California as bell weather… (deflation at work)

This is what deflation does. It forces you to sell assets to cover your liabilities.

Trouble is of course that in a deflationary environment, sellers have trouble finding buyers and, when they do, sellers find that their property fetches far less then they estimated and hoped for.

It will be interesting to see how California fares because all other US States will have to follow suit as, indeed, will all Western countries.


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