Stagflation is coming, stagflation is coming! [Bloomberg]

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  1. swicklund says:

    I am just dumb? Isn’t inflation part of the answer we need to our current dilemma: Housing prices way out of sync with incomes…
    Clearly most homeowners will be unable to sell (perhaps to move to a more affordable home/apartment) if there is 30% drops in their home values, but if its couched in 12% inflation without matching rises in home prices, would that not hasten the end to the crisis?
    At least home values would be less likely to fall below the amount mortgaged (assuming fixed rates – and the variable rates folks are already screwed).

  2. swalve says:

    @swicklund: I’m pretty sure there’s nothing that says home prices won’t keep going up if there is a little inflation allowed to counteract the bubble.

    And they said stagflation, which is recession and inflation at the same time. A very bad thing.