Balloon mortgages have some tempting qualities. They come with lower interest rates and, because of this, smaller monthly payments. This can help borrowers get into a pricier home that they might not have been able to afford otherwise but balloon mortgages come with one huge risk: At the end of a set period, borrowers must pay off the remaining balance on these loans in full (the "balloon") and these balances can be quite large. So, how exactly do these mortgages work, and who do they work best for? Let's break it down.

Higher interest rates will lead to higher deficits and still higher borrowings. As such, we will have the perfect vicious circle that leads to the whole caboodle collapsing.

Increasing stock market prices are largely driven by an increasing rate of monetary inflation BUT monetary inflation growth has now been either flat or declining for the last three years, depending on what time frame one looks at. Conclusion: Earnings, and ultimately valuations, must fall as an ever-expanding rate of monetary inflation is unsustainable and as interest rates cannot forever be kept artificially low.

It is clear global real estate prices are heating up again and, due to interest rates being lower now than in the previous cycle, real estate prices in the U.S. and globally may actually surprise us with several more years of growth before they peak as global liquidity searches for the few relatively safe assets (in the least dirty shirt fashion) as a way to protect against reflation and devaluation in non-U.S. countries.

Gold is becoming more and more acceptable in the investment community and especially since interest rates have approached zero and in some countries even gone negative. Until recently no portfolio manager would have mentioned gold and even less recommended it but now the investment profession is starting to discover the liquidity trap and acknowledge the value of cash and, more specifically, gold and its place in a diversified portfolio.

You need to stay in markets despite an impending economic collapse. [Really?! Yes, really.] Normally such an expectation would be addressed by getting out of the way of the oncoming disaster and taking ones chips off the table [but,] in this situation, there is no place to hide. Low-risk assets, like bonds and near-cash, produce little to no return...and the threat of rising interest rates and inflation make them dangerous. Higher risk assets are unavoidable, given current conditions. [Let me explain further.] Words: 830

The following are my best economic “guesses” for the coming year, based on the statistical and technical data trends, for the market, interest rates, the dollar, employment and the economy.

When the Federal Reserve decided to lift interest rates, they made a colossal error. You don’t raise interest rates when a global financial crisis has already started. That is absolutely suicidal...Surely the “experts” at the Federal Reserve can see what is happening:

Who is going to pull the global economy out of its funk? No one knows, but it’s not going to be China – regardless of how many more times the central bank is going to tweak its policies and cut interest rates. That’s what China’s trade fiasco is saying.

We are in the early stages of a great debt default - the largest in U.S. history - and we know roughly the size and scope of the coming default wave because we know the history of the U.S. corporate debt market. Rising default rates, rising interest rates on corporate debt, and falling stock prices don’t need to be a crisis for you, personally, however, if you become informed and strike when the time is right. Read on!