tag:blogger.com,1999:blog-31350666.post1945956440062954810..comments2024-03-12T18:10:53.002+11:00Comments on Enough Wealth: US Sub-prime woes hurt Australian Home Buyersenoughwealth@yahoo.comhttp://www.blogger.com/profile/09371028394685288035noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-31350666.post-89744997788686931802008-01-06T20:10:00.000+11:002008-01-06T20:10:00.000+11:00Hi!The closest thing you can get to 'debt deflatio...Hi!<BR/><BR/><I>The closest thing you can get to 'debt deflation' is where high inflation rates cause the real value of debts to decline over time.</I><BR/><BR/>No, this is not debt deflation. What I mean by debt deflation is the contraction of money and credit, which will lead to falls in asset prices (as what happened in Japan). See <A HREF="http://cij.inspiriting.com/?p=317" REL="nofollow">HowAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-31350666.post-69538236997977351692008-01-06T19:15:00.000+11:002008-01-06T19:15:00.000+11:00That would be called asset deflation (house prices...That would be called asset deflation (house prices declining). The closest thing you can get to 'debt deflation' is where high inflation rates cause the real value of debts to decline over time.<BR/><BR/>I can see house prices dropping 10% where they have run up in the past few years (WA or NT), or didn't correct after the last boom (VIC, SA, QLD) but I think it's less likely in Sydney as prices enoughwealth@yahoo.comhttps://www.blogger.com/profile/09371028394685288035noreply@blogger.comtag:blogger.com,1999:blog-31350666.post-14508215957703088722008-01-06T00:07:00.000+11:002008-01-06T00:07:00.000+11:00If interest rates keep going up (or credit crunch ...If interest rates keep going up (or credit crunch gets worse, making money much more expensive), it will come to a point where we will have a serious bout of debt deflation (see <A HREF="http://cij.inspiriting.com/?p=214" REL="nofollow">What can tip Australia into a downward property price spiral?</A>).<BR/><BR/>What happened in the US (10% fall of median house price year to year) can easily Anonymousnoreply@blogger.com