2009 - Problems!

Questions for 2009 (cont.) with Dr. Martin Weiss, PhD.

MORE HOUSEHOLD DEBT - U.S. households are in far great debt today with much less savings. In the 1930,s, mortgages were rarer and less onerous. For all practical purposes, second mortgages, home equity loans, creative financing, and credit cards didn't even exist. Today, they are everywhere in our society.

U.S. IS NOW A DEBTOR NATION - In the 1930's the U.S. had large surpluses of foreign reserves and was a creditor to the rest of the world. Now, it has minimal reserves and huge foreign debts. As a result, there's ultimately a limit to how much Washington can throw good money after bad to save the U.S. economy before foreign investors rebel, refusing to continue providing abundant credit.

DERIVITIVES - In the early 1930's, derivatives were virtually unknown - - a tiny niche of little consequence. Today there are nearly $600 TRILLION in notional value derivatives globally, according to the Bank of International Settlements. The forced liquidation of many of these derivatives could frustrate government efforts to revive credit markets, driving the global economy into a deeper decline than would normally be expected.