Sunday, August 07, 2016

Car Crash

Get ready for it:
The economic backwash of too-expensive new cars — "incentivized" by easy credit and excessive but spread out, to make it seem affordable, debt — and the reappearance in the marketplace of affordable alternatives (good used cars) is causing sales of new cars to wilt, probably precipitously, as invariably happens in a Boom Bust cycle.

The car industry will squeal for help from Uncle — just like back in the early 2000s. And Uncle will be happy to oblige, as he always is.

But Uncle's "help" always comes at a cost.

The last time he "helped," good used cars became artificially scarce and unnaturally expensive. Expect something similar to happen again, in order to "stimulate" new cars sales and re-set the cycle.

The public will be swooned by a PR campaign describing anything not new as "dirty" and "unsafe," lacking all the latest equipment mandated by Uncle. New "incentives" will be put on the table to get people out of them and into a new car (and a new loan). The government may even issue fatwas formally outlawing these — ahem — "dirty" and "unsafe" cars. Especially if Hillary wins. Does anyone doubt she and hers are capable of such a thing? If so, I recommend pulling away from the crack pipe for 24 hours and reconsidering the question.

That plus the general conditioning of the public to be obsessed with electronics, with gadgets, the automotive equivalent of Huxley's centrifugal bumble puppy and electromagnetic golf, will assure a strong — but hugely artificial — demand for new cars.

And the merry-go-'round will continue.
"Affordability" under the government always comes with a hidden price tag...

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