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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (27614)3/23/2010 10:33:40 PM
From: Nevada9999  Read Replies (2) of 71477
 
<Cost to build is a function of demand and commodity prices.>

Perhaps we could simplify and say that the cost to build a home is equal to the cost of an extra large polypropylene tarp at Walmart. Thus, the goal of the Fed would be to print until the US$ cost of an extra large polypropylene tarp is equal to the average outstanding principal of the distressed mortgages. That will prevent housing prices and the credit bubble from collapsing. However, housing prices will become unimportant somewhere in this process and people will start thinking about food prices. Wages will have to rise to equal nutritional subsistence costs. Food and wages will be entirely domestic markets and will balance. I think that is sort of how true 'Weimarization' might look. Let's hope we don't need to go there. Our obsession with investing and other perks we presently enjoy would fade away :)
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