Tag: real estate

bookmark_borderDebunking Economic Myths: Misleading Narratives and the Path to Real Progress

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by Daniel Brouse
December 17, 2024

“In America today, over 60% of our people are living paycheck to paycheck and millions of children are living in poverty.”
— Bernie Sanders, October 4, 2024

Statements like these, made by figures such as Bernie Sanders, Elizabeth Warren, and Robert Reich have likely contributed to a misleading narrative about the U.S. economy. While such claims aim to highlight economic inequality and poverty, they fail to provide a balanced perspective, misrepresenting the broader economic picture and potentially alienating voters.

Breaking Down the Facts

The assertion that “60% of people are living paycheck to paycheck” oversimplifies the economic reality for many Americans. According to recent data, 18.5% of U.S. households report having no discretionary income after paying their bills. This is far from the majority Sanders claims. Furthermore, even within this group, the median household net worth is $193,000, suggesting that many have assets, savings, or home equity providing them with financial stability beyond their monthly income.

Millions of children living in poverty is another claim that deserves scrutiny. While child poverty is a serious issue, programs such as the Child Tax Credit and Supplemental Nutrition Assistance Program (SNAP) have significantly reduced the number of children living in poverty in recent years. By not acknowledging these efforts or providing accurate statistics, such statements paint an overly dire picture that ignores meaningful progress.

Misrepresentation of Economic Realities

The tendency to frame the U.S. economy as wholly failing undermines a more nuanced discussion about its strengths and weaknesses. For example:

  • The U.S. has one of the highest household median incomes in the world.
  • Unemployment rates remain historically low.
  • Despite challenges such as inflation, consumer spending continues to drive economic growth.

These factors demonstrate that the narrative of widespread economic despair does not align with reality. While economic inequality and poverty remain issues to address, claiming that most Americans are struggling misrepresents the complexity of the situation.

The Political Consequences

Overly negative messaging about the economy may have contributed to the Democratic Party’s defeat. Instead of highlighting successes like job growth, reduced unemployment, and targeted social programs, some leaders focused on an exaggerated portrayal of economic hardship. This approach risks alienating moderate voters who feel the economy is performing reasonably well, especially compared to global counterparts facing similar inflationary pressures and post-pandemic recovery challenges.

A Path Forward

To effectively address inequality and poverty, it is crucial to focus on actionable, evidence-based solutions:

  1. Expand Economic Opportunities: Investments in education, job training, and infrastructure can create pathways to upward mobility.
  2. Strengthen Safety Nets: Improving programs like the Earned Income Tax Credit (EITC) and childcare support can directly aid low-income families without distorting the broader economic picture.
  3. Promote Financial Literacy: Educating individuals about saving, investing, and debt management can help mitigate the risks of living paycheck to paycheck.
  4. Incentivize Innovation: A robust private sector fuels job creation and technological advancements, driving economic growth for all.
  5. Taxation and Universal Healthcare: Both are unsustainable in an aging population.  Individuals and governments will need to actively explore and implement alternative solutions.

The focus should shift from divisive rhetoric to practical policies that empower Americans, addressing challenges without resorting to fear-based narratives. Misleading claims not only damage political credibility but also detract from meaningful efforts to strengthen the economy for all citizens.

Balancing the Books: How Public-Private Healthcare Models Can Sustain Economic Growth

Taxation in a Changing World: Challenges, Inefficiencies, and Paths to Sustainability

Wealth Taxes Are Illogical

Social-Ecological Systems and Climate Change

The Age of Loss and Damage

Business and the Economy

 

bookmark_borderThe Cost of Climate Change: Rising Homeowners Insurance Rates

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The average annual homeowners insurance premium for a $300,000 house varies widely by state, driven by factors like natural disaster risks, repair costs, and location-specific risks. For example, in states with frequent hurricanes, like Florida, the average premium is exceptionally high, around $10,996. In contrast, Idaho has a more affordable rate, at around $1,636, while Pennsylvania averages closer to $1,306. Other states with high premiums include Louisiana at $6,354 and Mississippi at $4,312.

