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

To: GraceZ who wrote (25943)	12/14/2004 2:50:06 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 306849

Yes, the decline in inflation and interest rates makes the debt easier to service. However i do not agree with you that what we have right now is low inflation. The increase in inflation makes the debt more difficult to service but not because of higher inflation itself but because of higher interest rates that normally accompany higher inflation. Inflation by itself reduces the burden of debt. Right now, it seems the government has the best of both worlds. Inflation erodes the value of government debt, but because interest rates are low the cost of servicing that debt stays low.