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

To: pogohere who wrote (72662)	12/22/2007 7:36:07 PM
From: Mike Johnston	Read Replies (1) \| Respond to of 116555

how US consumers whose incomes are falling and who have no savings, and no money or credit will buy any goods. If the buying power is lacking I don't see how prices can remain stable Exactly, people with no money or credit will go hungry. Those that have something will pay much higher prices, because prices will increase due to increase in worldwide money supply, while only certain segments of the population will get their hands on additional money. This process is called a "decline in the standard of living". US consumers will work more and spend less. IMO living standards have already suffered and will experience a further massive collapse. It has already happened for example with house prices, food and gas prices. The fact that many people are struggling with gas prices did not bring those prices down , did it ? Housing "crisis" has been caused by the fact, that housing became unaffordable to the average guy and is still unaffordable. Yes, housing is correcting 10-20% depending on the location but prices are still 100% higher than in 2001.