Friday, June 12, 2009

Angela Merkel for Chairman of the Federal Reserve Board

"U.S. Federal Reserve officials are not likely to considerably increase purchases of U.S. Treasuries and mortgage-backed securities when they meet in late June, the Wall Street Journal reported on its website."

To read the rest of the story from Reuters, go here.

Inflation fears are already pushing up mortgage rates and bond yields. Even gas prices are rising since their prices are quoted in dollars. The dollar is declining rapidly due to concerns about the potential of hyperinflation and the massive, no MASSIVE, increase in Federal spending through the Congress and the Fed.

If you think higher oil prices, inflation, and rising unemployment are going to help real estate sales and home prices, think again. The point to Obama's stimulus plan was to help the U.S. economy not to weaken it further but that is precisely what is happening.

Obama claimed his stimulus plan would cap unemployment at 8%. It is now 9.4% and still rising.

The situation is now so grim that the BRIC nations are now seeking control at the IMF and want to "diversify out" (meaning replace) dollar based currency reserves. The U.S. Dollar, long the gold standard in international transactions will soon be replaced by the Euro. The impact this will have on the United States and especially real estate markets will be staggering.

German Chancellor Angela Merkel recently bashed the Federal Reserve and the European Central Bank in the harshest terms imaginable calling their policies of flooding the world markets with cash a failure. Here you can read some of her brilliant comments.

She's right. When her tenure in Germany is up I suggest Obama appoint her Chairman of the Federal Reserve Board here in Washington. We need her common sense and strong will at this point in our economic history. By the way, here is another blogger who agrees with me.

Robert J. Abalos, Esq.