eas of our nation.

It should come as no surprise that analysts of the economy disagree on what the future will bring.

A. Gary Shilling, president of his own investment firm, writes in Forbes, “The house price collapse will induce a painful recession that will send U.S. stocks into a tailspin.”

Shilling believes the Federal Reserve will continue to raise interest rates (which may i

Many good-hearted Americans are always the last to know. For example, in the late 1990s as the tech-stock boom was ready to burst, excited novices were buying and holding obscenely priced equities. As stock prices fell, so did confidence in the Dow Jones Index and NASDAQ.

Then many Americans entered another explosive market – real estate. The zeal for real estate was unprecedented.

But the fact is, many first-time homeowners put themselves in jeopardy by accepting variable-rate loans. These loans were designed to expand the mortgage market by enticing Americans who otherwise could not qualify for a fixed-rate mortgage with their bank.

New homeowners knew that by accepting a variable-rate loan, they were gambling with the future. If interest rates stayed low they would continue to be able to make payments on their mortgages. In theory a problem would arise only if the Federal Reserve tightened, or raised interest rates.

A significant rise in interest rates would mean that monthly variable-rate loan payments would sky-rocket, forcing some Americans to abandon or foreclose on high-priced homes they could no longer pay for.

Yet even if interest rates stayed relatively low, new homeowners faced another kind of bubble-bursting debacle: the collapse of housing values. In this event homeowners would be stuck paying for a home that had lost any where from 10% t0 30% of its value – a value that might never be recouped.

And as if that weren’t enough, the prospect of losing an income as corporations cut jobs loomed large.

Sorry to say, all these worries have become realities, in some areas of our nation.

It should come as no surprise that analysts of the economy disagree on what the future will bring.

A. Gary Shilling, president of his own investment firm, writes in Forbes, “The house price collapse will induce a painful recession that will send U.S. stocks into a tailspin.”

Shilling believes the Federal Reserve will continue to raise interest rates (which may in

t is, many first-time homeowners put themselves in jeopardy by accepting variable-rate loans. These loans were designed to expand the mortgage market by enticing Americans who otherwise could not qualify for a fixed-rate mortgage with their bank.

New homeowners knew that by accepting a variable-rate loan, they were gambling with the future. If interest rates stayed low they would continue to be able to make payments on their mortgages. In theory a problem would arise only if the Federal Reserve tightened, or raised interest rates.

A significant rise in interest rates would mean that monthly variable-rate loan payments would sky-rocket, forcing some Americans to abandon or foreclose on high-priced homes they could no longer pay for.

Yet even if interest rates stayed relatively low, new homeowners faced another kind of bubble-bursting debacle: the collapse of housing values. In this event homeowners would be stuck paying for a home that had lost any where from 10% t0 30% of its value – a value that might never be recouped.

And as if that weren’t enough, the prospect of losing an income as corporations cut jobs loomed large.

Sorry to say, all these worries have become realities, in some areas of our nation.

It should come as no surprise that analysts of the economy disagree on what the future will bring.

A. Gary Shilling, president of his own investment firm, writes in Forbes, “The house price collapse will induce a painful recession that will send U.S. stocks into a tailspin.”

Shilling believes the Federal Reserve will continue to raise interest rates (which may i

ake payments on their mortgages. In theory a problem would arise only if the Federal Reserve tightened, or raised interest rates.

A significant rise in interest rates would mean that monthly variable-rate loan payments would sky-rocket, forcing some Americans to abandon or foreclose on high-priced homes they could no longer pay for.

Yet even if interest rates stayed relatively low, new homeowners faced another kind of bubble-bursting debacle: the collapse of housing values. In this event homeowners would be stuck paying for a home that had lost any where from 10% t0 30% of its value – a value that might never be recouped.

And as if that weren’t enough, the prospect of losing an income as corporations cut jobs loomed large.

Sorry to say, all these worries have become realities, in some areas of our nation.

It should come as no surprise that analysts of the economy disagree on what the future will bring.

A. Gary Shilling, president of his own investment firm, writes in Forbes, “The house price collapse will induce a painful recession that will send U.S. stocks into a tailspin.”

Shilling believes the Federal Reserve will continue to raise interest rates (which may i

aced another kind of bubble-bursting debacle: the collapse of housing values. In this event homeowners would be stuck paying for a home that had lost any where from 10% t0 30% of its value – a value that might never be recouped.

And as if that weren’t enough, the prospect of losing an income as corporations cut jobs loomed large.

Sorry to say, all these worries have become realities, in some areas of our nation.

It should come as no surprise that analysts of the economy disagree on what the future will bring.

A. Gary Shilling, president of his own investment firm, writes in Forbes, “The house price collapse will induce a painful recession that will send U.S. stocks into a tailspin.”

Shilling believes the Federal Reserve will continue to raise interest rates (which may i

eas of our nation.

It should come as no surprise that analysts of the economy disagree on what the future will bring.

A. Gary Shilling, president of his own investment firm, writes in Forbes, “The house price collapse will induce a painful recession that will send U.S. stocks into a tailspin.”

Shilling believes the Federal Reserve will continue to raise interest rates (which may increase variable-rate mortgage payments) until it is obvious that something negative is happening in the housing market. Then, and only then, will the FED reverse its course and start lowering interest rates.

If Shilling is right, the cut in interest rates will cause a rally in the U.S. Treasury bond market. Investors may prefer this market as stocks fall because bonds are considered a safe haven. Remember this: When interest rates fall, the price of bonds rises. And the reverse is true.

But lower interest rates will discourage homeowners from saving money. And, Schilling writes, “A big drop in house prices will…awaken them to the reality that they can’t expect their home equity to finance their retirements.”

Ouch. Should Schilling’s prediction play out, Americans will need another income stream to bail them out. I have a solution. But first let’s look at the other side of the debate.

John W. Rogers Jr., CEO of Ariel Capital Management, LLC, writes in Forbes, “After 13 Federal Reserve rate increases in 18 months, many assume the tightening is almost over. But I think that, in the face of rising inflation, rates have a lot more to rise.”

Rogers notes that housing prices have risen 44% along with commodities such as sugar, copper and gold.

And he continues by reminding us that higher interest rates are bad for stocks and make “bonds and money market accounts more attractive than equities.”

In other words, either way you cut it, Americans are in for a challenging time. And to survive, homeowners may require the means to fight inflation, or breath