Saturday, July 10, 2010

Rising interest rates and inflation ?

Lawrence Yun, chief economist at the National Association of Realtors (NAR)

NAR and the US government feel there is little chance for inflation in the near term.

Yun suggests that it is possible that we may not see inflation when the economy gets back on track, the big winners, if inflation rises 5% or more would be property owners.

"Paper money will lose its purchasing power, but real tangible assets will rise in value," he said.  "As it has happened around the world throughout history and more specifically during the 1970s and early 1980s in the United States, property values rise with consumer price inflation."

Basically, what Mr Yum is saying is - If inflation occurs and prices of good go up, real estate will go up as well and this will be great for property owners!

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