On Monday March 12, 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 (14:46)
Ryan discusses the upcoming Fed meeting and the potential for more quantitative easing to keep interest rates low. Ryan notes that James Grant refers to the Fed actions as market manipulation. Louis notes that when interest rates are low for items that require borrowing, prices rise (housing, college tuition). Louis agrees that Fed and government policies contribute to this.
Louis notes that when there are low interest rates and an increase in the money supply and credit, not only do prices of goods that require borrowing rise, but prices of commodities like oil and gold and silver also rise. Low interest rates also create a speculative environment.
Ryan and Louis notes that the rise in the cost of oil also impacts the cost of finished goods. Louis notes that if there is QE3, the price of oil would rise which would not be good for the President’s reelection chances. Ryan notes that interest rates will need to rise if the dollar continues to be devalued. Louis notes we have been side tracked by the Arab Spring and Occupy Wall Street and that has taken public’s attention away from the US debt crisis.
Ryan notes that only Ron Paul is talking about the unsustainability of the US debt. Louis notes that Ron Paul and his message has been marginalized by the main stream media. Louis notes that a target inflation rate is not a good idea as it is a pre-calculated method of taking the value of people’s money away. Louis also notes that low interest rates force savers into the riskier equities market as they can’t get a positive rate of return in CDs. Continue reading this post