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Reply #32: inflation and the flight to quality [View All]

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sweetheart Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-06-06 06:48 AM
Response to Reply #27
32. inflation and the flight to quality
Finance has such antiseptic terms, and "flight to quality" means the same
as rats leaving a sinking ship. As the dollar devalues internationally,
by 1/5th over the next time, it will probably inflate at least that much
internally. You don't devalue a currency like that without causing investors
to seek quality. Then money seeks to find fungible proxies for "cash" which
traditionally have been gold, commodities... and yes, "housing".

If the dollar inflates to 1:1 yen parity, a house is still a house. So
investors are taking an plunging investment capital in to housing stock, and
this speculator behaviour is driving up housing costs, exacerbating the
inflationary pressures.

And all the while the printing presses are primed to do a weimar.
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