could not agree more dub

I think exactly the same thing as your paste author is saying in his article where he states:

"Stephen Roach of Morgan Stanley calls us “asset-dependent American consumers.”

"And that’s precisely what we are. Saving is at an all-time low. Debt is at an all-time high. The only thing keeping this gig afloat is asset inflation. Artificially-induced increases in home values and a liquidity-driven stock market: the inevitable result of artificially low interest rates, not genuine increases in value."

Thats exactly where we are in Aus, all sorts of amatuers now playing themselves off as savvy investors and paper millionaires living way above their true worth.

And you might ask what proof have I got to back that statement, well exactly this.

Are you earning that much more this year than last that you can afford the repayment on a second / larger morgage"

The answer is no, financial institutions are now calculating your borrowing capacity on your asset base not your income, on the basis that they think it will continue to rise and therefore support the rediculous notion that it is a one way street.

Suddenly maintaining debt is ok, repaying it, well that seems to be something to deal with when the time comes, so heres your money off you go and buy something you cannot afford, very dangerous stuff, the pendulum will swings, it always has, only this time many more poor souls will feel the pain than at any other time in history, worse still it will happen very quickly and unexpectadly IMHO.

Lets hope personnel debt is forgiven in the same way as foriegn debt is in times of trouble, dont hold your breath.