Sunday, June 14, 2015
What happens to a society when most of the citizenry can no longer afford to live in the cities or the suburbs?
What happens to the average citizen when a crappy college is $250,000 for a degree when a crappy apartment is $25,000 a year, when bare bones health care that you're forced to purchase is $15000 a year for a family of four, when it's $40 every time you fill up your tank, and when all the governments take 45 cents out of every dollar you make?
What happens when the policemen, the firemen, the nurses, the EMT workers, the shop owners, the gas station attendants, the teachers, the plumbers, the electricians, the waiters, the actors, the musicians, etc etc can non longer afford to live in the cities and the suburbs?
What happens when the working poor - some teachers, waiters, nurses, shop workers, artists, laborers, firemen, can no longer see any upside for themselves or their children - with the current cost of education, health care, food, energy housing etc?
What happens when the non working poor - the sick, the laid off, the mentally ill, the undereducated, the incompetent, stop believing that they or their children can possibly have any chance, when a basic education is so far outside of their economic orbit?
What happens when all these people who are struggling every day just to make it to the next pay check, which buys less every single month in spite of the fact that there "is no inflation" - what happens we these people continue to see a very very few people making millions and billions doing work that is no more productive, no more complex, no more important than what they are doing?
Well, look at Feguson. Look at Baltimore. The story is told as if this were a police brutality issue. In fact, nowhere in this country are the police equipped to deal with entire urban populations that just don't care, because they just don't see any opportunity. Make no mistake. This is a financial issue. Perhaps the financial issue of our time.
You can curse the myopia of these populations. You can curse the Nanny State. You can curse whatever you like. But as these angry bitter hopeless populations swell you have the makings of a real Crash that does not start in the markets.
The crash starts in the cities themselves and moves quickly through the suburbs. It starts almost imperceptibly with a few random uprisings, like in Feguson and Baltimore. Then all of a sudden these flare ups spread and become regular occurances in the every day life of the cities.
And then they move into the financial markets. Because the most important thing to each and every market is CONFIDENCE.
And what happens to confidence in the markets when it is lost in the citizenry?