The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Amy J who wrote (28254)	3/17/2005 2:38:36 AM
From: Elroy Jetson	Read Replies (3) of 306849

Devaluation of the currency is a monetarist carnival-mirror distortion of the economy. The income of most buyers is unaffected by the change in the currency, as a consequence the income/real estate price ratio is unaffected by this. Real estate prices do decline along with the value of the currency, relative to the income of outsiders. Those wishing to commute to their job in Paris from their new home in Passaic New Jersey may wish to become new participants in the New Jersey Home market. Obviously there would be some foreign buying, concentrated in some areas favored by offshore buyers. Serious currency devaluation produces inflation from increased import costs. It can also lead to increases in local wages, if the devaluation leads to increased exports and lessened imports - of which there is not yet any indication. The benefits of rising wages will tend to be more than offset by the inevitable rise in mortgage rates driven by fears of inflation and loss of principal due to further devaluation by foreign lenders. .

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