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

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To: John Vosilla who wrote (87969)	10/26/2007 3:19:11 PM
From: GST	Read Replies (1) of 110194

If I own something and I use it as an asset to leverage so I can buy stuff "cheap", and if that asset price declines, then the cost of buying that "cheap" stuff goes up. Those who think that falling housing prices in the US are "deflationary" are blind to the reality. A falling house price is the same as a falling dollar -- you are holding something that is becoming worthless. To think that you will be able to use your worthless asset to get other people to give you stuff cheaper than before is just plain dumb. Name me a banana republic that experienced deflation and I will consider this a debate with two strong sides -- till then, the people talking deflation are playing with half a deck.

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