As short-term political motivation sullies the sanctity of central banking, presumptuous open market meddling, unrestrained by the boundaries of logic, makes a ticking time bomb of Federal Funds. It’s time we meditate on circumstance, accounting for the rational and the hardly so. Let’s see: inflation without spending? A stagnant, yet expanded money supply? At what point did capitalism become so irrational? What brought life to our economic paradox? The distant thunder of a self-imposed inflationary storm demands anticipation; it will not subside with neglect, and survival is a blessing left only for the aware, but it is the keen that will thrive. Stay informed, and stay ahead.

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Today we field a great question from one of our RentPosters in California. It’s a great opportunity to discuss the ins and outs of condo investments, the current real estate market, and the future of the U.S. economy. Read closely, you will not want to miss this one, as we review the economic forecast for the coming decade.

“J” from California writes:

Tony,  I am a very conservative investor, but elected to retire early at 48, about 3 years ago, and put a majority of my portfolio into real estate rentals.  I own 4 homes in Ohio and 1 (and a quarter) in California.  With the down market, they are likely worth about 1.1 or 1.2 million right now.  I also have about 300k in mutual funds and 50k or so of cash.  I own all of them out right…

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The trend is to leave all fingers pointed to Fannie Mae and Freddie Mac, the two government sponsored companies who repurchase and are in control of nearly 90% of the mortgages in our country. In essence, they are the driving forces behind mortgage lending in this county. However, to blame mortgage repurchasers is a very superficial approach, and shows a very superficial understanding of the economic factors influencing lending and banking. Here’s the true story, and this tale starts in September, 2001, focusing on the actions of the less-than-capitalist aspect of our supposedly capitalist economy.

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