Thoughts on this article ? http://theeconomiccollapseblog.com/...y-is-dying-and-is-simply-not-going-to-recover
Some of the reasons he lists are kind of silly. The ARM reset scare has had everyone I know of with an ARM getting their payment lowered because the rates are tied to some rate like prime, which remains at unheard-of lows.
Yeah ... that pretty much covers it. Consuming more than you produce leads to economic meltdown. Doing so in a debt bubble puts the meltdown off for a while till the day of reckoning. I believe there is hope however. Likely NOT without severe reality, "attention getting" correction however. Americans are resilient. When they collectively ask ... How did we get in this mess? ... How can we get out? ... Is big Government and the Fed the solution or the problem? When and if we wake up and ask these sorts of questions and make media and those in authority produce accountability and true accounting ... then ... maybe with Gods help ... America will be a land of liberty again. OR ... a world Government with a "World Leader" having world powers will rise from this catastrophic economic/political/religious deluge and provide solutions that offer "Peace and Safety" for everyone.
This is a far more desperate situation than the "Great Depression." Back then they "could" (and did) fall back from the gold standard onto a fiat "standard" - a "faith based" monetary system. Today, we cannot even do that. Yes, there could be a government ordered devaluation of the money...that would soon lead into hyperinflation and a worse result than having done nothing. "Bad" doom one way and "even worse" doom the other way. -gastropod
Before and during the Great Depression, over 25% of Americans were engaged in farming, we were the world's largest exporter of oil, and we were the world's largest creditor nation. Today, we are the largest consumers of oil; that's a lot of dollars that leave the country, today we rely on the sovereign debt market - more so than any other country in the world. Today, 2-3% of Americans are engaged in farming, so more unemployed and underemployed Americans will be relying on food stamps. We entered the great depression with a low total debt to gdp level, at 160%. We entered this current crisis at a total debt to gdp level of about 320%, and it is fast approching 400%. So is our current situation better than it was in the 1930s? I think it's kind of premature to dismiss that.
There's a big difference between a standard ARM and an Option ARM. An Option ARM has a minimum payment option the first five years, and the loan can go through negative amortization. After that 5 year period, the debtor has to make the fully amortized payment. Despite low rates, that will be a HUGE payment shock for many people that just got by on the minimum payment. These loans were pretty normal in California and may have made sense for people planning to sell or refinance their homes within the first 5 years. They are now trapped, and face negative am. no way out.
You didn't address the points I made, you just posted a wiki entry and a "get real" retort. We are just entering this crisis. If we are to compare the Great Depression with today's crisis, then all we can do is to compare the beginning stages of each crisis. Today, we are entering a crisis extremely ill prepared compared to our situation entering the Great Depression.