Sunday, March 14, 2010

HEADLINES FROM THE FRONT LINES

Chief Economist Dr. Mark Dotzour is crisscrossing the nation delivering his economic message and collecting valuable data for the Real Estate Center at Texas A&M University.
Among the comments he heard this week at meetings of the National Association of Business Economics in Washington, D.C., were:
  • “Clearly there is virtually no threat of inflation in the next two years.”
  • “There’s virtually no chance of the Fed increasing interest rates (maybe a symbolic small move aside).”
  • “The last recession, the Fed waited until unemployment was 5.5 percent before tightening.”
  • "We won't get to that level for several years.”
  • “The threat is for deflation across the globe, with the exception of China.”
  • “China’s money supply is up 30 percent from last year. Our M3 (the Fed’s measure of the money supply) is virtually unchanged from a year ago, and available credit is less than last year.”
“The Congressional Budget Office said the United States is going to be unable to pay for the social contract with America,” said Dotzour. “It’s only a matter of when and how the adjustments for failed promises have to take place. Medicare, Medicaid and Social Security cannot be funded at current levels of spending.”
For more on Dotzour's findings, read the Center's news release.