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Doom and Gloom A short time ago (‘The Economic Precipice’) I warned about an impending economic collapse. According to The World Socialist Web Site: Experts warn that the debt bubble potentially dwarfs the US stock market asset bubble that burst in 2000. Consumer credit and mortgage debt represent a higher percentage of disposable income than ever before. Household debt as a percentage of assets reached the historic high of 22.6 percent in the first quarter of 2003. The Federal Reserve revealed that personal savings dropped to a mere 2 percent of after-tax income in the first half of 2003. Much (if not all) of the supposed increase in wealth is a result of rising house prices. If you bought a house for $150,000 and it’s now worth $300,000 you have made a paper profit of $150,000. What's more, you can borrow against $300,000 security. If someone gets laid off work and can no longer afford repayments, then the bank can reposes the home and will attempt to sell it in order to recover at least part of the dept. If this happens on a large scale then the houses that the banks attempt to sell will drop in price – it becomes buyers market. This causes house prices to drop even further and houses that were purchases for $250,000 are now worth only $200,000. Someone who is paying off a mortgage is still in dept even if after they sell the house. This is an accident waiting to happen. However, there is a way of making money when all around are losing theirs. In January 1980 gold went from $559 per ounce at the start of the month to $850 on the 21st. It had moved from a low of $160 in May 1978. In today's money, $850 is around $1700 per ounce. If people lose confidence in dollars they will buy gold, pushing the price up even further. Investing in gold is a much safer bet than investing in property.