I, for one, would love to be in an underwater house right now.
Somehow I have to feel you are being sarcastic. I think you’ve hit on something. The deflation is unprecedented and as such the playbooks of all the players don’t really cope with whats happening. This makes it (deflation) very dynamic. We could have all sorts of weird or unpleasant outcomes. I don’t claim to be a psychic. This thread was really intended to highlight something that I see as being a direct effect of the deflation, namely the increasing strength of the dollar.
The way I am seeing it, we are screwed, but everyone else is screwed worse. Australia may have no budget deficit, and a surplus, but that will evaporate in the face of slack demand for the commodities they export. The US has huge current account deficits, but the world needs to keep selling it crap to keep its factories going. Lots of ugly, very few rays of sunshine.
Josh
