05-15-2009, 02:04 AM
Sure, so if no good current numbers exist on the local level, maybe numbers and projections done by the DOE at the Federal level inform us all. Personally, if those sorts of projections are credible and we're looking at a trend towards 200 dollar a barrel oil again at some point in the near future, we need to stop and consider that 90 percent of all the energy in the state of Hawaii is oil based. I personally would project very little growth in a world with gas at the pump at 6 to 9 bucks a gallon and HELCO at 1.30 a KWH. It is very possible that we'll see a net population loss, not a gain, at least in the near term.
I don't think it's necessary to make the conversation personal or contentious. But it is important that it's complete. We're talking about road building after all. I simply cannot see why fundamental issues like fuel and energy costs aren't front and center important in all these discussions, except that many understand that the action of making them front and center make much current policy near obsolete, and it's hard to walk away from something that one has put so much time and effort into. I can understand that sort of personal frustration, and it's part of the reason I don't get involved in the political process--but if we're interested in the positive future for our community we need to get beyond that if we can. It looks to me a long time ago in a different world a choice was made to build a road, and people have been plugging away on that for a long time. In this new world we live in, reasons that were once valid may no longer be so. Obviously, there's a lot of people that want to hold onto those old paradigms. Unfortunately, there will be a cost for that at some point. GM and Chrysler are prime examples of two companies that simply stuck their heads in the sand and didn't keep up with the realities of the time. Governments do the same sort of thing, or course, and on an even grander scale.
So, after thinking about it in the wee hours of the morning where I thought I ought to pretty well drop it all, and go back to gardening, I'll offer a personal projection. I do this because making projections with numbers attached to them requires courage, and stand by their own validity as time progresses. Many in the establishment are speaking of a recovery in the economy in the 2cd quarter of the the year. I'd highly doubt that. While a number or two may be trumped out to validate that, I'd be all but certain we've got at least another 6 quarters of real recession left. I use the term recession loosely because in many ways what we have isn't a recession, but a crisis--but that's another issue.
We're starting to see inflationary pressure now and the dollar rally that has made things look better than they are for many now fade. This is likely to pick up steam by late summer. Some thoughtful analysts are projecting serious devaluation in the dollar, and perhaps a loss of reserve currency status. I doubt it, but it's possible. What seems to be likely is commodity prices first and energy prices second begin again to rise at an accelerating rate. This will be driven in dollar nominal terms by not only dollar devaluation relative to other currencies and inflationary pressure manifest without our own economy, but as well as speculative pressures of free capital looking for a safe haven. Outside of hard assets there are few. Obviously there's been a run up in gold, and may be more, but I'm personally more interested in the Chinese strategy to acquire large holdings of copper and steel. Different issues, of course, as there's a shortage of copper but not steel, but again and regardless we'll see upward price pressure. None of this bodes well for credit, as banks aren't going to lend in this environment, nor development, as there's no credit, nor employment. I'd expect to see national numbers for unemployment in excess of 10 percent by Christmas if not earlier. That will make the real rate of unemployment close to 16 percent or so(U6).
For those who follow the DOW, it's going to become a worse and worse measure of the economy as a whole, as it reflects more of a global market than a US one, and in nominal terms inflation adjusted we may have seen the bottom. I think we'll retest that bottom, but I'd be surprised to see it hang below 7000 much.
All of this leads to a very different sort of economy than what we've seen for the last 20 or so years, if not 50. We're getting quickly into uncharted territory on a global scale and it's going to be very difficult to plan ahead. Conventional thinking will not suffice. These issues are not going away. At some point all this will become evident regardless of our will to get involved in progress--all in all for me its simply a manner of hoping to ease the human cost of it all.
Lastly, I do believe that while we're looking on a societal level at a lot of hardship, I believe that rational individuals who squarely face what the future holds may find unique and unprecedented opportunities, perhaps not financially, but certainly in the basic sense of satisfaction in life. And that's a good thing.
