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Today's SLV post by "defcon_dong" received five 5-star ratings (so far).
A MONSTER BOX OF 500 SILVER COINS or FIAT backed by trust me, i pay u back
EASY CHOICE ~ I take the monster box of silver coins
US fiat will eventually go to 0.60 ~ and eventually go to zero
Even NAR chief economist David Lereah did not tell us that housing prices would go to infinity, although I must admit it would have made it even more fun to heckle his outlandish predictions.
January 26, 2004
A record 6.1M existing homes sold in 2003
Low interest rates were the biggest factor in pushing up sales again last year, says NAR chief economist David Lereah.
What is it about low interest rates that causes investors to take on so much extra risk?
Source Data:
Yahoo: SLV Historical Prices
Hedge funds were having a bad year until the leveraged the QE2 pump to da sky, Tipsy!!
ReplyDeleteWhat is it about low interest rates that causes investors to take on so much extra risk?
ReplyDeleteThis is what I don't understand. If interest rates are so low, QE is going to move them up eventually. I can see someone wanting to buy a house on a reasonable mortgage, but I can't see why one would lend money for housing at these rates. Remember the S&L's in the late 70's saddled with mortgages at 6% while the rates were going double-digits?
Of course the Fed can just bail out itself.
Anonymous,
ReplyDeleteI think "tipsy" is a great word to describe the situation.
"Pride comes before a fall."
So does tipsy! ;)
Charles Kiting,
ReplyDelete"I can see someone wanting to buy a house on a reasonable mortgage, but I can't see why one would lend money for housing at these rates."
And even that has its limits of course.
Median Manhattan home price: $840,000
Can you imagine paying 18% mortgage interest on that? Mortgage rates did hit 18% in 1981.
$840,000 * 0.18 = $151,200