Ander's Market Theories

[AnderL]

Here comes the money -

Good News for European Real GDP as well

When relatively lower interest rates and newly printed Euros and Pounds fully settle in the European markets expect the increased liquidity to start propping up the European markets and add some surprising prosperity to their economies. Lower rates provides more opportunites to borrow massive debt for investment. That will increase the value of European asset classes and will inevitably provide a steady stream of demand for US dollars and hard assets like real estate.

By no means does this mean it will prop up real estate prices. All it does is provides Europeans the opportunity to make gains from currency spreads and provide cash flow from their purchased properties, mostly commercial.

The increased liquidity will also help support demand for commodities as their flock to them when there is scare of infaltionary factors. Consider the European economies to be about 3-4 years behind the US in recovery.

Kash http://angrybear.blogspot.com/2005/11/gdp-3q-revision.html detailed the latest good news on U.S. real GDP growth. Eurostat http://epp.eurostat.cec.eu.int/portal/page?_pageid=1090,30070682,1090_33076576&_dad=portal&_... provides a link entitled “Euro-zone and EU25 GDP up by 0.6%” (approximately 2.5% per annum) for the third quarter of 2005. It appears that Europe is also recovering from the global recession of a couple of years ago.