These rates also reflect a significant trend of rising costs, largely due to inflation, increased construction expenses, and more frequent severe weather events. The national average is currently around $2,377, but premiums vary depending on additional factors such as home age, proximity to a fire station, and local building costs.

 

Here’s a list of average annual homeowners insurance premiums for a $300,000 house across each U.S. state:

State Average Premium ($)
Alabama $3,939
Alaska $1,116
Arizona $1,961
Arkansas $3,368
California $1,782
Colorado $4,072
Connecticut $1,764
Delaware $1,207
Florida $10,996
Georgia $2,426
Hawaii $1,150
Idaho $1,636
Illinois $2,050
Indiana $1,866
Iowa $2,120
Kansas $3,437
Kentucky $2,476
Louisiana $6,354
Maine $1,322
Maryland $1,670
Massachusetts $1,863
Michigan $1,840
Minnesota $2,332
Mississippi $4,312
Missouri $2,706
Montana $1,778
Nebraska $3,962
Nevada $1,224
New Hampshire $1,225
New Jersey $1,267
New Mexico $3,362
New York $2,257
North Carolina $2,110
North Dakota $2,519
Ohio $1,342
Oklahoma $5,444
Oregon $1,232
Pennsylvania $1,306
Rhode Island $2,036
South Carolina $3,082
South Dakota $2,562
Tennessee $2,470
Texas $2,621
Utah $1,034
Vermont $1,001
Virginia $1,091
Washington $1,055
West Virginia $1,150
Wisconsin $1,244
Wyoming $1,449

These values reflect the high variability in rates, with states like Florida and Louisiana seeing particularly high premiums due to frequent hurricanes, while states like Vermont and Utah have relatively lower rates due to fewer natural disaster risks.

 

Why are California’s rates relatively low given the high number of climate disasters?  California, Louisiana, and Florida have state subsidized property insurance which impacts the price.  California’s relatively lower average homeowners insurance rate, despite frequent wildfires and some insurers leaving the market, is due to a mix of state regulations, subsidies, and specific factors affecting the insurance market.

  1. Regulatory Controls on Rates: California’s Department of Insurance tightly regulates rate increases and approval processes. Insurers need state approval to raise premiums, which limits how much they can adjust rates based on risk factors like wildfires. This results in rates that don’t fully reflect the increasing risk of wildfires​.
  2. California FAIR Plan: For homeowners who can’t get standard insurance coverage due to wildfire risk, California offers the FAIR (Fair Access to Insurance Requirements) Plan. This high-risk insurance pool helps maintain some level of coverage in fire-prone areas, though it often comes at a higher cost and covers only basic needs. However, it provides a safety net, reducing pressure on average premiums by ensuring high-risk properties are not covered by standard policies​.
  3. Market Exit and Coverage Caps: Major insurers like State Farm and Allstate have indeed stopped issuing new policies in some high-risk areas, and other insurers are limiting coverage. However, this shift is recent, so current averages may not yet fully reflect the changes. Over time, as these limitations impact more homeowners, average premiums could increase or force more people into the FAIR Plan, which may be more expensive​.
  4. Risk Assessment and Geographic Variation: Not all areas in California are equally affected by wildfires. Coastal and urban areas have a lower risk compared to rural and mountainous regions. Since insurance premiums are partially based on location, areas with lower risk dilute the statewide average rate, making it appear relatively lower than what might be expected given the high-profile wildfire damage in certain parts​.

While California’s wildfire risk is high, average insurance rates appear relatively low due to strict regulations on private insurers and the exclusion of high-risk, state-subsidized policies from these averages.This approach may be unsustainable, and rapid changes are likely—either through significantly rising premiums or reduced access to private insurance as more companies withdraw from the state.

