Wednesday, June 29, 2005

Real Estate Bubble

My prediction is that by the end of this year the Real Estate Bubble will begin to deflate. Here's why the Fed will continue to raise interest rates. Next month student loans interest rates will increase dramatically. That's just the beginning. Inflation and foreign sales of bonds will also influence the Bubble. The flattening of the yield curve is a big warning sign of a coming recession. This will cause the Fed to hike rates. In my opinion The Fed should remove the term 'measured pace' out of any future minutes. The market only plans ahead with that term. Markets need to be more fluid and unreliable. this introduces risk and viabrancy to the market. And that's the kind of market we should have. You don't make money with a flat market. You make money when there is horrible bleeding.

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