Economy

All of this talk about a "bright future" for real estate is just a bunch of nonsense. The yield on 10-year U.S. Treasuries is starting to rise aggressively again and, because mortgage rates tend to follow such increases, mortgage rates are going up. As monthly payments go up less people will be able to afford to buy homes at current prices and this will force home prices down. As such, another great real estate crash is inevitable. Let me explain further. Words: 995 ; Charts: 1

At this point, thanks to a long-standing policy of wanton money printing, the Fed has more liabilities than ever before in its history - by an enormous margin - and this precarious balance sheet is dangerous, because if the Fed goes bust, everyone loses [- including YOU. Let me explain why that is the case]. Words: 398

Data from Barclays Research clearly shows that the strain on US consumers from student loans isn’t going to improve any time soon and that the risk to the taxpayers is on the rise.

Never before has the world faced such a serious debt crisis. Yes, in the past there have certainly been nations that have gotten into trouble with debt, but we have never had a situation where virtually all of the major powers around the globe were all drowning in debt at the same time. Right now, confidence is being shaken as debt levels skyrocket to extremely dangerous levels. Many are openly wondering how much longer this can possibly go on. [Here's my take on the situation.]

Anyone that thinks that the U.S. economy can keep going along like this is absolutely crazy. We are in the terminal phase of an unprecedented debt spiral which has allowed us to live far, far beyond our means for the last several decades. Unfortunately, all debt spirals eventually end, and they usually do so in a very disorderly manner.

Little has been done in the past six years to restructure economies and cut debt i.e. learn the lessons of 2008. Because we’ve partially recovered from that traumatic period, that’s led to complacency. All the while, the debt that caused the bust in the first place has compounded and threatens to undo the world again. Let’s hope it doesn’t come to that.

So much has been written about what various authors refer to as the economic (in alphabetical order) abyss, apocalypse, Armageddon, avalanche, catastrophe, chaos, cliff, collapse, crisis, disaster, downturn, endgame, meltdown, pain, reality, risks, situation, train wreck, tsunami, turmoil that faces the nations of the world I thought a source article of what has been said about the situation would be of interest. Have a look.

With stocks at record highs and the U.S. economy improving, the European debt crisis seems like a distant memory....[While] Europe is no longer the market’s focal point, however, that doesn’t mean the euro zone’s financial problems have gone away.

5 years into the official economic “recovery” the labor participation rate is still lower than when the recession was declared over in June 2009 by almost a percentage point. It is still over 4 percentage points lower than when the recession officially began. The Federal Reserve chart of employment as a percentage of working age adults proves the point that sometimes a picture is worth a thousand words - sometimes much more. Words: 388; Charts: 1

This summer we are nearing a possible inflection point in terms of Fed actions. The mere suggestion from the Fed that something is going to change is enough to supercharge markets, either up or down....Will markets go to 20,000 or to 5,000? That depends upon the Fed and how much they debauch the currency.......Stay tuned, this story has hardly begun.