Lower Interest Rates May Be the Problem

Posted On: Tuesday, August 17, 2010 - 5:30pm | Posted By: Donald Feaster
Topics: Market Statistics

It seems The Fed met this past week and decided yet again to keep interest rates at or near zero! There was a sole dissenter from the vote, who pointed out that this status-quo move is just more of the same policy that was necessary to get us into our economic collapse in the first place! (What he might be saying is that The Fed is practicing a form of "insanity," whereby they keep doing the same thing over and over, expecting different results!)

Fear of further damaging the economy appears to the prime motivation behind the Fed's decision. However, it seems to me that this group of individuals needs to concern themselves with doing the right thing and not second-guessing the results! After all, the psychology of our economy is so bad right now, that I hardly see a move in the right direction as making things a lot worse, esp. if it's a teeny-weeny step!

Finally, in 30 years of selling real estate in San Francisco, it is my observation that buyers and sellers get a move on when there is a real threat of interest rates going UP, not down. Keeping rates the same doesn't motivate anyone and in no way constitutes a "move" toward real recovery.