Foreshadowing

I see the future, at least in a reflection of the present.

Maybe there's always been people on the bottom, single parents, people with mental health issues, and generally people down on their luck.

Still, it would seem to me that there's perhaps more people "living on the edge" now than ever before. Living on the edge is relative, but it means generally living beyond their means to support themselves. It means depending on "good luck" to continue. It means willful denial of a problem that has no emotionally accepable solution.

Many such people are on the bottom, and many are perhaps in the middle, and even some might be on the top. It's all about having options, or not having options, and getting trapped into cicumstances that depend more and more on heroic measures to continue.

I always wonder if there's people who are struggling now when things are yet pretty good, how will they make it later when the shit hits the fan?

I am sadly a pessimist.

In the 1990's I would have told you investing in the stock market was a fools game - even if you manage to make money, you are probably getting "blood money" from those who are destroying local systems of support for communities for a faster buck, and making much more than the chump change you get back in dividends and stock value. That was before the scandels and crashes. Now even greed is lost for the small time investor who probably will get major stung in the next drop.

Now there's the great real estate boom - doubling of the value of homes over the last 10 years perhaps, and most in the last 5 years. I've long accepted a home as a primary investment, and I made careful choices on a high market to figure what I can afford and how fast I can repay the debt. I'm on a Adjustable Rate Mortgage, fixed for 60 months, and variable after that. I'm BETTING rates will be up in the future, and that incentive convinces me to pay all I can sooner than later. It seems to me that those smart enough to get a fixed 30 year may do ok on a home they stay in, but I expect such deals will be closing fast in the coming years as new inflation pressures make them uneconomical to lenders.

People say the time of one job for a lifetime are over in our ever faster changing world, and I do see similarly that the future will look very little like the past, at least the Post-WWII past, and we've got a long haul of troubles ahead.

My hope is that finanacial frugality now is the best game to play, even if it is the only game I'm good at.

In comparison my cousin is seeing a banker today I guess to look into a no-money-down mortgage option. I'm desparately hopeful he'll tell her that she ought to pay down her high interest credit card debt first and save $5000 and then come back. It's insane for a person who has high interest debt, no savings, to have any hope at all to own a home. Any banker who would tel her otherwise must have some financial incentives in his back pocket.

I suggest the frugal path is to pay down debt, and collect a savings, and yet I also see my quarterly interest in my savings was 0.55% - NOT good considering a projected inflation rate of 3.5%! Granted my savings is just my "options package" that is much more important than interest.

I remember when I was a kid my dad always liked to promote compound interest as the source of wealth. Just put X in the bank each month and in 50 years it'll be worth a million dollars. Such nonsense. There's no "honest return" that produces such magic risk-free.

I've even thought of paying off my cousin's credit cards and she could PAY ME 5% interest and pay it off much faster and we'd all profit. But I just don't trust her financial realism. If she owes ME money, then her credit cards will be clear to rack up NEW debt. PLUS, she'll be freer to throw herself into an unwise mortgage option, and I'm dead-last in the repayment queue. And WORSE, if I was to give her a zero interest loan, she'd have zero incentive at all to pay me back!

Sometimes I wonder what drives people into such slavery to debt, and so often it is from people who really do work really hard. They just never seen to be able to keep their spending below their income. I've imagined they justify "I sacrificed my time to earn money, so I can reward myself by spending money on X." And the harder they work, 2, even 3 jobs, the more justified they feel in offsetting their sacrifices with spending.

It's not fair for me to judge, but I can consider under what circumstances I ought to feel sorry for people. I think people are like fish, taking bait left and right, and often are the better for their risks, but eventually they stretch their odds too long and find themselves under a pile of debt that has become unpayable.

Okay, my foreshadowing suggests vast increases in personal bankruptsy cases as energy prices and inflation start really making their mark on our economy. I foreshadow wide-scale plummeting of sales and business bankruptsies as well. I foreshadow massive movements of people angry at their government for being unable to save them from their debt, even as the government vainly attempts to resurrect some over others, based on whomever has the most campaign contributions.

