We Are Wealthy

A recession is ultimately a short-term sharp decline in economic growth. This should not be confused with a depression that is a severe long recession. Recession could occur because of an inflation or deflation in prices. There is much speculation that the United States is headed towards this recession and we will discuss, in short, some of the reasons we may be headed there today. Many analysis believe the housing market hasn't hit bottom yet, and won't until after the holiday season. What exactly is the problem with the housing market? When interest rates were very low, banks made it very easy for people to take out sub-prime mortgage loans. We will cover all aspects of sub-prime loans in a later blog, but the main point with these loans is that the interest rates are adjustable. Since interest rates began to rise, many could not afford and can not afford the new larger mortgage payments. Many are being forced to sell their homes and, since more people are doin