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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Don Green who wrote (36105)7/23/2005 10:05:01 PM
From: Mike JohnstonRead Replies (1) of 306849
 
Yes, this is an extreme scenario, but it is not something that has not happened in the economic history of the world. Many nations have undergone currency devaluations, collapses, denominations, replacements etc. with quite a bit of hardship for ordinary citizens.

And even the scenario that i have outlined would not spell the end of the world. Unemployment,poverty and crime would increase, many people would lose their homes but there would be no mass starvation or homelessness.

I am not making predictions that it will happen, because the outcome depends on government and monetary policy, which is unknown. At each stage of inflation the government can change its policy, swallow the bitter medicine and allow imbalances to get corrected on its own.

But this scenario will come to pass, should the fed policymakers decide to use unconventional measures to avoid a necessary recession at all costs.
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