Not Ranked
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I heard the second wave, the big one, of home-ownership catastrophy is still coming. Sub-prime mortgages were understandably doomed to fail. But the next wave is the majority of responsible home mortgages that are either prime ARM or balloon-due. Not everyone got out of these contracts that seemed moderate only a year ago and this market represents a huge segment as opposed to sub-prime. Most folks assumed they could refinance at least at the equity they had built up over 10-15 years. But as CDC mentions, the bottom is falling out faster than responsible buyers could imagine. Some will lose their jobs, jobs they've had for 10-15 years.
I'm like CDC in that I'm sitting with all stuff paid for. But I can already see that real estate taxes are going to jump big time. Some people will reduce, or eliminate, most vehicles. I have an old, but good, seldom driven truck that will hold, or even gain, some value over deflating vehicle prices because it will remain a useful necessary device in any economy when everything else is pared to the bone. But who will pay for highways? Expect license tabs to skyrocket.
When my wife and I were a young couple, inflation was our friend, partially paying off (diminishing) fixed long term liabilities with time. Retirement was foreboding with fixed income and the cost of living going up or inflating. Does this deflation mean my retirement income will go further? Probably not if I can't afford to pay the taxes in my paid-for home or license my truck to pull my camper somewhere to live as a squatter.
Wes
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