DeeLoaf

Joe (Bubblemaniac), in a comment under a post on Mish's blog writes something very interesting. If you've read the Archive you know I am myself confused over what is coming. There are just so many factors. I've taken it as my underlying assumption that all these people who have been shoehorned into houses must simply be made to lose any equity they've gained in them and be forced to default on the loans so that they no longer own them. I dont think banks really want to own houses though, but I presume many corporations could spring up in the aftermath that specialize in finding ways for people to stay living in the home they are in, albiet by paying rent or some other scheme. Its important to remember that during the GD the currency was still backed by gold. Now we are globally pure fiat. Joe:

An Inflationary Depression era is what I see for the K-Winter Cycle in the U.S.

The Emerging Markets will experience better times economically as they shift alot of their markets slowly away from the U.S. Market especially as the U.S. consumer led economy fails to deliver like it has in the past.

As this occurs over time, there will be a greater need and focus by the Average American "consumers" to save and limit their excesses (of course coupled with higher interests rates). Limiting their excesses will occur due to the inflationary aspects from higher costs of living related to stagnant incomes, languishing assets prices (jhomes than no longer just go up), weakening currency, and the debt load withdrawl syndrome.

I do believe that interest rates could and would remain low for the Average American Consumers if they could continue to suck up more debt, but I think that the U.S. Consumer Credit Bubble is nearing an end and the shift will occur Overseas as new consumers from the various Emerging Markets come on stream to replace the tired American Consumers.

Once the nail is driven into the coffin (so to speak) on the American Consumer, then there will be no reason for us to have low interest rates here in the U.S. and they will simply go away. These higher rates in and of themselves will compound the effect longer term and the shift will become more dramatic over time.

These Credit Bubbles are like living creatures that need to survive and morph and mend to their environments accordingly to ensure their survival however or whereever that may be.

Basically I read this to suggest that the USA will be third-world-ified through continued (hyper?) inflation of the money supply such that rising costs of living take up a growing proportion of relatively stagnant take-home wages. House prices may very well continue to rise but this time not due to lowered interest rates, credit standards and exotic mortgages creating more demand for housing; but instead they'd be rising as a direct result of inflation. This way there will be very few individuals that can actually own homes, instead they'll all be renting (forever) from the companies that will have the means to take title to the homes.

Now the next question is this: If there is going to be hyperinflation in the USA, what role will the proposed North American Union and "Amero" currency have to play, if any? Is hyperinflation of USD and CAD the means by which the "Amero" would become appealing to the people? Sure why not. I think that'd push me over the edge though. I dont think I would accept Amero. Maybe join a secession movement or something and go underground. I dont know. I dont like the way things seem to be going in the world. I'm reading too much about Iran/month-of-March. Of course _last_ year there was a lot of Iran/end-of-March talk too.