Its the biggest news around right now. Forget December 21, 2012, the new apocalypse is August 3, 2011. According to some, the Federal government is just hours away from defaulting on its debt, plunging the worldwide economy into a depression the likes of which the world has never seen. Soup kitchens, bread lines, double digit interest rates--pandemonium strikes everywhere!
If you listen to the other side, you will hear that default is just not that big of a deal. Everyone will wake up in the morning on August 3rd, continue with their normal routine--life and business will go on. For this group, the debt ceiling is a great bargaining chip. If they don't get what they want the government is forced to control spending, win-win right?
The truth is somewhere in between. For the most part, everyone will wake up in the morning, go about their normal day. There will be no mass layoffs, so most people will still have their jobs--at least the ones without government jobs. Retired people will still get their social security checks, in effect, the world will continue. The real effect will be uncertainty. Markets hate uncertainty, so this debate is probably dragging out the recession. Not a good thing, but we've already lived through three years of it, what's one more?
You might be wondering what this has to do with real estate in Cypress, TX. I say it has everything to do with real estate. Despite all of the talk of impending crisis, I still believe in the long term viability of the Houston area market. Statistically we've done pretty good in this recession, so I think we are poised to lead the nation out of it. All we need is a little more certainty and we'll be growing faster than ever.
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