SOS Debt Crisis Ahead

1. There is a quadrillion dollars worth of BAD DEBT over the entire world


2. Even all central banks and Fed cannot handle that


3. Net supply of money and credit is shrinking in a fast pace


4. Clear demographic trends make US Debt issues even more pressing (baby boomers consumption spending peak in 2007)


5. Stimulus spending in 1930s eased the pain of the day, but did not cause a recovery, it was the rising spending wave within 1942 to 1968 that cause the sustainable recovery.


6. Despite the recovery, rising defaults from mortgage due to mortgage resets between August to Oct 2010


7. Household debt as a percentage of disposal income increased from 22% in 1946 to 130% in 2009,

Big suprises ahead

1. Major Stock Crash (Aug to Dec 2010)


2. Major Real Estate Crash (late 2010 and late 2012)


3. Gold falls and US Dollar Rises


4. Rising tax rates


5. Sale of a lifetime on Stocks, Bonds and Real Estates

MyView

The government/world central banks has deferred the 2nd tsunami for about 1.5 years since March 2009, we will see how the when and how large the Second wave. It is going to be very very very interesting.

The world is living on borrowed time (i.e. the implosion of debt is ticking).

Perhaps look at Japan's deflation since 1989 as an example, mainly on real estates and stocks. The only different is Japan has surplus, the West has deficit when debt imploded. Japan crash did not spread to the entire world, this round, it is hard to say.