If you read the previous post, you understand the location of the most dangerous Bubble to Americans, yet, unaddressed.
It is the cause of the Bubble and crisis the government is reacting to.
If I, Scott Leonard were President, here are some things I would do.
Not Bail Out Banks.
Not Bail Out Automakers.
Not Bail Out Any Organization (that I have considered to this moment).
I would place $$$$ (let's start with 800 billion or what every amount will do the following) in an account.
Utilize a department in FEMA to do the following.
Every Legal, US Citizen
and
Every US Business
May submit
ONE Mortgage
or
ONE Loan
Not to exceed
$ 300k
..To be paid, IN FULL by FEMA account, NOW.
----
The result.
A family with the relief of their mortgage or other loan removed, can also reduce their insurance requirements, and preserve their credit. With a loosened cash burden, global spending on the street can increase.
A business with the relief of their mortgage or other loan removed, can also reduce their insurance requirements, and preserve their credit. With a loosened cash burden, hiring and global spending can increase. Hiring adds more cash to families, further increasing spending on the streets.
STOP GAP
There will be a clause in the payoff of debt.
A recording made at the courthouse, and placed on credit report, which states this property or loan was paid off in full by the us government with a stipulation.
The stipulation is that the same property or item can not be mortgage or sold for 6 months or perhaps a Year.
Why? The forbidance of remortgage encourages Americans to find enjoyment in reduced debt, prevents them from getting back into the same situation again in the immediate future, and spurs economic growth from the streets, safely.
TAXES
This payoff is done Tax Free.
And. Every State or Federal Tax debt, non-filing, or other situation that Americans find themselves in, will be permanently forgiven effective today.
..Many people have, due to economic turmoil and cashflow, held back paying taxes, or as business owners, found themselves unable to pay certain taxes, and or stopped filing as well
Creating a boost to American pocket books only to hold them accountable to their tax failures which were also occuring would be counter productive.
We must admit that the economic failure effected payment of loans, mortgages, debts, and taxes.
I believe this plan, while simple, would releive burden in homes, loosed spending, increase jobs and hiring, and secure them from tax failures which happened during this horrible economic time, establishing a clean slate of a flourishing economy to move America forward.
Tuesday, December 30, 2008
The Great American Economic Bubble
Ok, I want to knock this discussion out as I've spoken about it for years, to crowds and to friends, yet it has not been focused on and continues to be a great risk to the American economy.
Beginning in the mid 80's Japan saw an economic boom. Many of my peers believed that the Japanese had bought up many of the large commercial buildings and properties in America.
Perhaps the buying frenzy was over stated, but the boom was real and it appeared to be, in great part, backed by government overvaluated collatorization.
1990 began a trend that was eventually seen as a great bust. The Japanese Economic Bubble Burst! They effectively lost the next 10 years of economic and industrial forward movement as they struggeled with living through and surviving this horrible economic downturn.
In many ways, the following approximate 10 years bringing you to today, have also been a struggling period of very little advancements in their economic condition, hence since the Great Bust, they have lagged for almost 20 years and may finally be poised to begin making headlines in the world again.
Now for America. Wow! If you don't know there's limited cash in the homes of Americans, you're living under a rock!
The recent catastrophe which captures everyone's attention today is A Bubble, but not The Bubble which WILL set our economy on a path which may, like Japan, put us in a lagging mode to the worlds economy for 20 years. However, as This Bubble still remains hidden, the When remains the question.
On the Current Situation.
Yes, the economy as a whole in America is in very bad shape with most American facing extremely limited cashflow in the home.
This limited cashflow forces them to make decisions of what bills to pay, and as the money continues to shrink, they begin to stop making payments on their car, their home, insurance, etc., focusing on food and clothing.
Sounds extreme, but that's what is happening.
America woke up!, or atleast the government did when AIG, Fannie Mae and many banks threatened to fold. A crisis of gigantic proportion demanded the governemnt involve themselves in saving the economy.
False Focus. The government, and the world, viewed, and chose to focus on the corporate world which threatened failure. Throwing money to these corporations to save them seemed to be a quick fix but in reality is less than a bandade.
Point, after the government gave the money to the banks, corporation, and now the automobile manufacturers, those companies now exist for a few more months.
