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Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 1:15 pm
by Richard Hull
This post is a natural expansion of the Frederick Soddy post immediately preceding it in this forum.

Infrastructure is a requisite part of all civilizations. The greater and more complex the civilization the more it is dependent upon multiple and ever birthing and expanding infrasturtures constantly supporting and feeding each other, every single moment of every single day. The foregoing is especially true if the civilization is massive and demands growth, be it linear or exponential growth.

Complex and often silly and superfluous infrastructures are found further piled on this shaky pyramid if personal luxury and an incredibly high standard of living is achieved by a significant portion of the populace.

If the populace rules, in effect, if not in fact, then the removal of much of their assumed comfort and wealth will so inflame them that a downward turn can wind up becoming a one-way calamity.

This is where we are now............

YOU ARE HERE..... points the little arrow on the map of history and civilization.........the little arrow points to your toes at the edge of a great precipice.

Infrastructures vary in importance, but one has to hazard a guess at the lynch pins that could start a one way trip to oblivion.

Frederick Soddy and myself, quite independent of his influence, arrived at 1. Energy related issues and 2. Ballooned, runaway, un-reclaimable world wide credit debt as the infrastructure issues that would kill, wound or cripple hundreds of vital infrastructures in a modern affluent civilization should they fail in any significant way to not only continue to expand, but just burp or cough. Even freezing of all future credit or zero energy growth would ruin all that we know today, sweeping it out to sea forever. We would surely survive, but at what level?

Imagine at this instant in time, the only credit you could ever have, ever again, is a mortgage and a car loan. No matter what you will ever get, own or obtain form this day forward in the form of food, creature comforts, etc. would demand cash or its equivalent. Let us say that you would have to drop in the hands of the supplier an acceptable weight of gold or silver or personal labor or trade goods you own.

Not pretty? Gee whiz, this was the world of me and Beaver Cleaver in the 40's and 50's for God's sake. All coinage was silver or copper or nickel and carried its value within it. All paper money was silver certificates reclaimable at any bank for 4 silver quarters just like you had in your pocket. So why go to the bank? Just use "silver backed" paper money. There was no problem except the standard of living was pretty much based on what you could hand over in cash. Perish the thought!

In 1900, gold and silver were just leaving the scene as pocket ripping $1.00 silver cartwheels and heavy $20.00 gold pieces were left in the banks. All your paper money was either a gold or silver certificate redeemable at any bank for the metals, if you had your truss on to haul'em away.

In the early 1900's and even in the 1950's we lived and bought to a level that we had cash in hand and this always keeps a society self limited to pretty much what is really out there to back all transactions.

To trained economists as early as the late 1800's this was just not the way to build a bold and expanding future. By the 1930's with every nation in the world abandoning the gold standard, leaving tit for tat in the dust, Soddy left nuclear chemistry and wrote of the horrors of the coming debt based society. He was viewed as an "out of his field" nutball to the day he died. This was true of all who spoke of a return to a more sound fiscal base for growth.

Today, if you are a business and have no cash, but need some, you can go to a bank and use as collateral, your accounts receivables!! In today's business world, debt owed to you is as good as cash in hand. Businesses that are strapped for cash to grow and expand, but who have a lot of debtors owing them have no trouble themselves in borrowing and becoming debtors. This pyramid of accumulated debt based on other debt as asset ascends ever higher into the heavens. It is as Soddy said, the higher the standard attained, the more certain and severe the fall.

With limited energy now appearing before us as a Gorgon set to trip the call in of all debt just to keep warm, some few are stirring from a slumber that might just be too late for action.

I leave you all with this thought..........

Your 401 K plans...........your IRA plans..........Your retirement plans............

How many of your are so naive as to believe that there is a pile of money (cash) somewhere with your name on it that is stashed for you in safe keeping?

How many of you who DO realize that the money shown in your plan's statments of earning to you is not really there, but actually tied into a system of investment and financial give and take? Continuing on, for these folks accepting the reality of no piles of cash...How many of you really believe that if a massive fall occurs, that you will get back more than 1/100 of what you think you have on those statements?

Finally, How many of you think there is a pile of money in your personal savings bank with your name on it and all the other depositors names on it that represent your actual savings account balance that you can get to if a great fall comes?

Weigh and consider.

