The American Dream of home ownership is once again on its death bed.
Home prices have dramatically increased in price, rising from their 2012 lows by a stunning 75%, with the average median home price now resting at $245,000!
This is up 4.5% over the last year alone, which means prices are increasing and increasing fast.
This has made home ownership essentially unaffordable for many millennial's who are looking to purchase their first home. This is causing more and more to either return home and live with their parents, or asking them for assistance in purchasing their home.
Profits for many businesses are rising and consumer confidence is way up, recently hitting a thirteen year high, but this has not directly translated into an increases in wages, which continues to stagnate.
This truly is the worst of both worlds for many average working citizens, who are just trying to make ends meat and pay the bills. This is what many in the precious metals community have warned about for years, stagflation.
Sadly, many are completely ignorant to what is unfolding in front of their eyes, and they appear incapable of seeing just how similar this current environment is to that which led to one of the greatest meltdowns in modern history, the 2008 crisis.
Stocks have roared higher, causing valuations to become more and more disconnected from reality, home prices are becoming increasing more unaffordable and wages are stagnating in comparison to inflation. This has the hallmarks of a disaster in the making.
These problems on their own should cause one to take notice and pause in reflection, but this is not it, these are not the only problems that need to be taken into consideration.
Geopolitical tensions are a true and real threat, with trade wars erupting all around us, the borders are closing and perhaps it will be many years before normality is restored.
Tariffs have begun to be enacted on multiple sides, and at least in the short term, this posses a real risk to the stability of the "current financial order" we all liver under. For the better or for the worse in the long run, is a matter of perspective and in the eyes of the beholder.
The global elites are unhappy with the system they have built being upturned and the rise of populist political leaders has spread to European Nations as well, with more and more "Donald Trump style" candidates gaining favor among their local constituents.
One way in which they could restore a candidate of their choice, ie a puppet, is to crash the markets and purposely spur on a recession, which would undoubtedly drastically reduce the chances of President Trump getting reelected, given how much he has tied himself to the success of the economy.
Whatever it is that sparks the next collapse is yet unknown, but what is known is that we have all the ingredients of an epic disaster in the making.
One way to mitigate some of these risks, at least financially, is by diversifying a portion of your savings into precious metals, of which have stood the tests of time and weathered countless such storms throughout history.
Whether or not you choose to prepare is your choice and up to you, but don't say you haven't been warned. Sparks are being lit on a weekly basis, it is only a matter of time before one catches and an inferno erupts.
- As first seen on the Sprott Money Blog