One important thing to realize is that in a credit bubble the price of things like houses, college education, etc increase even as the supply rapidly increases.

One important thing to realize is that in a credit bubble the price of things like houses, college education, etc increase even as the supply rapidly increases. This is because there is more and more credit available to pay for them from the same constant income stream of the consumer. This increase in credit is caused by the lowering of lending standards and interest rates. This credit is payed for by a continuous stream of income. Once the stream of income is fully tapped and debt service becomes around 30% of income, credit can no longer grow and a deflationary cycle gets going where the prices of those goods that were inflated by credit revert to the prices that they would have commanded had the supply of those goods (housing,education,etc) just been increasing and not the money supply. The "deflation" is the business infrastructure built around constant expansion of debt collapsing. In the end it is healthy as the economy was unreasonably warped towards over-production of credit secured assets. This warping is what has led to the current underconsumption of house-poor and student-loan poor individuals who are unable to spend because they sold their productive years, in the form of debt payments, to the dream of making it rich by overpaying for credit inflated goods. WHEN DOES THIS END? This ends when we reach the end of the K-Wave and prices come back down to levels where the cap rate on renting a house competes well with risky bonds. Even then, you've got the whole multitude of debt laden consumers who need to default on everything so they can have some spending money again. Unfortunately they are not yet out of the woods as higher taxation by our government, in order to pay its debts, is still an on-going problem that will overhang the economy until the massive bulge of government pensioners of the baby boomer era start to die-off and we end the Iraq/Afghanistan wars.