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Glen L. » Comments » AIV

  • What REALLY Caused the Mortgage Crisis - And What to Do Now [View article]
    The wild card in the rent vs. buy decision is inflation. If mass inflation occurs in the next couple of years, as I think it will, anyone who walks away from a fixed loan they can afford to take advantage of temporary cheap rents will be walking into a trap. First, they will NOT get a new loan, primarily because of market conditions rather than banks using prudent lending standards. Second, they will watch their cheap rent rise year-by-year in lockstep with inflation. The sale price of homes will also rise, albeit not as fast as rentals, unless and until the Fed allows interest rates to rise, which would put us in a real depression.

    Mass inflation is the recipe for mass homelessness, circa 2011. Then again, a depression will do the same thing.

    Cheers, everyone!
    Jul 06 14:01 pm |Rating: +1 0 |Link to Comment
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