For the Bush administration apologists who continue to blandly assert that "The economy is just great..." let me offer this. <blockquote>The nation's foreclosure crisis is being driven by home buyers with shaky credit who took out subprime loans. Many of these borrowers are now unable to make the higher mortgage payments required after the rates on their adjustable-rate loans reset. The ripple effect has caused several mortgage companies to fail, others to stop providing subprime loans and many more to tighten lending standards on all loans. The percentage of subprime, adjustable-rate mortgages in foreclosure jumped to 3.23 percent in the first quarter of 2007. Compounding the foreclosure problems are predatory loans, mortgage fraud and speculative homebuyers with properties whose values have fallen below their purchase prices, leaving owners unable to sell them for a quick profit. - <a href=http://www.mcclatchydc.com/homepage/story/18926.html>McClatchy</a></blockquote> Now, those of you who passed ECON 101 will immediately grasp that as people are harder pressed to maintain their monthly mortgage payments, they are going to stop spending on other items. You know...Cars, big ticket appliances, travel, clothing, food, etc. As the pool of disposable income shrinks, so to does the economy. And with credit markets, the mortgage markets in particular, drying up there will be less and less credit available, thus driving interest rates up. For those poor sots with adjustable rate mortgages coming due, the increase in their monthly payments due to the increase in their monthly mortgage can push them over the edge and into foreclosure, some even abandoning the property. The grim reality is that as the housing markets go, so goes the rest of the economy. And unless something drastic happens, and soon, the collapsing housing market could drag the rest of the economy down with it. The article I linked to has a chart listing the top 100 US cities with for foreclosures. What's truly staggering is the level by which most of them are out-pacing the same period last year. Do yourselves a favor...Pay down as much debt as you can, as quickly as you can and buy gold.