Thanks for your comments.

I do agree with you in that I think we have just about been saved from another great depression. And it is about time that Americans can buy real estate without putting any money down. It goes to show why Europe with its requirement for real estate down payment although affected, is at much less risk than America.

Here’s to structural economic adjustments. As you say, it is well worth the effort to get to the desired result. let’s see where we get to in the next ten years.

Reenita

Whilst I do not predict another great depression for your country, I do believe that a mild recession may not be the worst thing for your country’s long term future.

America has a large structural problem due to an unsustainable level of household debt. In order for your country to return to a path of long term sustainable growth, households need to reduce their debt to sustainable levels. For this to happen, a very significant period of adjustment will be required whilst households get their balance sheets under control.

This process will not be fun, but it is a necessary precondition if America wishes to return to a path of sustainable growth. Americans should not fear or in any way try to avoid this necessary process.

Remember back to the Asia crisis ten years ago. It wasn’t fun, but it provided the catalyst for fundamental reforms in Asian economies. The result – measured on a purchasing power parity basis, Asia has accounted for more than half of global growth during this decade so far.

Structural economic adjustments are not fun and can cause temporary pain, but their long term results can be well worth it, and they should not be avoided.

Cheers

Andrew