The next massive debt bubble to crush the economy – 10 charts examining the upcoming implosion of the student loan market. $1 trillion in student loans and defaults sharply increasing.
In the land of predatory bubbles it looks like higher education is now fully caught up in the credit market implosion. In the same debt produced vein as housing, college used to be a relatively cheap bet with decent results in the long-term. Even if you went to public universities and picked up a degree in a field with low job prospects, at least you didn’t have the cloud of student loans hanging over your head when you graduated. Today it is a very different ballgame and the mythology behind college is being used to lure people into institutions that are little more than paper mill factories. Even quality institutions are having a harder time justifying tuition and fees that cost upwards of $50,000 per year (or the median household income of an American family). Can the next major crisis come from the student loan market? There is currently close to $1 trillion in student loan debt outstanding. During this crisis most debt sectors contracted except for student loans. Let us examine 10 charts to see why a bubble in student loan debt is about to implode.
Federal Reserve openly targets dollar demise – U.S. Treasury and Federal Reserve solution to economic crisis is to crush dollar and target the standard of living for American families.
The collapse of the global stock markets was something that was supposed to happen if the debt ceiling wasn’t raised. But here we are, seeing a sudden correction even after the debt ceiling was raised. The Federal Reserve and U.S. Treasury are actively trying to crush the U.S. dollar so the debts of their banking allies will get cheaper as the years go by and the quality of life for most Americans continues to erode like a tide washing away a sand castle. Of course it will be expected that at some point some other archaic form of quantitative easing part three will be brought to the table but the Federal Reserve is a faith based system. Suddenly people are having less and less faith from a central bank that has sat idly by for the working and middle class while allowing the wealthiest in this country to become even wealthier simply by gaming the current financial system. The markets are not pleased with raising the debt ceiling without actually looking for new revenue streams. This is like getting a credit card line increase without your income rising. The Fed is targeting the dollar not because it is good for America, but for the specific reason that it will allow banking allies to hide the ill bets of the 2000s.
The 20 year financial depression in American real estate. Why housing will remain a poor investment well into 2020.
The American housing market is floundering like a fish out of water. The economy is puttering along as middle class Americans confront a quality of life that is declining. Household incomes have fallen for well over a decade yet the dialogue from Wall Street and their political partners seems to focus on home prices rising. How can this disconnect and lie be perpetuated over and over? For what it is worth, we now live in a make believe economy portrayed by the scripted mainstream press. The economy is fine even though we have 45,000,000 Americans on food stamps. The housing market is improving even though prices are now at record lows for this cycle and 6,000,000 homes are sitting frivolously by in what is now called the shadow inventory. 20 million Americans are out of work, working part-time but wanting full-time gigs, or have dropped out of the labor force yet the economy is fine. The public needs to ask, “the economy is fine for what group of people?â€Â The housing market is locking in a lost decade when it comes to values. How will the fragile psychology of people change when home prices enter a 20 year bear market?
The Retirement fantasy – middle class Americans are quickly realizing that a secure retirement future may only be a myth. Stagnant income, debt illusion, and the future outlook for working Americans.
Americans are having a tougher time finding extra disposable income to save and create wealth. It is hard to plan for the future when you are worrying about having enough money to purchase a couple of frozen meals. When looking at overall statistics we rarely get a glimpse at how tough things have become for the working and middle class. We usually get data discussing retirement account worth but most of these reports fail to acknowledge that 1 out of 3 Americans have zero dollars to their name. That is obviously an important caveat. You also have a banking system that imposes predatory practices on those least able to afford it. Case after case has been reported of those living paycheck to paycheck while having to pay multiple overdraft fees that can range from $25 to $40 per charge. Banks realize they can simply place a stop but why let all this easy money free? For those who can save and end up purchasing a home, most of the wealth is derived from home equity which in a nationwide housing bubble is like having all your money in one stock. Income is not a good measure of wealth. The per capita income in the United States is $25,000 and after paying the mortgage or rent, healthcare costs, and buying food little is left over. What all these items point to is that retirement as many envisioned may largely be a fantasy that is only available to a select few.