We discuss the nasty negative feedback loop that rising real estate taxes have on homeowners in a credit crunch event, and the role these taxes play in regional Housing market crashes when the local economy goes south.

Liquidity Traps come at you from all angles when you are struggling with a downturn in the economy! Don't become house poor by maxing out your mortgage qualification zone, it becomes a real life and finances stressor, and can bankrupt you in an unexpected financial emergency like a health scare or loss of employment income. The studies routinely show most homeowners are unprepared for these events. Ask yourself the following question: Can you afford your current home with the loss of income for a year, how about the total costs associated with homeownership, like real estate taxes and HOA fees?

Most homeowners are financially insolvent and currently set up for massive liquidity traps in a downturn in the economy or personal finances. They just don`t realize it until it bites them in the pocketbook, and is too late to realistically react in a meaningful way to avoid financial disaster. It is part of the reason we have market crashes, and housing market crashes are going to be continually happening in this country and around the world as there never seems to be enough money, in the end, to keep these giant Ponzi schemes afloat. Everyone, in the end, gets caught in the same types of liquidity traps that pension funds, governments, and fortune 500 companies often find themselves in regards to bankruptcy proceedings.

Video Length: 00:10:25