On Monday April 30, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big Talker 1580 WHFS AM, hosted by Ryan Sloper.
Listen to the show.
Part 1 (15:27)
Louis and Ryan discuss Ben Bernanke’s recent comments relating to keeping interest rates low for an extended period of time. Ryan notes that interest rates are kept low out of necessity to keep the US interest payment obligations from being too expensive. Louis adds that low interest rates also help keep the banks solvent. Louis notes that the policy statements don’t refer to these two points but rather state that low interest rates are in place to help the economy and consumers.
Louis notes that low interest rates are not good for consumers as they create an environment that does not encourage savings, so people are almost forced to put their savings into the stock market. Low interest rates also encourage consumers to take on more debt which is good for banks and not necessarily good for consumers. Ryan notes that loans are not available to small businesses that want to take advantage of the low interest rates.
Louis notes that the Fed policy of keeping interest rates low is market manipulation as interest rates are not driven by the market. Louis notes that if one can take advantage of these artificially low interest rate and lock in a long term mortgage you can hedge your future shelter costs against future increases. Louis notes that food and energy are stripped out of the official inflation rate.
Louis notes that the only reason the Federal Government can continue to run up deficits is because the Federal Reserve purchases the debt and that the Federal Reserve purchases 61% of all US Treasury issuance. Louis notes the Fed buys the debt with money that they print out of thin air which devalues the dollar.
Louis notes that Paul Krugman believes that the government should be borrowing more money, and the Fed should be printing more money to pay for the borrowing to help the economy, rather than encouraging savings and production. Louis notes that if printing money was the solution to economic woes, all countries would just print more and all economic problems would be solved.
Louis notes that wealth is not created from the production and spending of money but rather from the savings and investing of money and production. Ryan notes Ron Paul’s views on monetary policy. Louis notes that gold and silver hold their value. Louis notes that Congress ceded their authority on money to the Federal Reserve, a private bank and also notes Congress has also ceded to the President certain war powers.
Louis notes that Ron Paul’s position is not to run the economy or regulate people’s lives but rather to let people and the economy sort themselves out. Louis notes that most politicians make promises to get elected and that its difficult to get elected without a scheme.
Part 2 (11:28)
Louis and Ryan continue to discuss Bernanke’s comments regarding the definition of “exceptionally low interest rates”. Louis asks when will the next round of quantitative easing happen? Louis notes that the economy needs to be rebuild by liquidating the debt and that adding more debt devalues the dollar.Louis notes that home ownership is declining and home prices are at pre bubble prices.
Louis notes the irony that all the government policies and Fed actions designed to get more Americans into homes has backfired as both home ownership rates and prices are back at pre bubble prices and foreigners are buying the foreclosures. Louis notes that despite the Fed’s protestations to the contrary, the Fed policies did contribute to the housing bubbles.
Louis notes that low interest rates are not good for savers and are not helping the economy.Ryan notes that Ron Paul claims that low interest rates create malinvestment. Louis notes that the market allocates capital better than the government and that when the government does it, it will be inherently unfair and favor certain industries and industry players over others.
Louis notes that debt does not create wealth.Debt for speculation is not good for the economy as was the case during the housing bubble. Louis distinguishes between rising prices due to market driven supply/demand imbalances vs Fed driven market imbalances due to making credit readily available to boost demand.
Part 3 (12:15)
Ryan and Louis discuss rent vs buy. Louis notes that locking in a 30 year mortgage will lock in your cost of shelter as a protection against future rises in rent payments. Louis notes that US interest payable on the 10 year US treasury and mortgage rates are artificially low
Part 4 (12:13)
Ryan talks about the impact of foreclosures on children and families.
Listen to Federal Reserve-Money out of Nothing on You Tube
Listen to other Real Estate Radio shows with Louis Cammarosano
Listen to the Real Estate Radio show of April 23, 2012
Listen to the Real Estate Radio show of April 16, 2012
Listen to the Real Estate Radio show of April 9, 2012
Listen to the Real Estate Radio show of March 26, 2012
Listen to the Real Estate Radio show of March 19, 2012
Listen to the Real Estate Radio show of March 12, 2012
Listen to the Real Estate Radio show of February 27, 2012
Listen to the Real Estate Radio show of February 13, 2012
Listen to the Real Estate Radio show of February 6, 2012
Listen to the Real Estate Radio show of January 30, 2012
Listen to the Real Estate Radio show of January 23, 2012
Listen to the Real Estate Radio show of January 9, 2012
Listen to the Real Estate Radio show of November 14, 2011
Listen to the Real Estate Radio show of November 7, 2011
Listen to the Real Estate Radio show of October 31, 2011
Listen to the Real Estate Radio show of October 24, 2011
Listen to the Real Estate Radio show of October 17, 2011
Listen to the Real Estate Radio show of October 10, 2011
Listen to the Real Estate Radio show of October 3, 2011
Listen to the Real Estate Radio show of September 26, 2011
Listen to the Real Estate Radio show of September 19, 2011
Listen to the Real Estate Radio show of August 29, 2011
Listen to the Real Estate Radio show of August 15, 2011
Listen to the Real Estate Radio show of August 8, 2011
Listen to the Real Estate Radio show of July 25, 2011
Listen to the Real Estate Radio show of July 11, 2011
Listen to the Real Estate Radio show of June 27, 2011
Listen to the Real Estate Radio show of June 20, 2011
Listen to the Real Estate Radio show of June 13, 2011
Listen to the Real Estate Radio show of June 6, 2011
Listen to the Real Estate Radio show of May 23, 2011
Listen to the Real Estate Radio show of May 16, 2011
Listen to the Real Estate Radio show of May 9, 2011
Listen to the Real Estate Radio show of May 2, 2011
Listen to the Real Estate Radio show of April 25, 2011
Listen to the Real Estate Radio show of April 18, 2011
Listen to the Real Estate Radio show of April 11, 2011
Listen to the Real Estate Radio show of March 21, 2011
Listen to the Real Estate Radio show of March 14, 2011
Listen to the Real Estate Radio show of February 28, 2011
Listen to the Real Estate Radio show of January 24, 2011
Listen to the Real Estate Radio show of November 29, 2010
Listen to the complete archive of Louis Cammarosano on Real Estate Radio shows
Real estate radio interviews also available on Youtube
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The Real Estate Radio Network® is a nationwide alliance of real estate related professionals with a common objective: delivering the timely truth about local Real Estate Markets over local radio stations.
The Real Estate Radio Network brings hard-working and ethical professionals in a community together. We provide the media and forum necessary for Consumers to learn the truth about important aspects of their financial life, which is mostly centered around their biggest investment, the home they live in. The Real Estate Radio Network® brings each radio program to the audience with a “live and local” show hosted by well-respected members in the local Real Estate and Financial community.
About Ryan Sloper
As a highly motivated mortgage consultant, with more than nine years of mortgage lending experience, Ryan Sloper has acquired a solid understanding of the local and national real estate markets. Ryan has been investing in residential and commercial real estate for the last 5 years, where he has first hand knowledge of what it takes to be a successful real estate investor. Ryan also hosts a weekly radio show, Real Estate Radio, which airs every Monday on 1580 AM in the Washington, DC Metro Area. Real Estate Radio also streams live nationally @ http://whfs.cbslocal.com/shows/real-estate-radio-with-ryan-sloper/
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