With the current economic crisis,
consumers are caught in the middle. While many have been financially stressed,
Boycott Watch sees some new stress, yet some points of hope. The following are
a few observations Boycott Watch has made:
- The prediction Boycott Watch made for $3/gallon
gasoline be the end of 2008 is coming to fruition. We made this prediction
because, as we stated, once the Olympics are over, China will stop hording
fuel, thus lowering international demand. Despite a spike in gas prices when
oil platforms in the Gulf of Mexico had to close for hurricane Ike, oil prices
have dropped steadily.
- Chinese imports have effectively given the
middle-class a 20% increase in salary due to lower prices, thus the ability for
families to stretch their dollars. This worked great when the economy was
booming, but in this recession, which we are clearly headed for, we have a
reduced our domestic manufacturing capacity. Inherently, this means we simply
do not have the capacity to employ Americans who need jobs to get the economy
moving forward.
- People need to know that the second version of the
bailout bill was filled with an extra $150B in pork-barrel spending and tax
credits, meaning the cost went from $2300 for every man, woman, child and
infant to $2800 per person, and that is before interest payments. Still, this
is only a start - Washington will find a way to spend more of your money for
you.
- The housing bailout plan needs to be focused on the
people who are in homes they were tricked into buying when they could not
afford it. If we, as a nation, force these people out of the houses they live
in, we will end up with a new housing glut and a rise in apartment rental
prices because of increased demand. In other words, we may inadvertently create
a double-buyers market for home, thus increase the devaluation of homes and
both lengthen and deepen the recession.
- Those who encouraged and participated in lying on
home mortgage loan applications need to be prosecuted. The missing money on
Wall Street and in Fanny Mae and Freddie Mac are in the hands of greedy
mortgage brokers who charged people all the extra points they could, including
things like $1K "signature fees," meaning a payment to sign a name.
Additionally, many appraisers illegally inflated the values of homes in order
to get the work from mortgage brokers, thus increasing the value of the loan
which created the lies that made the faulty mortgage work on paper, knowing it
was wrong. Prosecution for these wrongdoings will have the added affect of
restored consumer confidence.
- Over the past two years, there has been a
tremendous market for scrap gold and silver. In fact, many Jewelers made their
living recently just in buying and selling gold. Right now, that market is
drying up because people are running out of scrap gold to sell. This means
people have already disposed of the family heirlooms to pay their bills, so
Americans are essentially tapped out, this families will now start making deep
cutbacks, which alone would have signaled the dawning of a recession.
Meanwhile, gold prices are dropping, mainly because the retail market has
shrank while gold re-processors have large inventories.
- Now is a good time to invest. The stock market is
down by about a third, depending on what time of day it is. Stock prices will
eventually recover, as the value of businesses, their property and inventory is
just shrinking because of consumer fears. As people gain confidence in the
economy, the market will rise. We will probably see the Dow recover in two
years, meaning a 15 plus percent return on investment for two years running.
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