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November 15, 2007 at 18:12:42

Headlined on 11/15/07:
PERFECT STORM = HOUSING CRASH, IRAQ DRAIN & COLLAPSING DOLLAR

by Allen L Roland

www.opednews.com

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The perfect storm has arrived on American shores with the housing crash, ongoing Iraq drain on our economic resources and a collapsing dollar ~ all pointing toward a major recession or depression in 2008: Allen L Roland

The enormous storm clouds are now visible to everyone and yet the majority of Americans are bracing for a brief frontal system when, in actuality, it could well be the mother of all recessions if not a depression.The Center for American Progress issues their dire economic weather report and shares that approximately 48 percent of Americans feel that the economy is already in recession, including 69 percent of black Americans.

Allen L Roland http://blogs.salon.com/0002255/2007/11/15.html

'Storm On The Horizon'

American Progress Report 11/13/07

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, and Ali Frick

Last week, Federal Reserve Chairman Ben Bernanke testified to Congress that the economy would "slow noticeably" this year and likely get worse before getting better.

Yesterday on ABC News's This Week, Sen. Chris Dodd (D-CT), chairman of the Senate Banking Committee, said of a possible recession: "[I]t's certainly pointing in that direction. We hope that's not the case, but there are many people who watch this minute to minute and would have drawn that conclusion."

America's economic fundamentals have been weak for some time now. Since 2000, investment growth has been anemic, productivity growth has declined, and income growth has stagnated. Weak income and job growth and the decline of health care and retirement benefits have already squeezed the middle class and made Americans more vulnerable to economic downturns.

When these trends are combined with the subprime mortgage crisis and the ensuing slowing of the housing market, the collapsing dollar, and the enormous cost of the Iraq war adding to the country's ever-growing debt, the economic slowdown is likely to hit Americans quite hard.

Sen. Charles Schumer (D-NY) found Bernanke's testimony disquieting. "I'm very concerned that there may be a bigger storm on the horizon," he said. Approximately 48 percent of Americans feel that the economy is already in recession, including 69 percent of black Americans. Another poll found that two-thirds of Americans worry that economic conditions are getting worse, "by far the highest number since 1992," and four in ten say recession is likely next year.

THE HOUSING FALLOUT: Last spring, Bernanke downplayed the broader effects of the subprime mortgage crisis, suggesting that the effects seemed "likely to be contained" to the housing sphere. Last week, Bernanke admitted that "[a]lthough the problems with subprime mortgages initiated the financial turmoil, credit concerns quickly spilled over into a number of other areas." He added, "A sharp increase in foreclosed properties for sale could also weaken the already struggling housing market and thus, potentially, the broader economy." An October real estate report showed that U.S. home prices fell nationwide in August for the eighth consecutive month, in the ten largest cities falling five percent from a year ago, the biggest monthly drop since June 1991. Remarking on the falling housing sales, Dodd noted that it was "the first time since the Great Depression we've had two successive years of predictions of housing sales declines." Housing had been the one sector through which many middle class families could get ahead through investment.

A report released late last month by the congressional Joint Economic Committee, however, stated that "families, neighborhood property values, and state and local government will lose billions of dollars as two million subprime mortgage homes are foreclosed." The housing crunch, dragging the whole economy down with it, demands the government's full attention. The most President Bush will admit thus far is that "housing is soft."

IRAQ EATING UP DOLLARS: A new report by the Joint Economic Committee estimates that the wars in Afghanistan and Iraq have cost the average American family of four more than $20,000. The government is spending $2 billion per week to wage war in Iraq, and a Congressional Budget Office report estimated that the total cost of the war in Iraq could equal $2.4 trillion. Though the White House has asserted that it is "not worried" about the cost of war, it should be. The war is draining finite resources away from needed programs at home and abroad. Approximately $2.4 trillion is enough to "provide every college freshman in the country with a free, four year education at a private college or university; provide health care coverage to every American for one year; [or] pay off 26% of our current national debt."

