Here’s a link to one of the better articles we’ve seen in some time detailing the interactions the US economy / Fed experience and exert with the ECB (European Central Bank), the “Group of Seven” and other world banking and regulatory entities.

Written by Gary Dorsch, a former Charles Schwab global market analyst who’s now writing his own newsletter (Global Money Trends), the article is posted over on Seeking Alpha, a very useful economic news web portal with a section dedicated to housing under the US Market tab. 

Back to the article – it’s pretty heady stuff (you will need your thinking hat - the spam hat works for us), but here’s our spin on why you need to be mindful of your personal and the national economic store these days.  Economic issues in the US and around the world are getting very interesting, and are likely to get a lot more interesting over the near term.  After 25 years (give or take) of unprecedented economic prosperity and relative economic ease in our country, more than a few chickens are coming home to roost. 

We’re not economists here at Redfish, but from reading and talking to smart guys and gals who are over the past year or so, the most insightful seem to articulate a common theme – that being the fact that there are economic cycles that have repeated for decades, and those cycles continue to roll on just as real estate market cycles do.  The US economy is certainly not as insulated from world economic events as in the past, hence our suggestion to consider articles like Dorsch’s linked above. 

Savvy real estate investors attend carefully to pertinent economic issues and money flows – according to some money is fleeing stocks to safe havens, though we’ve seen more than one mention that some of that market cash is feeding speculative commodity investments “because there’s not much else out there” [Real Time Economics Blog, WSJ, 27 June]. 

One of our mentors offered during a call this morning that he has been approached by three former investment partners this week asking him if he had “any new emerging market apartment deals” to consider.  Our mentor had not interacted in a business sense with any of the three in several years; all three had pulled funds out of their stock portfolios recently and given prior success with our mentor, were seeking him out to find projects.  Yes, we’ve already started working on some suggestions for them. 

We believe the old saying that “every cloud has a silver lining” – granted some days look cloudier than others, and the media may indeed try and convince you that the sun will never come back out.  

Now is more than ever the time to search for good projects in fundamentally sound markets.  They’re out there. 

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