re: trouble at mill: hyper inflation or stagflatio
Gerry, my take on US is must let housing markets slowly deflate in nominal terms. Consumer 70% economy and rate rises to 5.25% have driven savings rate negative. Rate rises do not fully hit economy for 12-18 mths. I believe Bernanke has 1 further rate rise up his sleeve, problem is his mouth has been writing cheques his a**e can't cash with talk of getting tough on inflation. When this becomes apparent the US dollar will be hit hard. I see rates at 5.5% and printing presses running, high underlying inflation will allow property market to effectively track sideways to marginally down in nominal terms. While inflation to a degree bails out over-leveraged consumer. Fine line to tread, but the US has been managing this for a good 3-4 years so far withour falling over.