THE COLLAPSING DOLLAR: The dollar fell to a new low against the euro on Friday, propelled by Bernanke's glum economic forecast and by signals from the Chinese government that it would "readjust" some of its U.S. Treasuries holdings from dollars to other currencies.

A weak dollar is likely to affect average Americans at the gas pump, since "crude oil is priced in dollars, and oil producers, especially members of the Organization of Petroleum Exporting Countries, want to be compensated for the dollar's decline." As oil approaches the unprecedented price of $100 a barrel, the average cost of gasoline continues to rise, surpassing $3 per gallon last week, a rise of over 81 cents from last year. Gas prices are expected to rise another 20 cents over the next two to three weeks, making holiday travel more expensive. Sen. Sam Brownback (R-KS) said, "When those gas prices get up to $3 a gallon, it seems to hit some sort of psychological point in consumer's mind that 'I have less to spend,' and that's a reality for them."

Before the holiday recess, Congress should pass a final energy bill that will establish a 35 mpg standard and require utilities to draw 15 percent of their electricty from renewable sources by 2020.

Allen L Roland http://blogs.salon.com/0002255/2007/11/15.html

Freelance Online columnist Allen L Roland is available for comments , interviews and speaking engagements ( allen@allenroland.com )

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5 comments

Midwesterner, veteran of VietNam era naval service, I still feel an obligation to defend the Constitution against "all enemies, foreign and domestic."
John Sanchez Jr.Midwesterner, veteran of VietNam era naval service, I still feel an obligation to defend the Constitution against "all enemies, foreign and domestic."

Taxation without representation

The Nation is about to receive the comeuppance due to all who cannot restrain their spending. Now, China has lent the Bush Administration so much money for his vanity war, and the rest of us for our overconsumption that there is no realistic expectation of repaying it in our life time nor our children's. It will fall in large measure to grandchildren yet unborn to finish paying down this debt, and this is the ultimate exercise in taxation without representation.

Moreover, China does not even need to dump all of the dollars they hold to bring pain to these shores. We have given them direct control over our economic wellbeing, and they need only make an "adjustment" to their dollar holdings or threaten it to discipline the United States for any slight, real or perceived to bring us to the brink of economic catastrophe.

It is, no doubt, to be expected that the Bush Administration, would bring us to a pass where everything goes badly at the same time. George W. Bush, after all, is a man who has never succeeded at anything without cheating. Alan Quasha made him rich through Harken and the Texas Rangers, both transactions under a cloud of suspicion, Carl Rove engineered the theft of two presidential elections for him which he couldn't have won on his own. He is a man with an unbroken record of abject failure. We might expect as much from the policies he has someone (Dick Cheney) set for him.

And here is his legacy.

by John Sanchez Jr. (5 articles, 0 quicklinks, 12 diaries, 1168 comments) on Friday, November 16, 2007 at 8:57:08 AM

Kent State, Graduate work in philosophy of logic, of science, Ph.D. SIU neuroscientist, forensic neuropsychologist, PostDoc Medical College of Ohio, Preferred activities: Restoring British motorcycles, cars, Matchless, Austin Healey, Triumph, Jaguar, building an engine, programming a computer. Other stuff: SDS 1968, antiwar,911 truth advocate, anticorporatist, anti-classist, anti-neocon, pissed off. Best thing: Father. Blessed.
richardKent State, Graduate work in philosophy of logic, of science, Ph.D. SIU neuroscientist, forensic neuropsychologist, PostDoc Medical College of Ohio, Preferred activities: Restoring British motorcycles, cars, Matchless, Austin Healey, Triumph, Jaguar, building an engine, programming a computer. Other stuff: SDS 1968, antiwar,911 truth advocate, anticorporatist, anti-classist, anti-neocon, pissed off. Best thing: Father. Blessed.

