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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (30412)	4/12/2005 10:59:30 AM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

I think the real question is whether the coming collapse in housing prices in the coastal bubble markets is enough to cause a nationwide deflation in the overall economy?

To: mishedlo who wrote (30412)	4/12/2005 5:42:14 PM
From: LLCF	Respond to of 110194

<1) Once asset prices start falling who will want to borrow?> The government? And all sorts of folks who won't qualify anymore! :)) <2) Once asset prices start falling who will want to lend?> The Fed? <2) Once asset prices start falling who will want to lend? 3) How much money will be destroyed in upcoming housing bust> None... I expect printing to increase, not decrease. Credit outstanding will fall substantially however as loans get put in the default category. That's probably what you mean by deflation via contraction. I guess it all depends how quickly the fed acts to buy skyscrapers and defaulted bonds. DAK