Richard Hull

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 2:31 pm
by davidtrimmell
Very interesting Richard. Soddy sounds like a fascinating character. Yes, just like in 1929 when people rushed to the banks to withdraw their savings, the banks very quickly ran out of money and closed. Sorry out of luck, by the way, we need that mortgage payment by the end of the month or we will foreclose, what no job? Very tedious world we live in. Debt is also great power, we (the US) have used it in many a nefarious way around the world, just read Perkins book "Confessions of an Economic Hit Man":

http://www.amazon.com/exec/obidos/tg/de ... ce&s=books

It will be interesting to see what happens, hold for bumpy ride!

Regards,

David Trimmell

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 2:59 pm
by davidtrimmell
Richard found a couple things that may interest you. First there is a online copy of one of his early books on economics:
"Wealth Virtual Wealth and Debt, by Frederick Soddy © 1926, George Allen & Unwin LTD"
The web site requires the DjVu plug-in for your web browser and provides a link for it:
http://abob.libs.uga.edu/bobk/wvwd/

And this paper:
"COMMITTEE ON MONETARY AND ECONOMIC REFORM
- - - - -
FREDERICK SODDY
- and -
THE DOCTRINE OF `VIRTUAL WEALTH'"

" PAPER PRESENTED TO THE 14TH ANNUAL CONVENTION
OF THE EASTERN ECONOMICS ASSOCIATION
BOSTON, MASS. MARCH 1988
- by -
J. MARTIN HATTERSLEY, Q.C., M.A., LL.B.,
FORMER PRESIDENT
ECONOMICS SOCIETY OF NORTHERN ALBERTA"

http://fn2.freenet.edmonton.ab.ca/~martinh/soddy88.htm

""The threatened collapse of our Western civilization has nothing to do with the political issues between capitalism and communism, but is the consequence of its false money system." -Soddy: `Money Reform as a preliminary to all reform', Birmingham, 1950, p.2

I couldn't agree more.

David Trimmell

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 3:38 pm
by Adam Szendrey
And Marx has said something quite similar. But we have to remember, that the current system evolved to be "compatible" with the average human behaviour. It's sort of a consequence. The system reflects the personality of those who have created it.

Adam

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 4:12 pm
by Richard Hull
The system obviously works........But only too well and has ballooned out to the burst point. One moment of lack of faith on a major institution's part and it could come tumbling down. The faith in, and worship of, the present financial system far exceeds the populace's faith in God.... for God is intangible. Faith in a system that daily provides gameboys, fur toilet seats and two SUV's in every driveway is easy to come by. Those preaching against such a faith are scorned, if not scourged.

The right super disaster could start the ball rolling. Then, a major breakdown in energy supplies could trigger the economic effect.

We are truly balanced on the tip of a very sharp needle.

Richard Hull

P.S. Dave,

I have ordered the book and recommend the latter paper to every one here as it requires no reader and can be printed directly. It is only 10 pages long and is a very interesting commentary on Soddy and his work by a cogent economist.

RH

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 9:13 pm
by 3l
Hi Richard:

It is an unfortunate trueism that the economy is nothing but smoke and mirrors. The rise of the fake credit moblier style of banking rang alarm bells at the true thinkers of the tangible worth schools. Ann Rand harped until blue in the face...it did no good at all. Nixon drove the final stake through America's heart when the US deserted the gold standard of currency. The promise of the unearned credit is the lotus that will crash the twentieth century institutions. We have plenty of trees so let's print money.
Trouble is that paper money is no different than toilet paper.
Once the wizard of Oz is revealed, paper money won't buy anything! People will treat it like confederate dollars.
That will blow away stability and forment a crash.
Nothing will survive the crash that will sweep away the remaining myths of the good ole days. Hard times ahead. Just imagine the caos during the rearrangement. Even if electricity is running...how would you buy it? If you worked ....how would they pay you? Basic services would vanish as banks failed. As Toffler (Third Wave,Future Shock) has suggested a prosumer will be the wealthly individuals of the succeeding generations. What's a prosumer?
A producing consumer. A person who can fend for most of his needs like electricity,heat,land,water,sewer,food,clothing,shelter without outside assistance. A totally different paradyme from the last century. Artificial rules and structures will melt like snow. Large cities the crown jewels of 20th century progress will be vacant
untenable monuements to past excess. Without the stick and carrot of economic clout Washington will do little in the lives of her people. Without the resources ,the military will crumble and a new form of home rule will take effect. Centralized anything will flop over dead! Everyman for himself.

Happy Fusoring!
Larry Leins
Fusor Tech

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 11:20 pm
by pawinemaker
If my memory serves, FDR was the one who abandoned the gold standard, and not Nixon.

