Are We Heading Towards Depression?

Everything You Need to Know About the Fall of the Economy.

Are you scared and confused about what is going on in the economy?
Well let me explain everything to you.

What's going on why is everything falling apart, where did it start?

It all began with the housing crisis. To keep housing demand high and supply low and therefore keep home values up the banks started offering "subprime loans" to people with bad credit who otherwise couldn't buy a house. The idea was to generate more potential buyers to take care of the overwhelming supply of homes on the market. "Subprime loans" have rates that could raise beyond the persons means to pay them. This didn't work and housing values still fell.

Why did housing values drop so much?

The law of supply says when supply drops prices go up, so inversely when supply raises prices drop. A couple years ago when values were at an all time high developers kept building houses to keep up with demand. What happened in result is the market got flooded with houses driving supply way up beyond demand and in result driving down value.

Why did the banks collapse?