The common household faces worst financial nightmare – crashing home prices and free falling equity prices – how do you protect against the financial meltdown?
Sondra Huffington
Aug. 6, 2007

In the recent days, the common household is losing badly. The equity prices are collapsing after the bubbles in leveraged mergers and acquisition, mortgage refinancing, and real estate has busted.

Falling home prices and equity prices are wiping out common household net worth by 1.5% every month. That is very significant and unparalleled in the last several decades since the Great Depression.

Many analysts now predict that worst is far form over. If home prices fall another 30% and Dow Jones Industrial Average falls below 10,000, the economy will plunge into deep recession as households cut down on discretionary income and start paying off debts.

The biggest question is what can you do to protect yourself from the catastrophic financial meltdown started by the collapse in several bubbles in the system at the same time?

First, you should park your money outside equities of any country. Second, US Government Tbills provide a safe heaven. Although gold is lucrative in the short to intermediate term, long term it can also suffer.

You must reduce your exposure from all debts. That starts with your home. Unless you own a business that can earn more than 10% on your investment in this difficult time, you should pay off your mortgage, car loans, and credit card bills as soon as possible.

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