That will take us to 2012

Authored by Garth Turner — Greater Fool – The Troubled Future of Real Estate

So, first we have a deflationary recession, lasting maybe two years. Then, as the recovery takes hold, as those trillions need to be repaid and as the world is awash in liquidity, we get inflation, probably severe. That will immediately start reflating real estate and oil and Vespas, and cause central banks to ratchet up interest rates in order to choke off too-rapidly rising prices.

That will take us to 2012. Ask me then what comes next.

Expect these things to happen in following 3 years

Authored by Garth Turner — Greater Fool – The Troubled Future of Real Estate

Expect these things to happen

* Falling house values until at least 2010

* A large and growing federal budget deficit in Ottawa, starting in 2009

* Unemployment rising almost continuously for at least two years

* The banking and financial system rocked with bad assets and a few failures

* Stunning stock losses before a market-led recovery starts

* Banks suspend dividend payments to stockholders

* Reduced exports and corporate failures as the US tries to protect jobs

* Fewer services as governments at all level struggle with a funding crisis