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May 28, 2003

The Latest Economic Trend

When I can spare a few virtual dollars, I'm going to watch for the Euro to dip and then buy them speculating that Snow has no real control. I imagine that a bunch of nations are ready to beat up on the United States, and that a soft dollar can backfire.

The government is back to deficit spending. So we'll have to borrow money in order to pay off the debt. We'll issue bonds, which will raise interest rates. This reverses out the few gains made by dropping interest rates. That means while housing prices, especially in California, are up, the overall value of the assets will go down relatively speaking. If the stock market stays flat, then there will be two attractive investments. American real estate and American debt.

So look for real-estate speculation like we saw in the 80s, REITs will go up and you'll see a lot of corporate fire-sales in real estate. (Just like the 80s). I could be wrong, but so could everyone else.

Posted by mbowen at May 28, 2003 01:27 AM

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