- On 1 Nov 2005
I Was Thinking to Myself This Could Be Heaven or This Could Be Hell,
Inflation will kill the housing bubble before it eventually saves it.
No way in hell our paychecks will rise as fast as inflation.
Near future inflation numbers won't show the depreciating home values (numbers didn't show housing on their ride up either -- due to FEDs mysterious CPI).
- We're going to have inflation due to govenment deficits (i.e., the government borrowing because the consumers are too tapped out to expand credit -- but we can always count on Uncle Sam to spend like a drunker sailor). But we'll have deflation in housing until housing meets the historical housing trendline (after an undershoot for a while, due the IO idiots, flippers, and other weak hands).
- Oil is going to crash hard. I expect at max. $40/barrel by this time next year (this is what happened post 1991 bubble and it started the machinery rolling for the last stock market bubble).
I expect low oil prices to help drive the next expansion in the stock market. When Exxon is talking about Peak Oil watch for the head fake. That's like Robert Toll giving you housing advice.
- On 2 Oct 2005
October is here!,
"Let’s say if I am confident that USD will go down and we will enter into a high inflationary period, and I’d like to do something with my home. "
Funny, I tought we already had the inflation (i.e, credit expansion) via the housing bubble. Deflationary periods follow inflationary credit expansions.
The FED cannot create inflation via consumers credit much longer. We're tapped out and the banks don't give money away for free. And another thing, banks don't like to lose what's owed to them via hyper-inflation either.
To create money someone has to agree to be lent this money (unless it's the government like in the case of Katrina). Since the consumer is tapped out, the only inflation (by credit) can be through larger government deficits. In order for our debtors to take on these riskier US loans look for higher interest rates (this will kill the housing bubble with a head shot ... it's already slowly dying from clogged arteries).
So, do you think the FED policy will watch out for Joe Consumer's best interests or the banks and corporations?
Personally, I wouldn't count on inflation. The cycle of Inflation/Deflation/Consolidation makes much much more money for the elite.
- On 23 Sep 2005
Social effects of the bubble,
You're right on the no societal introspection. Many people are afraid to look inside of themselves out of fear that they may be wrong and have to change. Change can be painful, but only those who have love for the truth will bear down and accept the truth ... and change. Most will take the path of least resistance and look externally for blame. Winston Churchill once said...
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened."
"we look to government for the solution…"
I think people want to be lead because it is a lot of work to be the leader. Personally, I cut my own path through this world. I don't care what people think of me but most people who know me like me ... only because I love my neighbor and sincerely watch out for those who are foolish (I don't believe in the kind of gain that relishes in 'stupid' money passing into the hands of 'smart' money)