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

To: andiron who wrote (78206)	1/26/2007 2:31:08 PM
From: ahhaha	Respond to of 110194

will rampant asset inflation ultimately cause CPI type inflation.. Will the phases of the moon cause granny's corns to ache? There is no inflation in RE. You have to separate price changes due to market clearance and price changes due to inability of the market to clear. In any event since RE is an intrinsically free market, any excesses that may arise due to circumstances of location or from financial macro economic factors, are corrected. This is the way the price mechanism works in a free market. Rising price brings rising quantity and quality. What has that to do with CPI? CPI would rise regardless of home price. Although the two are correlated historically if there's one period where they were adverse, thoroughly refutes the causality some imply. Did such a period occur in the modern era? Yes, in the early '90s. Answer this: if everything is inflating commensurately, is there inflation?