During hurricane season, the forecasters track the path of the hurricane and provide warnings. Not to cause fear, rather to provide information so that you can make choices for yourself.
I have a forecast with the same intention, like my previous housing bubble forecast, I cannot let you know when exactly this will hit, as people create a lot of manipulation to delay the inevitable.
You will hear a lot more about debt, not just the US debt, more the debt of other countries, small towns, cities and the states here in the US, as well as those such as banks who own the debt. Currently Greece is on the verge of defaulting on their debt, close behind are Spain, Portugal and Ireland. The states in this country have current deficits and projections up to the year 2011 of a combined deficit of $134 billion dollars.
That doesn't include cities and towns which not only have deficits, they also have huge unfunded pension and health obligations for government employees. Some thing has to give, there is resistance by the unions to lay offs and pay cuts and there is resistance from tax payers to higher taxes. Both have to happen.
What does all this lead to? It leads to what I call phase 2 of the re-balancing of the economy. This does not mean it has to be painful for you, many came through phase 1 intact. They did so by being careful or conscious, they eliminated much of what they really didn't need to have or buy. They refinanced debt levels at low interest rates to free up cash, and many paid down or paid off debt (by the most amount in history).
There has been no significant change to banking regulations since phase 1 and as a result at least 1 major bank will fail and hundreds of smaller banks will do likewise. At least one major city will declare bankruptcy as will several smaller towns to clear themselves of high priced union contracts. This will bring deflation and things that you need will become less expensive, as they generally did in phase 1.
This is not good news for the stock market or the bond and commodity markets or the general economy.
We will come out of this stronger and better, use this time to clean things up in your life and create the minimum inconvenience. You have some time, this is not going to happen tomorrow.