By Dr. David Eifrig in Retirement Millionaire:

Three of my close friends - my best friend from medical school, my massage therapist, and my sister - are about to disrupt the U.S. housing market...

What are these three about to do? Independent of each other, all three are about to default on their mortgages. Technically, they're each going to do a "strategic" default.
The value of their home is so far below the outstanding balance on the mortgage it makes sense for them to walk away from their obligation. They're calling up their banks and telling them they want out of the responsibility.

Why do I say their strategic financial decisions are about to disrupt the U.S. housing market? When I hear of three people close to me ready to pull the plug, it tells me thousands more are making the same decision.

In many cases, borrowers across the U.S. have simply stopped paying their mortgages. Some have tried reworking the terms through the government's "loan modification" program to little benefit. About 90% of those who modified their loans ended up in default anyway within 12 months.

All these forsaken mortgages represent houses that will end up on the books of banks around the country. To get these properties off their books, the banks will slash prices.

That will lead to another round of fear and increase volatility in the stock and bond markets. Most importantly, it means the choices my family and friends are making will thwart price inflation for the foreseeable future.

The collapse in real estate is bad. New home sales are at the lowest level in 47 years. With a second downdraft in housing prices, people will hunker down and spend less on other goods and services. Less demand means little to no price inflation. I've been telling you this for a couple years, and I think it will continue as people struggle to make ends meet.

Crux Note: Right now, Doc Eifrig is recommending a high-dividend paying stock to take advantage of low interest rates and low inflation. Even better, this company is in the one sector that should buck the slumping economy. To access this month’s issue, and learn how you could safely double your money in the next 10 years, click here.

More on inflation:

Tom Dyson: The world is on the verge of a historic collapse

Top SocGen analyst: Deflationary collapse will be followed by "super-inflation"

Top Austrian bank: "Gold is the optimal investment in both deflation and inflation"