The asset class within tangible assets in the immovable category is none other than real estate. This greatly varies from one location to the next. We face two main problems with real estate because we are facing a major Sovereign Debt Crisis.

First is the fact we have a problem with leverage reflected within interest rates. While many tout derivatives and fiat money are the reason for a crisis on the horizon, of greater concern is the leverage within real estate. The 30-year mortgage was part of Roosevelt's New Deal. Real estate prices collapsed along with massive bank failures. There was no credit available, so real estate collapsed to about 10 cents on the dollar.

Real estate was auctioned, and land that had sold for $2-$3 during the mid-1800s brought 10 to 30 cents an acre. FDR created Fannie Mae to revitalize the real estate market by providing 30-year mortgages to allow people to buy property. Sales were taking place at auctions and on a purely cash and carry basis, which obviously limited the buyers.

We have to be concerned about the results of shutting down these agencies, which can result in reduced leverage within the system; if you add to that a banking crisis, then we will see a return to the atmosphere of the 1930s. The amount of leverage within the entire system based upon real estate is astronomical. This has been a major factor in creating the long-depression in Japan, for at the top mortgages became 150 year mortgages with several generations responsible. Everyone was doing it so it became the NORM. As property collapsed with banks, everything changed in Japan.

Derivatives and fiat scenarios pale in comparison to the deleveraging of real estate for this is also a direct hit upon the people. Many have built their lives around the assumption that the value in their home will be there for retirement. This is part of the massive DEFLATIONARY wave we are in, and is why we have to restructure. The entire future will be lost and there are no political candidates willing to tackle a subject they do not understand. They will never accept the fact that government is responsible for this economic nightmare.