Are you sure your washer is working correctly? Yes? You can. Also, you should repaint and possibly add a swimming pool to your home. You should eat out more and then go to the movies. Why? You see Uncle Sam wants you to spend, and spend, and spend. This charade of a recovering and healthy economy can be continued by the Fed and our politicians, at least until their end.
The Europeans would love to have some of your money if you are interested in traveling. For now, the U.S. economy looks more robust than the Europeans. Spain joined 11 other European countries currently in recession.
These countries, particularly those in the southernmost part of Europe, have spent much more money than they earned over the years. One year ago, the response was to go on an austerity program to bring down debt to the original 3% of GDP. But austerity hasn’t worked as well as expected. Hundreds of thousands have turned out to voice their discontent. In countries like Italy, France and Greece, leaders of pro-austerity parties were quickly voted out of office.
The European financial system has its own Ponzi scheme. Shah Gilani, of Wall Street Insights, stated that European banks are receiving euros from the European Central Bank (okay, they’re borrowing money but very cheaply) to purchase sovereign debts from their respective countries. This is backing the ECB as well as the banks in trouble. Hmmmm… Are insolvent sovereigns buying sovereign debts from banks that aren’t liquid? Ponzi scheme.”
Where are the Euro countries going from here? Because so many people hate austerity, it’s not a good solution. Plus, it often means a shrinking economy which makes it more difficult to pay back debts. Reverting to pro-growth policies will lead to more debt and further exacerbate the problem. Although it is impossible to predict what will happen next I believe that several countries will be forced to leave the Euro and start their own currencies.
The recovery seems to be taking root in the US of America. But not so. Bill Bonner, of “The Daily Reckoning,” states that “real growth” requires investment, risk, skill, and customers with money. They (Bernanke, and some economists) cannot give the world more debt. This is precisely what the plan is.” The 1997 levels of the home ownership rate, and the basket of goods the median household income can purchase, are both back at 1997 levels. This is a good thing. It gets us back at the beginning of real estate’s incredible rise. There are some devilish details that are more important than others, such as our huge debt and the fact that CNN Money says that hundreds of thousands of Americans can’t afford $1500 to file bankruptcy. Also, there is a real (per Shadow Stats), unemployment rate of 22%, rather than the 8.1% reported in the media.
The United States needs to find a new way of growing that attracts private investment and entrepreneurs. It doesn’t appear that the green industry has the ability to move forward. We will be watching closely to see how it develops.
A few people have commented that my blogs are not always upbeat. These writings are not meant to be pessimistic, but to present the reality as it is based on what I’ve been able to find. Your comments, whether you agree with or disagree with me, are always welcome.
Adam Mcbrian, a Texas mortgage buyer lives in California. How is that possible? He is both a Texas mortgage buyer as well as a California buyer, having purchased slightly more Texas real estate notes over the past decade.