What happens to real estate if they taper?

On August 28, 2013 by Phil Champagne
Balloons at the Gatineau Hot Air Balloon Festival

Balloons at the Gatineau Hot Air Balloon Festival (Photo credit: Wikipedia)

Wondering if the Fed will taper? The economy is so artificially supported by central planning right now that the stock market and real estate market is entirely dependent on the Fed QE. So could they taper? They just can’t and they won’t! The situation we are in is just like a huge piano hanging to a hot air balloon, cut the cord and it will fall. On the other hand, the more they support it, the higher the piano gets. But there is so much they can do, and the cord is getting thinner and thinner. The rise in the 10 year treasury bond yield has put pressure on the economy.

On the international level, the Indian rupee is falling with severe stress on their economy, which could cascade to other Asian countries. And we are approaching this dreadful fall market…

So the real question to ask is when will QE4 start, under which circumstances will it be introduced and what cute name will they give it. What do I mean by QE4 since QE3 is open ended? Simple: it means a new program that piles up on top of the existing QEs with $85 billion+ per month.

I believe the circumstances will be severe stress in the market.  We expect a worst situation than in 2008 is to happen in the next 2 to 3 years, probably much sooner. (I’ve bought some put options on Toll Brothers)

When it comes to real estate: buying right is even more key in this environment.

 

 

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