Every investor and retiree remembers the financial collapse of 2008 and 2009. It would be hard to forget – seeing as many investors saw their portfolios wiped away in the blink of an eye. But as time passes, some of the details become murky. This is a problem, because history tends to repeat itself. Many people have noticed that the stock market seems to be healthy again, but have forgotten what caused the collapse in the first place. The culprit was the bursting of the housing bubble… and there is reason to believe that another bubble is forming.
Easy money, low interest rates and speculation have allowed the real estate market in the United States, Canada and elsewhere to grow exponentially. Of course, the housing market’s rise in value hasn’t been based on sound economic principles, but rather central banking interference.
In the U.S., the Federal Reserve’s monthly bond-buying initiative has created several bubbles, including in the real estate market. Therefore, it has produced a phony housing recovery that will eventually lead to another collapse for homeowners everywhere because the values will fall dramatically.
“This is a destructive poisonous monetary medicine that is being put into the system that is distorting all kinds of economic mechanisms with malinvestments on a massive scale,” said David Stockman, former budget director during the Reagan administration.
This is part of the reason why the Federal Reserve will likely taper its taper talk next year because the market relies on the monthly injections. Since the economic growth has been unsound and can’t run on its own legs and will thus continue to need stimulus from Fed Chair Janet Yellen, though it appears her mandate has been to keep interest rates low in order to create jobs as she alluded to a couple of times this month.
If the housing market collapses once again, the results could be disastrous. The stock market would likely plummet, just as it did in 2008 and 2009, and investors could see their portfolios once again wiped away. The mainstream media has remained largely silent regarding this threat, perhaps to avoid alarming the public, but don’t let their silence fool you into thinking that all is well.
What will happen to your retirement plans if this nightmare scenario plays out again? Are your assets so tied up in Wall Street investments that you’ll be out in the cold if things go bad? Will you end up having your assets wiped away in the blink of an eye, like many investors in 2008 and 2009?
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Don’t let a housing collapse threaten your retirement hopes. To learn more, please visit LearnHowToRetireNow.com.