RESTRUCTURING AMERICA'S SUBURBAN DREAM:

[Crewleader]

The root cause of rising oil prices must be addressed
if we are to provide a Sustainable Future for Our Grandchildren

by Michael Hampton
January 7, 2008

The comfortable fantasies that have sustained the American Dream for several decades, are fading fast. 2007 was the year when we took a peek behind the curtain, and saw what financial machinations are sustaining the world's largest economy. American consumer spending represents 25-30% of global GNP, but the money that Americans are spending is not all their own, nor is much of the energy we are using. Keeping the oil and the money flowing relies on spin, financial manipulation, and statistical adjustments which are now being exposed as fiction. If the dollar loses its purchasing power, how will US energy consumers go on importing the oil they need to maintain an extravagant lifestyle?

. . . A "House of Cards"?

We learned something important in 2007. Mortgage loans were being repackaged and sold at high ratings. This practice had helped to sustain the final years of a massive US housing bull market. But when the subprime crisis hit, shocked investors learned that these securities were they were not worth what they thought they were. In some instances they were worthless. Now these securities are no longer in demand, the money is no longer flowing so easily into mortgage loans, and the US finds itself in a deep housing crisis.

This story is only at its beginning. The US economy is reliant on "the kindness of strangers." But those accommodating foreign strangers can lose confidence in dollar-denominated investment opportunities, and their "kindness" can be quickly withdrawn. Even if they can be persuaded to go on providing capital, they will do so on less generous terms. It is now very likely, they will be providing less money in the future. The US will find that it has to rely more upon its own capital, and that may mean that certain excesses, and fantasy lifestyles such as are found in the American suburbs will need to be curtailed or cutback.

http://www.financialsense.com/fsu/editorials/2008/0107c.html?

[Adsos Letter]

1. Makes me very glad that, while owning a modest 1600 sq. ft.

home in the suburbs, we chose to eschew "excesses and fantasy lifesyles," live modestly within our means, and send two daughters through private schools, with 1 through 4 year university and now in her 2nd year med-school. The younger daughter is just starting university, and that is where I will put my "excesses" also;...seems like a good investment.

:D