Answers (6)
- Pasadenan
- Contributions:26026
Of course the Federal Reserve knows there will be inflation if they inject more money into the economy in order to keep housing prices stable!
(Some people call it "printing money", but it really isn't because it is mostly electronic money and less than 2% of our money is "printed").
That is the whole point! To make the dollar worth less so that the housing prices don't fall, and so that the government can collect more from the people, and so that when the government redeems the treasury bills they are paying less than the amount originally borrowed!
It has been the same technique that has always been used to take resources from the middle class home owner to give it to the mega wealthy.
Yes, you will still have the same house worth the same number of dollars; but those dollars will buy a lot less.
And really, the Federal Reserve's injection of cash into the economy is no different than the injection of cash into the economy by the banks and government agencies when they were lending money on imaginary home equity for anyone that asked. The only difference is who will get to spend that extra money injected into the economy.
(And speculation on commodities is not "inflation", nor is temporary drought conditions... you have to subtract out those temporary effects).
(Some people call it "printing money", but it really isn't because it is mostly electronic money and less than 2% of our money is "printed").
That is the whole point! To make the dollar worth less so that the housing prices don't fall, and so that the government can collect more from the people, and so that when the government redeems the treasury bills they are paying less than the amount originally borrowed!
It has been the same technique that has always been used to take resources from the middle class home owner to give it to the mega wealthy.
Yes, you will still have the same house worth the same number of dollars; but those dollars will buy a lot less.
And really, the Federal Reserve's injection of cash into the economy is no different than the injection of cash into the economy by the banks and government agencies when they were lending money on imaginary home equity for anyone that asked. The only difference is who will get to spend that extra money injected into the economy.
(And speculation on commodities is not "inflation", nor is temporary drought conditions... you have to subtract out those temporary effects).
- Dan, "the_country_hick"
- Contributions:4827
The fed says we have no inflation now. They do not see food and fuel costing more. DO not believe the statement that inflation will remain low. It is just a guess or hopeful thinking.
- Fred Strickroot, "homenetyouteam"
- Contributions:52
It's a long way back from where we have come from. Definitely think your best best is to do your homework before you buy. Make sure you get a good comparative market analysis from a Realtor who is an expert in an area. Some market areas have not hit bottom yet, and appreciation rates will vary. Widespread, I don't think we are going to see the appreciation rates of the real estate heyday for a long time to come.
- Maria Picardi Kenyon, "mariapk"
- Contributions:501
Some areas will appreciate, some will not. I don't think homes will appreciate for the foreseeable future at the rate they did in the 2000-2003 years. Whatever decision you make it should be one that keeps you in a price range you can be comfortable with and a home you will enjoy.
- David Cooper, "LasVegasRents"
- Contributions:281
I put the Fed predicting the inflation rate right up there with S&P giving Triple AAA ratings to mortgage backed securities. I look at my expenditures for Food, Clothing and Gas from August 2010 to August 2011.
No Inflation Here??? LOL
David Cooper
No Inflation Here??? LOL
David Cooper
- ProfessorBaron
- Contributions:308
Just like with the past few years, only someone with a working crystal ball (or Warren Buffet) can tell you that. Some areas will appreciate, some will not, so make your best estimate and make your investment decisions based on your comfort level with each specific investment. Good luck!
Since the Fed says inflation will be low, will houses appreciate at a much slower pace?
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