One reason we had such a massive bubble between 2004 and 2007 is because the big banks were pushing No Income No Job loans, a.k.a. subprime loans, on poor people. The banks then took these subprime loans (debt), packaged them as securities, had them rated as AAA, and sold them to pension and sovereign wealth fund as assets. The more debt that was created, the more housing prices went up, causing people to use their credit cards more and to use their home equity to pay off those credit cards. The more people spent, the more the economy boomed. Of course, we all know what happened when credit was finally maxed - the bubble burst.
The reason I say this crisis is not over is because the system is the same.
The Fed wants and needs you and me to borrow more money so that more money will be created in the economy. If the Fed tried to change the system, let's say back to the old system of the gold standard, which I doubt will ever happen, there would be a bigger crisis. So far now, as long as people think the crisis is over, more and more people will slowly come out of hiding and begin to use their credit cards again, and hopefully the crisis will end.
Rather than wait for the crisis to end,as always, I recommend you aggressively increase your financial education. Maybe take a real estate investment course, hire a coach, start to use debt now, while the bargains are plentiful, and emerge richer if and when the economy does return.
These are very difficult times. These can also be times of great opportunity. I hope you make these the best of times for you and your family.
