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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (80078)	6/25/2007 12:38:34 PM
From: Mike Johnston	Read Replies (2) \| Respond to of 306849

Back in 2001/2002, when real estate bubble was gathering steam, inflation was not yet that much visible in retail prices ( in January 2002 oil was $20, gasoline was a buck, gold was $280, it seems like ages ago, but it was only 5 years ago !!!) Only those watching money supply figures were alerted to what is happening. I think house price increases were a combination of inflation and a bubble. I don't think people were trying to escape "inflation" per se. At this point, bubble is deflating, while high inflation will limit potential nominal declines. Hard times are coming for J6P, yes, his wages will go up, but his living costs will rise twice as much. Standard of living has declined for average J6P and the biggest magnitude of those declines is still yet to come ( of course unless someone would measure his standard of living by the number of cheap electronic gadgets that he can purchase) -g-