Warning: This is ugly.

As I write this, the US economy is crashing.

Listen. You won't read about the crash in the newspapers. You won't see it on television news. You may read about it on blogs and on sites like this one. I have no advertisers. I can tell it like it is. Do you really think the Washington Post or the Los Angeles Times or ABC News is going to tell you this stuff?

They are not.

Their advertisers would dessert them.

The US economy is crashing.

Non-financial debt makes up 167% of the gross domestic product. If you include financial debt, total of all debts is close to 300% of the GDP.

Now that credit is crashing, easily 20% or 30% of that debt can collapse. And when you have a collapse like that, it means the US economy is crashing.

It isn't a subprime credit problem. It's in all of real estate. Many trillions of debts are threatened.

It's simple. As houses are foreclosed on, the whole neighborhood declines. More homeowners who bought with little or no money down decide to walk away.

As the New York Times wrote, spilling the beans, even the "affluent" are suffering.

As the people who have the money in the economy in the US, the middle class, suffer, they take down everyone else with them.

What should you do?

• Get out of debt
• Settle your debts, walk away, negotiate them away
• Start saving money
• Count on job losses, layoffs and business reversals
• Inflation is very bad. Consider buying extra things like paper towel and toilet paper, non-perishable canned goods and whatever you consume. You will protect yourself somewhat from price hikes by stocking up as much as possible. This can get you a 15% or 20% return over a year, so it is quite meaningful.
• And make sure you are emotionally prepared.

Will real estate crash?

Not necessarily. In inflation-adjusted terms, real estate must fall and fall.

But not in dollar terms. As inflation hits us, dollars are worth less and less. The US dollar is already at historic lows against other currencies.

So what does that mean?

It means that with high inflation, we may see a bottom in real estate in a year or two.

Watch rents versus total cost of ownership. Once you can rent for about what it costs to own the property, then we are nearing the bottom.

If inflation continues to be high, rents will start to rise. At some point in a few years, they will rise to the point where it pays to own property and rent it out.

We are in the midst of some very bad US inflation. And that might drive wages up and rents up, over several years. Even 15% inflation over two years can mean a huge increase in rents and this would come much closer to preventing a crash of real estate prices.

Be prepared.

See how to sell your house in nine days.

And how to sell your house and rent.

And please watch my video on how to avoid foreclosure by doing a short sale even if you have a second mortgage foreclosure situation. The answers are here. I will never share your name or email with anyone.

And watch this video on short sales and foreclosures. This is a screen shot — just type in your email and I'll get you to the real video. Thank you.