I think you're right. The ground indeed quakes.

If the Dollar has nothing to stand on, I imagine a lot (a lot!) of money will move towards anything-but-the-Dollar. gold comes to mind, but so do other things... Swiss Francs anyone?

A kvetch:

I've seen the "Home Equity Loans" graph a number of times in different places. It's very dramatic, but as presented it's completely inscrutable: 40% of WHAT please? -x% of WHAT? I mean really...

(BTW, I got an email today telling me I was pre-approved for a... home equity loan!)

Thanks for your website.

Estimated gross equity extractions rose 10% from the previous quarter to a seasonally adjusted $990.6 billion (for Q3 2005), according to an update provided to Investor's Business Daily of a September Federal Reserve study on mortgage originations.

For the first nine months of last year, equity extraction totaled $2.6 trillion vs. $2.4 trillion for the same period of 2004 and over double withdrawals during all of 2000.

In the first quarter (of 2007), 'home equity extraction' net of fees fell 8% to $449.6 billion at a seasonally adjusted annual rate from the fourth quarter, the lowest since the fourth quarter of 2003 well below the peak of $863.7 billion in the third quarter of 2005. CHS: note that the data on the Calculated Risk entry from other sources places the peak at $990 billion;' clearly, it is an inexact number.)

Homeowners extract equity from their homes either by selling their home at a capital gain and spending some of the proceeds, taking out a home-equity loan, or refinancing their mortgage and taking cash out in the process.

Such extraction soared with rising home prices and falling mortgage rates earlier this decade, and has since slowed as first mortgage rates edged higher and then home prices stopped rising and home sales fell. The drop in the first quarter was principally due to a sharp, 82% decline in the growth of home equity loans; equity extracted through the sale of existing homes rose 9%, and equity extracted through cash-out mortgage refinancing eased 5%, according to seasonally adjusted data.

In 1999, total outstanding household debt was $6.4 trillion. As of the end of the second quarter of 2006 total outstanding household debt was $12.3 trillion.

Household debt has increased by almost as much since 1999 as the sum total of all debt accumulated by all households across the preceding 220-year history of the US. In 1999, household mortgage debt stood at $4.4 trillion. At the close of the second quarter of 2006 it had more than doubled to $9.33trillion. In 1999, consumer credit outstanding was measured at $1.6 trillion.

The last six years have hosted the most stupendous extraction of inflated household wealth in history. Across the 22 quarters from 2000 through the second quarter of 2006 disposable personal income increased by $2.3 trillion. However, disposable personal income as a percentage of household net worth fell. Rising house values contributed more than personal income increases largely derived from these rising house values.