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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (19594)	12/27/2004 1:30:43 PM
From: Rational	Read Replies (1) \| Respond to of 116555

Yes, median affordable home value will drop due to declining incomes, and so the median price of homes traded will drop. But that does not mean that prices of comparable homes will drop. Excessive creation of money (done competitively everywhere) will likely continue while demand for loans will continue to drop, making the cost of capital lower and comparable home prices higher. I also see a drop in the number of homes being sold/started/traded, but not the price of comparable homes.

To: mishedlo who wrote (19594)	12/27/2004 2:02:31 PM
From: John Vosilla	Read Replies (4) \| Respond to of 116555

Am I now supposed to believe that high monetary growth over an extended period of time leads to continued low interest rates? Median home prices affordable to only a small segment of the population in many bubble markets even with 45 yr low interest rates and a low unemployment rate is irrelevant? US being a nation of debtors in our new ownership society and massive twin deficits by our government is supposed to be a big positive to avert a serious downturn that occurred in Japan a nation with a high rate of savings, fiscally responsible government and a stronger work ethic than the US? So this time is different? Or perhaps the worst bloodbath is coming for the modern post WWII period in this country and those that export their goods to our beloved credit card happy consumers?