...leads to depression.
and was I "depressed" yesterday! I was having an off-day and decided to putter about online a bit. I found some radio and video programs by the author of "from boom to bust and beyond" Jerry Tuma. The man is an economist and he uses demographics to predict/explain the current economic and social crisis. It is AMAZING stuff! There was just so much in it, and I had nobody really to share it with, my darling hubby was just too exhausted from the daily grind to listen to the complex details. Poor guy, but I guess that is my privilege in being able to stay at home and manage my own days. I do get to spend quite alot of time learning new things. I really really enjoy listening to lectures and sermons online while I putter about the house doing chores and playing with the boys.
Back to Jerry Tuma. He predicted the housing market bubble, quite easily and used demographics (the study of populations) to explain what may happen next. Here goes..
Most People reach the peak of their "spending" power in their late 40's, this is when they buy the house and all the fancy stuff inside. The baby-boomers have been buying up homes for quite some time now. The last--and biggest wave of boomers hit that critical time in 2005. The market was peaked (also super inflated due to the large demand for homes) builders kept on building, the next generational wave is MUCH smaller than the boomers (thank you birth control and the changing attitudes towards children in society) and therefore we wound up with too many houses and not enough people to buy them. If you pair that with the fact that people took out unsustainable loans and were foreclosed on housing values plummeted. We have NOT bottomed out yet. The ARM loans (the ones where your rate is fixed super low for 5 years then go up) as well as the "liars loans" (those that required absolutely NO income verification and had adjustable rates) are about to come due. Nearly 7 million more homes will be foreclosed on in the coming two years. It looks dire.
BUT there is good news! It will be prime time to invest in real estate in the next 2-3 years! Start saving every penny you can now, and perhaps you may find a real bargain coming up!
History repeats itself, during the great depression when so many lost everything, those who were prepared for the coming crash made MILLIONS. Properties were picked up for pennies on the dollar, good stocks and investments were purchased at all time low prices and when everything recovered, their net worth did too. The same can happen for us if we look at this as an opportunity and not a time to panic.
We are also, living in a time of a generational and a demographic change. Neil Howe has written a book "The fourth turning" using History to describe what is/may happen in the coming years. His book was written in the mid-90's when we were in the middle of the greatest economic upswing in our history and nobody paid attention. He accurately predicted the economic crash...as an event that would change us all starting in about 2005. HMMMM....did you know this has all happened before? Holland and the tulips anyone? His point of view is a generational one. Basically that every 'fourth' generation there is a rebirth or death of society. Every generation in history has connected with and acted like a previous one, and economics and politics have reflected that as well. We (those of us born in 1982 and after) are now emerging onto the political scene, and things are going to be shook up. Basically we all follow the same pattern: Generation 1 experiences a conservative high after a major war, the 2nd gen hits the spiritual revival mode, 3rd Gen has the wild unraveling of all the values that have come before, and the 4th generation experiences the Crisis that will reset or change everything. Generation 1 raised gen 3, Gen 2 raised Gen 4. Gen 4 has little contact with Gen 1 and therefore does not learn from their experiences so society must re-invent the wheel. This could be very very good, or very very bad. During this time of Crisis a political party will set itself up and try their darnedest to patch things up, but it most likely will not work...its the ones that come immediately after that will establish what America will look like for the next FOUR generations.
Once again, there is hope. WE can change things, as long as enough of us wake up and start voting our values and shaking up the political and social systems. Don't be afraid to express your beliefs and values, live the life you want to live and change your corner of the universe!
The third thing is mentioned a bit by both authors (please note, I haven't been able to read the books yet, I am discussing based on their interviews and radio broadcasts) Is the demographic switch. Europe is in the middle of a demographic crisis. The birth rate in many countries are FAR below replacement levels (in fact, the world birthrates are just about there as well) Meaning there are less young workers to support the elderly retired. (china, anyone?) this is BAD for our current economy, and our social programs--all of which are based on an ever-growing economy. America is about 10-15 years behind Europe (I still find it odd that half of Europe is going bankrupt due to unsustainable government funded health care, retirements ect. and yet our politicians keep saying we NEED to be like them, it will save our society!) Basically Europe is dying off, and we are quickly following. Now, there are three things that can be done about this. 1.people can have more babies--many countries now offer tax breaks and outright payments to native-born citizens who are willing to have more children. This has not worked so far. 2. Active immigration. Allow those from developing countries (who have growing populations) to become citizens and start paying taxes. or 3. Change the system. (Yeah right, who wants to give up all their "free" government benefits and start doing things on their own.)
SO, in reflection of all these ramblings here are my thoughts: This has all happened before and it will all happen again, there is nothing new under the sun. History has shown that. We will not repeat it exactly but it will echo the past. WE are in the midst of a great change, and if we stand strong and trust in God there is a chance for a great rebirth of society and even personal economic prosperity.
What will I do? Save every penny I can squeeze out of my budget and get ready for the second wave of real estate foreclosures. I will continue to support politicians who want to radically change government BACK to the values of the constitution and who practice sound fiscal policy, who have strong moral character and a sense of absolute truth. I will keep having babies and not let this crisis mode destroy our dreams.
whew. that was a tiring post, I hope it made sense! I am off to find some more stuff to study!
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