I didn’t mean to say that an inflationary scenario would prevent home prices from coming down, just that it may skew when things happen and by how much. Looking at ARM reset charts gives us a scale of magnitude for the problem, but using them to try to time the market is probably ill-advised, especially since monetary policy will have a huge impact on whatever happens. Whether we like it or not, inflation will help some ARM borrowers and might actually keep a few of them from losing their homes. Looking at past performance as a predictor, it’s still a fair bet (IMO) that the fed/government will try and print their way out of this mess…