CONCLUSION

All of these rates are expected to rise by 25% annually for the foreseeable future, driven by factors such as increased natural disasters, inflation, and higher repair and construction costs. In addition, up to 50% of U.S. properties could face challenges in securing private homeowners insurance, particularly in high-risk areas. States most vulnerable to an insurance market collapse due to escalating premiums and insurer withdrawals include Florida, Louisiana, Mississippi, Georgia, Oklahoma, Texas, Arizona, Arkansas, Alabama, New Mexico, Nevada, Colorado, California, and Washington. As natural disasters like wildfires, hurricanes, and flooding become more frequent and severe, these states are increasingly at risk of a market breakdown, which could leave homeowners with limited or unaffordable coverage options​.

THE FUTURE
Florida’s homeowners insurance market has effectively become socialized, with taxpayers increasingly bearing the financial burden. Due to severe weather risks and skyrocketing claim costs, many private insurers have pulled out of the state or raised premiums to unaffordable levels. In response, Florida has had to expand state-run insurance programs, such as Citizens Property Insurance Corporation, which was originally meant as a last-resort insurer but is now one of the largest insurers in the state. As a result, when large-scale disasters occur, taxpayers often end up covering the costs, either through increased assessments or state funding support. Without major reform or federal intervention, Florida’s insurance market could face even greater instability, pushing more costs onto taxpayers.

Regarding climate change education, while a majority of U.S. parents and teachers support it, Florida’s restrictive standards limit teachers’ ability to address human-related climate impacts without risking conflicts with official guidelines or community pushback. Yet, the evidence of climate change is undeniable in Florida, which faces a heightened risk of severe environmental impacts. Rising sea levels threaten Florida’s extensive coastline, leading to more frequent “sunny day” flooding in areas like Miami and the Keys. Additionally, warming ocean temperatures are fueling stronger, more frequent hurricanes that intensify faster and bring heavier rainfall, as seen in recent hurricanes like Ian and Michael.

In Arkansas, the stance is mixed: the state shows minimal official support for policies addressing human-caused climate change and does not prioritize it as an urgent issue. Discussions around emissions reduction or clean energy transition are limited compared to other states. However, Arkansas is increasingly affected by climate change, evident in more frequent intense rainfall, flooding, and rising temperatures, which are altering agricultural cycles and stressing water resources essential to the state’s economy.

The Human Induced Climate Change Experiment

bookmark_borderEconomic Outlook 2025 – 2035

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During the first Trump administration, tax cuts initially accelerated economic growth but led to increased federal deficit spending, which soon drove up borrowing costs and ultimately slowed the economy. While many attributed the initial supply chain issues and inflationary pressures primarily to the COVID-19 pandemic, the first inflationary event was actually sparked by climate change—the 2019 drought in Taiwan. Taiwan, a global center for microchip production, saw its chip manufacturing severely impacted by this drought, which reduced the water supply crucial for chip fabrication and forced some facilities to shut down temporarily. This disruption marked the beginning of supply chain issues that rippled through multiple sectors, creating shortages and fueling inflation.

The climate-induced inflationary cycle was further amplified by multi-billion dollar climate-related disasters, from severe hurricanes and wildfires to extended droughts. These events impacted insurance costs significantly, leading to spikes in homeowners’ and auto insurance premiums. President Trump’s proposed “Drill, baby, drill” approach, which prioritizes expanding fossil fuel extraction, is likely to exacerbate these issues by accelerating climate change effects, driving further economic instability, and intensifying the inflationary cycle tied to environmental damage.

The impact on health and wellness in the United States is already evident in a significant decline in life expectancy and quality of life. After remaining generally flat between 2014 and 2019, U.S. life expectancy saw a sharp decline, dropping from 78.8 years in 2019 to 77 years in 2020, the largest single-year decline since World War II. This trend continued into 2021, with life expectancy falling further to about 76.1 years. These factors contribute to a worrying trend of early mortality and diminished quality of life, which poses long-term implications for the economy and the healthcare system.

In addition to these factors, climate change is likely to accelerate the decline in life expectancy and increase health risks. Pollution, already the leading contributor to death globally, is expected to worsen with climate change, increasing respiratory issues, cardiovascular diseases, and other pollution-related health conditions. Climate change impacts, such as severe weather events, also disrupt healthcare supplies and logistics, as seen during Hurricane Helene when IV solution shortages spiked. Rising temperatures are anticipated to drive up the rate and transmission of zoonotic diseases, further straining healthcare resources and costs.

