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Other countries, like China, are getting hesitant about financing our debt. They are concerned that we will not be able to pay it back. The treasury auctioned some bonds yesterday and was unable to sell them at a lower interest rate. The stock market is slumping because of this, and IMO it will only get worse. See this story: Slumping Treasury bond prices send stocks lower - Yahoo! Finance (http://finance.yahoo.com/news/Slumping-Treasury-bond-prices-apf-15360914.html?sec=topStories&pos=main&asset=&ccode - broken link)=
Other countries know that the Fed's main response to the financial crisis is to inflate it away. Get prepared for a surge of inflation, probably by the end of the year. If you thought last year was bad, you haven't seen anything yet. Thank you, government
I suspect those who think inflationary pressures are growing are listening to the talking heads constantly trying to hawk their service on the 24x7 invest-o-rama programs. Somehow I don't such sources are to be trusted.
Other countries, like China, are getting hesitant about financing our debt. They are concerned that we will not be able to pay it back. The treasury auctioned some bonds yesterday and was unable to sell them at a lower interest rate. The stock market is slumping because of this, and IMO it will only get worse. See this story: Slumping Treasury bond prices send stocks lower - Yahoo! Finance (http://finance.yahoo.com/news/Slumping-Treasury-bond-prices-apf-15360914.html?sec=topStories&pos=main&asset=&ccode - broken link)=
Other countries know that the Fed's main response to the financial crisis is to inflate it away. Get prepared for a surge of inflation, probably by the end of the year. If you thought last year was bad, you haven't seen anything yet. Thank you, government
Agreed. I am in the mortgage business and my team was one of the top in my state last year with over 400 loans closed and I get to see first hand the finances and mentality of quite a few folks. I am convinced that we are not only on a slippery slope, but we have lost our footing and grasping at that slender little tree branch which rests on the edge of a perilous cliff. The mentality of the influencial folks in the real estate world scare me the most. I just saw today that in my state, the head of the state association of realtors was lobbying to extend the $8k tax credit to ANYONE that buys, not just first timers and he wants to raise it to $15k. What scares me, is how do we ever get off the heroin we are on? At what point are we full fledged addicts dependent on the gimmicks and schemes used to BRIBE people to take on debt? I think I see the tree branch breaking loose.
We as a country are quite invested in keeping a growing real estate market, because the majority of our industry has been sold to other countries since the passage of NAFTA. There were literally millions of well-paying manufacturing jobs that have vanished in the past 15 years. They have to be replaced with something, and real estate has been a big part of the replacement. We are really hurting now that lots of real estate jobs have been eliminated or seen a significant cut in earnings.
NAR makes me want to laugh in a way; have you ever heard them say that it's not "a great time to buy"? Yeah right. I don't even pay attention to what they have to say anymore. Lareah and Yun have been proven to be a joke.
As for inflation, I guess we will see what happens. The main thing saving us is our status as the world's reserve currency. China and probably several others would love to change that, but can't (at least not at this time). I'm planning for a fairly strong inflation of about 10% a year, but honestly don't think that it could go into hyper-inflation. The government is going to do what it is going to do, there is absolutely nothing we can do about it except try to plan.
So far the financial crisis is being solved by administering more of the cause, which is not sustainable. Suddenly everyone wants a piece of the "easy money" and "bailout pie". If we don't swallow some medicine NOW, we may get by with a very weak recovery for the next few years, and then a bigger crash a few years down the road. You don't want that. I believe that if that happens the dollar could literally crash, and we may be joining forces with other countries with a replacement currency of some sort. Sad to say, it makes me very glad that I don't have kids.
10 year bonds have nothing to do with mortgage rates. They are determined by MBS (mortgage backed securites). Now granted there used to be a correlation between the 10 year bond and MBS prices but that tie was severed with the stated income loan.
Oh Yeah! no denying that. MBS took a beating yesterday and that is why rates are up- not the 10 year bond.
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What scares me, is how do we ever get off the heroin we are on? 
At what point are we full fledged addicts dependent on the gimmicks and schemes used to BRIBE people to take on debt? I think I see the tree branch breaking loose. 
