I've seen a bit of inflation, but now, it appears that I'm seeing a bit of DEflation.
Housing is a big piece of the expense of anyone these days. If home prices fall 20% or more in some area, one of the biggest bites is suffering deflation. 20% on a 200K house is 40,000.
That's a lot of Eggs, gas, and milk, I can tell you.
Mark
If we will never construct houses again,
Started by
spielchekr
, Aug 25 2007 09:13 PM
11 replies to this topic
#11
Posted 26 August 2007 - 05:38 PM
Mark S Young
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#12
Posted 26 August 2007 - 06:19 PM
I've seen a bit of inflation, but now, it appears that I'm seeing a bit of DEflation.
Housing is a big piece of the expense of anyone these days. If home prices fall 20% or more in some area, one of the biggest bites is suffering deflation. 20% on a 200K house is 40,000.
That's a lot of Eggs, gas, and milk, I can tell you.
Mark
Agree that housing decline is deflationary (as is the pay-down of debt if done in a non money-print manner). However, will the Powers allow it to occur? Will they print money hand-over-fist in an effort to avoid a deflation and give us perhaps an equal or worse problem on the inflationary side? Will there be deflation in spite of the maximum money-pump?
I don't claim to have the answers, but I think they are the most important questions we will face over the balance of our financial lives. (Personally, I think they try the "all-out money-print" which results in hyperinflation and destruction of the $USD... and we won't be cheering that we avoided deflation. I also hope I'm wrong.)
Edited by HoseB, 26 August 2007 - 06:25 PM.
40,000 headmen couldn't make me change my mind....