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One of the great long-term economic fears I have about the American economy is inflation.  The Federal Reserve has done a fantastic job over the past 30 years at taming inflation, but the relevance of the Federal Reserve will decline over time.  So many dollars are floating around outside of the United States that it is inevitable that a country will be able to crash the dollar despite any action by the Federal Reserve.

China has foreign currency reserves in excess of US$1 trillion.  A huge trunk of that amount is in dollars.  They have so much money that the country is determined to diversify their investments.  The latest diversification was an investment in the Blackstone Group, leverage buyout firm.  But China isn’t necessarily the country that will tank the dollar.  There are other factors.  As the dollar weakens against the Euro and other currencies, commodity-based economies who normally sell their commodities for dollars, are increasingly looking at non-dollar currencies to sell their goods.  As non-dollar denominated contracts proliferate, the value of the dollar decreases.

What then, should a small-time investor do?  Invest in foreign markets, invest in real estate, and invest in U.S. companies that large chunks of their revenues coming from foreign countries.  But it’s easier said than done.  Try buying stock in LG or Samsung.  Try buying any stock in Vietnam.  Try buying Russian oil stocks.  There is a business to be had here… a brokerage that can help small investors invest internationally as easily as we invest domestically.

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It seems rather remarkable, but someone has actually heralded Houston as a model of city planning, though I should really say, “unplanning.”  the Antiplanner from Portland, Oregon, recently visited Houston and said, “I came to Houston last week prepared to like it, and in fact I loved it.“  Although I think the Antiplanner is wrong about the lack of need for planning, I think he is right that governments probably shouldn’t endorse multi-use developments with tax breaks or other economic incentives.

 But the killer detail from the post is the following passage:

The money quote came from Michael Morgan, a local developer who was partnering with Trammel Crow, which has built several mixed-use developments in Portland (not all of which have been successful), to plan a 24-acre development in Houston. But after due consideration, they scaled back and probably will not do a true mixed-use development, just some apartments next to a big-box store.

After looking at other cities, says Morgan, “we discovered the ones that were economically successful were the ones that had government help.” Amen.

The area Morgan is talking about is the old HISD complex on Weslayan and Richmond.  It was supposed to be a fantastic mixed-use development.  Now, it looks like it will be apartments and a Costco in the middle of the city.  This first picture shows a rendering of what the project was originally conceived as. 

The second picture shows the ugliness it will become.