[quote=Arraya][quote=CA renter]I Everyone is short the dollar by going into other currencies, commodities, stocks, real estate, etc. They are expecting someone else to pay them more, in dollars, than they paid for these things, IMHO. If everyone who is convinced that the dollar is toast is already in on the trade, who is left to buy things at a higher price? The unemployed/underemployed workers? The poor from the developing nations, whose jobs depend on those (underemployed and unemployed) people in developed nations buying more junk?
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You just described a classic speculative bubble which is grounded in ponzi-dynamics. The bubble burst when it ran out of new entrants.[/quote]
Exactly. I’ve been thinking of the run-up in asset prices as a bubble that was fueled by the Fed’s actions, and the govt’s unwillingness to let things sort themselves out, especially in the RE market.
