A STORM AND A BUBBLE

VIEW FROM THE DECK

VIEW FROM THE PORCH

HWY. 13, SOUTH OF WASHBURN

Wednesday, 9:00 AM.  32 degrees F, wind ENE, constant, with very strong gusts.  The sky is completely overcast and there is heavy, freezing fog.  It is snowing steadily, with approximately three inches of new snow and more accumulating rapidly.  Very heavy snow is reported immediately to the west and south and we will be lucky if the east wind keeps some of it at bay. The photos are from yesterday.   I no longer worry that I am not getting enough exercise.

   It has become obvious to me, and perhaps to you as well, that the health care industry is a classic economic bubble, and that Obamacare, as ugly as it is, is no more than the pin prick that will  deflate it
   The history of the Western world, and probably the rest of human history as well if we had been paying attention, is full of economic, or financial, bubbles.  Some of note from the last few hundred years:
   1637.  Tulip Mania.  Tulip varieties became first objects of beauty, and then objects of speculation.  They became more valuable than homes and businesses.  One investor was ruined when the cook put his most valuable tulip in the soup. The Dutch economy collapsed in ruin when the bubble burst.
   1720.  The British South Sea Bubble.  Stock in the South Sea trading company became a speculative bubble, which bought ruin to investors and the British economy when it popped.
   1840's.  Railway Mania.  Railways were a hot new investment but their stocks became over valued, and the market colapsed.
   1926.  The Florida Real Estate Bubble.  I can remember my parents talking about people losing their savings as overvalued swampland became once again what it really was; worthless.  Florida has been a boom and bust environment for over a century.
   1929.  Everything became a bubble in the Roaring Twenties, which ended in the Great Depression, or as some have called it, The Great Hangover.
   More recently there has been the Dot Com Bubble, the Banking Bubble and the US Housing Bubble (we're still recovering from that one) and many others around the world that we have chosen to ignore.
   Recognizing a  bubble isn't that difficult if we open our eyes and use the brains God gave us.  If something becomes so expensive no one can afford it and everyone still needs or wants it, it's a bubble.  If an investment gives returns that are too good to be true, it's a bubble.  If its all everyone is talking about at dinner parties, it's a bubble.  I could go on but it is not really necessary.  You know a bubble when you see one.
  So how do I know that US Health Care is a bubble?  Because I read my doctor and hospital and insurance bills and I know that a bandaid should not cost $15 or an aspirin $5. Because my insurance premiums and medical costs go up 20% or more a year while my income goes in the opposite direction.  Because a ten minute doctor visit may cost $150 to $250.  Because people without insurance are charged double, triple or more than someone with health insurance. Because I can hardly afford health care, and I am not all that unhealthy.  Because I see huge new hospitals being built practically one on top of the other in cities and along the freeways, and I know there can't be that many sick people to fill them and that they are speculative ventures to raise money and produce cash flow for hospital corporations and insurance companies.  Because hospital administrators and insurance executives become millionaires  in what used to be a non-profit, charitable industry.  That's how I know that US health care is a bubble.
   How do I know that Obamacare is the sharp instrument that is going to burst the bubble?  Because when people find out they aren't covered by the policies they thought they had bought, they aren't going to pay any insurance premiums.  Because when people find out that they can't afford the premiums for the policies the government has forced them to buy they aren't going to pay.  Because people will pay a fine rather than be scammed. And if the insurance companies aren't being paid they are going to limit coverage or go out of business and the doctors and hospitals won't be paid and they will go out of business or accept only cash for their services, and if people can't afford those services at the current inflated prices the costs will drop back to the level they were before the bubble began, or most likely, far less (I can remember when country doctors were often paid in chickens or apples because their patients had no cash).  That's how I know that Obamacare will burst the Health Care bubble.
   But of course the government won't want to let the health care industry go broke, so it will try to bail it out. How? by printing more dollars, that are depreciated before the ink is even dry, and throwing them at the health care industry.
   Welcome, America and the world,  to the grandaddy of all economic bubbles;  the Dollar Bubble.