From: "jIM" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Invest now, or should I wait?
Date: Fri, 7 Jul 2006 14:49:58 -0500
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anoop wrote:
> jIM wrote:
>
> > My opinion is we don't have a housing bubble, we have a credit bubble.
> >
>
> I disagree.  I think when the bubble pops the pain will be felt by
> everyone to varying degrees.  Even those in good financial standing
> will be affected by secondary effects.  They may lose their job
> (even though they weren't really making more money during
> the boom than they were before) and things like inflation and
> currency devaluation will affect buying power of saved monies.
>
> Anoop

I think a credit bubble stops consumer spending and slows the economy
down.  High interest rate type environment.  The high interest rate
environment may cause more problems than the actual credit bubble
popping.

I think we have started to see the consumer spending slowing, and the
impact of higher borrowing costs affecting consumer behavior.  The
bubble is not getting any bigger now, IMO.

Whether the consumer spending slow down trickles into to larger economy
and triggers higher than expected inflation, currency devaluation,
higher unemployment, or other catastrophic mass financial crises has
not happened (yet) and is what I would hope is trying to be prevented
by the fed and other government agencies.