Housing down and going lower:
Gary Schilling wrote the book on housing and having listened to him over a number of years, my ears perk up when I hear his name. I seem unable to embed the video but you can watch an interview with CNBC here:
The additional complication this scenerio adds is that housing equivilent rent (the way the economic powers follow the price of houseing in America) comprises ~70% of the official formula for calculating the inflation or deflation rate in the United States. As a result a fall in housing to or below the historical mean could result in numbers (and headlines) which scream of deflation even while the prices of things that you and I buy everyday were going up due either to world-wide monetary concerns about the dollar, growing trade barriers, resource depletion or any combination thereof.
As a result we would have what I have, for a time now, seen as the problem on the horizon: a great re-pricing of pretty much everything which could be felt as inflation, deflation or over all stability based upon your personal situation. If you are a saver, it could feel like inflation (low real interest rates which lead to loss of capital), if you are in too much debt it could feel like deflation (less disposable income with which to pay back debt).
It is an age of hurt where one is less concerned about making progress in their economic lives but rather limiting the amount of hurt. The best place to be would be someplace in the middle ("neither a seller nor a buyer be"). I'm not there yet but I am running; but not fast enough.
Related:
Account Balances, the Dollar and American Power
Robo-signing: the Tip of the Iceberg
Time for a New Stress Test?
Huffpost: Foreclose on Bank of America
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