Topic: "No Sale" (3)
It has been many weeks since last Frodo visited Lake Lovey. Much to his surprise, the autumnal changes are much brighter than anticipated. Although the flaming scarlet of the sugar maple is not present, the yellows and oranges are tinged against the blue skies of continuing high pressure. There is no rain, and no pending additions flowing from any hillside.
With Fiona and Mick, the Wonder Dog, in tow, Frodo has been exploring the property of other residents about. Many properties, some new and some renew are, as is usua,l up for sale. In recent years properties sell quickly, simply because there is demand, and capital, in abundance. However, Frodo notes that every single "For Sale" sign present nearly two months ago is still in evidence. In conversation with a neighbor recently moving from Rohan into this area of the Shire full-time, Frodo learns that his house in Rohan sold in only six days. The conflicting results of sales and purchases have always interested Frodo, and he knows that it is not wise to pre-judge based on simply what has been observed. Science requires that all factors be examined before laws and theories are recognized, and so should it be in the worlds of behavioral judgment.
Declining value is a trend in capital backed by real estate. As the number of houses, for example, available become more numerous, then the prices for all drop competitively. Since, as discussed some months ago, so much real property was over-priced due to demand and overly-available credit, it is only natural that the value of assets should retreat. Credit becomes more difficult to obtain, and new activity comes to a halt until some measure of stabilization occurs. Why would anybody buy something that may get even cheaper if one simply waits a week or two?
Frodo could stop at this point and simply conclude that good things come to he who waits, and to not be fearful of economic conditions. Frodo harkens however to the phrase initiated by John Edwards more than four years ago, when he began to speak about "Two Americas." With an economy which is approximately two-thirds dependent on the purchase of goods and services by consumers, Frodo fears that the percentage of those able to fuel economic growth is shrinking. When George W, Bush stumbled into office, oil was less than $25 per barrel, and today it is almost $95. Other variables, like food and oil, are not tabulated into the measures of inflation, because of their seeming volatility. Although such theory may be historically sound, Frodo argues that the astronomical percentage increases in these essentials has seriously eroded the amount of capital which those on the lower end of the "Two Americas" have available. In fact, it is likely to increase the need for assistance to make health care and general nutrition accessible to an increasing number of Citizens in Middle Earth.
Now add in the fact that Frodo, and people like his neighbor from Rohan, will soon not be additions to economic growth, but bystanders. Perhaps we soon will speak of "Three Americas." Those gaining, those struggling, and those with their money under the mattress.
There is much to consider as Fiona steps into the lake, taking note of the fact that the water is a lot chillier than when last she pursued Frodo across the surface. Mick, the Wonder Dog, doesn't seem to notice at all.