Federal Reserve trapped in its own game – stagflation hits Main Street as housing markets slumps and rents start rising rapidly
Peter Oberois
Apr. 3, 2007

Federal Reserve is very concerned about the inflation from rising rents. Before the recent real estate bubble collapse, people were buying homes leaving the rental apartments. It made sense at that time to buy than rent with real estate moving up close to seven to ten percent every year.

Now people are favoring rentals to buying residential real estate. Consequently, the rents are rising rapidly. According to some studies rents are rising at the rate 4 to 6% per year at this time. This adds to consumer price index and the Fed is really concerned about the same.

The last leg of Stagflation has started hitting the main streets. The wages and real income are at best sub par. At the same tine the inflation is rising on the surface. If you add up everything the stagflation is creating ripple effects called induced deflation. People are paying high tax, high gas price, high heating and utility bills and now higher rents. As a result their residual income to spend in the fall is falling short of the economic expectations. The effects are serious on the stock market and the economy.

Federal Reserve trapped in its own game – stagflation hits Main Street as housing markets slumps and rents start rising rapidly
Peter Oberois
People are paying high tax, high gas price, high heating and utility bills and now higher rents. As a result their residual income to spend in the fall is falling short of the economic expectations.
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The cyclical top in crude oil is in place and the secular bear market takes control of the chart - Iran Seeks U.K. Diplomatic Settlement
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Home sales rebounding nicely as manifested by the Home Resale Pending data – real estate in a cyclical bull market within a secular bear market
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The surprising bounce back in the Home Resale Pending data manifests the nice rebound in real estate. The residential and commercial real estate is bouncing back buoyed by the extra liquidity in the system.
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The worldwide depression will be triggered by China-US tension over trade and Chinese spying – other nations are also concerned over Chinese ambitions
Karen Zuba
China-US tension over trade is escalating. America finally understands Chinese trick of delay and do nothing tactics. China's emergence as a world trade powerhouse, blamed in the U.S. and Western Europe...
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Service companies plan to boost spending at the fastest rate in 17 years – then why is Nikkei going down? What will happen to Dow?
Sam Adelton
But Nikkei is going down. What can be the reason for Nikkei to go down when the Japanese economy is going to go through the roof? Is it an April’s fool paradox?
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The slow and steady drop in ISM Prices confirms deflation – what is the effect on the stock market?
Alan Hershey
The ISM Price index is dropping slowly but steadily. While consumer price index and producer price index shows signs of mild inflation, the price deflator and ISM Price index are showing ample sign of soft trend in prices.
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A drop in ISM Manufacturing shows recession getting near – but the bond sell the stocks
Peter Oberois
The stock market is showing ample signs of trouble, as manufacturing is getting weaker. The drop in ISM Manufacturing shows recession getting near. The real estate is also very weak. Mortgage defaults are going through the roof. Construction is down.
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