couple of things to worry about for renters

[RDeNiro]

OMFG, you really don’t get it do you??? One more time for the slow-witted ones here. THE HYPERINFLATION IN ASSETS HAS ALREADY HAPPENED!!!!!

I admit I am slow witted and a little ignorant. But I’m pretty logical. So maybe I’m missing part of the picture. Tell me where I’m wrong:

1)House prices increased because interest rates were too low, people thought houses would continue going up forever and global investors thought the debt they were buying was safe.
2)Interest rates were low because foreign funds were flowing into the US.
3)Now that the scheme is over, interest rates will rise.

I think I answered my own question. The fed will not be able to affect long term interest rates. Money will be expensive and short to come around and therefore deflation??

[cyphire]

Interesting comments, I hope this makes sense in the context of some of these arguments…

Prices went up on houses because of a bubble. That is the main reason. There was a bubble because anyone could qualify for any loan, and the loans were unrealistically priced with ARM’s both subprime, up to super-jumbos for good credit scores. Some people got 30 years, or refinanced as the rates went up…

Now what?

It looks like there will be inflation. The way to curb inflation is there will have to be interest rate rises. Usually inflation translates into wage increases (wage inflation), and more people make more money which gets worth less and less because all prices are rising at the same time.

The more important factor which I haven’t seen here yet, is that as interest rates rise, home prices have to fall. Because the new buyers can’t possibly afford the new payments. I also see stagflation, prices going up but wages not going up. This will put huge pressure on home prices. It takes time for a bubble to burst, and many people can’t get loans at good rates right now, hence the lowering of home prices…

I am on the sidelines, sold in Dec 2006, will watch and see what comes.

[cyphire]

Interesting comments, I hope this makes sense in the context of some of these arguments…

Prices went up on houses because of a bubble. That is the main reason. There was a bubble because anyone could qualify for any loan, and the loans were unrealistically priced with ARM’s both subprime, up to super-jumbos for good credit scores. Some people got 30 years, or refinanced as the rates went up…

Now what?

It looks like there will be inflation. The way to curb inflation is there will have to be interest rate rises. Usually inflation translates into wage increases (wage inflation), and more people make more money which gets worth less and less because all prices are rising at the same time.

The more important factor which I haven’t seen here yet, is that as interest rates rise, home prices have to fall. Because the new buyers can’t possibly afford the new payments. I also see stagflation, prices going up but wages not going up. This will put huge pressure on home prices. It takes time for a bubble to burst, and many people can’t get loans at good rates right now, hence the lowering of home prices…

I am on the sidelines, sold in Dec 2006, will watch and see what comes.

[cyphire]

Interesting comments, I hope this makes sense in the context of some of these arguments…

Prices went up on houses because of a bubble. That is the main reason. There was a bubble because anyone could qualify for any loan, and the loans were unrealistically priced with ARM’s both subprime, up to super-jumbos for good credit scores. Some people got 30 years, or refinanced as the rates went up…

Now what?

It looks like there will be inflation. The way to curb inflation is there will have to be interest rate rises. Usually inflation translates into wage increases (wage inflation), and more people make more money which gets worth less and less because all prices are rising at the same time.

The more important factor which I haven’t seen here yet, is that as interest rates rise, home prices have to fall. Because the new buyers can’t possibly afford the new payments. I also see stagflation, prices going up but wages not going up. This will put huge pressure on home prices. It takes time for a bubble to burst, and many people can’t get loans at good rates right now, hence the lowering of home prices…

I am on the sidelines, sold in Dec 2006, will watch and see what comes.

[cyphire]

Interesting comments, I hope this makes sense in the context of some of these arguments…

Prices went up on houses because of a bubble. That is the main reason. There was a bubble because anyone could qualify for any loan, and the loans were unrealistically priced with ARM’s both subprime, up to super-jumbos for good credit scores. Some people got 30 years, or refinanced as the rates went up…

Now what?

It looks like there will be inflation. The way to curb inflation is there will have to be interest rate rises. Usually inflation translates into wage increases (wage inflation), and more people make more money which gets worth less and less because all prices are rising at the same time.

The more important factor which I haven’t seen here yet, is that as interest rates rise, home prices have to fall. Because the new buyers can’t possibly afford the new payments. I also see stagflation, prices going up but wages not going up. This will put huge pressure on home prices. It takes time for a bubble to burst, and many people can’t get loans at good rates right now, hence the lowering of home prices…

I am on the sidelines, sold in Dec 2006, will watch and see what comes.