I would expect that in the event of such a financial catastrophe, things like gasoline and oil would become more valuable than gold.

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 06, 2005 11:22 pm
by davidtrimmell
Think Silver.

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 9:25 am
by 3l
Hi Roland:

As I recall FDR issued an executive order that all gold be held by the government.
All Private gold was seized and put in Fort Knox.
It was illegal for any private gold to be held.
The Great Depresion made folks leary of paper money and gold and silver cut into the usability of greenbacks.
Gold and Silver certificates were issued for the seized bullion.
Reeamable in greenbacks of course! LOL!
I used to have one.
That stengthened FDR's rollout of dollars during the war.
Hard to run an unlimited war with a finite limited budget.
WW2 was barely financed under the gold standard even with the dollar rollout.
Nixon finally cut the tie between gold and the dollar.
Vietnam's rising cost made the President AND the Congress
undo this essential link.
Gold was legal to own again.
The dollar was then based on the Economic strength of America itself... Ie a Promise of payment.
It was great in 1947 after the war with America poised to rebuild Europe after the war but now the bloom is off the rose.

Happy Fusoring!
Larry Leins
Fusor Tech

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 11:12 am
by Richard Hull
Both are correct, in a sense.

FDR made it a federal crime for any private person to buy, sell or retain gold. He removed the dollar from gold claims, thus freezing out the loss of gold bulllion from the treasury to foriegn debtors. In doing this, he froze the price of gold at an artifically established federal level to back dollars internally via gold on hand.

No US issued currency has ever been de-monitized. FDR did however declare all gold certificates forever un-redemable in gold, thus making them worth only their face value in silver certificates or fed reserve notes. The last gold certificates were issed PRIOR to FDR.

Nixon in the late 60's saw the shame of artificial internal controlled prices for gold and silver as the prices of both gold and silver on the world stage started to rise in the 1960's. The US was no longer the sole guy on the world stage. The effect was that marks, pounds and yen started being exchanged for US silver coins ONLY and the silver in them was worth far more than the face value pegged to them by the stupid US locked bullion price policy. All of this happened during the LBJ presidency!!! LBJ was forced, in 1964, to forever remove all silver from common US circulating coinage. The 50 cent piece limped along at a world adjusted near 50% content of silver for about 3 more years until finally even the silver left that coin.

Nixon realized that all over the world private people were hoarding gold and silver and accumulating wealth privately while the US still held its citizenry in check via FDR's old ruling. Nixon then pulled all backing from the US currency like every other nation in the world had long ago done and let the dollar float. After this, he also recended all laws limiting bullion holding and allowed all Americans to buy, sell and accumulate gold and silver bullion to any level, privately. He was forced to give a 6 month warning that the treasury would redeem all silver certiciates for that period only in the form of the floated silver price. You would give your certificates to the mint and recieve a bag of pure silver grain in return. After that period, the silver certificates would no longer be redeemable in silver but in FED RESERVE notes only.

Nixon did us all a big favor here.

So here we are and that is the story of silver and gold and our silly money-bullion policies 1930-1968. An economy hooked fast and rigidly to a purist gold and silver backing would stagnate at about an 1880 level. (there is only so much gold and silver on the planet.)

Don't get me wrong, real is real and faith is faith, but locking money substances to a standard is not the way to go in the 21st century. Limiting production of money substances to that which is in hand is the sane policy coupled with not buying that which you can't pay for immediately. The definition of currency or monetary notes given by Soddy in the paper mentioned in Dave's post is superb.................

"Money is not wealth, even to the individual, but the evidence that the owner of the money has not received the wealth to which he is entitled, and that he can demand it at his own convenience. So that in a community of necessity, the aggregate money, irrespective of its amount, represents the aggregate VALUE of the wealth which the community prefers to be owed on these terms rather than to own."

Brilliant!

Soddy's similitude is sound, but unfortunately this idea of a dollar printed for a dollar's deferred value is not so now for all the money in circulation currently would represent only a tiny fraction of the debt. Therefore, the money itself is not truly representative of what is deferred in the real world and is truly worth far, far less than it is commonly exchanged for. This is a FAITH based economy now. The motto on our bills is prophetic........."In god we trust"

Richard Hull

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 11:30 am
by Richard Hull
Dave is correct. Silver is perhaps one of the better holdings. It is portable and yet cheap enough and avaialble in small units compared to gold. In the hardest of times it might just sustain as the daily unit of value. There is plenty of silver out there, too, and it is a far more industrially useful metal than gold. Both gold and silver are the millienal old choices of portable wealth representative along with labor and property.

