Are we setting ourselves up for en economic depression?
QUESTION: A listener emails in that his son has been reading about the US depression in 1837 that resulted primarily from land speculation. Could it happen again?
ANSWER No, not based on where we currently stand. There isn't enough instability in the housing market to break the back of this country and send it into a depression. Now, are there millions of people who got houses that weren't financially ready to do so and now their sub-prime loan has them in trouble? Yes.
Keep in mind any time something happens bad in the economy these days, it's magnified 5000 times by our news-saturated society. Britney Spears custody battle and Paris Hilton's 20 days in jail is headline news now. Did anyone spend much time on the stock market breaking records last week? Not really, becauase that's not as sexy. If it bleeds it leads.
But no, right now are we close to a depression? Not a chance.