Umm, yeah

Stagflation and Peak Oil: How Related Are They? (Part II)

Larry - I thought that the basic correlations are:

Wages and Inflation correlate. Also, wages and home prices correlate. Therefore, your statement about Inflation and Home Prices correlating makes sense at first glance.

However, in the most recent housing bubble, home prices far outgained wages due to much easier obtained credit. And we are in the process of home prices deflating back towards wages.

So the Inflation we've been experiencing, mostly from high commodity increases, has not seen a corresponding increase in wages, and furthermore, there has been a deflationary effect in housing. I question whether it makes sense to put down a highly leveraged 'bet' on real estate or not.