Sorry about the economics lessons but if a nuclear guy like Soddy could see the resultant energy crisis and a nuclear solution which could ultimately be de-railed by economic crisis, it is important that this be looked at as part of the ultimate equation, not only personally for each of us, but for the impact on energy and vice versa.

Richard Hull

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 12:18 pm
by badflash
I may be missing something, but other than a lot of really neat info, what is the point? If something happens bad enough to make our current system unworkable, gold & silver will be too. You can't eat it, or live in it. When the ecomomy really dies, you want food, guns, bullets, shelter, and people to watch your back.

An economy is just confidence. A place to store your effort. Once you do enough to be fed and sheltered, everything else is excess. If you can figure out a way to get people to work more that they need to, you get lots of excess. How the excess is distributed is called politics.

I read that the American Indian worked an average of 17 minutes a day to provide for his families needs. Now look at us.

If you are worried about it all comming apart, build a shelter & stock it with stuff you will need. Join a militia. Beyond that, we are just along for the ride. I don't think any of us are going to convince the rest of the world the sky is falling, even if it is. I'll enjoy the excess and tinker.

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 1:04 pm
by Richard Hull
Jack is intrinsically correct, but there will have to spring up nearly instantly, in a dreary scenario, a medium of exchange that is real, beyond barter. Gold and silver will quickly return to their places in the crudest of exchange systems.

If one reads Soddy fully, you will realize that real wealth is in materials and things that are permanent and renewable. Land, Labor and materials. All else is deferred wealth. Money is just tokenized, deferred wealth.

Smart folks will have skills, guns, bullets, gold, silver, land and materials of use and real value at a crunch time, not stocks and bonds or even greenbacks.

All others will be suckin' on hind tits.

Richard Hull

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 2:09 pm
by Adam Szendrey
I tend to think that energy will be of extreme value.

Adam

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 3:44 pm
by badflash
If you haven't already, read a copy of Atlas Shrugged by Ayn Rand. Her solution would be great (maybe already in place). Barring that, stock pile the fire wood. Other forms of energy will be many years in comming.

Other books for required reading are Lucifer's Hammer and Mote in God's Eye. Larry Niven & Jerry Pournelle have thought this through pretty well, but they are a bit more optimistic than I am.

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 4:48 pm
by davidtrimmell
Rand, Ugg! Lucifer's Hammer was great, but taking and keeping the Nuclear power plant will be no simple task... The great thing is all the idiots with serious guns. Think Iraq, only no occupying army.

It appears Soddy realized a truly sustainable economic system, built on the principles of sound science, something that as Richard pointed out we are so far from. Now we just put our faith in supernatural entities, and we claim to be 'civilized'? But one thing these hairless apes are good at is tinkering, and I am sure we haven't seen the last of that

David Trimmell

Re: Infrastructure - the joy and end of us all.

Posted: Fri Jan 07, 2005 11:38 pm
by badflash
If you say UGGG to Rand, you were unable to wade through the repetition to get to the meat. Anyone that has worked in any big organization can see that only a few keeps any system running. Pull out the keystones and the entire system falls down.

Pull those key creators out and put them together and you get a Manattan Project, or the Poseidon Program, The Space Race, the X-Prize. You get the picture.

People around me call the first part "Rowland's Laws of Corporate Motion". I can't remember where I heard it. "Things at rest stay at rest. Things in motion come to rest unless acted upon by an outside force". The common man cancels out everything. Only a single individual EVER makes a difference. The best of us can upset the balance before anyone can pass a law to "fix" it.

Re: Infrastructure - the joy and end of us all.

Posted: Sat Jan 08, 2005 2:44 am
by davidtrimmell
There are many factors involved. The individual can create a significant change, as they also have free will, but for their own good often one succumbs to the pressure of the greater. The CEO of ENRON can ensure delayed prosecution (or even freedom from recent criminal activities) due to his connections and superior race, but nature will always be the great equalizer. It takes more than just putting people together to foster creativity, it takes a purpose. Many lies were fed to those in the Manhattan Project. They did what others would have done anyways. Only sooner.

David Trimmell

Re: Infrastructure - the joy and end of us all.

