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Can the Federal Reserve Stop a Recession?

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By Kalinda Rose Stevenson, PhD
Can the Federal Reserve stop a recession or prevent inflation by its actions? On Tuesday, August 5, the Federal Reserve voted to keep the interest rate for banks unchanged at 2 percent. Although I am by no means an expert on the economy and the role of the Federal Reserve, the actions of the Federal Reserve often remind me of that old cartoon about the conversation between Bob and Joe under the streetlight. Bob sees Joe looking at the sidewalk under the streetlight and asks: Bob: "What are you looking for?" Joe: "My keys." Bob: "Did you lose them here?" Joe: "No, I dropped them over there." Bob: "Why are you looking for them here, when you dropped them over there? Joe: "There's no light over there." The goal of the Fed is to control the money supply to prevent both inflation and recession. It's easy to think of the Federal Reserve as a giant puppet master in Washington, able to pull the strings of the economy when it goes off track. As powerful as it is, the Federal Reserve is really a one-trick pony, with one major tool. It can raise or lower the interest rates that it charges banks for money. The Fed's problem is that its main policy tool----setting interest rates for the banks----can only address one problem at a time. To get back to Bob and Joe, the real problem is "over there, but the Fed can't fix that problem, so it stands under the streetlight, looking for a solution in the wrong place. The two big threats facing the economy right now are inflation and recession. What can the Fed do when inflation is not the result of interest rates but the cost of oil? What can the Fed do when recession is not the result of interest rates but a result of the housing, mortgage, and credit crises? What effect does the Fed's decision to hold the banks' prime lending rate at 2 percent have on inflation when the primary cause of inflation is oil prices? Consider what happened in the 1970s, when oil prices shot through the roof and the Federal Reserve raised interest rates. The result was "stagflation," an era of both inflation and stagnant growth in the economy. Once again, we have rising inflation, triggered mostly by oil prices, and either the imminent threat or reality of recession as a result of the housing, credit, and mortgage debacles. What is the Federal Reserve doing in response? The decision on August 5, to keep the prime lending rate unchanged, is not so much smart strategy as recognition that the Federal Reserve can't do much to prevent inflation or control recession. So, will the Fed's decision help the economy? Will it either prevent recession or inflation? Wall Street responded favorably to the Fed's decision to keep interest rates unchanged, but it is important to note that Wall Street was already responding favorably because oil prices have fallen. Taken as a whole, the economy is affected by many forces. Many of these forces are far beyond the control of elected officials and the actions of any agency, such as the Federal Reserve. Although the actions of the Federal Reserve are powerful, they are not all-powerful. And so, the Fed makes its decisions under the streetlight, and keeps its fingers crossed, hoping that keeping interest rates for banks unchanged for now will buy time for other economic forces to work.
Kalinda Stevenson
Kalinda Rose Stevenson, Ph.D. Discover how Federal Reserve interest rates determine how much money banks have available to fund your business and real estate projects in No Money Limits For Real Estate Investors Visit NoMoneyLimits.com for your Free "52 Heart of Money Insights."
Article Source: http://EzineArticles.com
 

How to Build Your Dream Home!

