Fiscal Ship

Do you know what was so brilliantly tragic about the Titanic sinking? All of those “upper class” folks still died like everyone else. With all of their riches they could not save themselves from the predictable and yet inevitable icy death.

We are seeing a replay of sorts today in America. Over the last 10 years a new breed millionaires and upper class people rose to the top. Some of them made their money from the booming housing market, while others benefited from the tremendous amount of disposable income Americans had. Plastic surgery was commonplace and was more affordable now than every before, the common family had a toy hauler and two or tree ATV’s to go with it. Everyone was buying the biggest house they could lay their eyes on, and refied as fast as they could to buy the newest DLP 35” flat screen TV. Yes, times were rolling along and things were looking great.

Then a chunk of ice came along and tore a small hole in the side of the financial boat. Those really cool 5 year ARM’s came due and there was not a bank in sight that wanted to refinance a person who owed 350K on a house that was only valued at 225K. There was soon too many houses on the market and not enough buyers. Companies that purchased land for millions of dollars, with the intent of building million dollar homes, all of a sudden closed up shop and disappeared. The family that was “Escalade roll‘in” yesterday could not afford to fill the gas tank, pay for their new I-phone, buy “Afflicted” clothing for 14-year-old Johnny, and still make the house payment. The new rich began a new plunge into an icy death.

The stark reality is this, just like the Titanic disaster, people today have failed to plan. They were so enamored with their fast money that the future seemed only to be brighter. They ushered in a new culture of wasteful spending, financial carelessness, and fiscal invincibility. As Hawthorn predicted, families rose and fell in America, this time with their pocket books clutched tightly against their chests.

A new cycle is about to begin and a new upper class will ascend to the dollar-laden throne, and yes, some of them will eventually fall as well. Because after all of this, some people will still not realize that being rich, is nowhere near being wealthy.