Throw In The Towel....Everybody Else Is

http://www.bloomberg.com/news/2011-03-08/u-s-home-sales-accelerate-as-prices-decline-amid-rebound.html

   Debating the future of interest rates is now left to fools. The markets are speaking loud and clear, and rates are going to continue to climb. The best thing one can do if they are considering going into any kind of extended term debt is lock in now! One might be able to save a quarter point here or there, but you risk losing halves and whole points. In equity trading its called chasing an eighth and it costs you dollars. Not a sound strategy since 12.5 cents < $1.00.

  Rates are going to climb for a few reasons:

Inflation and Economies of Scale: What, the Fed says there is no inflation as they keep pumping billions out to large institutions. You may never see a dollar of it, but you are seeing the effects. Check oil and food prices. They are screaming...surprise, surprise. They are screaming because speculators and national governments have nowhere else to spend the money the Fed has been so kind to give them for the low price of next to nothing. The next time you see a Fed official or a Treasury official, you can thank them for crushing your spending power and putting the average consumer in a worse place than they were 6 months ago. The only upside to their strategy is that the unemployed don't have too many places to go, so they aren't burning gas at the same rate. To many dollars chasing too few goods is the definition of inflation. Typically it is an entire economy (all inclusive, you, me and them) that has too many dollars. The script changed this time. They improved it in their eyes for our salvation. Now it's too few institutions with too many dollars chasing too few goods thereby causing serious harm (to you and I) for benefit of too few citizens (Chase, Goldman, etc), which leads us to Economies of scale.

    Simply put, he/she with the most capital (money) wins. Any large economy or company can sustain price shocks or price their goods below market value. They can't do it forever but they can outlast their competition and force them to commit to things that they would rather not do. Again, food and oil example. Smaller countries and companies have to participate and perpetuate the price runs because they lack the capital to hedge for the longer term. They are living "check to check" without adequate reserves. When nations (China) enter the trading pits, they have they capital to corner or at least jam markets. When they do, everybody has to play for fear of losing out on the resource. Throw India in the mix, and you have a bidding war. Where there is a bidding war there are speculators in between and price runs get exaggerated. Eventually the Fed will have to pull some of the money in before anymore nation get toppled due to resource riots. They need to raise rates to absorb the money supply. It is the first move against inflation! When the rates to direct borrowers go up, they get passed through to you.

Regulation: All politics aside (I have little positive say here), new regulation of any kind costs you money! The added "safety" of a regulated or over regulated market creates barriers to business. That costs money. Extra people in compliance and the lawyers required to deal with the regulators are not provide free of charge by the government. I'm not saying that there were and still holes in the law left to exploited, there are. I'm simply saying that the new Dodd-Frank laws are going to cost a ton of money and that will be passed on to the consumer in the form of new fees and higher interest rates.

Regardless, if you are fortunate enough to be in a position where you can expose yourself to increased debt or have no choice....the time is now. Lock in that loan and save yourself money. Six months from now could be too late and you could be paying thousands more. If you need a property tax loan, or refi, or finance a new home purchase, call the professionals at Tax Loans USA or The Associates Mortgage Company respectively. 800-719-4096 and you can get you everything you need from professionals who value you and your time.