The scale of this devaluation has not sunk in. Let’s take the figures from the USA by itself – there are nearly two million homes that have been foreclosed. If you estimate that each house had a debt (a loss in value) of say $100,000 – then do the maths. It means that bankers are out around $2 trillion already.
And it’s no over. Nor have we considered the commercial property market and all businesses with assets that have depreciated. Why any politician thinks that there is enough money in the world to recapitalise these losses is beyond me.
Australia is headed the same way. Until property prices reach a sustainable level this WILL NOT STOP.