The old adage is if you repeat something enough its bound to come true. That seems to be exactly what is happening with our economy. Even though all the indicators point to good economic growth the pessimists are out in full battle regalia over the housing market. Is it just me or does anyone else remember 18% mortgage rates?The sub prime market is the root of this nonsense, a market that is small compared to millions of mortgage customers in America, but large because of the money financial institutions have in it. Because greed won out during the housing boom of the last few years, we now face problems because banks loaned money to individuals they should not have. Additionally, marketeers and individuals seeking to make a quick buck by flipping real estate now find themselves unable to cover their margins. It all amounts to a mess, but not the end of the world.
Even though democrat pundits would have us believe the bottom is dropping out, the Dow remains solid, volatile, but solid. We aren't seeing a spill over into other sectors of the market and the banks are still loaning money. Albeit they have tightened up their lending standards, which isn't necessarily a bad thing. The market is doing as the market does, It is correcting itself.
Even so the MSM is giddy with story after story of how the "crunch" is going to ruin us all. For the nearly 40 years I've been making money I have heard the same thing numerous times, yet never once have I been directly impacted or has it cost me my life savings. It all comes down to being smart with your finances, which unfortunately a wide margin of we Americans aren't.
Its almost hypocritical to damn Congress for spending like a drunken sailor when the majority of Americans are doing the same thing. We as a nation constantly rack up billions of dollars in unneeded personal debt each year. Many times using credit to buy things we can't really afford. And when the first payment comes due, whine because we can't afford to live.
I have no sympathy for anyone who lives in a $2000.00 trailer so that they can barely afford the payments on a $45000.00 vehicle. Or someone who buys a new HDTV when they should be putting that money aside for the future, then scream when the future gets here and they have no money.
The bottom line is Americans need to get smarter financially from top to bottom. We need to apply conservative financial principles and stop spending ourselves into oblivion. If we did we wouldn't have to worry about half of things we do right now. There are always going to be those that through misfortune, not necessarily of their own, who will need help. But the vast majority of problems we face are created by own lack of vision and unwillingness to make the hard choices.
If we were more intelligent with our money then perhaps we wouldn't think we need socialized medicine, or welfare. If we applied conservatism properly these needs could be met without trillion dollar entitlement programs. Work = Money, Money * Financial Prudence = Peace of Mind.
Just like the overall market if we tell ourselves the situation is bad, then bad is all we will see. It applies to our own finances also. No matter how difficult we find the situation we still have choices. We can either make a bad one or a good. We are fortunate enough to live in country that not only allows it, but is founded upon it.
