2009-01-25safehaven.com

``... the deflation argument is strongest for houses because most buyers borrow to buy houses. So the stock panic's impact on credit availability definitely hurt the housing market. But the degree of impact is debatable. Sure, borrowers needed to be more creditworthy and put more cash down in late 2008 than in 2006. But the stock panic scared people so much that they may have slowed house purchases anyway even if banks were begging to give them easy loans like in 2006. Panics breed extreme economic fear, and extreme economic fear greatly slows big purchases no matter how easily they could be made.''



Comments:

followingthemarket at 01:56 2009-01-26 said:
Good God, all that writing for a "Buy Gold" article. Of course the money supply's increasing. How else is the gov't covering this debt?

It could just be me, but when people refer to "deflation" more often it seems like they are talking about falling prices in the retail sector. Permalink

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