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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: glenn_a who wrote (49816)	1/15/2006 8:23:26 PM
From: worksinjammies	Read Replies (1) of 110194

Thanks for the post glenn_a Although the post was commenting on the bubble of the late 90's (Equity markets) it implied that the bursting of other bubbles (including Real Estate) can lead to the credit quality issues which may lead to spiraling deflation. I found it particularly interesting that he claims that there are no mechanisms in place to engineer a "soft Landing" once deflation is in full effect. As for gold as a hording vehicle for asset preservation, he implies it becomes significant when the deflationary environment is global as opposed to being limited to our country alone. My questions would revolve around the potential crash of our current real estate bubble. Could this event be enough of a catalyst to cause deflation in our country (I suspect it can), and if so, would the resulting economic conditions become a global crises leading to a global deflationary downturn. It is in this situation that gold might become the preferred hording vehicle over cash and the like. Message 22063742 Could a deflationary economic crises caused be a domestic real estate crash be enough of a catalyst to cause global deflation?

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