Serf's Up

My belief is that it is not a matter of 'failure' or incompetence on the part of the President. Indeed, the whole issue of the incompetence of Bush is a kind of 'limited hangout'. The opinions of many converge upon the notion that this coming collapse of the dollar has been engineered in large to pave the way for the NAU and to help destroy the American middle classs. Can you spell, 'R.O.Y.A.L.T.Y'? How about 'S.E.R.F.S' ? How about 'dupes'?

In addition, with the confluence of peak oil, global warming, the probable full implementation of the fascist state in the U.S., and very likly instigated war (cold and hot) with Russia, China and the Shanghai Cooperation Organization and parts of South America......... which catastrophe to focus upon? If you are not one of the 'royalty', I'd say either get out of the U.S. Empire as soon as possible or locate some place to try to hunker down, disconnect if you can from the grid and grow your own -- whatever.

And, yes, the world would welcome the Empire of Death's collapse.

by richard (0 articles, 5 quicklinks, 1 diaries, 789 comments) on Friday, November 16, 2007 at 10:16:24 AM

Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on Conscious talk radio www.conscioustalk.net
Allen L RolandAllen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on Conscious talk radio www.conscioustalk.net

COMMENTS

Good comments Richard and John ~ Bush and Cheney will take the country and economy down with them because no one will stop them ~ least of all the Democrats who are still playing political games with an outraged American public.

Allen L Roland

by Allen L Roland (877 articles, 7 quicklinks, 0 diaries, 346 comments) on Friday, November 16, 2007 at 4:27:25 PM

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TomK .

A few more inconvenient ...

Well all those things you identified are facts. Let me add a few:

- Consumers debt bubble about to blow. Consumer debts (aside from mortgages) such as credit cards, lines of credit, have reached unsustainable level with millions of consumers up to their eyeballs in these high interest debts. Millions will default, sell assets at distressed prices, or just declare bankrupty. This is in addition to subprime.

- Infrasturcture deficit. With governments and consumers spent trillions on 'questionable' things, little money have been spent on basic infrastructure such as roads, bridges, power grid, dams, etc. Thousands are decades old and about to break.

- Health services bubble. Need I say more. Health costs have become unsustainable and millions will be added to the uninsured list. It is fair to say that we now have some 50 million people uninsured, a medical emergency will bankrupt many of them.

- Pension underfunded by the trillions and the boomers begins to retire. A nightmare too deep to think. The head of the GAO has issued dire warnings publically.

- Zombie generation. The younger generation, 15 - 30, have been called the Z Generation, Z for zombie. They lacks good education, creativity, desire to win, ability to think and work hard. Their science and engineering skills are low. But they do know how to point-and-click fast, change cell phone every 6 months, and like to be entertained non-stop. This generation does not know how to invent, make new products, solve problems, and probably will end up in low pay service jobs. Don't count on them to handle the challenges of the future.

We are now at the final stage of era of the Unraveling, according to the book The Fourth Turning (www.fourthturning.com). The next era, which is the 4thTurning called Crisis, is due to begin around 2015 and would last 20 years. Such turnings are proven from studying 500 years of history and *will* happen. The previous 4th Turning occurred in 1928 - 1948, and we know what happend then.

by TomK (0 articles, 0 quicklinks, 0 diaries, 217 comments) on Friday, November 16, 2007 at 5:30:08 PM

COMMENTS

We are now at the final stage of era of the Unraveling, according to the book The Fourth Turning (www.fourthturning.com). The next era, which is the 4thTurning called Crisis, is due to begin around 2015 and would last 20 years.

I would argue that the crisis or shift will happen in 2012 ~ it will be painful but it will also mark a transformation in consciousness where mankind will recognize the universal urge to unite versus separate from each other.

Allen L Roland

by Allen L Roland (877 articles, 7 quicklinks, 0 diaries, 346 comments) on Friday, November 16, 2007 at 5:44:21 PM