We don't know the future so it's impossible to accurately predict it. This is particularly true when it comes to economic issues such as investment, real estate, and interest rates. What are the implications of inflation, recession, interest rate changes, Federal Reserve Bank decisions, and other factors? How does one hedge his bet to reduce unnecessary risks and still receive a high return? Because so many factors have significant influences, there is no easy answer. This article will briefly review, analyze, and discuss potential factors to give readers a better understanding of the possibilities.
1) Interest
rates: There has been a long period of historically low interest rates. Because
borrowing costs are so low, this has made it easy to make money. Individuals
and corporations both have benefited in the short-term. Home buyers can
purchase more houses because their monthly costs are lower due to low mortgage
rates. Banks, corporate bonds and government bonds have received low returns.
It has slowed inflation and caused a rise in home values that we haven’t seen
in recent years. Federal Reserve Bank indicated that they would end this
propping-up and would also increase rates by three times in 2022. What do you
think it will do?
2) Supply chain
problems have had a significant impact on the auto industry's ability to
borrow, lend, and get auto loans. Auto loans and leases will become more
expensive as interest rates rise.
3) This pattern
started after the Tax Reform legislation was passed at the close of 2017. It
created the first, new trillion-dollar deficits
4) The increase
in government spending due to financial difficulties and problems, shutdowns,
etc., has created trillions more debt. Unfortunately, the problem of debt must
be addressed.
5) Perceptions
and attitudes: These past few years have created a public perception along with
many fears that has had a devastating economic impact.
If we don't plan
effectively and have common sense, we will put many at risk. America, wake up
and demand better leadership and service.