While these factors generally point toward increased healthcare demand and costs, the impact on health insurance rates remains complex. On one hand, higher medical needs and treatment costs suggest rising insurance premiums. However, as life expectancy shortens, some individuals may not incur long-term healthcare costs, potentially offsetting some insurance expenses. In any scenario, climate change is a critical factor affecting both personal and public health outcomes.

The proposed economic policies in the next Trump administration would likely include substantial corporate tax cuts along with significant taxes and tariffs, which are expected to primarily impact consumer costs. This approach could lead to a dramatic increase in the federal deficit due to reduced corporate tax revenue and heightened consumer prices. With increased deficit spending, the federal government will likely need to borrow heavily, which could spur inflation and push interest rates higher as the government competes with the private sector for financing.

As inflation and interest rates rise, this could create a “debt spiral” in which the government must borrow even more just to cover mounting interest payments on the national debt. According to projections, if these policies are enacted, federal interest payments could exceed $3 trillion over the next decade, with an estimated $1.7 trillion in annual interest payments by 2034. This feedback loop could lead to further economic strain, as inflation erodes consumer purchasing power and the cost of borrowing increases for businesses and individuals alike. Such policies, if enacted, could thus deepen fiscal instability and exacerbate the ongoing climate-driven inflation pressures impacting essential goods and services.

RECOMMENDATIONS FOR ASSETS
Investors may see an initial stock market surge followed by a period of prolonged decline as the economy faces mounting fiscal and environmental pressures. With this volatility in mind, it may be prudent to prioritize secure, inflation-protected investments. Treasury I-Bonds are a sound choice, offering inflation protection and low risk; however, they are capped at a maximum investment of $10,000 per individual per year. Additionally, 4-week Treasury bills could serve as an effective, low-risk short-term option due to their liquidity and lower exposure to interest rate volatility.

Real estate should be approached cautiously, with a focus on how climate change is affecting property values and insurance availability. Areas with high vulnerability to climate-driven disasters, such as coastal properties and locations in Florida, Louisiana, Mississippi, Georgia, Oklahoma, Texas, Arizona, Arkansas, Alabama, New Mexico, Nevada, Colorado, California, and Washington, may face increased insurance premiums, frequent natural disasters, and dwindling property values. Liquidating properties in these areas may help mitigate financial risk, especially as the insurance industry reassesses coverage availability in high-risk zones. Insurance costs — particularly in areas prone to climate-related disasters — are expected to rise annually, impacting crop, property, real estate and transportation insurance premiums indefinitely.

RECOMMENDATIONS FOR LIABILITIES
Borrowing costs are expected to rise considerably, making it critical to secure fixed-rate loans whenever possible. Investors and homeowners should lock in fixed-rate mortgages sooner rather than later to hedge against future interest rate hikes. Variable-rate financing, including adjustable-rate mortgages (ARMs) and other forms of variable loans, could become unsustainable as rates continue to increase. By opting for fixed-rate options, borrowers can better protect themselves from the uncertainty of future rate fluctuations and potential inflationary pressures on their monthly payments.

Trumpenomics: The Decline of the US

The Human Induced Climate Change Experiment

Climate Change and Insurance: Costs, Availability, and Sustainability

Balancing the Books: How Public-Private Healthcare Models Can Sustain Economic Growth

Taxation in a Changing World: Challenges, Inefficiencies, and Paths to Sustainability

Wealth Taxes Are Illogical

The Cost of Climate Change: Rising Homeowners Insurance Rates

bookmark_borderThe Trump Trade

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Why have interest rates been going up after the Fed cut rates? Because investors concur that Trump’s economic polices will be harmful to the economy, drive up inflation, and explode the national debt. Investors have been making “Trump Trades” based on this concern. Unfortunately, a large number of investors — approximately 75% — currently expect that Donald Trump will win the election.

