Global Recession 2007!

Admittedly, Gary Shilling is a reknown bear economist. But when he speaks, you should listen. He was correct numerous times in the past regarding recession, especially when he said the tech sector was headed to a meltdown in 1999.

This time Shilling is saying housing prices will collapse, spurring a global recession deeper than the last one! That's frightening, but when you look at the facts -- especially the liquidity glut affecting the world right now -- it's probable that the U.S. economy will take a deep hit this year.

On the bright side, he sees a recovery in 2008. One can only hope. My view is that most consumers' financial health is intrinsicly tied to their housing values. When those deflate -- and I predict a 50% drop in some parts of the country, as it stands now, we're seeing 20% drops and the crash is only getting underway -- consumer spending will go into shock. If this doesn't lead to an all-out depression, then the recession will be so deep it could take the better part of a decade to climb back out.

And for those of you who are "gold hawks" -- the ones who believe you ought to throw your entire weight into precious metals -- I'd air on the side of caution. Shilling warns of a commodities crash, which has been long overdue. While gold may not crash, per se, you won't see those $800 to $1,000 per ounce prices again. Why? Well, if consumer spending drops, then people aren't buying as much jewelry and extravagent gifts. That means gold will deflate.

If you want more insight from my "bear's lair," let me know.

Would like more insight, this has been on the cards for seven years now?

Whats wrong with that?
Ive been waiting for a good time to buy a house!

Originally posted by thisguyrighthere
Whats wrong with that?
Ive been waiting for a good time to buy a house!

If you're currently a renter and want to buy a house, then you're money, so to speak. You will be in the position of buying much more house for the money, and hopefully selling high when the time comes.

But for people like me, who own say a starter home and want to upgrade, on the one hand, we can upgrade more this year than say we could afford last year. But it's a double edged sword: Our current home won't command the same value it may have last year.