The inflation of the U.S. financial and mortgage finance stocks that began in the mid-1990’s with institution of the strong dollar policy, the suppression of the gold price and the movement of significant capital out of the US is now over. This coincides with a 20% drop in the stock market, an indication of a bear market.
The unanswered question is “how much will housing, land and other asset prices drop before the capital that was shifted out is attracted back on shore?”
Crisis Wipes $1 Trillion From Financial Stocks
By Joe Bel Bruno – Associated Press (7 Jul 2008)