The Death of the Life of America???
Time Magazine has a great article documenting the demise of Detroit titled:
Detroit: The Death — and Possible Life — of a Great City
Detroit was a one horse, or shall we say one industry town, whose industry has faded....and so has the city and much around it. There are many manufacturing towns across America that have suffered similar fates.
In recent years, America has morphed economically into something essentially not too much different than Detroit....a nation primarily dependent focused on one industry, on leveraged consumerism, to drive its economy.
Leveraged consumerism drove revenues to government and health care which in turn drove more revenues into additional consumerism. Just like how Detroit boomed in the fifties, America boomed from everyone borrowing and consuming products and services across the nation.
Much of our success post 9/11 was driven by borrowing to consume...families borrowing, businesses borrowing, cities borrowing, states borrowing and the federal government borrowing.
Just like Detroit really didn't have much absent massive numbers buying Detroit vehicles, America doesn't have much without massive numbers borrowing and consuming....not much at all. Further, Detroit would be in much worse shape if its citizens did not receive MASSIVE aid from the government....a government that no longer generates the revenues to even supply that aid any more.
Do you think the people of Detroit could have ever imagined what was going to happen to their city a few decades ago???? The average selling price of a home under $10,000? It is why many of you are having such a difficult time accepting the present.
Now that the banking system has cut off America from credit, our nation is dying. Go drive around your area, look how many businesses are shutting down, vacancies are popping up, At this point, we still have thousands of auto dealers to shut down, tens of thousands of retailers, and many other other enterprises including insurance companies, banks, hospitals, and government agencies.
Prior to current times, America was NEVER a nation so dependent on consumerism and government spending to survive. In prior recessions, we were much more production and export orientated...we were a creditor nation not too long ago. All we had to do was drive more production and we were able to exit downturns relatively quickly.
This time is different..VERY different. The driver of the economy, the consumer and government, is tapped out....so driving more borrowing will only make a bad situation worse.
With SBA lending down 50%, Home Equity borrowing down even more, and credit cards lines of credit evaporating......fewer and fewer are spending. In order for America to function under the current system, America NEEDS massive numbers consuming massively.
Cash Flow in America is slowing dramtically to practically every industry. Banks are resorting to gambling to generate funds by playing derivitives earning over $5 Billion in Q2. Many are drawing down their savings and tapping out the limits on lines of credit.
The banks have basically become a black hole of money....where dollars going in to pay down debt are not going back out to generate cash flow in the economy. The problem is with only a few trillion in savings and tens of trillions of debt...without money recycling, it should not be too much longer before much of the savings will be driven to pay down debt and most of savings in America will evaporate.
Under the current Zombulation policy, what happened to Detroit is certain to happen to America. The process is well under way with 20% unemployment, $2 Trillion Dollar deficits, and bankruptcies growing rapidly.
We must restucture debt and lower interest rates the CONSUMER pays to sustainable levels for the new economy...otherwise, servicing debt will consume over $2 Trillion dollars per year in cash flow that will never benefit society because any profit made from such payments will be offset by losses in defaults.
We must restructure debt and restructure it now...otherwise our schools, hospitals, businesses, and governments will go broke. The process and effects from Zombulation are now very visible....read that Time article on Detroit...it will give you great insight into where things are going if America doesn't restructure.