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: Wyätt Gwyön who wrote (34625)	6/29/2005 6:14:08 PM
From: mishedlo	of 306849

what you ignore is the housing bubble is the new "wage growth". in fact, housing "wealth" extraction more than makes up for the real wage growth of past decades. because you think housing inflation only affects new buyers, you ignore all the current owners who use the bubble to prop up their earned income. the effective "bubble income" is growing much faster than wage growth of the 70s. the housing bubble is helicopter money, the most blatant kind of inflation there is. On the contrary I do not ignore it al all. It is indeed the busting of that bubble that will bring upon the deflation that I am calling for. Notice I said "calling for" as opposed to what we are in right now which I guess the best word would be stagflation. To believe in sustainable inflation you have to believe the housing bubble can go on forever. I say it cant and it wont and the end is at hand. When it pops we will have deflation, regardless of what the FED does to fight it. Mish

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