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samz
Joined: 19 Feb 2008 Posts: 102 Location: Medford, MA
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admin Site Admin
Joined: 14 Jul 2005 Posts: 1826 Location: Greater Boston
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Posted: Mon Aug 23, 2010 1:54 pm GMT Post subject: |
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In agreement with the article, my current hypothesis is that real estate, stocks, and bonds have all done well over the last thirty years because of falling interest rates and money illusion. Not low interest rates, but falling rates. With not much room left to fall further and inflation too low to offer the same illusion, I'm not expecting a repeat of the last 30 years.
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john p
Joined: 10 Mar 2006 Posts: 1820
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Posted: Mon Aug 23, 2010 7:49 pm GMT Post subject: |
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The person who paints my wife's toenails understood the content of this article two years ago. I don't understand the newsflash....
This was a good takeaway however:
Quote: | By the late 1990s, however, the rate was 4 percent a year. Happy homeowners were taking about $100 billion a year out of their houses, which paid for a lot of good times. |
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admin Site Admin
Joined: 14 Jul 2005 Posts: 1826 Location: Greater Boston
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admin Site Admin
Joined: 14 Jul 2005 Posts: 1826 Location: Greater Boston
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Posted: Mon Aug 23, 2010 9:36 pm GMT Post subject: |
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In fact, that same survey was just updated and the update was mentioned in the NY Times article. Now people expect long term appreciation to be 10% instead of 11%. That's still delusional (at least with current inflation expectations).
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