Former Fed chief Paul Volcker summarized the overall US economic situation at the second annual summit of the Stanford Institute for Economic Policy Research. In his speech he said:

“Altogether, the circumstances seem as dangerous and intractable as I can remember. Boomers are spending like there is no tomorrow. Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security.. As a Nation we are consumin about 6 per cent more than we are producing. What holds it all together? - High consumption - high leverage - government deficits - What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 billion per day.” The nation is facing “huge imbalances and risks.”

Volcker made those statements in his keynote address two years ago at Stanford. Unfortunately things haven’t gotten any better. Rather, our country is facing massive challenges than equal or exceed any faced iin our 230 year history. The credit storm has swept across the country and affected the rest of the planet, descending on real estate, due to the subprime and credit card debt. While we as individuals can’t change much on the national level, other than vote, we can make changes on our individual situations. Now’s the time to do so.

What do you think?

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