Good morning! I hope you're well. I was having lunch with one of my very best referral partners yesterday and we were touching on reality. He showed me a graph that talked about equities and how much they had increased and decreased within the past 1 1/2 years. We also talked about the likelihood of a bond bubble which I didn't disagree with.
So where are we today? We have the short term interest rate effectively at 0, very slow or no growth, very high unemployment, and falling prices on homes. All signs seem to be pointing to deflation or as it was coined in Japan "The Lost Decade".
What do I wish? I wish everyone would just tell the truth! I think the Federal Reserve is doing a good job and know there are always opportunities. In fact, my company just concluded its best month ever. But let's not candycoat things. I used to have a partner where everything was always good. In reality, that wasn't the case. My partner was a pollyanna!
My prediction for the next several months? I expect mortgage interest rates to stay low. There is a tremendous amount of money in bonds right now. Yes, there may eventually be a bond bubble but not until our economy shows some signs of life. For the next couple of years at least, expect very slow or no growth. The powers-that-be may try and put a positive spin on things but reality states we are dealing with a nervous nellie in the U.S. consumer. Until consumer confidence returns, there will be little in the way of purchasing. This is one sign of deflation.
So what are your thoughts? I'm curious and invite you to weigh in. Have a great day!
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