Who needs a few items - unemploument/underemployment is already near 18%. But let me answer in one word: Japan. Check it out we are on the same path with QE1, QE2, QE3, etc...
We're not Japan. Their population is in serious decline - we're not.
"deflation. It has got to happen to flush the system?
Really? So the 25% decline in house prices is only the beginning. Hmmm.. world population increasing 2%/year, China and India growing at 8% per year and commodity prices are going to tumble. I'll have to think about that.
"The consumer debt still rivals annual GDP so any decrease has been very marginal."
Incorrect. Go consult the Federal Reserve data. Household debt service as % of disposal income have decline 23% for renters (2004) and 12% for homeowners (2007) (half of them who have no mtgs).
Also consumer debt as a % of disposal income has dropped by 27% since 2004.
Marginal you say. Facts do not support your opinion.
Things are not great in the US. We have many problems. But we're not going to drop off the cliff. It's going to be slow growth for a number of years and this has set the stage for major consolidation and cost reduction in the banking industry. Strong banks are great investments at current prices