how inflation and deflation goes

Where is inflation and deflation goes of our economy

Housing just can not see any back up prudential. Just like Bernanky prepared. Within two years he won’t raise base interest rate. It is great move for stabilize housing market. Because most people have variable interest loan will keep similar payment on their house. Even when first 3,5,7,years interest only loan start variable payment. So this move will help for keep less new house being through in to market.

On the other hand, Bernanky’s move tell us. Housing market like this will last even longer then we thought. Why? Because bank money is private controlled not by Bernanky or White house. Bankers are most greedy business man, no matter how low the base rate of government, bank wont really put money out into market to work. Unless they think market of housing start going up. People buying housing or refinance housing are the people have steady income which can afford to do so. But  job market stay slow too, which means buying power won’t be able to increase dramatically.
 
Not only job market won’t help housing, basic living need goods inflating cause bigger expense for every household, which also cause buying power decreasing. All the working people know $100 can buy a full cart stuff in Costco, but now $100 only get a few item which won’t fill up the bottom of the cart in Costco. So the inflation is obviously.

Time wise the more slow economy goes, the less buying power will be. So if we go the same way of Japan. It will more likely have deflation on housing.

 
So in conclusion, we have a lot chance to go parallel on housing deflation but living need inflation in a long time.