Wednesday, October 28, 2009

0% interest and reality


I was just reading THIS article and it seemed to be spot on. Reality is not a 0% interest rate, and let's face facts, many assets were being speculated on (that's what helped drive the 29 crash also). The price to earnings ratio was skewed on many companies too, being overvalued. Same with housing prices. The town where I grew up in, a small town in Minnesnowta, the average real estate range for lakeshore property is in the 900,000$ region. Talk about overpriced! Although when I went back there for my 20th class reunion, it had been built up more. Where we once had a nice public beach to go sit and swim at, is now condominiums, and a private beach. It seems to have lost its small-town feeling. But again, to the markets. Here is another chart, showing that we are back to the Carter years for stuff:


I'm expecting hyperinflation, with the treasury printing off more and more money, making the dollar even weaker against other currencies, dairy farmers are killing off their cows because milk prices are so flat; I know of a shrimper who went out of business a year ago because the bottom fell out of the shrimp- they were only paying 85c a pound for the jumbo extra-large shrimp..and lesser prices for the smaller shrimp. This economy is going down the tubes, and in the meantime, the government is growing, and spending more than they could possibly accumulate.

1 comment:

  1. Diane:
    You're right on target with this, dear!

    If all this crap hits the fan this government is trying to put together, inflation rates WILL sky-rocket...

    And our bucks will be worth LESS than the paper they're printed on.
    BTW, how well can you speak CHINESE?
    (I'm just sayin'...)

    very good post!

    ReplyDelete