The study of economics on a national and international level is called macroeconomics.
Macroeconomics has been in the news quite a bit lately with the news of the ever-weakening dollar and decreasing mortgage rates. How are these two related and more importantly, how does it affect you?
Picture the world as a series of banks where each nation is a bank. The nation's discount rate is the interest rate you get if you put your money into that nation, or bank, following our example. Normally, money flows into the banks that have the highest interest rates. Money leaves the banks that have the lowest interest rates.
The US has low interest rates compared to the rest of the world. Therefore money does not flow to the US. That results in a weak dollar.
If the Federal Reserve raised the discount rate by 3 points tomorrow (for illustration), mortgage rates would rise almost immediately. But money would flow into the US at a higher pace also. Remember our example of money flowing to the nations (banks) that have the highest interest rates? This would also reverse the weakening of the dollar.
You see, it is all a trade-off, in macroeconomics. Low mortgage rates, a weaker dollar. High mortgage rates, a stronger dollar.
It is a great time to take advantage of the low interest rates which have afforded us historically low mortgage rates. This works in behalf of you, the real estate investor. Houses are very affordable for both the first-time buyer as well as the move-up buyer. All due to macroeconomics.
Take advantage of this favorable position by contacting me today.
Also, for my free report, "How to Buy and Sell Real Estate in 2008", please email me at Marilyn@MarilynTheRealtor.com.
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