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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (71299)11/17/2007 10:51:19 AM
From: Tommaso  Read Replies (2) of 116555
 
Prices will fall 20% or more on average, I believe. That's home prices. But I just heard someone who seemed to know saying that the total home market represents about 5% of the total value of wealth in the United States. If that is correct, we are talking about a decline of a few percent at most in CPI due to housing. That leaves the rest of the (true, not doctored-up)CPI to be affected by costs of labor, machinery, etc. and even more by food and energy.

I think we could have a serious recession accompanied by up to 10% per year increase in the cost of living. People would have less to spend and be choosing to spend less, but what was available could cost more. Declining production could mean rising prices. Why? Simple. Abundance of fiat paper money. Dollars flooding back into the United States from abroad as the world shifts to better currencies.

I know I am painting my economic picture with a very wide brush dripping with black paint. But I am joining Buffet and Rogers and others in trying to escape the effects of a dollar devaluation that all branches of the giverment except maybe the judiciary are participating in. I accidentally misspelled "government" in the last sentence but I think I will leave it that way.
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