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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 (91052)	1/30/2008 4:13:57 PM
From: John Vosilla	Read Replies (3) \| Respond to of 110194

'Housing is imploding. The dollar is imploding. The cost of goods is soaring. None of this is deflation.' Housing values, cost of construction and equivalent rent should be going up in a true inflationary cycle and will in a major way once the current excesses are cleared IMHO.. This misallocation of capital, excess credit and overbuilding is a side issue that is shorter term in duration to the long term picture..

To: GST who wrote (91052)	2/2/2008 9:28:25 PM
From: glenn_a	Read Replies (1) \| Respond to of 110194

GST ((Your balance sheet is imploding and your cost of goods is soaring -- that is not deflation. An imploding balance sheet is not deflation -- it is the sound of your net worth going up in smoke. Housing is imploding. The dollar is imploding. The cost of goods is soaring. None of this is deflation)). I agree with all the above except that an imploding balance sheet is not deflation. No, it's not deflation per se, but it does have a deflationary impact, no? It's the whole "wealth effect" thing. It should lead to households curtailing their expenditures, which all else being equal, will have a deflationary impact. g