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Economy Data May Suggest Inflation

The real estate division in Nevada is super strict when it comes to licensed real estate agents talking about finances or anything outside our scope of expertise. So I will start by giving a bit of my background as well as with the message: “THIS IS NOT FINANCIAL ADVISE AND I ENCOURAGE YOU TO DO YOUR OWN RESEARCH TO DETERMINE HOW YOU MAKE INVESTMENTS.”

So a bit about my background… I used to work at a trade desk helping day-traders create accounts and help them fund their accounts along with the normal stock market day to day regimen. I was signed into all my software and chat rooms by 5 am every morning and we started talking about the economy and it’s indications of directions prior to the morning bell ticking. This was an awesome new venture and I loved learning from our clients all over the world on how the US Financial Markets ran and functioned. Then the SEC and FBI came to shut the operation down due to the owners of the firm giving people training accounts and pocketing their deposits. I was completely in the dark but I had to find a new career that made sense to me. Enter Real Estate.

I have taken everything I learned from Wall Street and started applying these principles to real estate to determine market direction. I eventually worked for a large investment group here in Vegas for a man that would turn out to be my most valuable mentor. He has flipped over 5000 homes and taught me everything I knew about real estate and how to make solid investments. I was actually able to see very similar patterns in both the economy numbers and housing prices.

Now that I gave a brief background about me, let’s get into these numbers I found that make me think we may have a huge economic recession.  As we can see from the consumer price index numbers by the Fed. Our numbers are very similar to those in 2007-2008 when we had one of the worst recessions in US history and as you can see by the charts, there was a steep decline immediately after Wall Street began to fail one fund at a time. What the hedge funds do, always affects the economy way more than they really should. This time around, we are facing the highest repurchase contracts we have ever seen as seen here in the Federal Reserve website. What a reverse repo means, is that the banks can literally not find anything else to invest their money into so they are selling the money to the Federal Reserve at almost 0% rates because they feel that bonds are safer than betting on anything in our economy. Mortgage backed securities are no longer being purchased (again) and the banks cannot lend money fast enough to beat a crash. In my opinion, we should buckle up for a lot of action over the next few months.

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