The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: gregor_us who wrote (24018)	11/7/2009 8:52:13 AM
From: robert b furman	Read Replies (1) of 71412

Hi G, A good article. I agree with your underlying premise - but I think you take it too far. A reversion to the mean often shoots too far - I think that is what we've gone through. The bubble has taken speculation out of pricing - that's what appears to be deflation. That does not mean the deflation rekindles. We are after all a growing population. For every couple trapped by debt, there is a young couple that has been saving and they are seeing real estate value like never before. What props up the reflation of real estate assets and commercial properties is replacement value. As all these Dollars (most if which lie dormant in the big banks as capital injections and not in the economy) create a reflation, the prices of real estate revert to the mean. It is natural to fear a double bottom and Armegeddon all over. The most likely prospect as we see gold climb, is an increse in natural resource pricing which props up replacement value and puts in a bottom in overall pricing. The chicken thieves who run around wanting to steal the excess and levered commercial real estate have been running around claiming the ruinous fall - which has been slowly propped up by cheap money and most renewals are in fact occurring. As money flows into the SBA even small local problems will be saved in lieu of there being a banking problem on the local scene. I believe your premise is possible,but with every second of time and cheap money, the reflation of commodity prices and it replacement value of existing CRE provides a reasonable value support, that is a market placed event (the best and strongest kinds of events). The last persective one must acknowledge is the massive degree of capacity that has been taken out of our economy. Althogh the rebound might at first be intuitively slow - I think the resulting reduction in capacity (which has been huge) will add to the acceleration of the recovery. It may not be a V,but the right side of the recovery will pick up more speed - as a result of reduced capacity. I'll go back to that Ferris Wheel grease the fittings and put some paint and my bet is when the music plays - people will show up.<smile> Bob

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