Here are a few thoughts for the day:
I have been examining my pro-capitalist stance with all this mortgage stuff. There is one ingredient that should be in this mess that is not. What's missing is transparency. For capitalism/free markets to work, you need buyers and sellers who actually know what they are buying and selling. This mortgage-backed security stuff is missing transparency. It's not really mortgages that are being bought and sold. It's mortgage-backed securities. It's mystery meat from your high school cafeteria. It's various wild, weird, wacky stuff that is hard to realy get a grip on. It's too complex. The free market has been usurped by marketing. Form over substance. It's nuts.
The financial world is out of whack.
The other issue is inflation. All this money going for bail outs for lenders/big-time Wall Street investment companies, and yes, the silly voter stimulus package has to come from somewhere. The short version is that the Federal Reserve is just going to print more money. We'll borrow from China and elsewhere. We'll print billions of dollars to pay them back. Then there will be lots of extra dollars floating around. There will be so much money out there that we will be in a big inflationary situation next. It might take two to four years, but it's the only thing that can happen. We may well end up back in double-digit inflation.
So far as local real estate investing goes, maybe take advantage of deals for buy and hold (rentals). If getting loans fits your program, now is probably not a bad time to borrow, if you have good credit. Try to get fixed-rate loans. In the back of your mind, remember that before too long, we're going to be in an inflationary time. It's too early to act on it, but not too early to think about how you will approach inflationary times in your business.
I have been examining my pro-capitalist stance with all this mortgage stuff. There is one ingredient that should be in this mess that is not. What's missing is transparency. For capitalism/free markets to work, you need buyers and sellers who actually know what they are buying and selling. This mortgage-backed security stuff is missing transparency. It's not really mortgages that are being bought and sold. It's mortgage-backed securities. It's mystery meat from your high school cafeteria. It's various wild, weird, wacky stuff that is hard to realy get a grip on. It's too complex. The free market has been usurped by marketing. Form over substance. It's nuts.
The financial world is out of whack.
The other issue is inflation. All this money going for bail outs for lenders/big-time Wall Street investment companies, and yes, the silly voter stimulus package has to come from somewhere. The short version is that the Federal Reserve is just going to print more money. We'll borrow from China and elsewhere. We'll print billions of dollars to pay them back. Then there will be lots of extra dollars floating around. There will be so much money out there that we will be in a big inflationary situation next. It might take two to four years, but it's the only thing that can happen. We may well end up back in double-digit inflation.
So far as local real estate investing goes, maybe take advantage of deals for buy and hold (rentals). If getting loans fits your program, now is probably not a bad time to borrow, if you have good credit. Try to get fixed-rate loans. In the back of your mind, remember that before too long, we're going to be in an inflationary time. It's too early to act on it, but not too early to think about how you will approach inflationary times in your business.
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