noteworthy wrote:
From the archive:

Because all asset hyperinflations revert to the mean, we can expect housing prices to decline roughly 38 percent from their peak as they return to something closer to the historical rate of monetary inflation. If the rate of decline stabilizes at between 6 and 7 percent each year, the correction has about six years to go before things stabilize, leaving the economy in need of $12 trillion. Where will that money come from?

I dunno if I've mentioned this before but I have a personal theory ... inflation. Thats why they aren't raising interest rates any higher or faster than they are. They are inflating the currency in order to soften the blow of housing deflation... Meet it half way. Ultimately, the people this hurts aren't in charge... This is a case where the rather ironic reality is that the debtor controls how much the debt is worth. Now, I don't think they are going to come out and say it, and there is a limit to how much inflation they can get away with while keeping up appearances. But I think they are going to allow every bit as much as they can allow. Thats my theory...

RE: Mortgage Market Week in Review