TIME Magazine does it again with their cover story, “The New Hard Times”. The article’s title “The End of Prosperity?” is pretty much doom and gloom, but they go on to say that the chain reaction that lead to the Great Depression can be averted. Households and financial institutions must reduce their debt before they are forced to do so. The US cannot sustain massive bankruptcy’s that will drive more assets onto the market and further drive prices down.
The pain isn’t over they go on to say. The worsening of credit availability will simply up the unemployment rate which means a lot of us won’t be eating, much less owning homes or cars.
Can it all be avoided? That’s still debatable. If everyone simply does the “Right Thing” I think we’ll make it. It’s not going to be easy. The free ride is over. “Funny Money” as a good friend of mine used to call his Tech Industry stock options is pretty much a thing of the past. Let’s buckle down and ride it out.