Sep 05
1
And in the aftermath of Katrina…
Over the last few months there has been a lot of speculation in the
economic reports and blogs that I have been reading about the potential
for derailment of the global economy fueled by the US economy running
out of steam for a variety of reasons. Energy costs brougnt on by Peak
Oil, increasing interest rates ensure that housing bubble bursts,
consumers just get tired of the same old crap coming out of Hollywood,
etc.
Of course there are some other real issues that have a big part to play
in some of the above – US GDP, speculative interest in real estate in
Florida and Nevada, stability of hedge funds (several of the big ones
have closed recently), potential for foreign countries to dump US$
reserves – among many more.
I am just starting to think though, countertuivity being one of the
things that Perceptric is all about, that perhaps Katrina will turn out
to be the thing that keeps the US economy from becoming derailed.
Look at it this way: Just as people have got enough DVD players,
playstations, houses, and white goods to be totally spent out, along
comes a demand driver of humungous proportions.
New homes will need to be built. And as we speak, big building
companies' stock prices are jumping in anticipation of renewed growth.
But at the same time all the people who are now disposessed will need
to replace all those white goods that they have lost. Regardless of
whether they were insured or not, and I bet that a lot of them weren't,
they won't be able to live without their DVD players, their
Playstations, and all the content that goes with them.
That is going to represent literally millions of replacement goods
sales over the next 18 months, along with raw materials and labor to
rebuild. And New Orleans will bounce back as the jewel in the crown of
the USA over the next 5 years. It will have brand new infrastructure,
new building regulations that ensure flood preparedness. This is going
to be where the money will be spent regardless of where it may end up.
Chinese plants and factories will be working every hour God sent to
meet this demand and the US and global economy will be driven into
hyperdrive one more time…. but only if the US also ratchets down its
military engagement costs. If it continues to spend like a drunken
sailor on war, which is a totally unproductive way to use capital, all
this opportunity may come to nothing and we may yet see the biggest
economic meltdown in history.