[ShinyOldLady]

The info on Matt Savinar's site, Carolyn Baker's, etc are all yelling about the sky falling NOW. I'm current on the mass marketed news, in touch with the general public around here and I still must be missing it! Please tell me how the sky is falling where you are, I'm tired of staring up for no reason here, and people are wondering why I'm outside and looking so confused.

[Jack]

Much depends upon where you look, and the inferences you make. Additionally, the projection of the sky falling is an extrapolation based on limited data, which is a rather risky enterprise.

The decline of the housing market and airline industries, along with the rise in food prices, hints at a more challenging economy. Such matters could build, leading to depression.

On the other hand, markets tend to discount events rather effectively. Some contend that the stock market has already done so, and that the present down-cycle has run its course.

It must also be noted that the population is not monolithic. The top economic quintile may not be affected by price increases in the same way as the bottom quintile.

Where I am, a restaurant that caters to the top 5% is doing more business than ever. Another that caters to the lower levels is experiencing reduced sales.

My personal opinion is that the sky is not falling at this time. In a few years, it may be; but projections, while amusing, should be taken with a large portion of salt.

[Farknight]

I live in the second wealthiest (per capita) county in the US (Loudoun, Virginia) and there is virtually no impact whatsoever to be seen. Road whales clog the streets and gas stations, even at $3.97 a gallon. Chain restaurants, upscale and fast food outlets all remain crowded.

But, scratch under the pretty shiny surface of affluence and an ugly canker is growing. I work for local government and I know the budget is hurting now and next fiscal year will be potentially disastrous. The school buses, all 500 of them were budgeted for diesel at $3.50 not $4.10, and in every corner the costs escalate like so many paper cuts slicing through a rich economy.

Yes, the PO impact is a localized phenomena now but when areas that are "affluent" truly suffer, well then TSHTF for certain everywhere. This is a "bottom up" impact and it will slowly eat its way upward through the economic food chain. When it hits the top the bottom will be pretty much devastated and in certain areas of Amerika Mad Max will decide to move.

[Ferretlover]

The sky is falling-in a slow, gentle rain that is never going to stop.
Right now, a few are taking their umbrella's out, but the majority still feel that it is just a quick dash to the car or the front door. Nothing to worry about.
Unfortunately, the rain will keep coming, slowly, barely noticably getting heavier, until one day everything is flooded.
And, yes, Farknight, IMO you are correct. This situation is going to affect different areas at different speeds.
Tonight, on the local news, there was a story about the housing market in south Florida. It was about a house that had been purchased last year for $691, 000. It just resold at: $219, 000.
See a problem there? It all depends on who's spinning the data.
The sellers took a massive loss-BUT, the house sold!

[Cashmere]

$this->bbcode_second_pass_quote('', 'I') live in the second wealthiest (per capita) county in the US (Loudoun, Virginia) and there is virtually no impact whatsoever to be seen. Road whales clog the streets and gas stations, even at $3.97 a gallon. Chain restaurants, upscale and fast food outlets all remain crowded.

[Farknight]

$this->bbcode_second_pass_quote('cashmere', 'T')he average home price is down a staggering 1/5 in a year and you claim "virtually no impact"? Seriously, you have got to be kidding, because I have no doubt that every home owner in Loudoun who bought in the last 4 years is shitting piles of bricks.
KB homes announced recently they were pulling up and leaving the county altogether because it was such a housing morgue.
In short, any readers who want to see THE prime example of a KunstlerF-cking, just follow Loudoun.
Here's Loudoun in a nutshell . . .
A very long commute by car (1.5 hours?) into DC with no mass transit options, IF traffic is moving.
A huge percentage of homes are 4,000sf McMansion crap boxes that were thrown together in the last 5 years that are a nightmare to heat and cool.
Nothing but ugly "planned communities" and strip malls and retail and casual dining for miles in all directions looking like a giant crap box machine came through and crapped all over the place.
It's hard to contemplate what a disaster Loudoun is going to be - they are literally the poster child for McMansion Sprawl into Distant Suburbia.
If you get to D.C. within the next year or so, go take a ride through Loudoun.
2nd richest per capita? You have got to be kidding.
Finally, be clear about this final point.
Loudoun is not only NOT wealthy, Loudoun is on the verge of poverty.
Loudoun is the incarnation of the expression, "big hat, no cattle."
The "median household income" in loudoun is about 75k a year, which is 2nd in the nation.
But as everybody knows, income is not wealth, and I'd reckon that if you did a net worth analysis for Loudoun that it would be a pretty good bet that Loudoun is one of the poorest counties in the country, if not the poorest.
Why? Because the poor folks in EastBumF-ck Mississippi only have a few grand worth of debt on their 30,000k shanty and they can only obtain a few grand worth of credit card debt.
The DSE in Loudoun, however, are almost universally drowning in underwater mortgages that have lost, you heard it, 100,000 or more in value in the last year alone .
I'm not even considering the expensive car culture that dominates the county - in Loudoun it's all about appearances, and every fool in a "million" dollar house has gotta have a shitty SUV or 3 sitting out front. Furniture for those McMansions? All new of course!
"The second wealthiest!"
Call me in 5 years. Loudoun, both the county and its denizens, are heading for a brutal landing.
Get out while you still can.

