Optimism in US is Good; Globally is Much Better

If, as President William Jefferson Clinton noted, we live in a global society, then it is incumbent upon us to take into consideration the thoughts, considerations and ideas presented to us by our global community. On the economy, whole most Americans are feeling as if we are pulling ourselves out of the recession, it would not be as important if the world felt the same way.

According to the International Monetary Fund (IMF), the worldwide recovery is under way. In a recent article, IMF chief economist Olivier Blanchard said that most countries are going to see growth in the near future, but sustaining a recovery will not be automatic. William Strauss, senior economist and economic advisor at the Federal Reserve Bank of Chicago, likewise sounded a cautiously optimistic note during an interview with CPE. “All in all, there’s more confidence now than even a few months ago,” he said. “It’s pretty clear that we’re at or near the bottom.”

During the spring and into the summer, he said, the contraction of the U.S. economy began to moderate, and he’s expecting some growth in the third quarter of this year. Among other things, home sales will edge a little higher, as will auto sales–not a full-blown rapid recovery, but a recovery nevertheless.

Next year, Strauss posited that the economy will grow “close to trend.” Considering the depth of the recession, that's not a full-blown rapid recover either. Sluggish U.S. consumer spending growth, for one thing, will probably still be a drag on the economy, as household savings rates continue to be relatively high. In other words, the memory of the panic and recession won't fade quickly.

“In the long run, a higher savings rate is a good thing, but in the shorter run it’s going to slow the recovery down,” Strauss said.

On another note… are you starting to read and hear more about multiple offers on real estate? Bidding wars? Short sales drawing multiple bids?

Get off the fence. If you have cash, you are King/Queen. Self-directed IRA funds, you, too, have opportunities like at no other time in your investment history. There are opportunities right now – mortgage notes, Bank REOs, land – that are being sold at deeply-discounted prices. The time to act is now.