One reason many believe Trump’s economic policies, particularly his tariffs, would be detrimental to the economy is their potential to drive up inflation. Tariffs on imported goods increase costs for businesses and consumers, as companies pass on higher import taxes in the form of price hikes. This can stoke inflation, especially if the targeted imports include essential goods or raw materials (like steel and aluminum). Tariffs also raise uncertainty, disrupt global supply chains, and result in retaliatory tariffs from other countries, further driving up costs for U.S. exports.

Another major concern is the national debt. Analysis of Trump’s economic plan suggests that his policies could increase the national debt by an additional $10-20 trillion over the next decade. This is largely due to a combination of aggressive tax cuts, which reduce federal revenue, and increased government spending, particularly on military and infrastructure projects. While tax cuts can stimulate short-term economic growth, they often fail to generate enough revenue to offset the loss, resulting in long-term debt accumulation.
Moreover, Trump’s tariffs and trade wars further burden the economy by reducing international trade, increasing costs for businesses, and weakening the competitiveness of U.S. industries abroad. These trade disruptions can also negatively impact GDP growth, limiting the government’s ability to manage the national debt. With interest payments on the debt projected to rise significantly in the coming years. In fiscal year 2024, the U.S. government is projected to pay approximately $892 billion in interest on the national debt. This figure is expected to rise significantly in the coming years, reaching $1 trillion in 2025 and $1.7 trillion by 2034. Over the next decade, total net interest payments are estimated to amount to $12.9 trillion. These figures do not account for potential changes in debt repayments that could result from a Trump presidency​

The economic strain from Trump’s policies could push the U.S. into an unsustainable fiscal situation.

For historical reference see “The Great Depression.” Tariffs, especially the Smoot-Hawley Tariff of 1930, played a significant role in deepening the Great Depression.

Agricultural Sector Collapse: U.S. farmers were particularly vulnerable to tariffs. They had benefited from international markets, especially after World War I, when European agriculture had been disrupted. The Smoot-Hawley Tariff and the subsequent retaliatory tariffs drastically reduced demand for American agricultural products abroad, leading to falling prices and farm bankruptcies. This deepened rural poverty and unemployment.

Investor and Consumer Confidence: The tariff policy also hurt investor and consumer confidence. Businesses feared the impacts of the trade war, leading them to cut back on production and investment. Consumers, already cautious due to the economic downturn, faced rising prices on imported goods. This further depressed consumption and business activity, worsening the economic contraction.

Business & Economics

bookmark_borderReal Estate Market Update

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By Daniel Brouse
August 5, 2024

Short sellers in the real estate market are currently anticipating a significant downturn, driven by a combination of factors. The recent trend of private investment groups purchasing large quantities of real estate has led to concerns about a potential future liquidation of these assets. As these investment groups may eventually seek to offload properties, this could flood the market, potentially driving down prices and creating an oversupply.

Additionally, the looming impact of climate change on the housing market cannot be overlooked. There is increasing concern that within the next decade, around 25% of the U.S. housing market could become uninsurable due to the heightened risk of natural disasters such as floods, hurricanes, and wildfires. Properties in vulnerable areas are likely to face skyrocketing insurance premiums or become entirely uninsurable, making them less attractive to buyers and investors alike. This scenario is expected to create a more challenging environment for real estate investments, as properties in these high-risk areas may experience significant depreciation in value.

As a result, short sellers are betting on a decline in real estate prices, anticipating that these combined pressures will lead to a market correction. The long-term outlook for real estate investments, particularly in climate-sensitive regions, is fraught with uncertainty, prompting investors to reconsider their strategies. This situation underscores the importance of considering both market dynamics and environmental factors in real estate decision-making.

The Human Induced Climate Change Experiment

Business and Economics

bookmark_borderThe Federal Reserve and the Chevron Decision

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by Daniel Brouse
July 10, 2024

The Federal Reserve chairman was questioned in Congress today about the potential impacts of the ‘Chevron Decision’ on the Fed. Although he mentioned that it was too early to determine the full effects, he acknowledged that numerous frivolous lawsuits could become a significant hindrance. This uncertainty clearly poses challenges for the future stability of our economy. It was not a reassuring day for economic prospects.

