Well, that is true. But, they have the option of selling as the day approaches (head on a swivel, please) and moving to a home they can afford. But, this doesn’t indicate a complete collapse or the kind of destruction that you described. I recall in the NW when the shut down in the forests caused entire mill towns to close (yes, whole towns). The media never covered this and the towns eventually went on. We adapt, we recover, we work it out. That is what we should be saying to each other. Let’s talk to our young friends about being productive, standing up for good hard work, sharing with those in need around, being careful. Let’s be a part of the real change, not the fake Obama-change where the Gov. will finally be pure. We all know that can’t possibly occur. But, don’t pick up the media’s love for disaster. You are playing into their hands. And, if there is a disaster coming, here it is...don’t invest in Newspapers! You will soon seen the reporters standing by the offramps with a sign, “Will write any story you want for food.”
I remember the Alaska depression after the pipeline was finished. People adapted, recovered, and worked it out but many lost their ass. The numbers seem small today, but my sister and her husband bought a home for $80,000 that plunged to $20,000. Too honest to walk away, he paid the $60,000 loss out of his own pocket. The good news is, when they bough again, they later got a much bigger and nicer home for $50,000. Yes, they worked it out with much blood, sweat and tears. Lesser folks would have quit.
I remember the Texas depression after oil deflated dramatically in the mid-=980s. They worked it out but I have friends whose lives were irreparably changed in that depression.
I know you don’t mean to sound cavalier, but you do. Maybe you mean to sound optimistic, but there is going to be real severe pain among all those who were dumb/naive/unknowledgeable enough to think they were buying a home and are losing their ass this time around.
The only big difference today is, while Alaskans and Texans lost their 20% down payments, many this time around had 0% down and no skin in the game. They walk away clean or with HELOC money in their cookie jar. The 20% downs being lost this time are being extorted from you and me. We are the ones feeling the pain this time around.
Correctly anticipating the future is important for success. I have put my money where my mouth is, paying off all debt, selling my California real estate, lowering my standard of living, liquidating my assets, selling short the market, and increasing my gold investment.
If I am right, I will do well. If I am wrong, I will be poorer, as it should be. Either way, I call them as I see them, take my best shot, remain grateful for my good health, and do my best to live an honorable life.
There is nothing inherently good or evil about the various cycles in the our government, economy or society. They are what they are, and by and large I have only the most modest impact on them.
There are people who do well, stand tall and live lives of honor in the best of times, and in the worst of times.
I sense some hostility or denial from you towards predictions of gloomy economic times. Do I sense correctly? If so, why? If indeed we are embarking on one of the more substantial Panics (to use the term of the 1800's) or Depressions of the last few centuries, does that make you or I any more or less of a person?