12-21-2006, 03:14 AM
Here's a fun little excerpt from the Honolulu Star Bulletin. It is a warning on "peak oil" and how that will affect Hawaii. It came out earlier this month.
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http://starbulletin.com/2006/12/10/edito...cial3.html
"HAWAII HAS one of the highest rates of per capita oil consumption in the world. Our rate in Hawaii is twice that of the U.S. average; four times the average of Europe and 28 times that of China. Moreover, oil not only fuels our transportation and electricity-generating plants, it also fuels the airplanes that fuel our tourist-based economy and the ships that bring in almost all of our food and consumer goods. Un- or insufficiently mitigated oil supply shortfalls will hit Hawaii much harder than almost any other place in the world."
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Add this Peak Oil whammy to the upcoming decline of (I'm guessing) 20% to 30% of real estate values this year, increased living costs of at least 15% (remember Matson asking to increase the shipping rates by 10.7% and gas going up by 11 cents a gallon in January?) and all those ARMs out there starting to hit their first rachet up point. Did you know that many of the ARMs are tied into LIBOR which is the London interest rate index and not the U.S. federal interest rate indexes? T'ain't nothin' the Feds can do to change the London rate so even if the U.S. interest rate goes down, those ARMs are still gonna go up.
Dare we mention the dollar being devalued? Many economists expect our national economy to crash once the dollar gets to eighty cents against the world market. At this moment it is at eighty two cents.
Forget about leveraging more real estate deals, right now paid off real estate is what you want. Paid for "stuff" that you have in hand is better than stuff you still owe money for. Write out a budget, trim off everything you don't need, pay down all the bills you can and figure out if your job and lifestyle will survive a huge drop in tourism and a big increase in gas prices, increased unemployment and double digit inflation.
Oh, for those of you who follow real estate curves, traditionaly the gap between the decline in sales volume and the price decrease is about two years. However, with all these other economic factors out there, I expect the price drop to show up about six months early (the sales volume drop was Nov/Dec. '05) and the price drop to be much more severe, maybe up to 40% to 60% by 2008 or 2009. It isn't just houses, our whole economy is about to hit the wall.
My suggestion is to plant a garden and buy non-hybrid seeds so you will be able to save and replant seeds from your crops. Maybe you'll have to become a vegetarian, but you'll still be eating.
2007 will be the beginning of our next Great Depression, so start getting ready for it now.
Edited by - hotzcatz on 12/21/2006 07:15:27
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http://starbulletin.com/2006/12/10/edito...cial3.html
"HAWAII HAS one of the highest rates of per capita oil consumption in the world. Our rate in Hawaii is twice that of the U.S. average; four times the average of Europe and 28 times that of China. Moreover, oil not only fuels our transportation and electricity-generating plants, it also fuels the airplanes that fuel our tourist-based economy and the ships that bring in almost all of our food and consumer goods. Un- or insufficiently mitigated oil supply shortfalls will hit Hawaii much harder than almost any other place in the world."
************************
Add this Peak Oil whammy to the upcoming decline of (I'm guessing) 20% to 30% of real estate values this year, increased living costs of at least 15% (remember Matson asking to increase the shipping rates by 10.7% and gas going up by 11 cents a gallon in January?) and all those ARMs out there starting to hit their first rachet up point. Did you know that many of the ARMs are tied into LIBOR which is the London interest rate index and not the U.S. federal interest rate indexes? T'ain't nothin' the Feds can do to change the London rate so even if the U.S. interest rate goes down, those ARMs are still gonna go up.
Dare we mention the dollar being devalued? Many economists expect our national economy to crash once the dollar gets to eighty cents against the world market. At this moment it is at eighty two cents.
Forget about leveraging more real estate deals, right now paid off real estate is what you want. Paid for "stuff" that you have in hand is better than stuff you still owe money for. Write out a budget, trim off everything you don't need, pay down all the bills you can and figure out if your job and lifestyle will survive a huge drop in tourism and a big increase in gas prices, increased unemployment and double digit inflation.
Oh, for those of you who follow real estate curves, traditionaly the gap between the decline in sales volume and the price decrease is about two years. However, with all these other economic factors out there, I expect the price drop to show up about six months early (the sales volume drop was Nov/Dec. '05) and the price drop to be much more severe, maybe up to 40% to 60% by 2008 or 2009. It isn't just houses, our whole economy is about to hit the wall.
My suggestion is to plant a garden and buy non-hybrid seeds so you will be able to save and replant seeds from your crops. Maybe you'll have to become a vegetarian, but you'll still be eating.
2007 will be the beginning of our next Great Depression, so start getting ready for it now.
Edited by - hotzcatz on 12/21/2006 07:15:27
Kurt Wilson