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Here in NJ the problem is a bit worse because we have the highest property taxes in the nation. Plus the NJ government is $50 plus BILLION dollars in DEBT, with underfunded pensions and paying extraordinarily high $$$ in interest monthly on loans - do you see where I'm going with this?
If things do break apart and we go into an economic meltdown like in 1929 then expect things to go really bad. We are not the same country we were in the 1930s.
Just a little history. The United States has been riding a wave of prosperity since World War II that allowed the working classs to live a middle class lifestyle, buy cars and TVs and buy homes in the suburbs. I think that wave maybe over. We are now living on borrowed time and borrowed money from China.
Look at Chine. It is industrializing at an amzing pace. Yes, it is polluted, but their cities are growing and they are optimistic about the future. They should be since their quality of life is improving. Is your quality of life improving?
The government will never let the wealthy lose money because the government is controlled by the wealthy. About 2% of Americans control about 50% of the wealth today. So unless the economy goes into another real depression there is no way the Federal Reserve is going to ignore the interests of the controlling class. Click below to watch Jim Cramer goes nuts.
My prediction is that the Federal Reserve will continue to lower interest rates in order to entice more borrowing and thus encourage spending. The problem is how do they get people to borrow more when everyone is already in debt. I mean, so many Americans have crappy low paying jobs which will never allow them to repay their debts.
I agree they'll do this but this will only delay the inevitable. The sh_t has to hit the proverbial fan WITHOUT a government bailout as well as banks only giving out only conventional mortgages with very stringent credit requirements.
Then the market will adjust accordingly.
The people made this mess themselves and another adjustment in peoples mentalities of having to live within ones means and NOT trying to keep up with the Jones', in other words more than they can either afford or need.
It even goes beyond housing - alot of "adjustments" are needed and really way overdue.
All I know is that in this country we've lived well in much smaller square footage in the past with no problems. There's another subject which I won't speak of here which I think has been the catalyst of why housing went much higher then what it once was starting in the 1970's.
What? now I'm curious. What other subject won't you speak of?
I won't discuss it as it'll open up another can of worms and I maynot be liked all that much by some and is off subject to this forum. All I'll hint is that when the household income started going from one person (and was affordable on one easily) to the now two it all went downhill.
The government will never let the wealthy lose money because the government is controlled by the wealthy. About 2% of Americans control about 50% of the wealth today. So unless the economy goes into another real depression there is no way the Federal Reserve is going to ignore the interests of the controlling class. Click below to watch Jim Cramer goes nuts.
My prediction is that the Federal Reserve will continue to lower interest rates in order to entice more borrowing and thus encourage spending. The problem is how do they get people to borrow more when everyone is already in debt. I mean, so many Americans have crappy low paying jobs which will never allow them to repay their debts.
I saw that video; that's another example of wallstreet crying out for help.
The problem is that the fed can do all they want, but they can't make lenders want to lend money. The dollar is falling and foreigners are losing interest in the dollar; when they dump their dollars, it won't matter what the Fed does with short term rates, mortgage rates will skyrocket! We will have hyper-inflation and the fed will have to really ratchet up the rates!
Bernanke wants to cut the rates; but he also knows that the dollar is flurting with disaster. China has already threatened to dump their dollars! Cutting interest rates will be equivalent to throwing gasoline on a fire; it will make the whole recession/depression even worse.
There is no way out of this; we are overdue for a recession. Greenspan screwed up; he shouldn't have brought the rates down that low; we should have just took the recession then, it wouldn't have been as bad as it is going to be. Greenspan has only been prolonging the recession; I guess he figured he could just prevent it long enough until he retired thinking he wouldn't get the blame for it.
I won't discuss it as it'll open up another can of worms and I maynot be liked all that much by some and is off subject to this forum. All I'll hint is that when the household income started going from one person (and was affordable on one easily) to the now two it all went downhill.
I respectfully won't comment further - no offense
No, please; discuss it! This isn't one of those lame forums that people can't discuss things on, is it? It's not about telling people what they want to hear; it's about the truth and if anyone can't handle the truth, they might as well turn their computer off and stick their head back in the sand because it's pretty much all over the internet now; it still has yet to be on local news and they are the last to inform the public. These problems are real and they aren't going to just disappear.
Greenspan screwed up; he shouldn't have brought the rates down that low; we should have just took the recession then, it wouldn't have been as bad as it is going to be
Do you mean after 911? When 911 happened the Technology bubble had already burst and the economy was slowing down. Do you think the rate cuts then were meant to lower our anxiety levels. Remember Bush saying Americans should just go out and shop. We all did. We refinanced and borrowed our way into happiness buying homes, cars, vacations, computers, etc..was it all just a mirage?
I guess njguy means that when women began to work, the economy suffered because two incomes could buy a better house and thus the housing prices went up because they could go up ????? But, don't forget that pre-1974 or so there were very few single mom families. Many mothers have to work. There is no other choice.
Do you mean after 911? When 911 happened the Technology bubble had already burst and the economy was slowing down. Do you think the rate cuts then were meant to lower our anxiety levels. Remember Bush saying Americans should just go out and shop. We all did. We refinanced and borrowed our way into happiness buying homes, cars, vacations, computers, etc..was it all just a mirage?
Now the party is over. Is this 1929?
Yes. It was all orchestrated by Greenspan after 911, when he took the rates to 1%, held them there too long, convinced the lenders to create more exotic loans and the public to use ARM's; then he immediately increased the rates. This is equivalent to having someone hold a slingshot; pulling the sling back as far as you can; putting a nice big rock in it and then letting go. That bugs bunny cartoon with the crusher comes to mind.
It was all that easy credit that allowed all this spending; people thought they were getting rich but it was all just a scam! Wallstreet made obscene amounts of money; anyone who sold a house during the bubble or at the peak and held onto the money instead of buying another house will do well; or if they downsized or relocated to a cheaper area. Anyone who bought their first house or if they traded up; they will be hurt pretty badly.
None of this should have ever happened; Greenspan sabotaged the economy. Now we're all going to have to pay big time through inflation; yet many others will be devastated.
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