The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: GST who wrote (27607)	3/23/2010 4:55:50 PM
From: Real Man	Read Replies (1) of 71477

Cost to build is a function of demand and commodity prices. Certainly, it came down substantially lately. However, if the Fed keeps printing money, it will go up again. As for people not being able to afford the price, you'd be very surprised to learn how high Re prices went in some developing countries, where average salaries are well below US salaries. Housing in Europe is also quite a bit more expensive than in the US, and it is sky high in Japan (after declining for 20 years!) Housing not being affordable in part reflects declining standard of living. I agree with you, but both inflationary and deflationary dynamics will likely be present. What this means is that, like equities, housing is likely to decline in real terms for a long time, but what will happen in dollar terms is less certain. In my view housing will bottom in dollar terms in 1-2 years, once the next wave of defaults subsides and deep distressed bargains disappear.

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