Can you imagine a 100-year mortgage?

If you wanted to buy Tokyo property 20 years ago, that's what you needed... The lifetime earnings of a typical Tokyo office worker weren't enough to buy a small apartment in central Tokyo. Real estate prices got so out of hand there, the grounds of the Imperial Palace were valued higher than all the real estate in the state of California.

Japanese stocks were just as outrageously expensive...

The boring "textile" sector sold for an average of 103 times earnings. The slightly more exciting marine transportation sector sold for 176 times earnings. Japan Airlines soared to a comical 400 times earnings. But not to be outdone, All Nippon Airways hit 1,200 times earnings (the "hidden" value was supposedly in the company's land assets).

Japan is the last developed country to have experienced a major property and stock market bubble, fueled by easy credit. The bust was ugly. Today – nearly two decades later – stocks and real estate are still 50% or more below their 1990 highs.

I went back and looked at the Japanese market in 1990 for guidance on the U.S. situation today. I was surprised by what I found.

Folks claim we have a housing bubble here in the States. When you honestly size up the figures, we don't have a bubble anymore...

I live in Northeast Florida. According to the latest stats, the median home price in Jacksonville is $175,000, and the median household income is $64,000. This isn't Tokyo, where your lifetime pay wouldn't cover a shoebox apartment... Your pay will cover your home price in less than three years here.

It's not just Jacksonville. U.S. home prices have fallen 20% since peaking two summers ago (according to the Case-Shiller Index). So now – and you may not want to believe this – the bubble has washed out. Homes here, in the ol' U.S. of A., are affordable. The American Midwest and the South are particularly cheap right now.

Even the supposed "bubble" markets – like Phoenix and Las Vegas, which were hit the worst – aren't that expensive anymore. Both markets have the same median household income as Jacksonville ($64,000). And median home prices as of the latest stats are $195,000 in Phoenix and $223,000 in Vegas. (I'm sure prices are even lower than those numbers right now.) It's still nothing like Japan.

Don't buy the fear. Just consider those facts. The obvious conclusion is:U.S. real estate is no longer a bubble. It's affordable once again. The median family can afford the median home in most of America.

Sure, we have an oversupply of homes for sale. It happens in recessions. That'll work itself out. No big thing. (Really!) And sure, it will likely take many years for the market to stabilize, much less recover. But the bubble is gone.

So if we don't have a Japan-style bubble in housing... what about stocks? Do we have a stock market bubble? Are stocks outrageously overpriced and doomed to fall?

Remember, in Japan in late 1989, many sectors traded for over 100 times earnings. In plain English, if you bought that business privately, it'd take you 100 years of similar earnings to break even.

How about in the U.S. today? The situation is much different than Japan back then... The forward price-to-earnings ratio for the Dow Jones Industrial Average is about 12. By that standard measure of value, stocks are the cheapest they've been in a quarter century... That's hardly a stock market bubble!

Home prices aren't the big problem now. Neither are stock prices. So what exactly is the problem in America right now?

Obviously, it's the banking system. But do you really understand what's going on? Let me explain it...

In short, you can't borrow money now. Nobody can. Banks are afraid to lend anyone any money (including each other). This problem can seriously spill over into the entire world economy...

As a simple example, let's say you have a shop that sells T-shirts in the summertime. Every spring, you borrow money to buy your inventory. If the bank cuts your line of credit, then you are out of business. Your employees lose their jobs. The store might close. And the Chinese factory that makes your shirts is out of work as well.

Most people on Main Street think the government is trying to save Wall Street bankers. That's not it. It's trying to save the line of credit for the T-shirt shop owner – it's actually trying to save Main Street.

I have no doubt Ben Bernanke and the boys will succeed. They will find a way to get credit in that shop owner's hands.

So while it feels bad out there... Real estate is actually affordable, stocks are cheap, and Ben Bernanke is committed to cranking out dollars until the banks will lend again.

Meanwhile, people are downright fearful. Instead of being scared, you should think about buying. Stocks are 1) cheap and 2) hated. We're just missing 3) our uptrend... Then, it's time to buy!

Good investing,

Steve
Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.