Economic doomsayers - part 2
Two interesting links appeared in comments from yesterday's post on the Armageddon Economy. First (h/t to Sean O'Toole for setting me straight on Janszen's perspective), iTulip's Eric Janszen explains the distinction between two types of economic doomsayers:
Deflationistas (Janszen's term) believe that continuing asset deflation is rooted in consumers spiraling deeper into debt while real wages fall due to global wage arbitrage (plus the added bonus of the deflating asset values like stocks and housing).
Hyper-inflationistas believe rampant inflation will rear its head with further massive Fed / Central Bank rate cuts combined with a sinking dollar. Janszen argues this won't happen (for similar reasons I've expressed earlier in Transparent):
For a nation to experience a hyperinflation, all four of the following conditions need to be met:Janszen posits a scenario in between the deflationistas and the hyper-inflationistas - "the dollar will decline but will not crash, and the decline will exert an inflationary bias on the economy" - it sounds status quo, but Janszen's article is a must read to understand why his conclusion seems plain vanilla.
- Large and growing external debt as a percentage of GDP with falling GDP (Yes, like the US.)
- Politically and economically isolated and irrelevant (Not like the US. Think: Zimbabwe.)
- No external demand for the currency (Not like the US dollar. Think: Iraqi Dinar.)
- Political chaos (i.e., tanks rolling down the street, not like the US.)
Second, Tim O'Keefe of Houseblogger fame, alerts me to the Positive Real Estate News site, and the accompanying Positive on Real Estate Facebook group. Simply put, this is a grassroots voice to provide counterpoint to the gloomy media. Even though the counterpoint may be construed as overly optimistic or even tinged with Realtor agenda, it still needs to be expressed. That's how the liberal political blogs gained ascendancy after 9/11 - by questioning the Bush Administration's autocratic actions in the name of fighting terrorism when the mainstream media were afraid to provide counterpoint for fear of being labeled "unpatriotic" in a tense time. That's what blogs as new media are about.
Thanks for the mention Pat. I invite everyone to participate with positive news stories about real estate. Get on our email list too as we offer ongoing seminars like here:
http://www.positiveonrealestate.com/dl/
Reply to this