“I feel like I’m in a dream. A bad dream. The kind of dream where you know something terrible is going to happen, but you can’t stop it.”
Housing Market Crash 2007-2008
The financial institutions, knowing that something was going very wrong, decided to provide subprime mortgage options. A subprime mortgage is an option that allows financially unstable individuals to qualify and afford a mortgage. These borrowers are typically given adjustable-rate mortgages (ARM) in which their interest rate can fluctuate based on changes in an index or margin. The idea behind these types of loans is that they allow someone with poor credit score access to home ownership; however, they also come with higher rates and shorter terms than traditional fixed rate loans.
The crisis started because of a new type of investment vehicle that allowed investors without any personal assets or liabilities (i.e., risky investments) into what was previously a safe investment class: real estate securities backed by residential homes. In other words, banks could now sell mortgages off their books as “securities”–collateralized debt obligations (CDOs)–to other financial institutions like pension funds who were looking for higher yields than those offered by government bonds.”
Causes leading up to the 2008 Crisis
The following are a few of the causes leading up to the 2008 financial crisis:
- Housing market bubble: In 2001, interest rates were lowered to make housing more affordable. This caused an increase in home prices, which fueled a housing boom. Between 2000 and 2006, for example, home prices increased by 95 percent (from $200k to $350k). But after 2006 when interest rates began rising again, people could no longer afford their mortgages and started defaulting on them in droves. This was what caused the housing market crash that led us into recession at that time.
- Financial crisis: The collapse of Lehman Brothers Investment Bank in 2008 triggered an unprecedented global financial crisis that was made worse by banks’ excessive risk taking and failure to manage their risks properly. Banks relied heavily on debt financing instead of equity financing due largely because they thought they would always be able to sell assets at higher prices down payment or even refinance loans as necessary – but this wasn’t possible when people stopped buying houses (or any other asset) because they couldn’t afford them anymore!
Current Housing Market Crash today
If you remember the housing market crash of 2008, then you’re probably familiar with what a crash looks like. That crash left many people in negative equity, meaning that they owed more on their homes than they were worth.
Today’s current housing market is similar to the one before the Great Recession: it’s full of foreclosures and underwater borrowers. In fact, there are still more than 3 million mortgages that are underwater today—and those numbers aren’t shrinking fast enough to make up for future supply.
A new Global Economic Depression?
You may have heard that we are headed for a new global economic depression. What does this mean? It means that there will be another global recession, but it will be much more severe than what we experienced in 2008. A recession is a period of temporary decline in economic activity and inflation, which can last from six months to multiple years depending on the severity of the downturn. When people say “global” economy, they mean that the entire world’s economy is affected by these changes in business activity and monetary policy—not just certain regions or countries within it.
A depression is similar to a recession because it involves negative growth rates across various sectors of an economy (e.g., consumption spending falls sharply as fewer people purchase goods/services). When these negative trends persist for at least five quarters (that’s two years), then we call them depressions instead! The cause of depressions varies from country-to-country depending on their unique circumstances: For example, some countries might experience large fluctuations due to external forces like war while others might experience internal factors such as banking crises caused by poor management decisions over time; but regardless there are always reasons why one country could fall into such dire circumstances compared with another.”
Follow the Money – The Federal Reserve, Coronavirus and Fiat Currency
The Federal Reserve, established in 1913, is the central banking system of the United States and is responsible for printing our money. The Federal Reserve System (the Fed) has total control over our economy through its ability to manipulate interest rates and print unlimited quantities of money out of thin air. A government decree is the deciding factor on the value of money printed.
Fiat currency literally means “so-called” because it’s not real money — it’s fake! The paper money is printed on is manipulated and holds little value once this economic depression begins in earnest.
What comes next?
The next several years will be rough. Fortunately, you can prepare yourself by planning ahead. Here are a few things to consider:
- Prepare for a global economic depression. This is the worst-case scenario and one that could occur at any time—the market is too unstable, our national debt is unsustainable, and more nations are entering into global trade agreements with their own currencies (which means they’ll no longer need dollars). This would paralyze America’s economy and ultimately lead to widespread poverty; all we can do now is hope it doesn’t happen anytime soon.
- Prepare for a global pandemic or war that would cause mass casualties in our country (or even worldwide). If this happens sooner rather than later, we’ll see less food available on store shelves as everyone panics about whether they should stock up before things get worse—and then there’s always the chance it could spread through air travel as well! In short: bad idea!
- Prepare for another financial crisis like 2008-2009 where banks collapse because no one wants to lend them money anymore due to fears about defaulting loans being worth less than expected due some unforeseen event like another recession happening soon after already existing ones end (which creates uncertainty at best) or worse yet – A Global Financial Crisis caused by bad investments made overseas which makes it impossible
Prepare for what is coming next!
You can prepare for what is coming next by:
- Establishing a budget and sticking to it.
- Saving money by reducing expenses on luxuries such as expensive dinners out, cable television subscriptions, and shopping sprees.
- Find a way to make extra income. Having all your eggs in one basket is riskier than you think.
- Cutting back on expenses like food and entertainment.
- Find other unique ways to make money (etsy, writing books, consulting etc.)
- Buy food and other items you use in bulk, while you have the money.
You may not have time for these things now but soon you will have no choice but to do them if you want your family’s survival intact during these troubling times ahead.”
There’s no denying the fact that we are in the midst of an economic depression. Yes, there are signs and indicators that point towards it being more severe than the one experienced during 2008 – 2009. Do not take our word for it, instead do your research! Listen to more than one side, and don’t take all media coverage as being truth.