[vetusfirma]

Bravo Farknight, you need to wright a book on how to prepare. I don't impress easily, but your accomplishment are impressive. And you did it all without 4 phd's and a life in academia. I wish I had accomplished as much.

[Cashmere]

Farknight, I'm impressed too.

And thanks for the info on western Loudoun - I was ignorant about that - all I ever read/saw was the disgusting McMansion sprawl on the east.

[JJ]

$this->bbcode_second_pass_quote('ShinyOldLady', 'T')he info on Matt Savinar's site, Carolyn Baker's, etc are all yelling about the sky falling NOW. I'm current on the mass marketed news, in touch with the general public around here and I still must be missing it! Please tell me how the sky is falling where you are, I'm tired of staring up for no reason here, and people are wondering why I'm outside and looking so confused.

[BigTex]

The sky has been falling at LATOC for several years.

But Matt does a good job at getting the word out, so I'm not knocking him.

I think that the areas of the country that have a significant energy industry presence (Houston and Dallas come to mind) will weather any near term storms pretty well, since so much local economic activity is driven by the energy business.

Longer term, I think the moderate climate areas will be good places to be.

[threadbear]

$this->bbcode_second_pass_quote('Cashmere', 'I') have no doubt that every home owner in Loudoun who bought in the last 4 years is shitting piles of bricks.

[CarlinsDarlin]

Farknight,
I'll add my name to the impressed list. Sounds like you have a good setup and a well thought-out plan. Congrats.

Shinyoldlady,
I think a lot of what we're seeing is truly denial. Even if one were wealthy, the increase in prices in basic commodities has to have some impact. (just put it on a credit card?) Add in the falling house prices and so on, and it can be a recipe for disaster. Why are we not seeing more obvious catastrophy going on around us? I think people are acting as if nothing is wrong, sucking up the price increases and trying to hang on as long as possible to the status quo, because they really have no idea how to do otherwise.

The poorer segment of society is most definitely feeling the pain. While I don't consider us among the bottom "poorer segment," we're not wealthy by any means. I've watched our bills go up each month and our income stay the same. It will only be a matter of time before some serious cuts will have to be made at the current rate. And we're in a lot better position than many. We have no house payment or rent, no debt other than monthly expenses, we produce a fair amount of what we eat here, we live frugally, and we have a good community network. Carlin's "commute" to work is only about 15 miles, and he has a decent paying job for the area we live in. If we were in the position to where we had to live on minimum wage, rent (or even had a house payment), and depend on the grocery stores for everything we eat, we would be in a world of hurt.

The thing is that most people who are in this boat are not the ones who have the loudest voice. I agree with farknight, when the affluent start feeling the pain that many average people are feeling now, THAT's when TSWHTF, and *everybody* will know about it.
Kathy

[Cashmere]

$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('Cashmere', 'I') have no doubt that every home owner in Loudoun who bought in the last 4 years is shitting piles of bricks.

[Kingcoal]

Since the Euro's introduction, the USD has fallen over 50% in relation to it. The price of fuel at the pump has skyrocketed, housing has appreciated into the stratosphere on ridiculous credit policies and we are headed into a recession while fuel prices are firm and rising (which isn't "normal", by the way.) The US is bleeding money for an occupation which has no real return on investment (Iraq.) Do I really need to go on?

We are at the precipice. Does it mean that "the sky is falling?" No, first off, the sky doesn't fall, instead, slow decay happens. Ask yourself, with impending layoffs, do you think that wages will keep track with inflation? Out lifestyle is getting more expensive and will continue to do so. It will just creep along, this decay, so slow and steady, you might not notice it because all the while, the media reprograms you into thinking in terms of "restructuring" and constantly shows you people who are doing just fine and have adapted to the new economy. That is the situation I see today. Most of the people I know around where I live are strapped, often living paycheck to paycheck. Most of the working class people I know believe deep down that if they would have went to school, they'd be doing as well as the people they see on TV. I know a lot more young people, newly graduated from college trying to borrow their way to the lifestyle that is quite honestly out of their reach. Most of them who buy houses, do so with considerable help from their parents/grandparents.

To sum up, the American dream of having a good job, getting married and having kids, buying a house with two cars in the driveway is evaporating. Without considerable help from others, kids these days are getting out of college and finding $20K/year jobs, which when inflation is taken into account, is below the poverty line. Even after ten years, these kids still find themselves, who started at $20K/year up to maybe $27K/year. In that same time, inflation has made their real take home pay go down.

[threadbear]

$this->bbcode_second_pass_quote('Cashmere', '')$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('Cashmere', 'I') have no doubt that every home owner in Loudoun who bought in the last 4 years is shitting piles of bricks.