The fate of real estate is in the hands of Helicopter Ben

T

The Kin2

Scenario 1: Bernanke defends the value of the U.S. Dollar and deflates the real estate in overheated markets.

Scenario 2: Bernanke climbs in his Helicopter and drops thousands of M1s, M2s and M3s over Southern California, Midtown Manhattan, and South Florida. 125% LTV, 50-year I/O mortgages appear and real estate continues to appreciate to reflect the unlimited monies in circulation. Wheelbarrels of $100 dollar bills are used as shit paper and are later burned to keep familes in the northeast warm at night since they are far less valuable than toliet paper and natural gas, respectivly, but still get the job done.
 
Deflation wont be stopped by liquidity, inflation and deflation is about the velocity of money moving around. The speed or lack of it is the concern. It will be about consumer confidence or stupidity.

Ben wont be able to do S**T with the massive asset bubble pumped up by a massive debt bubble, when it goes pop !
 
Ha! I wish Ben would drop a few of those M-1's in my account. I would be glad to take out a 125% LTV 50 year negatively amortizing I/O Bi-Annual Payment Mortgage and help prop up the real estate market.
 
Quote from The Kin2:

Scenario 1: Bernanke defends the value of the U.S. Dollar and deflates the real estate in overheated markets.

Scenario 2: Bernanke climbs in his Helicopter and drops thousands of M1s, M2s and M3s over Southern California, Midtown Manhattan, and South Florida. 125% LTV, 50-year I/O mortgages appear and real estate continues to appreciate to reflect the unlimited monies in circulation. Wheelbarrels of $100 dollar bills are used as shit paper and are later burned to keep familes in the northeast warm at night since they are far less valuable than toliet paper and natural gas, respectivly, but still get the job done.
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I agree with that in principle, however the Euro Zone can't allow the dollar to drop too much othewise their exports and tourism are screwed, a fine balancing act is required.
 
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