With or without government bailouts, the auto industry, worldwide will fail. Look at it this way; anyone who needs a car already has one, and if you don’t have one and need one (my young daughter) you’ll borrow or buy used. If you’ve driven coast-to-coast along Route 80 like I have, then you should be able to predict what will happen next. Whole towns beginning with Detroit, Dearborn, Hamtramck will collapse from the ensuing domino-effect. The calamity will extend to places like Flint, Gary, IN, South Chicago and Chicago’s south side. Moving further West, Milwaukee will get hit, and to the North, Minneapolis. Running east you’ve got Cleveland, Cincinnati and Columbus, not to mention Youngstown which is already blighted but will become obliterated, and even Pittsburgh. The Pocono’s will suffer because people will not be skiing this winter. Car pooling will become the national pastime, and oil prices will drop below $30 barrel. This will engender great social rancor if not over time, upheaval.
There’s more. Since Russia is the 2nd largest oil exporter, and lacking much else besides weapons, vodka and caviar, it will cave in as we are already witnessing. And China, having nobody to export to will also deteriorate. In response, I expect that Russia and China will revert to their Communistic ways. The US, Canada, Mexico, England and the rest of Europe will adopt a form of socialism; hell we are already nationalizing all the financial institutions. Singapore should be fine…who cares. India will relearn what starving is.
After a few years and some stability in the “new order,” we will see worldwide hyperinflation because of all the “Monopoly money” that is being printed to shore things up right now. As in the Weimar Republic, we can foresee what happens during hyperinflation…it isn’t pretty and it takes a dictator and a world war to escape it, or so it did.
There’s more such as Silicon Valley’s demise (see the recent Intel announcement), empty (closed) restaurants in San Francisco, San Jose, Chicago and New York and a massive rebasing of our society.
Jesus I hope that I am wrong but the logic seems inescapable to me.
JMA
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