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

To: NOW who wrote (21861)	1/20/2005 5:27:31 PM
From: Tommaso	Read Replies (2) \| Respond to of 116555

A 40% decline would just bring house prices in certain U. S. markets back to where they were three years ago. I do not know how many people would suffer a real loss of wealth if that happens. Anyone who borrowed and spent that equity, or anyone who borrowed and bought at the high prices, would certainly be deflated, but for a lot of us it would just mean that we were paying higher taxes than we think we ought to be paying. I do not see the price of gasoline dropping 40%, or the price of food, or the price of lumber, or most useful commodities. Such prices drop in across-the-board deflations. Instead, I expect those prices to rise. There is little foreign demand for American houses, and soon may be little foreign demand for U. S. stocks and bonds. But there is great and increasing foreign demand for commodities of all sorts, and Americans are only a small percentage of the population of the world that wants these things. And the value of our dollar has dropped already and may well drop a good bit more.