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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (262476)	7/20/2010 9:24:58 PM
From: tejek	Respond to of 306849

I think you are right. But the funny thing is that you acknowledge how deflated we are, but you don't acknowledge that this recovery is an artificial, phantom recovery. Its not artificial. Things are booming in Brazil, India and China. Canada, Russia, AU, NZ and some other countries are experiencing strong growth. The US is the caboose. Bush and the Rs did a lot of damage to this economy.....far more than I think people fully understand. Nonetheless, the US benefits from what's happening in other countries. Currently, we are in a soft patch......one that I thinks results from the effects of the stimulus coming to an end, the end of the housing credits, and China trying to engineer a soft landing for its economy. They happened almost all simultaneously. The good news is China feels it has done enough and has taken off the brakes on its economy. And housing is stronger than most people believe. Also, there's a common misconception that economies move from deflation to reflation to inflation to hyper-inflation in a smooth curve. Oftentimes, hyper-inflation has hit very suddenly. Problems accrue over long periods of time, but consequences hit all at once. I don't think there will be much warning when inflation hits. It could hit hard and fast. I really think there is little chance that capacity utilization of our factories will go from the current low 70s to the high 80s overnite. And I know housing prices are not about to boom any time soon. And then there is all the office and commerical vacancies in our cities. It will be at least 2 years before we start to reflate.....if we are lucky.