because I can get a ridiculously high price?” Dr. Dotzour responds, “Sell now, only if you have a better place to put your money. If you don’t, and that bothers you, then ‘your fear factor isn’t high enough to overcome your greed factor.’”
catalyst to watch for is when the feds begin to raise interest rates again. And remember, don’t pay attention to anyone other than the Chairman of the Federal Reserve.” Dr. Dotzour says we don’t need to be worried about runaway inflation or that the U.S. dollar is going to collapse because, ‘the U.S. dollar is the best pig at the trough!’ The ‘two things that matter right now are: when will the feds let rates go up and how much will health care cost us?’ Regarding the cost of health care, the ‘wait and see’ mentality is what is keeping American businesses from moving forward, so the last half of this year will appear weaker, mainly due to slow hiring, but once the uncertainty of health care costs are resolved next January, Dr. Dotzour expects to see Americans, once again, begin to ‘overwhelm poor government’.
Other wisdom imparted by Dr. Dotzour: “We aren’t in a straight up economy. We can’t be when our government keeps hitting people in the face. But it seems to me that the current administration only has one volley left: the health care premium. Premiums are going to go up about 40%, which is a huge tax on American workers. Places like Regal cinemas are cutting back employees to 30 hours or less to avoid the health care costs. There are over 3.9 total job openings in the United States right now, but many employers aren’t hiring. They are ‘waiting to see’ what the hit will be on January 1. Small business net worth / profit is up, home prices could go up 6/7% and ‘the state bird of Texas is the Construction Crane.’ Everything except for land is overpriced, creating a ‘bubble’. No one knows when the ‘bubble’ will pop, but the
He believes that ‘Helicopter Ben’ will signal the Fed’s exit strategy’ way ahead of the game and we should watch for these indicators: • They will stop buying new mortgages • Stop buying more US Treasury debt • Stop re-investing principal from mortgages held in their portfolio (runoff) • Start selling mortgages held in portfolio • Start selling Treasuries held in portfolio • Raise the Fed Funds rate • Raise the interest rate paid to banks for excess reserves
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