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Economists Warn Growing Trade Imbalances Increase Risk of Global Recession
- Thread starter Arnold
- Start date
and big trees have lots of roots!
The Men Who Sold The World or at least our Nation and the way some view it as "the world".
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Thats money growing as a tree.it could.
You can see it where I live. The big three are circling the drain. But it doesn't just effect them. There are scores and scores of tier 2 and tier 3 automotive suppliers gasping for air as their work goes overseas. And it doesn't end their. I have two friends who design molds for the parts that the suppliers make. Guess what, that work is going over their, too. They get the mold design and spend time fixing and tweaking it. What was a 250,000 dashboard mold design for them is now a 40,000 rework job. Also, ask Ohio where there manufacturing jobs have gone. It's a serious problem. Thanks, Bill Clinton for having a free hand in the Oval Office to sign that deal. Sorry about the blue dress, Monica.
If the communist regime isn China would drop its fixed currency to a floating exchange rate this problem would GREATLY be reduced...more than half.
on a side note...a lower valued dollars is necessarily bad. Especially for the poor and blue collar in the US. It creates a higher demand for goods that cost less for foreigners to import...thus creating a higher demand for foreign goods. The only people that hurt from a low US dollar are US investors putting money in foreign countries (ie US corporations looking aborad and top tier currency speculators).
Robert, your post was true when stating if the change in currency value is quick and sharp there could be drastic effects...stock crash to that of 9/11 or the Asian currency crisis in the 80's.
But the sky won't fall....it will NEVER be that of the crash in the 20's.
These things happen in cycles and we can't have an exponential rate of growth forever.
on a side note...a lower valued dollars is necessarily bad. Especially for the poor and blue collar in the US. It creates a higher demand for goods that cost less for foreigners to import...thus creating a higher demand for foreign goods. The only people that hurt from a low US dollar are US investors putting money in foreign countries (ie US corporations looking aborad and top tier currency speculators).
Robert, your post was true when stating if the change in currency value is quick and sharp there could be drastic effects...stock crash to that of 9/11 or the Asian currency crisis in the 80's.
But the sky won't fall....it will NEVER be that of the crash in the 20's.
These things happen in cycles and we can't have an exponential rate of growth forever.
I don't think he likes the market right now. Houses are sitting there with high prices and nobody is buying. People aren't really lowering either. A lot of people are telling me to wait. I'll pay 12K this year in renting. I will save 20K to have to put down a house. I want to get rid of that second mortgage so I don't have to pay that high interest rate.
I was looking at these new construction homes in a highly desirable area. Very richy. These townhomes have been sold for 325/300/290. Now they are asking 260K. That is an example of losing money when buying a house.
I've gone over everything you've asked for in this thread take a look.
http://www.ironmagazineforums.com/showthread.php?t=68264
Just a quickie. If I'm renting a condo for $800-$1000 per month (which DB is not. I believe he's paying less) and to purchase a comparable condo would cost me $200K (more than likely more) I would lose money by purchasing in today's market. It's simple math really. Use the below calculator to figure it out, you'll see what I'm talking about. As long as one believes the market will not increase by more than 2% annually for the next 5 years you're better off renting given the above calculations. I'm beginning to see considerable draw back in home values in my area. Just as DB said in his above post. I don't see this changing anytime soon.
http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH
My gf and I are looking at apts currently. We are spending about 1000 in rent. 500$ a piece a month. Pretty cheap IMO. I used to pay 800$ by myself.
I ran the numbers at 1000 rent and 300000 purchase. Left all the other variables the same. It says to buy.
Stay there 12 years and increase appreciation to 3% and you get Buy + 59,000
Increase interest rate by 1 point and you are at Buy + 35719
Increase interest rate by 2 points and you are at Buy + 11,516
Lower purchase to 270,000 and you are at Buy +26,000
Use national average of 6%, 300,000 home, 1000 rent and stay there 12 years you are ahead nearly $100,000 vs renting. Meet 20% requirement to avoid mortgage insurance and you are up over $100,000.
Put away $1000 bucks a month for 3 years and it compounds to about $41,000. Sure, you have more money to put down, but, likely mortgage rates have gone up.
Why wait. Interest rates are going to probably increase making your purchasing power less and you also will not be getting the approximately $10,000 tax break on your return. I can only see your point if you were going to plan on moving in the short term. Even that depends on the market you live in.
I will probably be at my first house purchase for 5-8 years.
I think you're missing my point BM. I'm certainly not against buying a home. My contention is to wait 1-2 years when home values level off. I still believe that in the next 1-2 years values (depending on your market but certainly in mine) will decrease.
Also, your extended average of staying in your first home 10+ years is not even close to the national average. Over 12 years will we see a 6% annual increase? More than likely we will, after all that is the long term average, but you will not come even close to that over the next 5 years. Also, 5 years is closer to the average length of time you stay in your first home.
So given the above:
$1,000 rent vs $300,000 purchase. Down payment of 20%. Stay in the home 5 years, 2% appreciation you come out with renting + $8,890. Again, this is without consideration of HOA & property insurance fees of $300+ monthly. Add that in and your now + $26,890 in favor of renting!
The Men Who Sold The World or at least our Nation and the way some view it as "the world".
True we are not the world, but we percieve ourselves as a superpower.
That is a false front, because our industrial base has dwindled to only
producing defense related product. Someone look up What country had
the money before WWII.
When China decides it wants to reclaim some real estate, there will be no
industrial power strong enough to stop them, they are using our
technology, not paying us for it, and IMO, it will be turned against
us someday...
Sadly, who has money on paper, wont matter if that happens
Do you think the US was concerned about budget during WWII?
Why?
What I meant by 6% was 30 year fixed mortgage rates. That puts it at + $4661 over 5 years in favor of buying and gives you an extra 30,000 tax break that you can invest more aggressively than you could if you were investing for a downpayment.
Plus, interest rates could be significantly higher when you do decide to purchase, offsetting a drop in housing prices.
Anyway, you've made your points and I see them. There are a lot of variables and I would prefer to buy. Perhaps pissing money away on the street was a poor choice of words
By then I will want a bigger house with a yard. My first house will almost have to be a townhome. Singles are all over 300K unless you want a 60 year old rancher.