Perhaps the airlines will be the first to go in the coming years. I mean a steady consolidation reduction of airlines as fairs become unreachable for average people.

Whose going to "create the new jobs" in the new economy of high energy prices and low profit margins and high risks? When times get hard the big companies will surely offer the biggest layoffs to sluff off their excess expenses while they reorganize.

I just can't imagine being a politician and being expected to "solve" any of this. Of course Republicans might say Government can't solve it - just needs to get out of the way. But I can't see that either, except generally perhaps that hard times will demand simplified demands on businesses so they can focus on their business itself.

But when troubles get deep enough, it does seem to take a top-down approach. There are "core needs" of society and when core businesses fail in massive numbers, the bigger problems need to be analyzed and resources directed to rebirth them under new conditions.

I most of all imagine food production must change in the coming decade as energy costs make modern super farms unviable. I suppose there may be no room for reform (before the revolution). The government will just throw massive amounts of money at the current failed patterns.

I imagine a time will come of high unemployment and even larger scale factory farms being unable to make a profit with rapidly increasing input costs. I imagine a "new experiment" must be formed that the government buys out the failed farms and divides them into smaller farms that can be run with higher labor and lower energy inputs.

I tinker around in a vegetable garden, and even with a decade of experience, I have nothing to offer farming in knowledge. I mean I'm still in the stone age - mixing in a little compost each year and hoping my clay soil will eventually improve, but I really can't "make soil". I can't de-acidify my soil from my large input of oak leaves into the ground. I can't really restore nutrients lost each year. If I were a real stone age farm, I'd be moving my depleting returns into a new garden area. As I'm trapped in a limited yard space, and too much shade, my gardens are not 1/10 as produtive as they could be, as they'd need to be.

It is nice to live in an older neighborhood of mature trees, but I wonder if the time will come when we'll thin our our urban forests - both for fuel wood, and to restore sunshine to productive garden space.

In fact I do see "urban gardens" as one vital defense against food shortages, even if crops are limited. At least there's some useful work that can be done close to home, jobless or not.

I shouldn't be such a pessimist. I'm sure it comes from feeling alone, from feeling overwhelmed by the complexity of society and our vulnerabilities far beyond my knowledge for solutions.

My primary hope in times of higher unemployment is that it gives BREATHING space for people to prioritizes their needs and focus some energy on letting go of what they don't need and putting energy into new skills and work that can keep up their minimums while transitioning to a new world.

I imagine without debt, modern life is rather cheap. Seriously with a mortgage free house, and a frugal budget, a family can easily live for under $10,000/year. I mean with money to spare to put into education or and even time to spare to put into strengthening the community.

I see a household as the minimum economic unit. A strong household, one that organizes itself around collective needs and makes wise decisions on taking on debt and investing in a future so that resources will be available when times get tougher.

Such a community COULD perhaps transition from a modern one of high consumption and abundance into one of more hardship as the easy ways of living become more unreachable.

But how stable is a community where the average household has a second mortgage on their house, credit card debt, car debt, and inflationary pressures that make their at best fixed wages no longer stretches like they used to? How can we handle such times when massive numbers of people are unable to balance their household budgets, who find their once acceptable debt now grown into an impossible one?

Where are the resources to rebuild? To redesign the economy?

Hopefully economic changes will happen slowly, but maybe slowly itself it too slow. If gasoline prices crash back to $1.20/gallon, will we just call this short period an accident?

Anyway, I AM worried - worried so many people "on the edge" now will fall over, and people are now making decisions that won't make sense later, while having long term costs to them.

Overall I can't recommend anyone buy a house now, unless they have a plan to pay it off in under 10 years. I can't even well recommend higher education now, at least in regards to promised future income. And those are the safest "investments" available now.

I see the storm clouds clearly on the horizon. I hear the thunder. Perhaps it's all bluster on the next round, but behind each storm stands another one, and I don't like our odds to make it through the long haul.

The good thing is between each storm, we have quiet time to reflect. The more storms, the more we'll pay attention. I don't like the harsh thunder but I look forward to the cooling rain...