Mortgage Debt and Foreign Debt

How is the sovereign debt crisis like the mortgage crisis? Answer: consumers borrowed more than they could afford with the thought that their home values and their salaries would continue on an upward path. Foreign nations (and the U.S.) borrowed more than they could based on the expectation that the economy (and tax revenues) would never falter and that down the road they could pay the bill. The sad reality is that growth doesn't last forever. It comes in fits and starts and then retreats with the cycle starting up all over again. Most (if not all) economic growth is based on the assumption that populations will continue to grow, which is why Japan and 'old' Europe are facing a potential financial depression down the road. (Of course, this is all my opinion.) Meanwhile, even authors of popular Vampire books are not immune to the housing downturn. Writer Anne Rice writes on her Facebook page that the housing crisis has "pretty much wiped me out, frankly. I may soon be living in rented rooms for the first time in twenty years." You might say, the housing bust drained Ms. Rice of all her home equity, sort of like a vampire sucking the blood out of a cow, or whatever they nibble on...