Will Hyper Inflation Follow?

Click on the title to link. You are going to have to register on this site in order to read this article, but I assure you it is worth it. Inflation is one of those things we have been warning is coming. You have got to be realistic and prepared for it. Check out this article discussing what hyper-inflation may look like for us.

Prepare for Inflation Fight

Click on the title to link. Another article talking about the growing inflation problem. Jubak is a good writter. Check it out.

Our Next Economic Worry: Inflation

Click on the title to link. We have been warning folks that this was coming, but you should be informed. Inflation is the "elephant in the room" that nobody seems to be talking about, until now. With the Feds doing what they are doing (which they clearly don't know what they are doing), inflation is inevetable. Stay alert and educated.

Where Are Rates Going

The million dollar question - maybe it's the billion dollar question - a million just doesn't mean as much any more. The truth, as it always has been, is that we don't know where rates are going. However, what we do know is that when inflation goes up, so do long term interest rates, which includes mortgage rates. We also know that the Federal Reserve Board (with the infamous Mr. Bernanke at the helm), has recently begun a new round of bond buying (known as QE2), and that the intention here (at least in part) is to spur inflation. Based on what we're reading, it sure doesn't seem anything needs to be done to "spur" inflation.

Much of the recent financial news is beginning to report various inflationary concerns; not the least of which is in relation to commodities, which results in higher prices to consumers on food and other every day types of items. We've read that turkeys will cost 30% more this year; and that cotton futures are up 90% this year. Looks like jeans and t-shirts will be going up soon.

What does all this mean? There is real inflation here, and the bond markets (including mortgage backed securities) reacted with a huge sell off last week. This sell off means mortgage rates increased by about .25% last week, and this week is off to a similar start. One expert we read said, "Unless there is a huge negative economic decline, the end has come for low rates". Of course, while the indicators are pointing a certain direction, even the experts can be wrong - and in fact they are wrong often.

The good news: mortgage rates are still at ridiculously low levels. Yes, they did get down to the 4.25% range, and if you were able to take advantage of those rates, fantastic. But even with the recent uptick, they are still in the 4.5% range. These rates are still fantastic, so if you've been considering exploring your options for purchasing or refinancing, it appears now may be the time.

As always, we welcome your thoughts and questions.

Higher Inflation

Inflation is going to be going up. It is inevitable because the government has to do something to try and pay for all the garbage legislation they are passing. When you combine higher inflation with higher taxes you get poor people with no jobs. This is a major issue staring us in the face. Here is a quote by Federal Reserve guy, ...

what we're trying to do is encourage output growth and production, and through that channel, get inflation to move higher.

Not good at all, but it's comin'.

Stemming the Dollars Decline

Click on the title to link.

Inflation or Deflation?

Click on the title to link to this video.

The Inflation Problem

Click on the title to link. This is a huge issue barreling down on us, as we have said before. This is a very interesting article about the issue. There is no easy answer here, in our opinion.

The Nation of Inflation

Click on the title about to link to the article. Jim Jubak, who we enjoy reading, has a recent article about our next big struggle. We have been saying it for some time now. And that struggle is...inflation. With all this ridiculous spending there are sever and several consequences. One of those will be inflation. So despite the fact that things are still not doing so hot in the USA, we will start seeing rising interest due to this. We think this will start happening no later than the end of this year. Stay tuned...

What does this all mean? Well, again like we have been saying, now is the time to act. Rates are low and house prices are down. Now is the time to buy or refinance, if you do it at all.

Should You Refinance or Purchase Now?

The motivation behind this question is always, "Will rates go lower?" Well, they certainly could (although, despite a huge move in the bond market yesterday due to the Feds announcement, rates have not improved near as much as we anicipated), but you really should be careful to bank on that.

Our concern now is that rates are going to go up, and maybe quickly, by the end of the year. Why? First of all, despite the Fed's announcement yesterday that they will buy up 1 Trillion dollars worth of securities and bad debt, the mortgage rates today are not down near to the level they should be by such a move. We have said it would take the government once again intervening to push down rates significantly. So far, however, that push down has not happened in a drastic manner.

Secondly, since our government thinks they are Paris Hilton on a shopping spree and continue to spend money like we have it, we are going to start to experience inflation. This will occur because the government is spending so much money (and incurring a load of debt never seen) that it is devaluing the dollar. They also are going to be forced to print more money. All of this is going to lead to hipper inflation. If this happens rates will shoot up, and probably fast.

All of this said, now is the time to move on whatever you have been thinking because we do not think this is going to last for more than 6 to 12 months. If you have a scenario you need looked at then make sure we check it out and analyze it for you before you get into a situation you regret. We are here to serve you.