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

To: John Chen who wrote (34672)	6/30/2005 12:17:46 AM
From: Mike Johnston	Read Replies (2) \| Respond to of 306849

If the Fed refuses to raise rates to appropriate level it will only postpone the inevitable adjustment. For now, low rates are doing long term damage to the economy: 1. Artificially stimulated consumption delivers erroneous signals to the marketplace. Result: many small business failures in the future. 2. Consumers are encouraged to load up on debt putting their financial future in jeopardy. Result: future bankruptcies and foreclosures. 3.Resources are misallocated to housing, causing massive malinvestment. Result: many abandoned housing units in the future 4. Increased inflation rate. Result: impoverishment of society and widening gap between rich and poor. Social unrest, increased crime and decay. 5.Low returns on investment result: many people on fixed income falling into poverty 6. Housing bubble Result: lower standard of living, low affordability and increased offshoring of jobs due to higher costs. 7.Declining value of currency Result: Impaired long term economic growth and productivity.