Not for much longer.
The U.S. Military was primarily developed as a Petroleum Protection Force for Oil in transit around the world. That oil is going to be in shorter supply over the next decade, and the economic contraction as a result will leave the U.S. government's military budget with a double whammy - less need to protect Oil and less money to protect the remaining Oil with.
This may be a good thing, or it may be a bad thing, but it IS going to happen. That the U.S. will not be tempted to project its former might is certainly a good thing, but risks loom large during the adjustment period.
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"All politics is local."
Really? Not lately, or at least not as the American people that actually vote are concerned. National elections typically turn out 25% of the adult population to vote for president, but only about 6% of the adult population votes in "local only" elections, you know, mayor, dog catcher, that sort of thing.
This is about to change. In the very near future you are going to care FAR MORE about who is mayor than who is president, and all of those "national issues" that people were SOOOOO passionate about? They are going to slip from the political stage like water off a duck's back.
Good riddance.
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Think the individual states are in bad fiscal shape? They have nothing on the cities and counties, especially the BIG cities. Those in the worst shape are already the highest taxing states and cities: Boston and Mass. New York City and New York. San Francisco and Cal (my personal favorite). The criminal way in which these entities attempted to seize the assets of others to pay off their supporters used to be shocking - and then it became business as usual.
This is not your father's muni bond market (and Oldsmobile is no more, anyway). The first defaults will be here before you know it, and they are going to shake the bond market to its core.
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1 in 8 households with a mortgage was in arrears or in foreclosure. And that was before the Treasury market got routed. When mortgage rates rise from 4.5% to 5.75%, monthly payments rise nearly 20%. I think that sounds vaguely important. Everything hinges on housing prices. Everything. Increase the mortgage interest rate and you set off a chain reaction that will run through the banking system, the Treasury market, the stock market, and the US$.
Still, I think that the U.S. equity market will not likely make a new low (and I reserve the right to change my mind), though it might be close.
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Ahh... the end is nigh for G.M. as a public company. The Mad Scientist quipped several years ago that G.M., would change its name to General Motorcycle & Moped after it went Chapter 11. He was being optimistic. G.M. will survive for a few years as a government charge, and then will fade to the dust bin of American history.
I grew up in a G.M. factory town, so its a sad day in Mudville.
Mentatt (at) yahoo (d0t) com
You heard it here first.
4 comments:
Don’t know about you, but most of my neighbors think along similar lines as I do; there is a reason I choose to live here after all. As a result all my local politicians are constrained in what they can do. It’s really a matter of which group of buddies get jobs, not that they do in those jobs.
For instance: Our last health commissioner banned smoking in restaurants and was promptly fired- by Democrats. In the recent past the budget debate was between weather tax surpluses should be returned via rebates in direct proportion to the amount paid (democrat position) or weather tax cuts should be implemented (republican position.) Not a dimes worth of difference really.
On the other hand the federal government taxes me too, and then returns the money to the state with strings attached. Strings like no child left behind; Strings for things that otherwise wouldn’t be done here. Strings that require the local governments to do things contrary to the spirit of the place or loose all federal money forcing us to be taxed twice for things like highways- once by the feds then again by the state to make up the money that would not be returned to the state.
Ps. On that truck, eight bucks of touch up paint and wax with eighteen minutes of maintenance will save you eighty bucks in materials and eighty hours in labor for repairs. Bare metal or wood are cause for concern always, as is any cracks where moisture can seep in.
Dan:
Excellent points, as always.
The roof of my truck is over my head and I did not see the rust developing.
This was an excellent lesson. "An ounce of prevention is worth a pound of cure" - so from now on I will go looking for trouble in and around my farm and equipment.
I have spent a lifetime doing something that has no material measurement - the adjustment has proven not quite as easy as the doomer porn sites suggest, preparation this, dried food that.
B*ll Sh*t!!
You have to be doing it every day or at least be practicing often.
I thought GM stood for Government Motors (we Feds would own 72.5% of the company). :)
And I wouldn't be able to find one trader that doesn't think a company, brought to its knees and allowed a climate to do a "restart," couldn't find ways to live again (like Harley Davidson? At least for awhile ...). Yeah, only GE is left from the original 30 Dow stocks, but most of those company's functions didn't disappear. They went under new management (and a new name). We still make steel and have railroads and all that. Life is full of restarts.
Hi Bureaucrat
Please review the fate of British Steel....
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