Right now we are beginning to see the effects of the economy grinding to a halt. It is controlled by the financial interaction of the markets. The real estate industry is unemployed as are the homebuilder and it is spreading throughout the country.
Don’t for a minute think that government can fix this mess. It doesn’t work that way. Picture your wife paying the monthly bills year in and year out. That’s our government in action. Now when the husband tells the wife he has lost the house, don’t expect her to come up with some plan to save the family home. That’s just not the role of government.
There is no problem starting over if you are young, but that may not be the case for a lot of us. Today the government said that retirement funds have lost over two trillion dollars already. The stock market is getting a little bit green behind the gills. I hear pundits say “Don’t panic and sell and get out of the market you’ll lose money when it goes up.” It makes me think; maybe these guys were selling real estate two years ago. Greed will get you every time ("Stay in there, you’re going to get rich").
What happens from here? Things are going to get a lot worse. If you have expensive toys, unload them now, prices are going to drop fast on items like big boats ("yachts" if you paid more than a $1,000 a foot). Try to keep living in the home you occupy even if you are upside down, the banks will probably welcome you as a renter while they go through the foreclosure process (that could be two years of low rent). The schools offer free lunch programs for your kids.
Sadly you can’t believe anything that the government tells you. We know that we are about to lose a lot of our saving. So if we diversify into different things, we have a chance of limiting our losses. The trouble is, we have an awful lot of people with nothing to lose already (they’re already broke). That is the scary thing that we are facing.
Where to from here? Congress will finally "grow up" and rewrite Social Security and Health Care benefits. It ain't going to be more, but less. The silver foxes will get a free walker and a life time bus pass. Life is funny, it seems like just yesterday that I could hardly wait until I turned 18 to buy beer. Now I can cry in it with sincerity.
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