How big will the housing bubble's burst be?
If you want to know, there's a very interesting article linking the current mess in the US with the Japanese real estate boom/bust cycle in the 1980’s, and some additional analysis from Ian Welsh at the Agonist.
If they are even close to the truth, things are going to get very ugly, not just because of the similarities to the Japanese crisis, but because of other factors which will add to the United States problems. The ongoing wars in Iraq and Afghanistan, which will continue to drain government coffers for quite some time even if they ended immediately, and whose drain will continue to rise the longer they continue.
The Baby Boomer Bulge of retirees is about to start putting stress on the Social Security, health programs, and pension plans.
And the massive budget and trade deficits are reaching a point where they will have to be balanced. These all add up to a very nasty fall for the US and everybody who depends on their consumption to drive world markets.
