Friday, September 08, 2006

Apocalypse Never (?)

While not entirely related to living in Montevideo, this posting is a glimpse into the dark and tormented soul that is fuBarrio! For those that just want to know how things are going in Montevideo, skip over this post :)

For sometime now, I've been tormented by the feeling of an impending calamity (doom is too strong a word).

Those familiar with the life works of fuBarrio, could chalk this up to an overly pessimistic outlook on life in general. Those *really* familiar with fuBarrio could chalk this up to optimism (or arrogance) in presuming that fB could somehow predict, time, and AVOID said calamity. Those that don't know fB might be wondering why he keeps referring to himself in the third person and wondering what kind of self-absorbed meglo-maniac is this fB?

Ok. They're all correct.

I should preface this by saying that I am the same fuBarrio that did ABSOLUTELY NOTHING to prepare for y2K....other than fly to Vegas, and laughed at his mother when she suggested he buy duct tape to hermetically seal himself in a leaky 1930's home in case the bay area was hit with a chemical/biological weapon.

Then, why so worried???

It could be that the recent clean living and elimination of twinkies and "dancing with the stars" (no cable in our new home...rats!) from my daily routine has altered my brain chemistry....i dunno.

Certainly my media sources (Internet) seem to be a bit more fringe an apocalyptic in order to garner the necessary audience that isn't busy voting for the latest american idol competitor that winks at the camera with the greatest panache. However, this feeling of "unease" started creeping in before I moved here....and likely contributed mightily to my reasoning for abandoning the US (at least temporarily).

In fact, this feeling of unease started around 1999.

While the tech bubble bursting, has had a major impact on my life, it was before the tech bubble burst -- the reasoning for my move to CA from Seattle was the existance of more diverse employment opps than As early as 2002, I was articulating a very specific plan to save up a little money and take a break from the US.

So, early onset mid-life crisis leading to a hormonal inbalance? I don't know.

However, I see the signs everywhere of unsustainable activities all interrelated to some degree:


Since the 1990's, I've been complaining (to some that asked and others that didn't) that the US's imperialistic nature of basically being in EVERYONE's backyard was goin to lead to disaster. The all-volunteer fighting force, was turning the great couch potato nation into a band of armchair Corporals, and Monday morning Generals.

I'd often hear years later as the crap started to hit the fan, "we need to go over there and kick some raghead ass!"

Uh...No...You need to leave your family, put some cammies on, live in a tent and poop in the desert for a year or two for 1500/mo and be shot at. That might help you better define the word "need". It might also bring into sharper focus the term "cost of war"


While related to the previous, a lot of the heavy advocates for the fighting are:

1.) Too old to fight themselves,
2.) are financially secure enough that their loved ones don't have to fight, and/or
3.) direct beneficiaries of the RICICULOUS deficit spending that has been allowed to carry on in the name of "national security".

At the very least, these people seem to be people quite unaffected.

Da FED & "easy money"

Simultaneously, an ABSURD asset bubble has erupted in real-estate that has driven prices so far outside of historical norms in terms of Income to Housing...Rental prices vs. Buying...etc.

Initially, the FED's (and Japan's) easy money policies touched this off, and then was exascerbated by easy money lenders that would lend to a ham sandwich as long as they could package up the stack of crappy loans and "securitize" them -- sell them to other Institutions and foreign govt's.

The institutions were glad to get the debt at some reasonable default rate cuz they could borrow the money from Japan for effectively ZERO percent interest rate and loan it to the American gov't and stupid lenders, hedge the currency risk and pocket the difference FOR FREE. This led indirectly to an explosion in hedge funds, whose ramifications have yet to be fully understood I believe.

These newly wealthy foreign govt's looking for a way to "invest" their new dollars from selling disposable microwaves in walmart, were also willing to prop up the irresponsible consumer (refinancing, option ARMs, etc etc) and the US govt's staggering debt levels.

The Way Out

This one is not so clear.


1. nothing happens and I'm worried for nothing like the y2k nuts.
2. housing driven job market implodes on itself in a vicious cycle as housing moves lower, fewer loans, less opps for refi, etc. and we suffer Japanese style DEFLATION -- yikes., or
3. Inflation crops up and is accepted by the FED, et al. as a way to reduce the staggering demands of the consumer and governmental debt load.

number one seems like the best option.


Aren't these opposing forces? Isn't that like saying "it might go up and it might go down?"

Well yes. But, bear with me a minute. It's just a theory but...

Globalization of the workforce has had some consequences:

Some stuff seems really cheap to buy even for us poor service workers. For example, plastic crap bought from walmart, or computer programming time (from india).

Basically anything that can be MFG'd (overseas) or serviced (overseas) or grown and easily shipped from overseas is "cheap".

Ok, so what is expensive? (everything else! :) )

Energy and other natural resources (things that can't be mfg'ed) including unleaded fuel, a plumber's time, a hospital stay, a lawyer's time, a hotel room, HOUSING, an American education all seem to be soaring in price.

So, what is really going on fuBarrio?

Globalization, or the outsourcing of certain things has masked a dramatic DECLINE in the value of your AMERICAN DOLLAR SAVINGS.

Simultaneously, we've effective "outsourced" our savings!

We are printing and shipping dollars overseas for Chinese mfg goods, Indian services, and Middle Eastern energy.

This would all be well and good, but as India, and China (and to a lesser extent the middle east) all try to get what the US has in terms of "stuff", it is putting enormous strain on those things that CAN'T be manufactured, but CAN be shipped somewhere (besides the US)....Oil, Gas, Metals, etc.

Unfortunately, for historical and political reasons the US has built a society (if not so much an economy) that is EXTREMELY reliant on CHEAP ENERGY. If cheap energy cannot be obtained at a time when a housing led economy is in decline, there could be continued political pressures to do whatever the public perceives as necessary to obtain said energy "cheaply".

Of course, the public will often wrongly, in my opinion, perceive "resource wars" as an effective means of securing cheap supplies. However, the reality is more likely that the disrupted supplies, uncertainty, and energy spent in attempting to attain the energy likely turns it into a futile exercise....on top of being morally bankrupt and likely bloody.

In summary I perceive MAJOR social upheaval to a likely consequence, continued demonization of foreigners, with likely trade barriers exascerbating a US based ASSET DEFLATION, while doing nothing to diminish the asset inflation of those things in short supply that can be shipped (think oil, copper, etc).

Worst case scenario is that we are on a slippery slope towards WWIII --- However, I don't forsee that happening, UNLESS we fall into a DEPRESSION kind of situation and a new leader perceives entering into an erupting Middle Eastern/European conflict as a way out.

If it does happen, it wouldn't be until after we are bogged down in a DEPRESSION kind of situation for quite a few years, and some people may believe war is a way out. Unfortunately, the way out (economically) would more likely be the END of the war....not the beginning.

Luckily for Montevideo, they could likely escape thermonuclear war in the northern hemisphere, although their supply of bad television shows would be limited to Argentine game shows and Brazilian soaps :)

---And as we've seen from the last post, it's amazing what depths of despair the mind of one of the masses can reach without the circuses (cable t.v.) I don't even want to think about what happens if you cut off the bread!

Adios for now,

p.s. yes, of course, after noticing a definite hole in the local entertainment scene, i'm actively pursuing the lease of a windowless basement or poorly lit paneled den for the upcoming filming of a "creepy" public access show focusing on unprovable (yet simultaneously unrefutable!) conspiracy theories. i say, if they're going to take the "good" american cultural imperialism (like levi's and coke) they can take some of the "bad" too.

p.p.s. ok, for those that don't know me well enough to know that the p.s. was a was.

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