Pay attention, they reached this crisis of eminent failure as their income came to a screaching halt.
Income came to a screaching halt because the average American, being forced to make hard decisions, stopped making payments on mortgages, loans, and stopped making major purchases.
Average Americans made these decisions due to increasingly limited cashflow in the home.
Don't miss this.... If you bail out Company "A" with billions of dollars, allowing them to live for a few more months, on Monday Morning, the Average American is still unable to make those loan and mortgage payments, hence, the income and cashflow of Company "A" continues to diminish and the money received from the government eventually dries up, leaving them in the same place.
So, the bail out, as done in the Fall-Winter of 2008 by the US Government does not solve the problem or turn the economy around.
Meanwhile, during the last 3 months of 2008 with more and more people out of work, every month having basic food, water, and clothing needs but no income, credit scores of formerly rich people drops quickly and the average American not only has little or no cashflow in the home, but they have a credit score reflective of the conditions.
Jobs... if they get jobs, they will mostly be unable to borrow money again due to credit damage.
Now that the situation is stated, let me tell you of The Bubble which has yet to be seen or addressed.
The Bubble is the Debt or Loan Bubble.
What the world does not know, and even Americans are blind to....
In America, average rural town, every student in the high school must own their own car and it must not be an old car. In most cases, when they turn 16 they receive this car.
Now the Mother and the Father each have a car, a car payment, and full coverage insurance.
They work fulltime.
They borrow more money to buy their child a car. They now make another car payment and full coverage insurance.
Most people I know have several children, see the problem?
Also, if you pull up to the average home, you will see 3 to 4 cars, a boat or jet ski, a couple all terrain vehicles. In the home are atleast 3 laptops and two desktops, nintendos, playstations, wii, and every game imagineable.
4 Credit cards maxed out and a line of credit on the home.
Cable or sattellite tv, internet access, 4 or more cell phones, house insurance, car insurance on every vehicle.
Weekly gas bill of $300 to for everyone to drive to work and school.
Food, clothing... the list goes on!
And that's for the ones which established credit and borrowed on credit cards, cars, and homes.
A mother and father working full time do not earn enough money to stay on this road.
They got on this road by borrowing.
A mother and father which have ONE CAR, One Cell Phone and their child rides the public bus to school, with NO Cell Phone is considered poor. The student is shunned by others that enjoy these lavish pleasures.
Here it is... Look at an American family and on the Outside, we have the appearance of Success and Wealth. But on the inside, we are in Debt.
Just like the Japanese which had loans based on a false valued collatorization of the government, we are falsely valued. We look rich, but are in debt.
The bubble burst in Japan and reality struck.
In America A Bubble burst in the corporate world with limited cash comming in from the public to sustain these corporations, but... The Bubble still exists in the homes and for some, are deflating quickly.
Christmas and Birthdays are debt overload dates. Americans will use credit cards and savings to purchase things for friends and family in order to show their care, love, or consideration, further deepening the cycle.
In America, our homes Are a Bubble, ready to Burst.
Beginning in the mid 80's Japan saw an economic boom. Many of my peers believed that the Japanese had bought up many of the large commercial buildings and properties in America.
Perhaps the buying frenzy was over stated, but the boom was real and it appeared to be, in great part, backed by government overvaluated collatorization.
1990 began a trend that was eventually seen as a great bust. The Japanese Economic Bubble Burst! They effectively lost the next 10 years of economic and industrial forward movement as they struggeled with living through and surviving this horrible economic downturn.
In many ways, the following approximate 10 years bringing you to today, have also been a struggling period of very little advancements in their economic condition, hence since the Great Bust, they have lagged for almost 20 years and may finally be poised to begin making headlines in the world again.
Now for America. Wow! If you don't know there's limited cash in the homes of Americans, you're living under a rock!
The recent catastrophe which captures everyone's attention today is A Bubble, but not The Bubble which WILL set our economy on a path which may, like Japan, put us in a lagging mode to the worlds economy for 20 years. However, as This Bubble still remains hidden, the When remains the question.
On the Current Situation.
Yes, the economy as a whole in America is in very bad shape with most American facing extremely limited cashflow in the home.
