Comments on: Cat has 9 lives, and stocks may have its last

By: ParisGirl111

ParisGirl111 — Tue, 16 Feb 2010 15:26:27 +0000

Do you think the housing market will be lower in mid-June as well? I was thinking of buying, but am now thinking I should wait until it hits an all time low. What’s your thoughts?

By: Kirk Kinder

Kirk Kinder — Thu, 11 Feb 2010 15:24:37 +0000

I agree that a downturn is coming or is already here. But, I wouldn’t be too quick to rule out the deflation thesis. Japan did everything it could for the past twenty years to create inflation, and they still haven’t been successful. If we see another downturn in the markets, we will see more retrenchment from consumers, which will be deflationary. Consumer debt is on a one way slide down already, and that could get worse. This is exactly what happened in Japan. The consumer delevered and saved, and the government’s efforts to lever up wasn’t enough to offset the deflationary effects of the consumer. Throw in the banks reluctance to lend, and we could have deflation for some time.

We probably won’t see the drop that we did in the 30s, but this isn’t because deflation isn’t a factor. It has to do with the tariffs and trade wars that developed. Of course, we could see more protectionist action if things don’t improve, especially the US putting pressure on China to float the remnimbi.

By: moneyhoneysf

moneyhoneysf — Sat, 06 Feb 2010 00:19:34 +0000

slide has already begun before April timeframe. Good to invest if you’re LT.

By: Roger Crane

Roger Crane — Fri, 05 Feb 2010 20:26:49 +0000

I have a question- Why “cash will be trash”??
In the event of market meltdowns, declining real estate, gold declines, etc.
wouldn’t it be good to have cash to pick up all sorts of bargains??