Thursday, August 27, 2015

There has been no recovery in the west since 2007-8. Communism had to collapse and now its sister socialism will collapse too. Governments can not keep borrowing money with no intension of paying anything back. All western economies are collapsing because everyone has too much debt. We are about to go into a deflationary cycle which will see multiple sovereign defaults and wealth destruction like never before. We will all be looking for someone to blame. The laws of maths are universal and apply to everyone. You can not enjoy a life style you have not earned. The Fed has infected the world with all that cheap USD it has been printing and has inflated nearly every housing market in the world. When the flight to quality starts and the herd causes the dollar to rally, then those loans wont be looking so cheap. Emerging markets will get wiped out and the process has begun. Remember that Japanese real estate is still 60% down from its highs in the 90's. If you have not prepared by now its probably too late. If you have a medium to large mortgage get out now because when the panic starts the exit will get really busy. When the bond bubble bursts liquidity will dry up over night and interest rates will go sky which will really squeeze the housing market. These are only economic concerns but normally when an economic event so extreme happens there is usually lots of civil unrest or they take us to war.The French economy stagnated in the second quarter as household spending slowed and business investment contracted.

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