Saturday, January 7, 2012

Beware the Scrap Metal Bubble is Leaking and Will Burst

Actually we're in a bubble inside of a bubble - more on that it a minute.

The dotcom bubble and collapse was a given. I could see early on that most of the dotcom startups were making money off of other dotcom startups. There was little money coming in from the outside. It was inevitable that it would collapse and it did.

The housing boom bust was also foreseeable. Prices kept going up and along with them the percentage of people who could afford the higher prices kept going down. It only lasted as long as it did because oversight of the mortgage industry was hindered by the Bush administration so that people could easily borrow too much. The bust will be over when people can once again have a job in America and purchase a home that they can afford. We are not there yet.

Scrap metal prices have boomed in recent years mainly because of the demand in China and India. This demand is based on them being able to use these raw materials and manufacture things to sell to us in the U.S. especially through big box stores like Walmart, Lowes, Home Depot, etc. As we get poorer and buy less of this stuff, the demand for our scrap will surely go down. The irony is that these big box stores don't pay enough to folks to be able to buy homes (so housing bust goes on) nor do they pay enough so that they can buy all the goodies from China that are made with our scrap.

The big bubble is the 20th century and in the early 21st century we've seen it begin to burst. Poverty is up, jobs are down, good jobs are really really down. Any efforts to create jobs through rebuilding our infrastructure or just create jobs in general is thwarted in congress. Our congress still believes that reducing the taxes on the rich, the "job creators" will allow them to create jobs, make more money and it will trickle down to us. Trickle down from the "job creators" has never worked, never will. You can only believe in this if you don't believe in history.

So, there you have it. I predict that the high priced scrap metal bubble is beginning to leak and will soon burst. What to do? Well, one is to get rid of your scrap sooner than later. Another is to, as much as possible, deal in things that can be reused. The artificially high scrap prices has meant that a lot of good useful stuff has been crushed, shredded and melted rather than reused. As a society we can't afford to dispose of useful things much longer.

Love to hear your thoughts on this.

Mike for Free Home Based Salvage and Recycling Information Including: Metals, Deconstruction and Used Building Materials, Gold and Precious Metals and E-Waste.

Check out: How to Make Money in the Home Based Salvage and Recycling Business

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