longer climbing, buyers are down, and inventory is accumulating. This does not mean much–yet. But as new interest rates kick in and sellers find they just cannot hold on to their properties, prices will come down drastically. Whether this is a crash or a slide, prices will be heading toward one quarter of this year past–yes, if you bought this year you can look forward to 25 cents on your dollar if you ride this all the way to the bottom. (You local mileage may very. Some regions never did rise much, and will consequently fall less.) Prices will return to somewhere near where they were before the bubble started (if not lower). Housing will no longer be “a good investment,” and this will disrupt the entire US economy, whose only “growth” has been in sectors that service the real estate industry. How fast the dominos fall, I have no idea, but this year it begins.
That the dollar is overvalued, and may be due for a slide or a crash, has been noticed by none other than the IMF, which posted a report noting that private panic selling could occur and be a sufficient disturbance to make a crash begin. So now the “real” people are noticing it: It is almost mainstream. Once it is on CNN or in the WaPo, the crash will have arrived. Notice they are not worrying about the Chinese, who, in this context, seem to be a lesser threat. 😀
Oh yes, the Chinese. Suddenly the US is happy to entertain the Russian proposal on Iran’s nuclear programs, (well, not that happy), and the wingnuts are calling for a war on Syria (instead). Was Iran taken off the agenda? This is actually extremely good news, but for the dollar all it really means is that the Chinese won’t move on it until somebody else does. (Then it is all over.) Good news all the same.
This is the year to get out of the US, if you are going to: Regardless of whether Bush and Cheney are impeached, the political situation is going to “get interesting” with increasing rapidity. Right now there are no real obstacles to travel, but that will change. I am optimistic on impeachment, but not on what follows: The Powers-that-Be need their militarization, and their war for oil, and I believe that civil liberties will continue to be the loser. In any case, this is the year that chaos begins to enter your life–from the outside. Halliburton just won a massive contract for building prisons for “illegal immigrants.” Gay people with children are the canaries-in-the-coalmine–when the state moves in on them, you better be on your way out the door. If you are going.
If you are staying, it is time to think about contigencies. At what point will the government likely become interested in you? What is your plan for that? The good news is that the greater the coming chaos, the less control the government will have. That opens up a window for personal tactics and strategy.
I wandered over to From the Wilderness, and the Nigerian delta is really heating up with the recent kidnapping of an oil-worker support/service team. Fighting has cut oil production by nearly ten percent. Nigeria has not been in the news much, and it won’t be. But it is a key region in the war for oil. The US has said it will not send Marines until ?:/ the region is more stable, but one way or another it looks like military forces in Nigeria will have to increase–more, larger war.
So have I said it? Price your house way down and unload it, or else plan to live in it unsold some years. Get out of dollars. Be creative and diversify. Yes, people like gold, and it is worth putting some assets into, but really no one knows what any commodity is going to do. Or any currency. Only oil is guarranteed to climb as a general trend. Remember the people in New Orleans: The ones who did well thought carefully about what was coming and ignored or evaded the government completely. Think about how you plan to face what’s coming.
No one else can.
Life after this year? Probably, but that is another plan, and another diary. Think food.
