Where I go to keep it real…
Candy for everyone; and what the Chinese, the Arabs, the Japanese, and other lenders cannot cover, Federal Reserve Board Chairman Ben Bernanke will, just like he did for the Bush Administration. In the end, that massive overhang of money that continues to grow far in excess of the real growth rate of the economy will lead to one and only one end:
inflation. And it will not be some mild little rise in the aggregate price level; it will instead be a raging fire that will take an ever more draconian contractionary monetary policy regime to rectify the longer the irresponsible over-printing of money continues
I highly recommend the blog Calculated Risk for info on economics and finance.
Don’t fear the inflation. This may be one of the ways that we get back the value of our homes. It sucks while it’s happening, but there have been revolutions because of a lack of inflation.
lg, i’m of the impression that i can’t sell my house now, so wtf. Deflation for a bit as I’m tired of losing money. I know deflation from a macro-economic standpoint can be quite bad, but inflation from a micro-economic standpoint (ME!) sucks.
all about you isn’t it?
Actually, your salary will undoubtedly rise, along with the inflation. Meanwhile, your mortgage will stay the same (unless you move). If after 10 years, the value of the dollar has halved, your salary has doubled.
It is certainly a pain getting there, but what if I told you that I could cut your mortgage in half?
yes, because we all know wages increase with inflation…
i’m of the impression that i can’t sell my house now, so wtf.
maybe if you mowed the lawn, picked up the dog crap and painted it….
wait that’s me
Chiming in with UI — Calculated Risk is a great economics blog, as is Brad Delong’s place and Marginal Revolution.
lg, where do you work that you automatically get cost of living raises?
Try http://www.seekingalpha.com
Lock in a 30 year fixed rate and hope you can keep making payments through this disaster… I think we will have inflation over 10% at some point in the next 5 years, and I would expect high inflation to hang out for a while…
I liked this guy’s article… every time I see dems and republicans pointing fingers and acting like this situation can be ‘fixed’ I imagine all the extra trillions they are going to spend on things that will not actually fix anything and how completely fucked we are…
We’re definitely screwed for a while. As Krugman says, this is the return of depression economics where regular financial tools don’t work (like changing the interest rate).