Posted: Sat Jan 08, 2005 10:17 am
by 3l
Hi Jack:

Why do we bother with posts like this?
99.997% of the folks are not whom I'm trying to reach.
It's the .003% of folks who think for themselves,I'm after.
Yes I have read Atlas Shrugged.
In order for Gault to win everything had to fail.
Nothing can totally fail.
Pockets of smart folks will make it and make it well.
Ann Rand was a pessimist on human nature.
In her novel only one group of independants exist,but I have found in my wanderings a large number of folks numbering in the thousands who live a normal life by weekday and build independance on the weekends. This has been occuring for the past twenty years , a new infrastructure is being woven as we speak.
The truth lies somewhere in the middle.
You can Ignore the common man and he won't care at all.
He is as dumb as a box of rocks usually... as long as he's fed,entertained and has a few trifles,he's content.
Living in the moment.
This is not Russia.
Nor is it a utopia by any shot.
You have the freedom to starve if you like.
(The Bush Adminstration has a program under consideration...)
The rules are not an impediment to a creative mind.
I try to have hope for each day and trepidation for the morrow.
Faith without action won't save you.
You can either lead,follow or get out of the way.

Happy Fusoring!
Larry Leins
Fusor Tech

Re: Infrastructure - the joy and end of us all.

Posted: Sat Jan 08, 2005 2:02 pm
by badflash
Larry, most people just stay in the way and they niether lead nor follow. I think that is part of the process designed to slow things down so we have time to assess what it is we are doing.

Posts like this allow us to vent, think, and look at our own thoughts. Once in a while it sparks something.

I think Rand was spot on about human nature. I've been on enough projects and have seen the same pattern often enough:
Project Enthusiasm
Disillusionment
Search for the guilty
Punishment of the innocent
Kudos to those who contributed nothing.

I hope you are right about the underground infastructure. I know I lead many lives. Industrial Nuke Instructor by day, Computer Firmware engineer by night, and dabler on the weekends. If enough people do this I suppose something may come of it.

Re: Infrastructure - the joy and end of us all.

Posted: Sat Jan 08, 2005 5:36 pm
by 3l
Hi Jack:

I used to do high tech for the government.
Nuclear high tech.
I have seen the depraved specticle of the government in all it's glory.
I have glad handed senator's stumbling fool relatives.
The main reason folks can be outside the reach of government is the government has wriiten us all off.
In wartime the people become just numbers to the government.
A boat load of folks, KNOW deep down in their soul that the government will do the wrong thing 90% of the time.
Out of total stupidity for sure.
Not out of malice of fore thought
But bad judgement.
But by the time they develope a concious IE people get mad ,you could die an unintended death in their mercy drenched hands. People no longer trust the fickle finger of fate planning of past years Those folks are laying in food reserves and erecting windmills and solar panels in order to cheat death. I have friends in FEMA and other agencies. Don't count on them if you are wise. An NBC attack could paralyse the section you live in. They maybe so swamped it might take months to get to you. Can you eat ,have drinking water and warmth for a month or more while officials sort it out? I contemplated this while the power failure on Friday was playing out. We lost power for 8 hours. My house was the only one with heat and lights that worked. as far as I could see. I plan to make it.
I intend to have a hot cup in my hand no matter what.
Now that I've added emergency rations to my larder I can live totally off the grid for 3 monthes with no power,water or driving
for resupply. A sure indication of the underground is the Homepower movement. Check them out at Homepower.com.
Another good site is
http://www.otherpower.com/

Happy Fusoring!
Larry Leins
Fusor Tech

Re: Infrastructure - the joy and end of us all.

Posted: Sun Jan 09, 2005 1:51 am
by Richard Hull
Jack is right. This particular forum is the one where we can vent a bit and that is often a plus. I was not venting, but just noting the fragility of the infrastuctures that support our society.

I don't think I'll join any militias or anything that extreme, but part of our duty as citizens is to stay informed and keep our eyes open. This often involves discussion with fellow citizens.

As far as government is concerned, that is something that we can only alter at the ballot box, though the offerings there can be pretty meager.

Richard Hull

Re: Infrastructure - the joy and end of us all.

Posted: Sun Jan 09, 2005 12:00 pm
by 3l
Hi Richard and Jack:

I am not mad at the government per se.
Knowing the facts is not being mad at the government thank you.
Join a Militia?
Not likely...the government for all it's warts is still the best one going.
That ten percent is a huge lot of good you know.
I don't need to play army thank you.
BTDT at age six....militias can cross into "Lord of the Flies" with untrained ,undisciplined folks too easily.
The best defense is hearts and minds ,befriend your neighbors, be a good citizen...you might need them someday.

