On Monday April 23, 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 (14:40)
Ryan notes that the Fed is going to meet again next week and that many experts expect another round of quantitative easing. Louis thinks that the Fed won’t announce QE3 and that a lot of capital is flowing into the US as a result of the problems in Europe and that indeed many economists expect the US dollar to appreciate in value. Louis is not certain that is a well founded belief, but one that is prevalent.
Louis notes that an announcement of QE3 might cause a bit of a panic because it would be an admission that the recovery is not taking hold and oil prices would rise. Louis thinks that although the Fed may want to do QE3 they will probably hold off until after the election in November. Louis notes that the average investor is either short on cash or can not save as interest rates are low so they put their money in the stock market which drives valuations higher.
Louis notes that if you really wanted a strong dollar you would want higher interest rates so people would save money and invest in treasuries, rather than the Fed printing money out of thin air to buy them and thereby devaluing the dollar. Ryan notes that the dollar is appreciating vs the Euro. Louis notes that the dollar is not however strengthening against gold silver and oil. Louis notes that the amount of gold being mined is not as great as the amount of money being printed.
Louis and Ryan note the rising rental market. Louis notes that college grads will also put pressure on the rental market as most won’t be in a position to buy homes as they have student loans to pay and poor job prospects and will more often than not be renting. Louis notes that the American Dream of home ownership is in jeopardy for young people.