Well, yes. At this moment in time deflation stands to become the instrument of yet another great shearing of the public. The money supply was blown up to huge proportions and prices have followed. In the meanwhile, salaries have dropped in the face of rampant unemployment. As deflated as the housing market may have become, it is still higher in most places than it was previously and people are still hanging on to toxic mortgages, most likely hoping for better days which are not likely to be forthcoming any time soon.
When the deflation hits and depending on the degree to which is does, salaries will likely go down further. Commodity prices may also deflate, thereby lowering the cost of items such as food, heating oil, and other essential items..maybe. But those mortgages will not go down and that will put tens of millions of people behind a very big 8-ball. One can only wonder where this stands to go. If it goes that badly, and it is not far fetched to suggest that it may, how will the creditors proceed? I suspect that conventional foreclosure on such a scale will not profit the powerculture well at all. It would, in fact, raise threats against it. My thoughts are running along a line of subtle deviousness where the shit-scared homeowner is offered a way to keep "his" home that would include a reduced monthly payment in exchange for a GREATLY extended term, say, 75, 100, or 150 years. This would leave the homeowner feeling as if they'd dodged the bullet of homelessness or having to move in with his mother-in -law for the rest of his life.
I am also suspiciously musing over whether other considerations might be demanded as well. It would not take any great stretch to include waivers of basic human rights in some cloaked form where the frantic homeowner is so freaked out by his circumstance and so grasping of the apparent life preserver that has been thrown him, he eagerly and thankfully signs on the dotted line, unaware that he has just effectively sold his soul to the devil.
For example, I can readily see a new set of concerns for the integrity of the asset arise in sudden and rapaciously vigorous fashion. In the wake of the '08 housing collapse there was covered in the media several cases of former owners trashing the houses that were taken from them. It is no great leap to anticipate banks now wringing their hands over this most lamentable circumstance and therefore requiring additional insurance riders to be taken by "homeowners" (now really rent-slaves). I can readily see them extending this to restriction on the sorts of materials one keeps on the premises such as FIREARMS which they may deem a hazard to the physical integrity of the property. This could be hidden amidst a great litany of "dangerous" items such as chemical agents, tools of various sorts, and so on. The asset is THEIRS for all practical purposes and as such they may dictate such conditions.
Many would reject such conditions and those would end up on the streets, or living with "mom". But IMO the vast and overwhelming majority would cave without so much as the first thoughts about it, sign, and thereafter have to relinquish various possessions such as guns and ammunition to the market place. Were this to happen on a large scale, the gun market would flood and prices would collapse. Mr. Homeowner would get paltry sums for his guns and I would not at all be surprised to see corporate entities snapping them up at those depressed prices, the arms ending up in government melters and a great coup of disarmament having been pulled off without so much as a whisper.
Just to s how you how far this idiocy could extend, I could also see the asset holders imposing ridiculous protective requirements for their property assets such as that to install a safe of a minimal quality wherein all valuables such as jewelry, coin, negotiable instruments, and so forth must be kept if they are to be stored on the property. Why? Because without such a safe thieves would be more likely to hit your house, damaging the banks property. Ridiculous you say? Absolutely so, but when has that ever stopped "them" in the past? Never? Right.
Once the landscape changes to this dreary composition of bank-owned properties being leased very long term to a family in intergenerational style as we find in the UK, almost any freakishly unreasonable nonsense may arise and while there may be many far more reasonable and effective remedies to the "concerns" raised by the banks, they may as easily be ignored in favor of those remedies that just happen to yield results that serve the powerculture most admirably.
If deflation hits hard, it is going to wipe the middle class out in very short order precisely on the basis of large capital mortgages, whether for homes, second properties, costly conveyances including automobiles, aircraft, and boats, and anything else where the monthly nut becomes disproportionately large in comparison with income. This is the danger inherent in "leverage". Credit leverage is a GREAT thing so long as you're making money. If you're lending me $$ at 5% and I'm making 8% on it, I will do that all day long. But when my cashflow becomes restricted, that same leverage becomes a yoke around my neck and if things go far enough, a noose.
My father built a house in Flushing, Queens, City of New York in 1950 for something like $5K. It is now somewhere in the $800K range, the cost now far and away outstripping inflation. Nobody in their right mind would buy that house for such money, yet someone has. People have been had big time and the hammer may be about to fall. If it does, look for some quantum change in how life is lived in this nation. As Rahm Immanuel said not too long ago, there is no reason to let a perfectly good crisis go to waste and I seriously doubt these gangsters would.
Everything I've speculated here may be dead wrong, but I will nevertheless advise all to keep their eyes peeled. The coming 6 months may be very interesting.