I'm only doing what I think is prudent for my situation.
An individual is responsible for his plight.
I am relating what I'm doing...not to vent or hypothesize but to
maybe to galvanize folks into some kind of action.
Preparing for emergencies has fallen out of fashion in this country. A simple kit could be all it takes to save your life.
Most folks don't even have a med kit in the house or flashlights.
You have some time,I think to gather stuff.
I spend 15 minutes a year,adding stuff to my emergency list.
I started with a 36 hour candle and a box or two of energy bars.
The next year I added 40 gallons of water.
Four plastic water cans from Walmart.
The year after that a medical kit and pocket heaters and their fluid.
See by just adding as little as 30 dollars a year you can build a reasonable emergency store.
Richard is correct in pointing out the weaknesses in the support system.
Most folks are ignorent of this issue.
As an ex DOE & SAC guy ,I can confirm what Richard is saying.
I am a firm believer in the Aesop Tale of the Grasshopper and the Ant. We ants feel a cold winter is due. Grasshoppers on the other hand are basking at the pool with a drink wondering what the fuss is all about.

Happy Fusoring!
Larry Leins
Fusor Tech

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 13, 2005 12:52 pm
by ChrisSmolinski
I'm not quite as pessimistic as others about the future. I do think way too
many people are spending way beyond their means. All encouraged by the
government, since it leads to increased economic growth. I don't see a
bubble bursting, I just see a flattening of the growth curve.

My real concern is with the effects of the dramatic increases in real estate
prices (I hesitate to use the term value), all IMHO driven purely by low
interest rates, and simple supply-demand. People with existing homes can
"move up" due to the increased price of their home to sell, but many first time
buyers are somewhat locked out of the market. We're now seeing the first
side effect of this, dramatic increases in assessed values on homes. Expect
to see local governments slightly reduce the tax rates to lower the hike, but
still result in large increases in real estate tax revenues. This is their chance
to grab a lot more cash, and I've never seen a government official miss that
opportunity.

The real crunch will come when people are forced to sell their homes due to
job relocations, etc. No more turning a 100% profit for sitting on a house for
five years. They'll be lucky to get what they paid for it, if that.

The other major problem is with folks who took out massive loans on the
"equity" in their house, suddenly created by the increased "value". There are
IMHO good and bad uses for such loans. Putting an addition onto your house
is a good use. Taking a trip to Hawaii is a bad use. I suspect a lot more of the
latter than the former. At peak I was getting one or more equity loan offers a
week. Many were pushing interest-only payments, which of course offered
very low monthly payments. Hence the principal remains in full, ready to be
repaid after the set number of years. I wonder how many people understood
that? "Balloon Payment" isn't in the vocabulary much anymore.

As I think Richard has said, keeping your debts as low as possible is the way
to go. A house mortgage is usually unavoidable, but no reason to do what
most people do, find out the max you can borrow, and then find a house
which is that expensive. What a crazy way to go shopping.

With a third child on a way, a mini-van is in our future, but with the one car
loan (0.9% so worth it vs paying cash outright) paid off in a few months,
it'saffordable, especially with having paid down my mortgage at an
accelerated rate for several years and then refinancing for a monthly
payment down around what many people have for a car loan. It's allowed me
to quit the day job a year ago, and hang my own shingle. And while I am
saving for "retirement" I have no plans to retire, I enjoy doing what I do too
much to quit! Being given a finite amount of time to live, it does not make
sense to do something you dislike for 45+ years.

Re: Infrastructure - the joy and end of us all.

Posted: Thu Jan 13, 2005 3:30 pm
by 3l
Hi Chris:

I not a total pessimist but it is better to prepare like one tho.
Retirement is a big bad bear to plan for.
I put 100k away and it is not enough with the costs rising out of control.
I live in a modest 1960's three bedroom that I took a 46,000 dollar morgauge on in 1996. The house has changed little but the outside speculators have driven the valuation into the stratosphere. Since I'm within a ten minute drive from Ole Miss,the valuation of my house with 3 acres is now 120,000 bucks! Thank God I'm handicapped my taxes only went up 120 dollars verses the 500 per year tax hike my neighbors pay.
I'm now planning an under ground dug out...but the land is wacko. How to buy it? I can build my new home myself without the contractor's markup. I only have six years left on this mortguage but if the city of Oxford finally annexes the land I sit on....I'll have to sellout.
Ah Retirement the easy life!
LOL!

Happy Fusoring!
Larry Leins
Fusor Tech