posted on Jul, 24 2010 @ 09:27 PM
The Peace of God to all that belong to the Light,
It is just time to return to the economy in this forum of predictions, one of the topics in which the people knows I have more reliable credit as a
Recently, in January of this year, I released among my annual predictions many important facts to be accomplished in 2010 and 2011, including the
economy performance, that of course will be of more recession and we will cross on this period the so dangerous point that I can define as the edge of
the Abyss, if we overcome it successfully everything will return to normality in about two years but if not we can expect a terrible long period of
world economical crisis.
Unfortunately we are experienced in this first semester of 2010, a progressive sequence of regional crashes on various significant markets, and that
point in a very similar direction to the one I successfully forecasted by January 2008 that was going to occur in this 2010.
Now, we have seen on May not only a spectacular fall of about 1000 points in the Down jones, principal index of wall street stock market, but also how
the other time supposedly strong European economies are reaching one after other critical points of recession:
- The very bad behavior of the Spanish economy that is reaching the lowest levels in all its period being part of the European Economic Community.
- The terrible riots in Greece in which it is considered the worst episode of social disorders in the continent since 1968, when the country is
frankly showing illiquidity in his external debt.
- Now, the end of one British government in a desperate attempt to save its permanence in the power during all this social and economical turmoil by
building a solid coalition able to lead that nation in the middle of all this adversity.
- Finally the resignation of the Japanese Prime Minister, and the incoming political crisis in Spain, are showing that this recession is every week
behaving erratically, in a way that there is no agreement in between the federal reserve and the government of what to expect.
There is the hope that everything improve in this semester, and the Obama Administration certainly have taken a lot of very interesting measures to
shield the stock, commodities and financial market in general to prevent other crash than the one suffered in the last year of the Bush
Of course those extraordinary packages of new game rules for Wall Street can remedy a lot of potential issues that can ride to another dramatic fall
on it, but my impression is that the danger is still present and the stroke that will release the new crisis could come from the least expected
My perception is that the recession will drive the prices of the real Estate to a very dramatic fall, it is going to be in such a way that we could
feel a deflation phenomenon occurring in that market in six months or so, causing chaos in the financial sector, as a domino effect.
Why in the financial sector, in concrete in the principal banks that finance the mortgages of many home debtors, because if the commercial value of
the real Estate is drastically devalued, obeying the laws of the offer and demand in the current market, this may sent directly to bankruptcy many
corporations that have financed long term loans of that sector, since the debtors would prefer to lose their houses before to pay them inflated at the
At the end the banks can retain the houses in guaranty of the respective unpaid loans but if they commercially would represent let’s say only 60% of
what originally was paid for them, who is going to assume such a loss?
This is a huge weak point of our economy and something that requires an urgent attention of the banks, the federal reserve, the congress and the
authorities incharged to regulate the Real Estate market , otherwise this could even transform this recession in a depression.
Thanks for your attention,
The Angel of Lightness
Remember that my threads are an actual window through the veil of time for the ones have thirst of knowledge and wisdom, so feel free to do comments
and ask questions.