Tuesday, November 14, 2017

Federal Reserve Policy

There is  a constant barrage of information about the lowest interest rates ever. All of it positive. Home mortgages below 4%. But for every heads there is a tail. The other side of the coin.

Two negative results of super low real estate loans. People can afford a much higher price and the market responds with doubling down on prices of homes.

But the most severe hit is seniors that have invested all of their lives in bonds and equities designed for income, rather than growth. Thousands of senior savers had their retirements destroyed when the income from investments disappeared.

This is what happens when politics take over from a balanced economy. Watch when the interest rates finally go up what happens to the inflated equities that will suddenly deflate and leave people buried in loans that will exceed values.

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