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In his 2006 book, "The Crash Comes", a German economist named Max Otte predicted that the practices of mortgage lending at the time would lead to a financial crash. As he saw it, financial institutions’ habit of approving unsustainable loans would leave a lot of home owners overextended and burdened with debts they could not possibly repay. Otte predicted that the value of the U.S. dollar would fall significantly, triggering a worldwide economic crisis.
Sadly, Otte’s predictions have come true. In the past few years, millions of people have lost their jobs. Home foreclosures are at an all-time high. Government debt has risen astronomically, with some countries needing massive bailouts to keep them from defaulting. Families are trying their best to cope, but the pressures they are facing are enormous. Clearly, the Great Recession, as it has been called, has taken a severe toll. As we approach the end of another grim economic year, almost everyone has come to understand firsthand how serious this recession really is—and how long lasting it may be.
Our aim this month is not to focus directly on the economy or financial issues. Neither do we want to paint a doom-and-gloom picture. And we certainly don’t want to say that all our problems will be solved simply by…
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