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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (70515)	10/26/2007 1:59:11 PM
From: Claude Cormier	Read Replies (2) \| Respond to of 116555

- Are you or are you not expecting hyperinflation or even a very high rate of inflation? By inflation, I assume you mean price increases in this context. If the dollar continues to fall, yes we will see increases prices of consumables. - If you are, please justify falling home prices in light of it. Nothings goes up at the same time. Houses prices have already been greatly inflated in the past 5 years. There is no justification for higher home prices at the moment. But again, I am suggesting that stocks will go up more than anything else as long as the USD continues to fall. This could be Argentina 2002-2004 all over again.

To: mishedlo who wrote (70515)	10/26/2007 2:18:01 PM
From: valueminded	Respond to of 116555

Mish: Just as the increase in housing prices didn't affect the "government reported" inflation, the fall may not affect "government reported" inflation. To the extent that the government reported price figures appear somewhat distorted, it could be that we are always at or near the 2% target no matter what is actually happening. I expect the dollar to buy less in the future and for us to experience a decline in the standard of living. It may be so well managed the frogs dont realize we are being cooked. PS - Enjoy your blogs. Keep up the good work

To: mishedlo who wrote (70515)	10/26/2007 3:15:55 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 116555

I recently saw an interview with Dr. Faber, where he said we might actually have a mild deflation (the housing crash could bring it upon us), and then the spigots will be opened. What prevents the Fed from sending $100K to every household? Nothing, except that the value of the dollar will go towards hell. Which in turn means hyperinflation. So, a mild deflation followed by inflation followed by hyperinflation and resulting in everything getting FUBARed - is the likely scenario. Deflationists and hyperinflationists both agree that we are going to get FUBARed. They only disagree on how exactly we get FUBARed!

To: mishedlo who wrote (70515)	10/26/2007 3:19:50 PM
From: benwood	Respond to of 116555

Like about two hundred million people in American, I'm not buying or selling a home, nor refinancing my home. Falling prices have no direct effect on me. They certainly will indirectly, and that affect may increase over time, esp. the collapse of the MEW false stimulus to the economy. The reality I face and gazillions like me is much higher food and energy prices, medical, tuition and other college expenses and so on. The only thing I buy that's deflating in price is some electronics and also camera gear. Lots more are facing rent increases, so decline in home prices hasn't translated into lower cost anything from them because they can't (or don't want to) get a mortgage right now. And the foreclosure boom will put additional pressure on the rental market except in areas with dramatic overbuilds. What I'm now expecting is a high rate of inflation, accelerating from what seems like 7-8% to maybe 9-10% with deflationary headwinds caused by the current recession and the topping out of credit card debt leaving some manufacturers sitting on vast overcapacity problems. I think inflation will start trending back down but not that far as our financial house of cards will collapse in too many arenas.