I can’t believe anyone takes this seriously at all.
First of all I think Ron Paul would have to achieve something nobody else ever has, win the presidency when he currently has only 4% support. Possible? Yes, but its also possible the sun will burn out tomorrow, or go nova. But I would bet against it, with 1000:1 odds too. And yes he had 2 wonderful days with tremendous donations, but is still blown away by the other candidates.
Now as far as depression, also unlikely. I do expect a recession may be underway. Once they report we are officially in a recession, it will be over. There were plenty of reasons for the depression of the 30’s. 10% stock market margins, banks investing in stocks, and then they were able to call their mortgages due at any time.
Rules have been put into place to prevent things like this. It doesn’t mean there is no possibility of a depression, but I don’t see one headed our way.
The mention of the “housing crash” is total crap. The housing market was overpriced, and the market corrected, and is now about where it should be. Also if you could afford the mortgage before the price of houses went down, why couldn’t you after? That stupid car you drive drops like a rock after you buy it, but your payment does not go up.
Currently the mortgage market that is having problems is the secondary market. If you don’t understand what this market is, its the market for people who can’t afford a regular mortgage, so they get a mortgage with an even bigger interest rate, and bigger payment. (Does this make sense to anyone?) If you loan money to people who already have a hard time paying their bills, what do you expect would happen?
I am not for a government paid bailout on this. It needs to be stated that any bailout is not for the people with mortgage problems, it is for the businesses. Don’t fool yourself. But these mortgage companies took the risk, and should have to live with the results.
The next item on the agenda, (is there an agenda?) is oil. $100 a barrel oil is annoying. But is still not as high as it has been, when adjusted for inflation.
It is also overpriced. There was the “surprise” of India, and China improving their economies radically, and the market was not prepared for that. 2004 also produced a shocking 4% jump in demand. Other then that year, its been less then 1.5% a year. (Trying to remember the information I read a few months back.) This sudden increase in demand has pushed prices up, with a compounding problem of speculators. Oil suddenly looked like easy money, so the crazy investors helped jump on the bandwagon, adding to the oil cost. These types of investors will scurry away the second oil starts dropping.
The last estimate I read was that oil was priced about $30 above what it should be based on market conditions. (It was low 90’s then.) And this combined with Mid-East insecurities, keeps prices higher then they should be.
The way Iraq is going right now, I expect a draw down in troops this year, which will start the oil slide, barring some big news event. (Any excuse.)
If oil was to rise as high as this fantasy article says, it will push us into a recession, and that alone will cause oil to plunge. (Actually it will happen before $175 barrel oil, so that number will not be seen.)
The reaction to a recession would be to drop interest rates, which keeps our dollar low, so expect the dollar to keep dropping for now. Once a recession is over I see rates climbing a little faster. (Refinance now, or soon, and do not go for that stupid ARM.)
Also lets get away from this idea of a gold backed dollar. Some argue that the gold backed money of the depression era actually prevented the Fed from doing more then it could have, and increased and deepened the depression.
Right now, many things represent dollars. If you believe in gold, then buy gold, and simply sell it when you want to spend your money. But you could also hold stock in corporations. Which is actually better. Gold just sits around doing nothing, while a stock has value, and produces a profit at the same time.
The mistake is looking for security. And if you follow the investments of people who look for security, they always fail. Maybe they don’t lose as much as the people who treat the stock market as a casino, but then again they will never have anything in the first place.
Also if gold is so great, invest in the gold mines. When gold goes up, they climb right along. And if gold drops, they still make money. (Or is it gold?)
The key is you really do not want your money as money. You want it somewhere else doing something for you, and that is never the dollar, that is something else where the dollar is only representing the value of the stock or item. Don’t get stuck on the idea that money is only paper, or only gold. Just look at the air. Separate out the hydrogen and oxygen, cool it, and you have rocket fuel.
