Tuesday, November 16, 2010

Commercial Real Estate, 'Quantitative Easing'

Commercial Real Estate does not seem to be caught by mainstream radar yet, but it is gaining momentum and may move to the front of the line in terms of impact, moving home foreclosures to second place. All you have to do is look around your own town and see the vacancies.

There is a lot of discussion about Bernanke's 'quantitative easing,' especially in other parts of the world. The reason this will not work is that there is already money available to be loaned. There are no buyers for that money. Adding more to the pile is not going to get us anywhere. The author, Richard Koo, wrote about Japan's 'quantitative easing' in 2001 that did not work. One comment that stood out above the others was "... when there are no borrowers the banks are powerless." This means the Feds are powerless too. Here is how we as citizens actually can influence the banking industry. Consider contemplating on this. :)

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