Deflation 101: It’s critical to keep in mind that deflation is a symptom of weak demand but it is not necessarily a cause. If we attack the symptom of falling prices with a dose of inflation, we risk having 2 problems not 1–inadequate real demand and unwanted inflation. Yes, deflation has hurt Japan but they have an insoluable problem of inadequate corporate demand and a shrinking population.
Tag Archives: Demand
Families in the Market
I am quite bullish on the multi-family area of the market where demand is strong and strengthening and vacancy rates are declining. The apartment space looks good but as the homeownership rate continues to fall, the improvement in MF is coming at the expense of the single-family sector. This is important to consider because household formation (which itself is highly job dependent) is only part of the story.