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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Bonnie Bear who wrote (21898)	7/19/1998 10:24:00 PM
From: epicure	Read Replies (1) \| Respond to of 94695

Bay area market bottomed somewhere around 1994-if we are truly on a 17 year cycle 2011 will be the next bottom. Top should be somewhere around 2002- if these things are symmetrical- which they probably aren't. I feel we are in a blow off type housing market in the Bay Area, but since I am always early in calling the end to ANYTHING, as I am such a pessimist, I'd guess we could run another few years.

To: Bonnie Bear who wrote (21898)	7/19/1998 10:25:00 PM
From: bobby beara	Respond to of 94695

Deflation is just creeping in our system through Asian exports. We are only experience the benefits of Asian deflation. Silly Valley is a real estate bubble, just more irrational exhurberance. Talk about deflationary. How many years has the price of gas been basically flat, while our economy has been booming. If this was the 70's we would be seeing the gas go up 10-20% per year. If a 1/4 of your town went broke, would your town thrive. There is a distinct separation from fact and the perception of reality here. TO MUCH TV! 1/4 of the world has gone bust, broke, chapter 11. It's just a matter of time before the massive excess credit creates enough financial stress on our system through our own loan defaults that we experience here first hand. I'm a small businessman. Every businessman I know is leveraged to the hilt with leases, loans yadda yadda. Just a little slowdown, the poo poo hits the fan. The internet may be a great thing, but this will just be another salvo for deflationary lack of pricing power, where customers can shop for the cheapest price. The handwriting is on the wall for those that do their homework. This happens every 60-70 years. Just like the sun coming up every day. Those who do their homework can prepare. bwdik, bb

To: Bonnie Bear who wrote (21898)	7/20/1998 1:25:00 AM
From: Investor-ex!	Respond to of 94695

Bonnie, I don't know anyplace in the U.S. where housing costs match the fed numbers. The only way someone could match the fed numbers is if they don't own a car, rent a room with shared bath, eat at McDonalds and buy a secondhand computer from a garage sale. Sounds like a nation of college undergrads! :o) I agree that the Feds are cooking the numbers something fierce in an effort to rein in Medicare and Social Security payments as well as "nominally" balance the Federal budget (which, incidentally, in NOT in balance in any way, shape, or form). I think we're pretty close to the limit of masking the true inflation rate in the US. It's actually becoming rather comical. I tend to disagree with bobby beara on this, as I doubt we will experience anything like rampant deflation in this country. The planet will inflate all troubles away, as deflation is just not a viable option, no matter what the IMF's (West-serving) wishes are. In currency terms, the developing world is already experiencing strong inflation. As their currencies have crashed, most imported goods, especially those priced in dollars, have risen strongly. In relative terms, the West has recently been importing deflation from these countries. This is rather nice for the West but will very likely not continue. Trade imbalances and competitive pressures will quickly come to the fore. Inflation has the happy outcome of putting idle excess capacity back to use, as more money means more product may be purchased. Given a choice, inflation is nearly always preferable to deflation. And in a global sense, choosing inflation is a slam-dunk. The only fly in the ointment is that the US, along with many other countries, are in terrible positions to choose inflation, as their respective national debts will once again rapidly become untenable liabilities. This situation alone would seem to favor a 1930's global depression scenario. However, the planet's last experience with widespread deflation was so awful that it will likely be avoided at all costs this time around. Whereas deflation will lead to many layoffs and kill the budget (lower tax revenues, higher social spending), inflation will keep people employed but the printing presses will be kept running full tilt. Either way, the budget's a goner, but there's definitely much less civil unrest (and hopefully no global war) if everyone inflates. This is exactly the conclusion Indonesia is coming to, flaunting the desires of the IMF. The other Tiger economies, Russia, China, et al will come to the same conclusion. Should the deflation route be chosen instead, the financial sector will eventually implode, a la Japan. Either way, commodities -- especially gold and silver -- would seem prudent at this juncture as at least a part of one's portfolio. As a kicker, I believe potential Y2k effects have about a 50% probability of producing extremely inflationary pressures in short order. Such interesting times! :o)