[cyphire]

Interesting comments, I hope this makes sense in the context of some of these arguments…

Prices went up on houses because of a bubble. That is the main reason. There was a bubble because anyone could qualify for any loan, and the loans were unrealistically priced with ARM’s both subprime, up to super-jumbos for good credit scores. Some people got 30 years, or refinanced as the rates went up…

Now what?

It looks like there will be inflation. The way to curb inflation is there will have to be interest rate rises. Usually inflation translates into wage increases (wage inflation), and more people make more money which gets worth less and less because all prices are rising at the same time.

The more important factor which I haven’t seen here yet, is that as interest rates rise, home prices have to fall. Because the new buyers can’t possibly afford the new payments. I also see stagflation, prices going up but wages not going up. This will put huge pressure on home prices. It takes time for a bubble to burst, and many people can’t get loans at good rates right now, hence the lowering of home prices…

I am on the sidelines, sold in Dec 2006, will watch and see what comes.

[hipmatt]

I don’t see prices in food, energy, healthcare, and other commodities falling much, even with a likely recession.

However, other asset values will fall, including housing. There is a huge oversupply of housing. Also, owning a home is completely different than providing yourself and family shelter. There are plenty of rentals available. Families will share homes again as well.

[hipmatt]

I don’t see prices in food, energy, healthcare, and other commodities falling much, even with a likely recession.

However, other asset values will fall, including housing. There is a huge oversupply of housing. Also, owning a home is completely different than providing yourself and family shelter. There are plenty of rentals available. Families will share homes again as well.

[hipmatt]

I don’t see prices in food, energy, healthcare, and other commodities falling much, even with a likely recession.

However, other asset values will fall, including housing. There is a huge oversupply of housing. Also, owning a home is completely different than providing yourself and family shelter. There are plenty of rentals available. Families will share homes again as well.

[hipmatt]

I don’t see prices in food, energy, healthcare, and other commodities falling much, even with a likely recession.

However, other asset values will fall, including housing. There is a huge oversupply of housing. Also, owning a home is completely different than providing yourself and family shelter. There are plenty of rentals available. Families will share homes again as well.

[hipmatt]

I don’t see prices in food, energy, healthcare, and other commodities falling much, even with a likely recession.

However, other asset values will fall, including housing. There is a huge oversupply of housing. Also, owning a home is completely different than providing yourself and family shelter. There are plenty of rentals available. Families will share homes again as well.

[mrwrong]

For those who are sure deflation will be the outcome, it is important to keep in mind that in a fiat monetary system, central bank can always generate inflation if it wants to. So the real debate is if things get really bad such as serious deflation taking place, is it politically acceptable to print money to generate inflation? I don’t know the answer to this question. If I had to guess, I would say yes. If a serious deflation in fact happens, nobody wins, not even the prudent renters.

Also, the current FED chairman is not a stupid guy. He spent a considerable amount of his career studying the Great Depression. With the new auction system FED introduced lately, he has shown his willingness to try new things to handle a crisis.

Mr. Wrong

[mrwrong]

For those who are sure deflation will be the outcome, it is important to keep in mind that in a fiat monetary system, central bank can always generate inflation if it wants to. So the real debate is if things get really bad such as serious deflation taking place, is it politically acceptable to print money to generate inflation? I don’t know the answer to this question. If I had to guess, I would say yes. If a serious deflation in fact happens, nobody wins, not even the prudent renters.

Also, the current FED chairman is not a stupid guy. He spent a considerable amount of his career studying the Great Depression. With the new auction system FED introduced lately, he has shown his willingness to try new things to handle a crisis.

Mr. Wrong

[mrwrong]

For those who are sure deflation will be the outcome, it is important to keep in mind that in a fiat monetary system, central bank can always generate inflation if it wants to. So the real debate is if things get really bad such as serious deflation taking place, is it politically acceptable to print money to generate inflation? I don’t know the answer to this question. If I had to guess, I would say yes. If a serious deflation in fact happens, nobody wins, not even the prudent renters.

Also, the current FED chairman is not a stupid guy. He spent a considerable amount of his career studying the Great Depression. With the new auction system FED introduced lately, he has shown his willingness to try new things to handle a crisis.

Mr. Wrong

[mrwrong]

For those who are sure deflation will be the outcome, it is important to keep in mind that in a fiat monetary system, central bank can always generate inflation if it wants to. So the real debate is if things get really bad such as serious deflation taking place, is it politically acceptable to print money to generate inflation? I don’t know the answer to this question. If I had to guess, I would say yes. If a serious deflation in fact happens, nobody wins, not even the prudent renters.

Also, the current FED chairman is not a stupid guy. He spent a considerable amount of his career studying the Great Depression. With the new auction system FED introduced lately, he has shown his willingness to try new things to handle a crisis.

Mr. Wrong

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