This limited cashflow forces them to make decisions of what bills to pay, and as the money continues to shrink, they begin to stop making payments on their car, their home, insurance, etc., focusing on food and clothing.
Sounds extreme, but that's what is happening.
America woke up!, or atleast the government did when AIG, Fannie Mae and many banks threatened to fold. A crisis of gigantic proportion demanded the governemnt involve themselves in saving the economy.
False Focus. The government, and the world, viewed, and chose to focus on the corporate world which threatened failure. Throwing money to these corporations to save them seemed to be a quick fix but in reality is less than a bandade.
Point, after the government gave the money to the banks, corporation, and now the automobile manufacturers, those companies now exist for a few more months.
Pay attention, they reached this crisis of eminent failure as their income came to a screaching halt.
Income came to a screaching halt because the average American, being forced to make hard decisions, stopped making payments on mortgages, loans, and stopped making major purchases.
Average Americans made these decisions due to increasingly limited cashflow in the home.
Don't miss this.... If you bail out Company "A" with billions of dollars, allowing them to live for a few more months, on Monday Morning, the Average American is still unable to make those loan and mortgage payments, hence, the income and cashflow of Company "A" continues to diminish and the money received from the government eventually dries up, leaving them in the same place.
So, the bail out, as done in the Fall-Winter of 2008 by the US Government does not solve the problem or turn the economy around.
Meanwhile, during the last 3 months of 2008 with more and more people out of work, every month having basic food, water, and clothing needs but no income, credit scores of formerly rich people drops quickly and the average American not only has little or no cashflow in the home, but they have a credit score reflective of the conditions.
Jobs... if they get jobs, they will mostly be unable to borrow money again due to credit damage.
Now that the situation is stated, let me tell you of The Bubble which has yet to be seen or addressed.
The Bubble is the Debt or Loan Bubble.
What the world does not know, and even Americans are blind to....
In America, average rural town, every student in the high school must own their own car and it must not be an old car. In most cases, when they turn 16 they receive this car.
Now the Mother and the Father each have a car, a car payment, and full coverage insurance.
They work fulltime.
They borrow more money to buy their child a car. They now make another car payment and full coverage insurance.
Most people I know have several children, see the problem?
Also, if you pull up to the average home, you will see 3 to 4 cars, a boat or jet ski, a couple all terrain vehicles. In the home are atleast 3 laptops and two desktops, nintendos, playstations, wii, and every game imagineable.
4 Credit cards maxed out and a line of credit on the home.
Cable or sattellite tv, internet access, 4 or more cell phones, house insurance, car insurance on every vehicle.
Weekly gas bill of $300 to for everyone to drive to work and school.
Food, clothing... the list goes on!
And that's for the ones which established credit and borrowed on credit cards, cars, and homes.
A mother and father working full time do not earn enough money to stay on this road.
They got on this road by borrowing.
A mother and father which have ONE CAR, One Cell Phone and their child rides the public bus to school, with NO Cell Phone is considered poor. The student is shunned by others that enjoy these lavish pleasures.
Here it is... Look at an American family and on the Outside, we have the appearance of Success and Wealth. But on the inside, we are in Debt.
Just like the Japanese which had loans based on a false valued collatorization of the government, we are falsely valued. We look rich, but are in debt.
The bubble burst in Japan and reality struck.
In America A Bubble burst in the corporate world with limited cash comming in from the public to sustain these corporations, but... The Bubble still exists in the homes and for some, are deflating quickly.
Christmas and Birthdays are debt overload dates. Americans will use credit cards and savings to purchase things for friends and family in order to show their care, love, or consideration, further deepening the cycle.
In America, our homes Are a Bubble, ready to Burst.
Monday, December 8, 2008
2009 Turnaround
Since before the 911 disasters, i've watched a continual slide of business cashflow and economic conditions. Others thought I was crazy but I appeared to have my finger in businesses so sensitive they themselves were indicators. Now, the world confesses the economic conditions once covered up. Two weeks ago I sent a text to close friends. I see now, we are on bottom. There will be more closures and business failures but we are on bottom. Dig, scavenge, build... be in survival mode and build your foundation and base for the future. Expect 9 month survival mode.
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