Mortgage Bankers Association

Investors are worried, say so until 2008 in various scenarios and the domino effect of the housing mess much attention may have in stock, it passes the real estate, gold and the economy in general.

Sweating bullets may be more. Many in-the-know investors are now sweating bullets over what 2008 provides.

And rightly so. The size of the house on the financial crisis and its potential to broaden and deepen, it is much larger than the typical TVnews-see the man and woman in the United States ever suspected. If they suspect anything.

Then what happens? How much harm can come? We're just a jerk? Or a severe shake and bake?

Or maybe, as with many "dangers of paper" in the past, in one way or another, go from us?

Never seen one of these domino topple show? Someone has blocked a shot more than a simple idea that you, and leads to an emotional reaction to a chain that ultimately knock every mother in complex projects.Well, if we can get away with comparing the complexity of our economy into one of the intelligent design here is a domino effect, which (as plausible as it may be) that we hope never happens.

Domino Trigger

Consumer spending could trigger a game of dominoes, the one who beats all the others? Yes, and with good reason. U.S. consumer spending is the engine that drives the global economy. Our enthusiastic about buying cheap imports to keep China happy, and our tankridiculously high gas prices keep Saudi sheik in the final.

What can be surprisingly a very good thing, given that both countries (most other Gulf states), nearly 3 billion dollars in cash reserves and needless to say, rather unhappy with the direction that the dollar is at the head of recent years. Threats have also made the nuclear option, China and the Middle East to unload their dollars in favor of 'euro and a basket of other currencies.

So far, thatgreat antidote kernel option that is the American consumer, until the Americans are eager to use China and Saudi Arabia do not seem particularly trigger-happy. They show little interest in the funerals of many people who buy things.

But if it served to stop spending, all bets are off.

Fed's Hail Mary Pass

So … What are the prospects for 2008, the American consumer? Here's the answer in one word: Housing. With residences in historical problems, America'shome-based "ATM" is actually closed. No more borrowing against the previously measured high values of our houses are not when, in parts of Florida, for example, are the homes that have sold half their value in 2005.

This is a serious matter. President of Wells Fargo, John Stumpf, certainly does not mince words: "We have a national decline in housing, which has seen since the Great Depression." Stumpf is not a lone voice in the wilderness. "Inever seen a market as bad as such. It could be worse, "said veteran Wall Street analyst Ivy Zelman. Similar Quotes Dire could fill this page.

Fed's response to this disaster in the making, is probably your answer to everything these days: cutting and printing. Lower prices and more dollars for printing. The idea is that cutting and printing, will lead to a dollar even weaker, then it is more convenient to obtain the stock of foreigners and the Fed hopes a possible increase in stockmarket. It would include the average Joe and Jill 401ks.

Ave Maria, this could go to work? The stock will increase, and even housing crash around us, will be sufficiently encouraged to keep spending until the crisis is over?

Question: has more Hail Mary pass to work?

The dreaded domino effect

Okay, just so we cover the bases here, we see the worst thing that could happen in 2008.

In the third quarter of 2007 rose to Foreclosureshighest level since the Mortgage Bankers Association began keeping records in 1972. Equally disturbing, owners behind in their payments rose to 21-years high. AND 'frightening trend continues in 2008.

With so many people either lost their homes or work in the second or third job at McDonald's just to make payments, purchases of the last big-screen HDTV is not only not a priority, it is not even considered. Nor is it a new dining setfishing boat, next-generation computer or digital audio system. And 'all discretionary purchases, luxury overworked people can afford to lose.

Tanks consumer spending.

Fed keeps its cutting and printing of the strategy, but as the medicine administered to an addict, it seems less and less effect on the markets. Perhaps it is because a credit crunch is happening now is that no one is lending to anyone and the loan, not to mention the fact that banks are in terrible conditions. According to some estimates, theirNext sub-prime losses up to half a trillion dollars. According to some estimates, more than that. It is difficult to hold a party for the recent reduction in interest rates when the house burns.

What hope for the Fed, the dollar, setting record lows almost every week, the foreign money now move to the United States is "cheap" stocks. But not fast enough, and taxed by negative consumer sentiment, the market will not rise high enough. People are not exactly enthusiastic about itlow 401ks.

Meanwhile, China and the Gulf States are now being hit with a double whammy: the 2.7 trillion U.S. dollars in cash reserves will lose value almost by the minute, thanks to the U.S. Federal Reserve cuts rates highly interest and their income by the American consumer is decreasing.

Scary enough that nuclear power is now back on the table.

What happens when China and Saudi Arabia play this possibility? That's another story for another day. Suffice to say, with a struggling economy anddollar decimated, people are desperate to find another way to save and exchange. Universally accepted by both buyers and sellers who, unlike paper money, never, never worth it, regardless of what the banks and governments throughout history have sought to do so.

Gold.

At that time, a little 'shiny stuff was worth a lot of about $ 1,000. Perhaps even more than $ 2,000 or more. Who knows? What you should know about domino topple this is truedark scenario, if there is a chance it could happen to you, your family, your stocks or your house is that gold will continue to serve as both the money and the possible final spread … especially if your portfolio contains only, well, paper.