Sunday, December 9, 2007

The global economy is exposed to America's houses of cards

Source: The Daily Star

"There are times when being proven right brings no pleasure. For several years I have argued that America's economy was being supported by a housing bubble that had replaced the stock market bubble of the 1990s. But no bubble can expand forever. With middle-class incomes in the United States stagnating, Americans could not afford ever more expensive homes."

"Economists, as opposed to those who make their living gambling on stocks, make no claim to being able to predict when the day of reckoning will come, much less identifying the event that will bring down the house of cards. But the patterns are systematic, with consequences that unfold gradually, and painfully, over time..."

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