Real estate prices are dropping cause we had a supercycle bull mkt(bubble)
in RE pop 5 yrs ago...it takes 10 yrs usually before mkt turns once a ubble pops.
The prices of Chinese goods are cheap cause we dont have manufactoring in this country anymore...China manipulates the yuan to keep it artificially low so they can sell their products to us cheap(hence Geithner pretends he is mad at China for not strengthening the yuan)...Japan does same thing...Japan govt buying tons of dollars right now to weaken the yen cause it NEEDS to keep selling Sony TV's and Honda's so they dont fall into a depression....that is why the things we DONT need are cheap...when you print money things have to go up in price...the price of gold will tell you whats really happening and it doesnt lie....hence everything we DO need such as gas and food is expensive.
Somewhat true retail lags wholesale for awhile...but I can guarantee you the price gas stations are paying has dropped modestly due to price of oil but they will not translate this into cheaper prices for retail until they are forced to do so, so that was my point...and gas prices dropping in 3-4 months depends on what crude does from now on...if crude prices start to go up again soon I can guarantee you the price of gas will not be down 4 months from now and wont reflect the beating the price of oil has had for past 2-3 wks.
And I think it is silly to think that the price of food going up is due to droughts...the price of food has been trending up for many yrs now...not over a quarter.
Originally Posted by pman10
Bolded part is false. That's basic economics man. Retail prices ALWAYS lag market rates for crude oil. Crude only started falling 2 weeks ago. Wait 3-4 months, and then see. I guarantee that gas prices will drop. You can quote me on that.
Food prices are elevated in part due to historically large droughts. The rest, I can't explain. I don't think it is inflationary, though, or else we'd see the price of EVERYTHING rising. Please explain to me why we are in an inflationary period, if everything from property prices to electronics to clothing is stagnant, falling, or rising SLIGHTLY?
PS - I agree with your core argument (no pun intended, lol). You're absolutely right, that we ARE potentially creating a bubble.