The Chevron Decision refers to the landmark Supreme Court case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984). This decision established the principle of judicial deference to administrative agencies’ interpretations of ambiguous statutes that they administer. The ruling essentially meant that courts should defer to agencies’ expertise unless their interpretations are unreasonable.

However, recent shifts in judicial philosophy and subsequent rulings, often termed “Chevron deference rollback,” seek to limit this deference. This change could significantly impact how agencies, including the Federal Reserve, operate.

Here’s how the erosion of Chevron deference could result in lawsuits every time the Federal Reserve makes a decision:

1. Increased Legal Challenges

Without Chevron deference, every decision or rule made by the Federal Reserve that involves interpreting ambiguous statutes could be more easily challenged in court. Previously, courts would defer to the Fed’s expertise, but now, they might feel more empowered to overrule the Fed’s interpretations. This invites more lawsuits from parties who disagree with the Fed’s decisions.

2. Reduced Predictability and Stability

Chevron deference provided a level of predictability and stability, as agencies knew their interpretations would likely be upheld if reasonable. With this predictability diminished, every decision becomes a potential legal battleground. This can disrupt the consistency and effectiveness of the Fed’s policies, as they could be constantly tied up in litigation.

3. Resource Strain

The Federal Reserve would likely face a significant increase in legal challenges, requiring more resources to defend its decisions in court. This could divert time, money, and effort away from its primary functions of managing monetary policy, regulating banks, and ensuring financial stability.

4. Policy Hesitation

Knowing that decisions could be frequently overturned, the Fed might become more hesitant or conservative in its policy-making. This could stifle innovation and responsiveness in addressing economic issues, as the fear of legal repercussions might outweigh the need for proactive measures.

Example Scenario

Imagine the Federal Reserve decides to implement a new regulation on bank capital requirements based on its interpretation of an ambiguous provision in the Dodd-Frank Act. Without Chevron deference, banks could challenge this interpretation in court, arguing that the Fed overstepped its authority. If the court agrees, the regulation could be struck down, leading to regulatory uncertainty and potentially undermining financial stability.

Conclusion

The potential rollback of Chevron deference could expose the Federal Reserve to frequent lawsuits over its interpretive decisions, hampering its ability to effectively manage the economy. This shift could lead to a more contentious and litigious regulatory environment, challenging the Fed’s authority and efficiency.

Chevron Deference Rollback and the Environment

In June 2024, the Supreme Court significantly expanded its authority and severely curtailed the Environmental Protection Agency’s (EPA) ability to enforce environmental protection laws. This ruling represents a dramatic shift in the balance of power, undermining decades of regulatory progress aimed at mitigating environmental damage and climate change. The court’s decision essentially nullifies the EPA’s mandate to regulate emissions and enforce compliance with existing environmental standards.

This judicial overreach is viewed by many as an act of arrogance and ignorance, resulting in a scenario where “worst-case” predictions for climate change have become the “best-case” expectations. The ramifications of this decision are dire, prompting a revision of climate models to reflect a much grimmer outlook. The new projections indicate a potential maximum global temperature increase of 9°C within this century, a stark rise from the previously estimated 4°C over the next millennium.

Such an unprecedented increase in global temperatures would push Earth toward a wet-bulb temperature threshold that is incompatible with human life. Wet-bulb temperature, which combines heat and humidity, represents a critical limit beyond which the human body can no longer effectively cool itself through perspiration, leading to potentially fatal heat stress.

