Deflation in already super-inflated assets like real estate, and inflation in energy, food, etc.In fact the real problem is insurmountable debt levels both public and private and huge misallocation of capital due to government meddling.

Risk based capital guidelines govern how much capital must be on the books for a bank.

We (me and my wife) tent to focus on buying council (government built) properties which are relatively cheap to buy but provide great cash flow.

If it's an fha loan that you are shorting...the seller can recieve up to $1000 from the government depending upon the amount of time the property takes to sell.

You can however qualify for some pretty cool incentives through the government, but I think the red tape would be a lot of work.

. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ http://www.iht.com/articles/2008/09/07/business/fannie.php The U.S. government's planned takeover of Fannie Mae and Freddie Mac came together hurriedly after advisers poring over the companies' books for the Treasury Department concluded that Freddie's accounting methods had overstated its capital cushion, according to regulatory officials briefed on the matter.

Robert, PropertyShark.com gets sales data from government sources.

I have met once an enterprising young Japanese guy who has amassed a sizable fortune in rental apartment buildings, but certainly he was not the average and he worked extremely hard to get the financing while credit was loose.One source of cheaper houses are the government auctions.

By then, I'm sure that the government will have found a way to take every penny!

The government tells homeowners to contact their lenders for equitable solutions, but so far only a few hundred thousand workouts have been done.