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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (70527)	4/16/2005 11:23:41 PM
From: Casaubon	Read Replies (2) \| Respond to of 94695

I think hyperinflation scenario does not make sense. In a hyperinflation, people pay back loans with worthless dollars. Therefore, it is advantageous to be margined up to your eyeballs. Most of America is margined up to their eyeballs in mortgage debt. Therefore, the hyperinflate scenario benefits the majority. Quite unlikey, since the majority most always pay to fix the problem, not benefit. I think the likely scenario is higher unemployment with wage stagnation. This will lead to a normal economic winter (recession). The real estate bubble will deflate. Higher unemployment will put downward pressure on the real estate market in two ways. Unemployed people do not buy houses, and marginal borrowers (and there are many) will be forced to liquidate into a weak market (ie higher default numbers). This simply will result in higher supply of houses and lower prices. Higher rate of unemployment will also pressure office space rents lower. People will pay down their debt and fix their personal balance sheets, over time. By the way, this is the reason the gov't likes a small positive rate of inflation. They are always running on deficit budgets, so they pay back their loans with devalued currency.

To: Real Man who wrote (70527)	4/17/2005 2:58:46 AM
From: unrealistic_thoughts	Read Replies (1) \| Respond to of 94695

>> Let's hope it's not hyperinflation, cause this is the worst nightmare of them all. << This is what i don't understand. Bush has done his darndest to start a hyper inflation. Multiple wars, huge deficit, huge tax breaks - George Irresponsible Bush. Doesn't he know that hyperinflation topples governments ?? A hyper inflation would be enough to topple the US government, you could kiss your beloved constitution goodbye, and get ready for a system like Ecuador where the prez can simply suspend the rules and fire the supreme court and then un-suspend the rules 24 hours later. This is what Bush is risking. Does he know it, or is he just a flaming fool ??