[Tunehead54]

Not if the Feds keep raising the overnight rate. Idiots. ;-)

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[AzaleaCity5691]

For some reason, I think this is a good thing

[snowsislander]

But yet another theory holds that long-term interest rates may have been depressed by other factors, including a "savings glut" around the world and efforts by Asian central banks to keep the value of their currencies down by buying United States Treasury securities.

If that is true, the flood of foreign money into the country could be diluting the Fed's effort to prevent inflation. That would imply that the Fed needs to raise rates more than many investors are expecting.

It is true that the flood of foreign money exists, and is likely to be having some effect on keeping our long-term interest rates down. But the utter weakness of long-term rates still seems odd.

[Penner]

Federal Reserve officials, who meet this week, are beginning to suspect that the perplexing decline in long-term interest rates is more than a temporary aberration.

Yes, it means that the middle class is disappearing.

[Mark was here]

The low long term interest rates could be explained by the expected decline in the actual value of the Dollar.

A penny candy of 30 years ago is now selling for a quarter.

This tends to make saving money silly when its value is eroding, the trick is to save something that will hold value.

[arthurus]

So long as the Chinese economy is doing well, the inflation that the US put on the train by "devaluing" the dollar-cranking out far more of them than the market called for- is being exported to China, at least partially. In this country it is showing up in the prices of oil and housing and in the little junk that doesn't get measured, i.e. cokes and nailclippers and coffee-by-the-cup.

[MaggieMay]

There is also an interesting link on Drudge. It states "Housing Bubble Trouble-home sales plunge 11% in Massachusetts". Would someone please begin a thread on this headline. I think it would create some interesting comment.

[NYCRebublican]

I think what people I starting to realize is that there is greater risk in the short term than there is long term. Ovver 30 years there will be ups and downs in values, inflation etc., but over the long-term you cn feel secure in the investment. Rarely if ever in an inflationary economy like ours will prices on real assets like real estate decline over aa thirty year period. Even in real terms.

In the short term, 1-3 yrs, you could easily get caught in one of the fluctuations. The market is also telling Mr. Greenspan to take his manipulation and @#$% it. It is not his job to protect people from "bubbles". If rates are low, higher prices will follow as the cost of capital is low. That's not a bubble. His job is to control inflation and provide adequate amounts of liquidity. Last time I checked inflation was in check, even with the higher prices of oil, and while there may be some overbuilding in real estate - let the market work it out.

[A CA Guy]

Well, by giving no interest to savings accounts, you have the elderly financing the new home loans on their retirements, or the old folks who saved have to pursue other more risky investments.

It's good for the state governments if you get low loans and $250,000 homes selling for $700,000. The income coming in and being spent for property taxes has increased by well over 200% on new purchases lately.

Long term I think this is not good.