No, the “QE II” I am referring to is not an ocean liner, but the next putative round of thin-air money printing that will be known as Quantitative Easing II.
I see plenty of signs that might lead a deflation-fearing Central Bank Chairman to begin making plans.
Here are a few of the things that are certainly causing a good degree of worry down at Bernanke Central in the Eccles building. The Fed, and Bernanke in particular, are avowed ‘deflation fighters’ who are constantly keeping their eyes peeled for anything that might hint at deflationary forces.
Housing Demand
Housing demand is slipping and sliding with the end of the government tax programs and despite the Fed’s engineered ultra-low mortgage rates:
Home refinancing up but buying demand near 13-year low
NEW YORK (Reuters) – Refinancing drove total U.S. mortgage applications to an eight-month peak, as loan rates fell to or near record lows, but demand to buy homes sank toward 13-year lows last week, the Mortgage Bankers Association said on Wednesday.
The U.S. housing market continued to deflate after a spring sales spree, fueled by now-expired federal tax credits of up to $8,000, robbed from summer home buying.
As home sales sink towards 13-year lows, prices are almost certain to follow.
On the other side of the story, the April 2010 Case-Shiller house price index is up 4.6% from where it was in April 2009.
That sounds good, but the graph is a little less than impressive:
And, as noted over at
by sagerxx 
