Expectations as expressed by market prices are what they are, whether you agree with them or not. You can always bet against them. Somebody raised the point that "inflation expectations are high". They are not. Not now.
Current home prices are not supportable by current incomes. Either home prices need to deflate by a great deal (another 30-50%), or incomes need to inflate by a great deal. I don't see how incomes inflate in a globally competitive environment, so that only leaves...
You're correct so long as the dollar maintains or increases in value. But, I don't think that's going to be the case 3-5 years out. In the time leading up to that we're going to see further declines in house prices and income over many sectors. Just the same, I think that current home inventories shrink as those prices fall, but it's not going to be individual homeowners doing the buying this time. I think we've seen a generational, possibly multi-generational, peak in terms of home ownership.
bingo......they can inflate the currency all they like, but he fact remains that even the real value of assets are inflated based on overtrading/overspeculation or whatever you wish to call it. That is what I am trying to say. The inflation of the currency is neither here not there when it comes to this crisis. This whole crisis is an issue of skewed values, and those values must deflate. Usually, in this envrionment it is nearly impossible to inflate the currency anyway, as the money does not enter circulation, but sits in the vault for good balance sheets.
Hogwash. Monetary inflation lifts all prices. Uh, this crisis was never about the over inflated assets themselves. This was all brought on because of the multiple layers of grossly over leveraged debt instruments that were created on top of those assets. Once the subprime end of the mortgage market started to unravel the most highly levered of the structured instruments lost all of their value practically overnight and that participated an avalanch effect due to one massive, interconnected negative feedback loop. Usually? This "environment" is without precedent in all of recorded financial history. Hell, all of this could effectively end in two weeks if the G20 decided that it just might be better to lift the cover and punch the reset button. Not that that's likely to happen...
no shit sherlock "this crisis was never about the over inflated assets themselves. This was all brought on because of the multiple layers of grossly over leveraged debt instruments that were created on top of those assets." oh really sherlock.... cause and effect dude....the debt instruments are just capital chopping and wouldnt have become an issue if the assets were not overvalued and overspeculated yes the debt instruments helped in the overtrading - but only as a catalyst - that would have happened anyway as it has done so for the past hundreds of years i do not have the patience for this forum everybody has a chip on their shoulder and comes out with guns blazing as if they are the smartest kid on the block..just trying to stroke an ego ive had enough leave you all to it
you sound like a child man... cmon.... this kind of narcy back and fwd is really silly...leave you to it
we all fall foul to intellectual egosim everyone on this forum needs to take a good hard look at themselves... myself included sometimes it just doesnt acheive anything it just ruins a healthy debate... it breeds negativity conflict doesnt make anyone feel any better its so easy to shoot off at someone when you are hidiing behind a screen
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