Just me? Or do you smell it too? I mean that aroma a sweated-up coonhound throws off after the hunt. Not that it was much of a chase. And that revenuer fella didn’t actually need his duodenum.
You sure could sniff it wafting through the Gaylord Hotel (one of my favs) in Nashville a couple of days ago, just after Sarah Palin took to the podium of the National Tea Party Convention. And you’ll be smelling it more, too. All the way to Canada.
So here’s the deal. Everything’s connected.
The US economy is on life support, thanks to a $1.6 trillion deficit. That Obama guy has pumped more drugs into America’s veins than any other president. The result is one mother of a debt load, and a mother from Alaska. Palin is tapping into a profoundly deep constituency of middle class Americans appalled at their descent into debt, untold more disgusted at government bloat and 15 million unemployed people rapidly losing hope.
This could mean big losses for Obama in the fall midterm elections, leading to speculation he’ll be a one-term wonder. That may lead to more talk of a new protectionism for Fortress America, as the Republicans go feral on us. Not exactly what they want to hear these days in Greece, Portugal or Spain – which are economies on the brink of a debt collapse. An isolationist Washington (except for a few wars, natch) is an economic nightmare.
Meanwhile on Wall Street they get it. The Dow has closed below the 10,000 mark again – after four weeks of losses – on fears a European skid could set the dominoes falling again. Incredible as it seems, the stock market is now where it was 10 years ago, despite having created fortunes and fools in some of the wildest swings ever. More proof those who swear by index funds aren’t paying attention.
How does this affect us?
How does it not?
It’s hard to underestimate the potential for mess. If Obama and the Dems smell coon, too, you might well see the US move to control its debt disaster with higher taxes, spending restraint and a rate hike to viagratize the dollar.
The result will be (as I predict) a flatlined economy for years. Inflation, but no growth. More jobs in the oil patch leading to $650,000 trailers in Fort Mac. No jobs in the Ontario rustbelt. And big consequences for realtors in the Okanagan.
Against this background, of course, the real estate pumpers continue to pump, hoping you simply won’t notice. And most won’t. CREA is predicting house values, already at an all-time high, will increase about 5.5% this year to a new historic plateau, bringing the two-year appreciation to a stunning 25%. And they may just be right.
I’d be surprised if there isn’t a housing rush, led by cashless, hormonal, frantic, pre-approved newbies, desperate to beat the HST and the fabled rate hikes of autumn. Fanning the flames will be every local real estate board, gorged as they are on the MLS fees which have gushed in (let’s save this for another post).
Once again, the actions of the herd – driving a market to orgiastic crescendos of desire – will be the truest barometer of what comes next. People so desperate to get in that price hardly matters. Bre-X. Nortel. Bullion. Pet.com. It doesn’t take a genius to know what comes next.
And speaking of Sarah, she’s hot.