The Human Induced Climate Change Experiment

 

bookmark_borderLooming Deadlines for Coastal Resilience: Rising Seas, Disruptive Tides, and Risks

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Looming Deadlines for Coastal Resilience: Rising Seas, Disruptive Tides, and Risks to Coastal Infrastructure

The report “Looming Deadlines for Coastal Resilience: Rising Seas, Disruptive Tides, and Risks to Coastal Infrastructure” highlights the critical challenges and timelines faced by coastal communities in addressing the impacts of climate change. Key points include:

  1. Rising Sea Levels: Coastal regions are increasingly vulnerable to higher sea levels, which expand floodplains and deepen floodwaters. This intensifies the frequency and severity of coastal flood events.
  2. Infrastructure at Risk: By 2080, major increases in the number of residents and buildings exposed to extreme coastal flooding are projected. For instance, the number of homes exposed to major flooding is expected to rise from 360,000 to 943,000, and annual flood damages could surge from $0.4 billion to $5.1 billion.
  3. Critical Infrastructure: The number of miles of roadways prone to chronic coastal flooding could grow from 500 to nearly 2,800 miles, drastically affecting transportation and emergency response capabilities.
  4. Environmental Impact: Significant loss of tidal wetlands and dunes is anticipated, with nearly 89% of existing tidal wetlands and 38% of dunes expected to be permanently inundated by 2080.
  5. Resilience Strategies: The report emphasizes the need for comprehensive and adaptive strategies to manage and mitigate these risks, including improved coastal planning, investment in resilient infrastructure, and community engagement.
  6. Financial and Policy Support: To support resilience efforts, mechanisms like the Community Flood Preparedness Fund (CFPF) have been established to provide funding and resources for projects aimed at enhancing coastal resilience, particularly prioritizing low-income communities.

The report underscores the urgent need for action and substantial investment to protect coastal regions from the accelerating impacts of climate change.

For more detailed information, you can access the full report here​ (VA Dept of Conservation)​.

 

Resources

Flood Insurance Brouse and Mukherjee (1995-present)

Insurance Cost and Availability Brouse (2024)

Create a Climate-Resilient Environment in and Around Your Home Brouse (2024)

Managed Retreat: Relocating Due to Climate Change Extreme Weather Events Brouse (2023)

Stormwater Runoff Management for Your House Brouse (2024)

Atmospheric Rivers Mukherjee and Brouse (2022-2023)

Violent Rain and the Substrate Brouse and Laden (2024)

Real Estate Underwater: A Florida Climate Change Case Study Daniel Brouse (2023)

Climate Change Impacts on Flood Risks and Real Estate Values Sidd Mukherjee and Daniel Brouse (2023)

Real Estate and Climate Change: Stranded on an Island Daniel Brouse (2023)

Climate Change: What Can I Do?

Human Induced Climate Change

bookmark_borderInvestments / Savings / Asset Allocation Update

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Investment Recommendation: I Bonds and T-Bills

One of the best investments is Treasury Direct I Bonds. I Bonds’ interest rates are determined by the rate of inflation.

I Bonds can be purchased directly from the Treasury Department without a middle man, brokerage, or bank. There is no risk of losing your principle investment. They are redeemable after 12 months with three months interest penalty. No penalty after 5 years. The maturity is 30 years. Tax reporting of interest can be deferred until redemption or final maturity. If you use the money for qualified higher education expenses, you may not have to pay tax on the earnings.

The bulk of 2023 new investments was in 4-week Treasury Bills. In 2024, the recommendation for younger investors shifted to a 10% holding in 2-year Treasury Notes. Those in or close to retirement age are better suited to remain fully invested in 4-week Treasury Bills.

Savings / Asset Allocation (< 50 years old)
66% Real Estate *
20% Stocks
10% Treasury Bills
2% Treasury I Bonds
1% Precious Metals / Crypto

Savings / Asset Allocation (> 50 years old)
66% Real Estate *
20% Treasury Bills
10% Stocks
2% Treasury I Bonds
1% Precious Metals / Crypto

* Why All Real Estate is at Risk

 

bookmark_borderCostly Disasters: Hurricanes

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By Daniel Brouse

In the United States, hurricanes stand out as the most financially burdensome type of climate-related disaster. While the number of disasters related to extreme weather events such as rain, hail, and wind, resulting in over a billion dollars in damage may be higher, the sheer magnitude of damage caused by a single hurricane surpasses them. For example, in 2023, there were 17 extreme weather events, each causing over a billion dollars in damage, but no hurricanes occurred. However, Hurricane Ida alone incurred an estimated $75 billion in damages, making it the costliest disaster of 2021.

