| mar 21 2007 | | Mortgage Meltdown. | That was the headline on CNBC this morning. When the talking heads begin to get it we must be late into the game. When I reported the housing bubble on March 14 2005, two years ago (see archive) and then updated on July 30 2006 there wasn’t any acknowledged problem. Since then we have gone from, ‘there is no bubble’ to ‘a small correction is taking place’ to ‘there will be a soft landing’ to ‘the correction is over’ to ‘what a great buying opportunity’ to ‘will this spill over to the main market’. This is so funny.
All of these comments came from ‘experts’. All of these experts were wrong. I was right just by reading what is happening in the real world. Granted I am not trying to sell you something like some of the experts but this conclusion based on the available information should have brought everyone to the same conclusion. The problem is most people would rather give up the decision making process to the experts. They don’t want to think. Fine but you will reap the consequences.
For the future you had better be aware that this mortgage meltdown will spill over into the prime market. What they are not telling you yet because they don’t get it, is that it will bring down the general market. You will lose most of your investments, your pension will be impacted, your savings will be lost. This is a normal process of the market. Watch for the dollar to breakdown below the 80 level against the basket of currencies.
Never mind China. Never mind the carry trade. Never mind the national debts. The cause of what is going to wipe most people out is a liquidity bubble created and still being fueled by most of the industrial nations of the world. It is the mother that has spawned the tech bubble, the housing bubble, the commodity bubble, the derivatives bubble, it is the mother of all bubbles. Have you read about it in the news? Thought not. When this mother pops, currencies go down, governments go down, ways of life we take for granted go down. Good luck.
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