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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (303)	8/24/2001 7:17:22 AM
From: Tom Gordon	Respond to of 306849

TW, The CPI nos. may not reflect inflation, but it's this Fed induced cheap credit via pumping up the M2 money supply creating a larger debt load on the average consumer, is the proverbial inflationary carrot. This hidden inflation could have a devastating ripple effect in world currencies if the Fed fails in stimulating this debt ridden economy.This is there last straw, only time will tell. The IMF is still doing there part, another 8 billion dollar handout on top of the already 59 billion. Regards,Tom.

To: TimF who wrote (303)	8/24/2001 9:15:56 AM
From: Ramsey Su	Respond to of 306849

Tim, In your opinion is it how low the rates are that matter or is the the reduction of them Good question but I have no answer. I think it depends on each situation and for what purpose the rate reduction is intended for. As an example, Fed controls short term rates which may or may not impact long term rates. Evidenced by Japan, once you have reduced rates beyond certain points, it becomes a useless monetary policy. Since this is a real estate thread, we will stick to that area. Long term rates are determined by market forces of supply and demand which are becoming less and less influenced by short term fed fund rates. How low do you think long term or mortgage rates will go? Lower mortgage rates supposedly stimulate the economy in two main areas, it supports the housing market and the refinance market, which put more money in consumers' hands. We really don't need any more stimulation in these areas which have reached irrational exuberant levels. I have long opined that Greenspan is incompetent. The Fed is now stuck. They allowed the tech bubble to get out of hand and now allowed the real estate bubble to get out of hand. So if we are just looking at real estate, we should actually be raising rates. Once again, the Fed is pumping more air into a bubble, making it harder to have a soft landing. Just my 2 cents. Ramsey