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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (15289)	4/1/1998 10:47:00 AM
From: Bonnie Bear	Respond to of 18056

in a truly deflationary environment, bonds and cash are king. By far the biggest expense for people in the west is housing- that's the point, when you see asset inflation in housing AND stocks AND money supply, this is wildly inflationary, not deflationary. 50-70% of after-tax incomes go to housing in the bay area. People are being forced out into outlying areas and driving the price up. Salaries are being driven up. I can't figure out where the feds get their housing cost numbers in their models. The cost of housing is the reason so many people opt for foreclosure- you mortgage your soul, file for bankruptcy and you get to keep the house without paying for it. It makes a whopping difference in their standard of living to do this. There's people sleeping in the parks here because they were forced out of their rentals by 30% rent hikes. I can remember a time when cash was king. It was in my lifetime.