In 2023, the world experienced an El Niño phase, which typically reduces hurricane activity. However, the climate pattern shifted towards La Niña in 2024. La Niña patterns often amplify the Atlantic hurricane season, particularly concerning when paired with months-long streaks of record warmth across the Atlantic Ocean.

Unfortunately, even scientists are failing to see (let alone forecast) the rapid acceleration in climate change. Due to their complexity, the impacts of the Domino Effect are being underestimated. Tipping points are Critical Milestones that directly impact the rate of acceleration in climate change by multiplying the number and intensity of feedback loops. The Domino Effect is also known as “tipping cascades” in climate science. Cascading impacts in relation to tipping points include cascading impacts across biogeophysical and social systems. Until recently, scientist have been drastically underestimating the social-ecological systems. The University of Exeter reports, “There is a notable lack of topic clusters dedicated to how humans will be impacted by climate-related tipping cascades.”

Previous climate models have inadequately incorporated “social-ecological systems” as human involvement was not a significant factor in past climate changes. Unfortunately, the United States ranks among the least prepared countries globally, with the highest percentage of climate deniers. The Republican party dismisses it as a manufactured crisis and plans to increase fossil fuel production, exacerbating the situation. Political extremists asserting that the climate crisis is manufactured employ an ironic term, considering that human manufacturing activities are the primary driver of climate change. Both political parties have concurred to allocate unlimited emergency funding for climate disasters instead of proactively preventing them. Last year, the US witnessed a record number of over a billion-dollar climate disasters, totaling 28 separate weather and climate-related events. It is due to this arrogance and ignorance that “worst-case scenarios” are now “best-case scenarios” for the acceleration of climate change. These factors have altered our climate model, shifting the projected maximum temperature rise from 4 degrees Celsius over the next millennium to a probable increase of 9 degrees Celsius this century.

* Our climate model employs chaos theory to comprehensively consider human impacts and projects a potential global average temperature increase of 9 degrees Celsius above pre-industrial levels.

How is All Real Estate at Risk From Climate Change?

The Human Induced Climate Change Experiment

bookmark_borderClimate Change, Inflation, and You

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Currently, a major contributor to inflation is the surge in homeowners’ insurance costs, propelled by the unprecedented number of climate disasters in 2023. California, Louisiana, and Florida are now dependent on government assistance to manage the financial burden of residential property insurance.

Flood insurance will become expensive and difficult to obtain.

NOAA: A historic year of U.S. billion-dollar weather and climate disasters

In 2023, the U.S. experienced 28 separate weather and climate disasters costing at least 1 billion dollars. That number puts 2023 into first place for the highest number of billion-dollar disasters in a calendar year and included:

  • 1 winter storm/cold wave event (across the northeast U.S. in early-February).
  • 1 wildfire event (firestorm destroying town of Lahaina on Maui Island of Hawaii).
  • 1 drought and heat wave event (focused across the central and southern U.S.).
  • 4 flooding events (in California, Florida, and across the eastern and northeastern U.S.).
  • 2 tornado outbreaks (across the central and eastern U.S.).
  • 2 tropical cyclones (Idalia in Florida and Typhoon Mawar in Guam).
  • 17 severe weather/hail events (across many parts of the country).

2023 was also deadly, causing at least 492 direct or indirect fatalities — the 8th most disaster-related fatalities for the contiguous U.S. since 1980.

* Our climate model employs chaos theory to comprehensively consider human impacts and projects a potential global average temperature increase of 9 degrees Celsius above pre-industrial levels.

What Can I Do?
There are numerous actions you can take to contribute to saving the planet. Each person bears the responsibility to minimize pollution, discontinue the use of fossil fuels, reduce consumption, and foster a culture of love and care. Be a butterfly and affect the world. The Butterfly Effect illustrates that a small change in one area can lead to significant alterations in conditions anywhere on the globe. Hence, the frequently heard statement that a butterfly in China can cause a hurricane in the Atlantic.

Here is a list of additional actions you can take.

How is All Real Estate at Risk From Climate Change?