Real Estate as a percentage of household assets now carries TWICE the weighting that the stockmarket carried back in 2001 for the average household. Real Estate is just starting to come off and probably has a 12-18 month stretch of correcting prices and weakness. As it is now, construction permits for residential real estate are at a 4 year low. The coming Real Estate "corrrection" is really going to deflate consumer spending. While everyone and the FED is so overly concerned about "inflation" ( most of which has not even hit the "service sector" of our economy), I think that the markets and people in general will be rather surprised of how hard the coming DEFLATION will be. Stay tuned.
I doubt it. The Fed and Administration can't handle deflation. Therefore, they will inflate and inflate (into oblivion, if necessary) but will not allow deflation. I suppose it's *possible* to have deflation regardless of the Fed's efforts. If we do, well, hide the women and children.
Worried about inflation?? NAH! No inflation.. Worried about deflation?? NAH!! No deflation... Well there has to be something! How can we all be so off? I guess that's what makes a market...
I haven't listened to CNBC for years, if that's what you mean by talking heads.. If you mean Fed Officials, then Fischer came out today and did his 2-step about inflation...worried...
They claim to "worry" about inflation when they're thinking "a few percentage points above comfortable".... that's because they know they're lying about the true inflation rate being probably 6-8% and they have to keep fudging the numbers so the sheelple [us] don't panic. They should also be worrying about the massive stuff which will explode when the Boomers retire.
Fed will do anything to avoid a Japanese style deflation at all costs, as will the current administration. 1) War 2) Helicopter Ben 3) Currency Devaluation 4) Illegal immigration encouraged All are meant to stave off the malaise of europe and japan where declining birth rates and ethnocentric societies have all but written their own death warrant for the next century. Think that it whips back and forth between the two and that the nimble survive. Not sure which one comes first. Maybe a mild deflation followed by a massive inflation then the big deflation that will inevitably follow. Just ride the waves and keep it liquid.