The new white underclass

You may recall that I told you the Great Depression had returned in 2008. The financial architects have managed to convince everyone otherwise, but the growing number of tent cities and the new white underclass belie their manufactured statistics:

Cities like San Francisco spend tens of millions of dollars each year trying to keep the streets clean to no avail. Within hours, freshly cleaned streets are again covered in filth. Many people seem to think the city needs to throw more money at the problem.

What do you think? How should they address the problem?

Doug Casey: Cleaning up after these people isn’t a solution. It’s cosmetic, at best.

What we have are thousands on the streets who produce nothing, and only consume. They survive on food stamps, various welfare programs, handouts, petty theft, and the like. In other words, they’re not an asset either to themselves or to society. They’re an active liability, and they’re actually encouraged by being allowed to group together on other people’s property.

Will cleaning up after them solve the problem? No, it aggravates it.

It’s now an epidemic. It started in 2008 when lots of middle-class people lost their houses. And oddly, the trend toward people living on the street has been growing over the last 10 years of artificial boom.

We’re going to have a very real bust very soon. The high levels of debt that we have today have allowed the whole country to live above its means. When the economy adjusts to lower levels of consumption, a new avalanche of people will lose their jobs, and they’ll have no savings to fall back on. However, their debts will remain and keep them from getting back up.

Not so long ago, Americans saved up and bought their cars for cash. Your car was a small asset, but it was an asset. Then came two-year, then three-year, five-year, and now seven-year financing. In fact, most now lease their cars, because they can’t afford to buy them, even with seven-year financing. The things have gone from being a small asset into a major liability. With simple pickup trucks selling for upwards of $50,000, many are going to lose their transportation. Then they can’t get to their job, can’t pay their rent or mortgage, and they’re out on the street. It’s easy to see how an ex-member of the middle class could become mentally unbalanced and start doing drugs.

People could lose houses they bought with mortgages they can’t afford but think they can because of today’s very low floating interest rates. Just like back in 2008 and 2009. Plus, real estate taxes keep going up—partly because local governments are in good measure responsible for supporting lowlifes forced to live on the street, ironically due to high real estate taxes.

Utilities are going to go up because commodities are very, very low now. They’re going higher—good for commodity speculators; not good for Joe and Jane Consumer.

So, you’re going to see more people moving onto the streets. And let me reemphasize this: They’re not—now—necessarily junkies or mentally disabled. But they may be, once they lose everything they thought they had. Their numbers are going to grow as the economy goes downhill.

This is an explosive problem. These are people who will have nothing to lose. They’re going to be overcome by envy of and resentment against the rich. You can count on them to vote Democratic in 2020.

The entire system is rapidly breaking down. Hence Russia Russia Russia and the impeachment charade. When the latter fails, it will be something else. And while it would appear unlikely at this point in time, it’s far from impossible that the God-Emperor will have to declare martial law before the next election. I doubt he will unless absolutely forced to do so; he’s a negotiator, not a warrior. But I suspect he now fully realizes that there is no way out but victory.