Blog Post Date: Oct 19, 2005

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That's unusual... President George W Bush telling Americans to Conserve. I guess he was mostly talking about using gas resources, but it's unusual to hear President Bush say that.

It's interesting that The Federal Government is spending approx $1 billion per day to keep troops in Iraq etc. I'm thinking that many Americans may disagree with a President asking them to conserve, while the government is debt spending on a nation, and in an action that is not well accepted.

I question also whether this conservative mentality is going to lead to a "recession"

As gas prices continue to rise, as well as other products and services because of Hurricane Katrina and Hurricane Rita, many people are going to have less discretionary income to spend on luxury items.

The word conservative in my opinion may be the start to some kind of recession.

Inflation: Along with higher gas prices, I believe that all of the supplies being consumed in the Gulf coast rebuild is going to cause the cost of these building materials to hit the ceiling. It's great that there is going to be a huge demand for building materials in the Gulf Coast. It's going to mean that these building materials are going to be as readily available for the rest of the country. Of course, everything is available at a price.

It's estimated that there are going to be 450,000 homes needed to be rebuilt ALL AT ONCE. That's unprecedented.

More Housing Inflation: The Hurricane Katrina and Hurricane Rita victims take up some of the vacant housing slack across the other states. Should these evacuees decide to relocate to other states, they're going to be using up a percentage of the current vacancies. This means that the house prices and rental properties will increase in those areas because the inventory of those properties will diminish. In this case the Hurricanes are increasing the property values of other cities and states.

Of course this bad economic news is not going to relate to higher income people who have more than enough discretionary income. The rise of housing and gas prices etc are not going to affect their behaviour. The affect will be mostly to middle and lower income families.

Is a recession around the corner?

By Monty Loree - Financial Maturity blog - Topic - President Bush Conserve - Recession and Inflation

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