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

To: GST who wrote (61714)	5/23/2006 8:12:16 AM
From: suanny	Read Replies (1) \| Respond to of 110194

When the engine of demand for products (real estate) shuts down,where will demand for them come from.Asset appreciation provided the coladeral for monetary expansion that created whatever increased demand caused rising prices.I cannot understand how depreciating assets will result in the same rising prices.Could you please explain where demand will come from.

To: GST who wrote (61714)	5/23/2006 10:18:23 AM
From: John Vosilla	Respond to of 110194

"The result of our bubble is likely to be a drop in consumer spending and a rise in prices along with falling housing prices. Will it take 17 years of economic stagnation to work through the housing situation in the US? Not likely. It will take a few years at most. And in that time we will face the consequences of a far more serious distortion -- the price of the dollar. The valuation of the dollar will adjust, and that is far more likely to disrupt life as we know it than is the housing bubble." You are making too much sense.. I think it comes down to long term rates and strength of our banking system putting a cap on asset price drops and declines in consumer spending. The inflation genie is now out of the bottle in a way not seen in decades..