Inflation Deflation and Real Estate
Today, the Federal Funds Rate is at 0%. This has created a surplus of Bank Reserves to fight the financial crisis. We are also seeing deflation in the Consumer Price Index. In parlance, the cost of living has gone down. But deflation today, combined with a mounting Federal Deficit should lead to inflation tomorrow. This shift should create a stimulus for real estate. In the absence of the mortgage industry and employment melt down, lower interest rates and a dip in housing prices would naturally lead to a real estate buying party. Sadly there has not been such fanfare, and [...]