http://www.biggerpockets.com/renewsblog/2007/12/12/the-fed-gets-new-glasses-sees-whats-in-front-of-its-nose/ Learn, Network, Invest Sun, 22 Nov 2009 10:53:57 -0500 http://wordpress.org/?v=2.8.5 hourly 1 http://www.biggerpockets.com/renewsblog/2007/12/12/the-fed-gets-new-glasses-sees-whats-in-front-of-its-nose/comment-page-1/#comment-52908 Rehab702 Wed, 12 Dec 2007 17:00:32 +0000 http://www.biggerpockets.com/renewsblog/2007/12/12/the-fed-gets-new-glasses-sees-whats-in-front-of-its-nose/#comment-52908 Many people get caught up in the idea that the Fed cutting rates will fix everything (watch how Wall Street reacts). There is a law of physics that states that every reaction has an equal and opposite reaction, the same is true of a rate cut. Domestically the rate cut hurts fixed income investors when the rates drop on CDs and other investments tied to interest rates. Globally the rate cut will cause the dollar to fall resulting in higher prices for anything imported. Did anyone notice the rise in oil prices after the last cut? These cuts have a way of increasing inflation so that we ultimately pay a heavy price for the cut that everyone is screaming for. It’s the old adage: you can pay me now or you can pay me later, but pay you will. Many people get caught up in the idea that the Fed cutting rates will fix everything (watch how Wall Street reacts). There is a law of physics that states that every reaction has an equal and opposite reaction, the same is true of a rate cut. Domestically the rate cut hurts fixed income investors when the rates drop on CDs and other investments tied to interest rates. Globally the rate cut will cause the dollar to fall resulting in higher prices for anything imported. Did anyone notice the rise in oil prices after the last cut? These cuts have a way of increasing inflation so that we ultimately pay a heavy price for the cut that everyone is screaming for. It’s the old adage: you can pay me now or you can pay me later, but pay you will.

]]> http://www.biggerpockets.com/renewsblog/2007/12/12/the-fed-gets-new-glasses-sees-whats-in-front-of-its-nose/comment-page-1/#comment-52900 Rick Marnon, Howell Wed, 12 Dec 2007 14:05:25 +0000 http://www.biggerpockets.com/renewsblog/2007/12/12/the-fed-gets-new-glasses-sees-whats-in-front-of-its-nose/#comment-52900 If I am not mistaken one of their requirements will be that you are not behind on payments. Isn't this the person that we should be trying to work with? They are the one's that need it most, because obviously they ultimately will end up foreclosing if they are behind. Once people get behind it is difficult to get caught up. If I am not mistaken one of their requirements will be that you are not behind on payments. Isn’t this the person that we should be trying to work with? They are the one’s that need it most, because obviously they ultimately will end up foreclosing if they are behind. Once people get behind it is difficult to get caught up.

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