Sometimes I wonder why I bother watching CNBC. I think that some of the guest believe that if they say something negative about anything – they will not be invited back. Two of my favorite guests are Peter Schiff and Nouriel Roubini. You can read Peter’s latest commentary at the link below. Roubini is a professor of economics at New York University. I knew that Larry Kudlow would invite him on the show after the latest GDP release. Kudlow and all of his buddies were laughing at Roubini a few days ago when he projected that GDP would be around 1.5% for the quarter. It came in at 1.6% – the slowest growth since first quarter 2003 and below the consensus of 2.0%.
Roubini forecasted 0.5% for the next quarterly release and once again they all laughed in disbelief. It doesn’t take a PhD in economics to realize that the slow down in real estate has and will hurt many people. Compare the size of your raises from the past five years with the ones of the previous five year period. Most will attest that wages are not increasing. Lifestyles have been maintained primarily by equity out refinancing. Unfortunately, the real estate slow down has turned off the home ATM spigot.
Don’t believe the hype. Prepare yourself for the road ahead. Companies are holding their highest levels of cash in history. If the economy was so great – wouldn’t they be finding opportunities to invest their war chests. There are two ways that you can prepare yourself. Either save now and invest later or invest now and invest more later. If you choose the former, learn as much as possible about real estate investing. Cash rich investors will have their pick of the litter in a few years. If you choose the latter, commodities are the place to be. There are many articles on this site on that topic.