Agreed. That’s certainly part of the broader motivation behind my question.

Along those lines, I wonder especially about the future value of the US $, and whether it is better to be in, say, stocks vs. something closer to “cash”. On one hand, will all the fluid markets retract, leaving a “cash is king” depression, or on the other hand will inflation soar making your cash worthless?

I’d be curious if anyone has a historical perspective on how this has worked in the past. (Or a good theory for how it will work now 🙂

On first blush, it seems that an over-extended credit market (which describes the entire US economy, not just the housing sector) has no choice but the lead to some serious inflation–when the people who owe are reluctant or unable to pay, the value of their IOU’s (which is all a dollar is) goes down…