Your Seattle home lost 7% of it's value in September

[rose-colored-coolaid]

[carlislematthew]

[Alan]

[rose-colored-coolaid]

[deejayoh]

[Alan]

[rose-colored-coolaid]

[deejayoh]

[SunTzu]

[quote="deejayoh"][quote="Alan"]The flip side to this is that your 100% financed loan also lost 7% of its debt load. Its a wash if your were smart/stupid enough to get into that situation.[/quote]

that's not true, unless you are getting paid in Euro your asset/liability balance is the same.

now if we have high inflation, having a bunch of debt is going to look pretty smart, and those of us with tons of savings are going to look pretty dumb..

Intersting post over at [url=http://globaleconomicanalysis.blogspot.com/2007/09/is-fed-deflating.html]Mish's blog[/url] that suggests the Fed is actually tightening money supply while it loosens credit. That should control inflation.

Safest thing is to get your cash out of the US peso, however.[/quote]


Actually, Mish does not agree with that analysis (ie inflation is under control). Mish was commenting on Gary North's article by showing the same data that North used. North was claiming that base money is decreasing as shown in the charts. Mishe's reply to Gary (towards the bottom of the page) was

"....Thus it's a serious mistake to look at base money, M1, or M' in isolation just as it is to look at M3 in isolation. One must also look at Fed policies to see whether interest rate polices foster enormous expansion of credit.

....A rapid expansion of money supply tends to lead to outcomes as seen in the Weimar Republic or Zimbabwe, but a rapid expanse of credit is what we saw prior to the great depression....

....To predict price stability, one also needs to look at what central bankers worldwide are doing. It is foolish to believe the Fed can directly control prices (and more importantly wages) in a global economy where every day the U.S. is becoming less and less relevant....

....If one uses M1 or base money as the sole measure of deflation, then we are indeed close. But if one believes that inflation/deflation is the expansion or contraction in money and credit, then as of now we are not close "technically speaking". But that can change on a dime....

....I certainly thought this credit bubble would have ended by now. When it does happen, it will hit businesses like a brick wall."

I think Mish os more worried about credit bubble than anything else.

[deejayoh]

SunTzu -
I had a different interpretation of Mish' response. I think he agreed with Gary's assertion that M1 was the important measure - and thought the data interesting - but was taking a wait and see attitude.

I generally think Mish is super-bearish so I wasn't really pointing out his commentary so much as I thought the data was interesting. Later realized I should have just linked to the source post