A Big Bubble Building!

Brand new cars awaiting buyers

When car manufacturers roll new cars off the assembly line the cars are placed in large lots awaiting orders and shipment to dealers. That is perfectly normal. However, it is  May, 2014, and more and more parking lots like the one above are appearing in far too many places, full of unsold stock. This is not are pretty sight and it feels uncomfortably like another bubble that is building towards bursting.

At what point do manufacturers say, enough already!

Without quoting the statistics, it's very easy to see that manufacturing of cars and trucks and busses is very big business. In the United States the combined group of employees who provide seperate parts and who turn out the final product is so huge, that whenever the order goes out to shut down the assembly line the impact is negatively felt throughout every corner of the American economy. This is an industry that is too huge and too important to fail.

However, it is indeed failing. The economic crash of 2008  that reverberated around the world is still with us. The United States, through the help of the Federal Reserve has made a strong comeback. Or, has it? Housing starts are indeed up, and the great middle class are back to spending the country back to good health. But, there are all these unsold cars, and the inventory keeps expanding everyday.

I can see this with my own eyes,  right here in Valencia, Spain. I would like to think that there is a large turnover  in the parking zones for new vehicles, rather than the very same ones. The numbers seem to be getting larger, not that I am actually counting them over at the Cheste grounds, but I don't have a good feeling about this.

The problem is that people like myself, retired and afraid for my pension cannot just go out and buy a new car every year, or for that matter, at all. I am being served by my  faithful 1995 Volvo. I frankly love this car, but a brand new Volvo would be nice too. Perhaps I could donate my old faithful to a new immigrant who is trying to get a step up. There are also several other model cars that I fancy. It would be nice to have a Jeep Patriot,  the new Jaguar to stand side by side with my classic Sovereign; and of course, a Mercedes S Class.

I would love to make that my contribution to the motor industry, but were I to have so many cars we would need a big new house to stable them. (We haven't gone through my wife's dream list as yet, or my son's.) I'm sure this kind of contribution to the building industry would be appreciated, but the trouble is that we have built so many houses, I fear we don't need to build another for the next 20 years.

As we say here in Spain, falta dinero! I know what I could do with the money, now all I need is the money. I am patiently waiting for my Big win to happen on the lottery. When that happens there are a lot of people who should be sitting down.

Copyright (c) 2014   Eugene Carmichael

P.S. Today is Day 79 and flight MH370 is still missing. Is anyone looking for it in NorthWestern Australia?