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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 (87987)	10/26/2007 6:16:56 PM
From: KyrosL	Read Replies (2) \| Respond to of 110194

My dollar buys a lot more house in South Florida now than a year ago. In the latest auction of Miami condos, prices were HALF of what they were a year ago. Some South West Florida houses are back to pre-bubble levels, erasing 3 years of gains. This is definitely not inflation from the perspective of a dollar holder. Prices of imported manufactured goods to America are rising much slower than the dollar is depreciating relative to other currencies. In fact, they are rising LESS than the CPI inflation reported by the BLS. So, they are still a source of deflation. They are a smaller source of deflation than when their prices were falling in nominal terms, but they definitely do not contribute to inflation yet.

To: GST who wrote (87987)	10/27/2007 11:58:51 AM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

'It worked like magic for a few years, but now both house assets and dollar asset are plunging in value in relation to commodities and internationally traded goods and services -- AND THAT IS INFLATION.' Your posts on a crashing housing market and plunging dollar being on the same side of all this confuse me.. Short term the plunging housing prices have mostly to do with oversupply, excess credit and misallocation of capital. The plunging dollar, excess monetary creation, deficit spending, wars and inflationary pressures are designed to put a lid on this from turning into the deflationary depression some have been expecting for the past 3+ years.. You can't have raging inflation and declining home prices in a balanced market at the same time.. Rising rents and appreciating home prices in the balanced nonbubbily markets of the heartland are the ones to watch for clues IMHO.. We are obviously a couple of years away from any balanced market along the coasts. Perhaps all part of the grand plan to keep a lid on reported inflation and interest rates as the real economy powers forward? Remember the 1970's when everything went up in unison from oil, home prices, rents, wages, food at a nice 7%+ clip compounded.. Same thing this time over the longer term this new cycle that I believe started in 2004,only the credit bubble created much more volatility this time..We have an entire decade still to go..