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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: GST who wrote (75283)12/11/2006 1:21:08 PM
From: John Vosilla  Read Replies (1) of 110194
 
'The poor have little if any credit. They have nothing. All they have is a future full of bills that squeeze them harder and harder every month. The big debts are with the 'middle class' -- lower, middle and upper middle class. Inflation screws the poor, benefits the middle class and for the rich it is a matter of how smart they are. Viewed from that perspective, the middle class have been brilliant to take on so much debt.'

Yes brilliant if they live in a bubble market and bought property 4+ years ago. All are so ahead of the game at this point. My guess is they lose their equity somehow some way in the next cycle through a combination of purchasing power loss, excess spending and a modest shrinkage in their nominal asset values..

The coming inflation already baked into their home prices and they don't even know it as they spend like drunken sailors.. Contrast this to the 70's when home prices rose in sync with everything else at the same time. So your house tripled, rents tripled and wages tripled. Perhaps that is what the other poster was alluding to in that stagflation last time benefited the middle class homeowner disproportionately as financial assets for the rich cratered and the assetless poor feel behind even more last time this happened?
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