I’m working on my 2016 outlook right now—yes, a couple of months before it actually gets here—and am struggling to focus on what will be most important. Developing an idea about the future requires first identifying the most important issues, then making some decisions about how they are likely to evolve, and finally trying to tie them all together.

Yesterday, I talked about housing demand and concluded that it is not only healthy but likely to increase. This represents only one-half of the picture, however. In many ways, the more important half is what that demand means for the housing supply. Home building requires labor, materials, financing, and most other sectors of the economy, so it can provide even more of a boost to the economy as a whole.

I held a client webinar yesterday that included a look at housing demand. As part of my commentary, I made the point that housing is actually an excellent leading indicator for the rest of the economy and a key part of any future growth. At that point, I realized I had not done a detailed update on this topic in the blog for some time—so here we go.

Just in case anyone has forgotten, it’s projected that the U.S. will run out of money to pay its bills on November 3, which is less than two weeks away. Since we hit the debt ceiling some time ago, the Treasury has been using the “usual extraordinary measures” to pay the bills—including raiding other federal accounts (e.g., federal employee retirement system balances). But even that cash will run out in early November. Once again, a crisis is coming.

We know the Federal Reserve is worried about inflation being too low, and yesterday’s figures seem to substantiate that fear. With headline inflation over the past month down by 0.2 percent, and flat over the past year, it seems that prices are indeed just sitting there.

I wrote yesterday about the economy and how I believe that, while we are seeing some weak data, we are likely experiencing a temporary “snowdown” (much as we saw the past two winters) rather than a true slowdown. Still, we have to ask ourselves, Is the market pullback similarly temporary, or is it the first stage of a deeper correction?

There has been a lot of talk in the financial media about an economic slowdown, with a sense—explicit in some cases—that a recession is a real possibility. Some of that talk, I will admit, has come from me. Given some of the recent bad reports, particularly the jobs report, I do feel that there is a possibility that the trend has changed. After giving it a lot of thought, though, I do not think this is what’s actually happening.

There’s an undeniable focus on the U.S. in my research and writing. In part, of course, this is sheer parochialism—you write what you know and what your readers seem to be most interested in. But my focus is also driven by a conviction that the U.S. is still the most influential economic and political actor in the world. I have stood by this belief for the past couple of decades and see no reason to change now.

The reason I bring this up is that we are starting to see the beginnings of a new cycle.

When markets drop, I always get calls from advisors and the media asking what the heck is going on. Volatility (at least when combined with a market decline) is often considered evidence that it’s time to worry—that something is broken. It makes sense; after all, if you’re losing money on your investments, something isn’t right. But, somehow, I don’t see the same reaction when there’s a market melt-up. No one called me yesterday to ask what was going on, anyway.

Maybe they should have.

The great financial crisis of 2008 was, of course, ultimately a financial crisis, but the proximate cause was housing. As of the mid-2000s, you may remember, the general consensus was that housing prices couldn’t go down nationally because, well, it had never happened before.