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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (68912)	4/29/2008 2:50:55 PM
From: Stock Farmer	Read Replies (2) \| Respond to of 74559

People who can afford $2k per month rent purchased $1.2 million flats because the loan ... As it turns out, these people who can afford $2K per month rent are discovering that they are just renting the property from unwitting landlords. So are the landlords, to their chagrin. They will move on to rent at $2000 per month elsewhere. Maybe we can expect rents (per square foot) to rise and house prices (per square foot) to fall and reach an intermediate equilibrium?

To: Elroy Jetson who wrote (68912)	4/29/2008 2:52:35 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

But Elroy, incomes don't remain high when there's recession or depression. Don't forget, the party time on debt also caused pay rates to stay higher than they would otherwise have done because economic activity powered by debt increase meant restaurants were busy, SUV sales were busy, house construction was busy, new shops were needed, with more retail staff so all the borrowed money could be spent, more kleptocrats were needed to collect all the money and waste in on various government ideas. So, as people lose their jobs, they will accept new jobs at lower pay, which means less money for rent, which means to get 10X rent as capital value, house prices might have to go further than expected. Big Ben is planning to avoid that by increasing incomes by posting cheques to people. It's the world's biggest ever debt bubble being deflated. That's quite an experiment to run. A real-time, 3D, no going back, merciless and relentless experiment. Since the history of debt is not normally a happy one, the experiment is not likely to be like an experiment with this new fangled cyberspace thing, or relativity theory, or the wheel, which could have good or bad outcomes. Debt normally ends badly. Super large scale debt resolution is not likely to act in a better way than in past debt resolutions of a smaller scale. Mqurice