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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MSI who wrote (3586)	7/25/2002 8:18:45 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 306849

<<Are you predicting massive unemployment, or drop in income? Otherwise it's hard to see homeowners giving up their place to live, to go somewhere less expensive.>> Neither. He's predicting that in a few years, if homeowner's stay put they'll be somewhere "less expensive", ie, valuations will decline. Of course, rising unemployment and drop in income (real income, at least) may well tag along for the ride...

To: MSI who wrote (3586)	7/25/2002 8:26:49 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

...unemployment, or drop in income? Either will do, Deflationary environments bring both. As Kindleberger points out, the extent of the deflationary post-bubble impact on aggregate demand will depend largely on the response by the Federal Reserve and the Federal government. The Federal Reserve's paper on Japanese deflation indicates their willingness to rapidly expand our money supply to conter-act deflationary pressures - more to the point it explains their actions during the past three years. Can the Fed maintain stable prices through dramatic inflation of the money supply? Or will their "solution" create and implode bubble after bubble, creating more chaos and destruction than a simple unattended depression? Stay tuned to your media frequencies and find out!