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Old 03-18-2005, 04:58 AM
Mark Heide Mark Heide is offline
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Join Date: Sep 2002
Location: Illinois
Posts: 646
Default Re: Doom, Gloom & Apocalypse

Some of what you hear is true to a point. Let's take the housing bubble as an example. The price of houses has gone up signicantly high, but this is due mainly to low interest rates. The way the housing market works is when interest rates go up the price for housing comes down. The truth to the housing bubble is that it is overprice in some areas and a lot of that bubble already burst back in 2001 when the tech market crashed. But, it's just like equity investments. You should never buy overvalued equities and the same goes for houses.

I wouldn't worry about balance of payment deficits either. Because if countries like China will not start cashing in their US Bonds because they don't want to take the risk of devaluing the US dollar. It would hurt them more than us.

The only real negative aspect of the economy is the price of oil, as this slows down economic growth. I expect the stock market to follow the same pattern this year as the last two years. Expect to do bargain hunting for stocks in the summer months.

Good Luck

Mark
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