William Blackburn

Today the Dow Jones average was down 500 points at one point in the day. Why is this?

Because "the market" was disappointed that the Fed did not do even more to boost the US economy. But what about us in the real estate business? Well, house are cheap, inventories are dropping and average days on the market is dropping and 30 year fixed rate mortgages closing on 3% can be purchased with 3.5% down.

Interest rate futures on the 30 year US Treasury bond increased from last Friday at $138 to $146 today! Interest rates moves are the reciprocal of prices meaning that long term interest rates are lower than ever! Step up to bat!

Interest rates are dropping like a rock!
Stock markets are crashing!
The US Dollar is declining fast.
The Federal Reserve cannot cut interest rates any lower (as they are almost zero now) to stimulate folks to buy stuff and hire people at businesses. Europe has problems that are more severe than ours.

Here is what is going to happen and is already happening:

Congress and the President are virtually deadlocked and the world is frightened of the US in that situation. The world calls this "lack of political will"...to deal with problems.

However, we have what no other country has: an independent Federal Reserve. But the Fed has already reduced the interest rates to about zero so that is not available to get people hired in new jobs or to encourage consumers to buy a bunch of worthless stuff....the backbone of the US economy. They have but ONE CHOICE and they have already secretly started on this path....to flood the world with new $ bills making them worth less and less. NOW that things are starting to reach a climax with rapidly declining stock markets and declining interest rates the plan will be accelerated FAST. This will supercharge the printing of new US$s.

Common logic is that if we have lots of new pieces of paper, they become worth less and less.

BUT GUESS WHAT: This will make the Florida economy BOOM because home prices will rapidly rise in terms of the US$. People will need lots of these green pieces of paper to buy a house. THEN GUESS WHAT: all of the Florida real estate "negative equity" will go away as house prices rapidly rise. THEN GUESS WHAT: The builders and developers will come out of the woodwork and Florida will have a very low unemployment rate.

Good times will be rolling in Florida.

Buy now and borrow with long term fixed rate mortgages at very low interest cost ...rates that are not now indexed for inflation but might very well be in a high inflationary environment.

Things are changing. http://tinyurl.com/3ybl6fm

Around "9/11" the US $ would buy 1.85 Swiss Francs.....today the $ buys only .935 Francs...the dollar has gone down that much! If we do all our earning and spending in US $, who cares?

If we want to take a trip to another country.

If the US government wants to continue to borrow money from foreign investors and governments.

If we want to buy foreign cars.

If we want to fill our gas tanks.

The US is becoming a "low cost" country worldwide which is why call centers are now going into Mississippi and South Dakota instead of India where wages are increasing rapidly while they are going down here.

Declining currencies ultimately leads to inflation ...meaning the price of "things" go up here. The biggest "thing" is residential real estate.

I read an article in our local paper quoting our Governor Elect on the issue of job creation. The statement was very interesting in that if we have an additional retiree that moves to Florida....that creates one job due to increased economic activity. If, on the other hand, a much younger college graduate moves here...two jobs are created!