Not to forget also as far as supply and demand go, the baby boomer generation spawned home building (those homes are still around of course) those baby boomers DID NOT have as many children as their parents did. As the baby boomers die off and leave another house in supply...in addition to the surplus of homes built after that time...Who will buy them?
yes, gnome, although I'm torn on the "big inflation first". By my reckoning, we are working our way thru the hyper-inflationary "burst" before the long term deflation. But I'm of the opinion that we are closer to the end of the "hyper" part of the inflation than the beginning. The bitter irony is that these markets are in great need of high oil prices, since the energy complex has such a heavy weighting in the s&p 500. A softening of demand and a crack in this sector is what has fueled the last 100 pts lower in the index.
Inflation has been higher than the "official declarations"... much, MUCH higher. But we've not yet embarked on the BIG inflation. So far, all we've had is the Gummint's "trying to get away with it without most people understanding how they're getting screwed" inflation. The BIG inflation is still waiting in the wings.
To look at the big picture and determine who are the "winners", it looks to me the winners are the lenders who were smart/deceitful/fast enough to pass the debts on and pocket their gain, but the biggest winners were the hedge funds who bet against the housing mess and bet on credit default swaps.