Well, PS, my understanding of macro economics isn’t as good as yours. The thing is housing will deflate and most everything else will inflate – thus the conundrum. I guess Bugs is right, housing will drop but inflation could appear to mitigate the drop in price, though not value.
I think the Fed should ignore the housing market and keep inflation to a mild level, but I don’t know what they’ll do.
As someone listed in another post somewhere, the housing correction is a necessary, “bad medicine” that must be swallowed to balance out many problems in the economy.