Time will validate or disprove all projections, including this one. I'd be tickled pink to see it proven wrong. None of this is about trying to win points or promote any ideology other than a clear understanding of what's going on and where we're headed. I hope that comes through clear, but I'll say it again if not.
I don't think it's necessary to make the conversation personal or contentious. But it is important that it's complete. We're talking about road building after all. I simply cannot see why fundamental issues like fuel and energy costs aren't front and center important in all these discussions, except that many understand that the action of making them front and center make much current policy near obsolete, and it's hard to walk away from something that one has put so much time and effort into. I can understand that sort of personal frustration, and it's part of the reason I don't get involved in the political process--but if we're interested in the positive future for our community we need to get beyond that if we can. It looks to me a long time ago in a different world a choice was made to build a road, and people have been plugging away on that for a long time. In this new world we live in, reasons that were once valid may no longer be so. Obviously, there's a lot of people that want to hold onto those old paradigms. Unfortunately, there will be a cost for that at some point. GM and Chrysler are prime examples of two companies that simply stuck their heads in the sand and didn't keep up with the realities of the time. Governments do the same sort of thing, or course, and on an even grander scale.
So, after thinking about it in the wee hours of the morning where I thought I ought to pretty well drop it all, and go back to gardening, I'll offer a personal projection. I do this because making projections with numbers attached to them requires courage, and stand by their own validity as time progresses. Many in the establishment are speaking of a recovery in the economy in the 2cd quarter of the the year. I'd highly doubt that. While a number or two may be trumped out to validate that, I'd be all but certain we've got at least another 6 quarters of real recession left. I use the term recession loosely because in many ways what we have isn't a recession, but a crisis--but that's another issue.
We're starting to see inflationary pressure now and the dollar rally that has made things look better than they are for many now fade. This is likely to pick up steam by late summer. Some thoughtful analysts are projecting serious devaluation in the dollar, and perhaps a loss of reserve currency status. I doubt it, but it's possible. What seems to be likely is commodity prices first and energy prices second begin again to rise at an accelerating rate. This will be driven in dollar nominal terms by not only dollar devaluation relative to other currencies and inflationary pressure manifest without our own economy, but as well as speculative pressures of free capital looking for a safe haven. Outside of hard assets there are few. Obviously there's been a run up in gold, and may be more, but I'm personally more interested in the Chinese strategy to acquire large holdings of copper and steel. Different issues, of course, as there's a shortage of copper but not steel, but again and regardless we'll see upward price pressure. None of this bodes well for credit, as banks aren't going to lend in this environment, nor development, as there's no credit, nor employment. I'd expect to see national numbers for unemployment in excess of 10 percent by Christmas if not earlier. That will make the real rate of unemployment close to 16 percent or so(U6).
For those who follow the DOW, it's going to become a worse and worse measure of the economy as a whole, as it reflects more of a global market than a US one, and in nominal terms inflation adjusted we may have seen the bottom. I think we'll retest that bottom, but I'd be surprised to see it hang below 7000 much.
All of this leads to a very different sort of economy than what we've seen for the last 20 or so years, if not 50. We're getting quickly into uncharted territory on a global scale and it's going to be very difficult to plan ahead. Conventional thinking will not suffice. These issues are not going away. At some point all this will become evident regardless of our will to get involved in progress--all in all for me its simply a manner of hoping to ease the human cost of it all.
Lastly, I do believe that while we're looking on a societal level at a lot of hardship, I believe that rational individuals who squarely face what the future holds may find unique and unprecedented opportunities, perhaps not financially, but certainly in the basic sense of satisfaction in life. And that's a good thing.
Time will validate or disprove all projections, including this one. I'd be tickled pink to see it proven wrong. None of this is about trying to win points or promote any ideology other than a clear understanding of what's going on and where we're headed. I hope that comes through clear, but I'll say it again if not.