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Luxury Mountain Home | Utah Luxury
By Tyron Mcdaniel
Now more than ever, there are more people building their own dream home all around the country! You can drive through inner city America in most cities and experience the rapid redevelopment of the inner city with dense townhome construction and McMansions. (McMansions are semi-custom homes from 3,500 to 5,000 sq. ft) Likewise you can take an evening drive to the outskirts of town and see more McMansions and estate homes being built on acreage and waterfront home sites. Many of these homes are being built by families fed up with the low quality inefficient tract homes and are opting for a more custom and personal approach to the homebuilding process. Most people consider the merits and even dream of building their own home but never really grasp the true financial benefits and the reality of being able to design and build their Dream Home! The allure of being able to build the home of your dreams with your favorite amenities is quite a temptation to resist however most get equally (if not more) excited by the tremendous savings that can be realized! Building your Dream Home for less has nothing to do with cutting corners or building a home that lacks quality and first class workmanship. In fact, you will find that most Owner Built homes are superior in quality and design to many tract homes and overall provide a better quality of life for their owners.
There are several pieces to the custom dream home puzzle however, I have found that there are (3) primary strategies to employ to help you build your Dream Home for less! #1 - Secure favorable terms from a local Construction Loan Expert first! - Working with a lender who is well versed in the various construction loan programs available will go great lengths in helping to save you thousands of dollars when constructing your dream home. In most cases, your Construction Loan Expert will be able to provide you with referrals of reputable builders, real estate agents and architects as well as contractors who work with owner builders. And because you have the money in advance of securing any of the other respective members of your Custom Dream Home "Dream Team" it gives you an unfair advantage in negotiations, not to mention the added savings of providing you with the best loan terms available. #2 - Eliminate the retail builder "markup" by managing certain aspects of the building process! - Most people think the largest cost savings are realized via sweat equity, however the time you spend planning and managing the process has proven to be 3 times more profitable than sweat equity! The best way to eliminate the retail builder mark-up is to hire an independent builder or general contractor to handle the day to day operations and management of your construction site. Generally you will be paying this construction professional based on the scope of the overall project or on a per square footage basis. People who build in this manner generally realize savings of 22-30% or more on the total construction costs of their Custom Dream Home. #3 - Build your Custom Home in a relatively new, growing community with strong demographics! - We have all heard that location, location, location is the key to success in real estate. Location is especially important when constructing your Custom Dream Home. It is important that you really study the building and development trends as well as the demographics of the areas that interest you before making the final decision. I have seen cases where a $400k home increased in value to $750k in a 5 year period while a comparable home in a comparable community in that same time period only appreciated $75k. So as you can see location is truly key and it could have a drastic impact on your overall net worth.
Luxury Home In Expensive Subdivision | Utah Luxury
I have found that upper middle class suburban communities and urban inner city areas tend to outperform over time so start your search there. Using these tips as a guiding point, you should be well on your way to planning and eventually building your Custom Dream Home for Less! I trust that you find this article informative and helpful and I wish you the best with your Custom Dream Home project!
About The Author
Tyron C. McDaniel, author of the book "How to Build Your Custom Dream Home for Less!" has been in real estate since 1999. As a Construction Loan Expert, Real Estate Agent & Real Estate Developer Tyron has helped a number of clients with the planning and construction of their Dream Home. Tyron's expertise in Custom Dream Home Financing and Design consultation is in high demand with clients from all around the country. For more information, please visit Tyron now at http://MyDreamHomeforLess.com/
Article Source: http://EzineArticles.com
 

Staging a Home to Sell Quickly

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Utah Luxury - Sundance Utah - Family Room
By David Beart
If you've watched the news or read a paper, chances are that you know the real estate market is in trouble. So what can you do to make your home one of the ones that will actually sell instead of lingering on the market with the others? The answer is staging. Staging is the term that real estate professionals use for arranging and decorating a home to show it off and make it as attractive as possible to prospective buyers. In this market, buyers have many houses to pick from, and they aren't willing to compromise. If you want to sell in a timely manner and for a profit, you need to make your home into a real "dream home". Luckily there are some inexpensive and easy ways to do that without hiring a professional. Cut the Clutter The most important thing that you can do to stage your home is eliminate as much clutter as possible. Before you put your home on the market, do an extensive clean-out. It can seem daunting, but take it one room at a time. And remember that you'll eventually need to go through everything anyway when you pack up to move, so you're really just getting an early start. A good rule of thumb is to get rid of anything that you haven't used in over a year. If you haven't used it in three months, box it up. You might want to consider renting a storage unit, or asking a friend or family member to allow you to store some excess items in their basement or garage. Remember that the fewer things you have in a room, the larger it will seem. Arrange your furniture in a way that clearly shows off the traffic flow from room to room. Keep unsightly but necessary items in decorative baskets or bins. Also, don't forget your closets. Buyers will want to look at the closet space, so shoving your clutter out of sight won't work!
Impersonal Touches While you're eliminating clutter, there's one other thing you'll want to eliminate from your home: Yourself. Replace family photos and portraits with neutral artwork. Take your children's school projects off the refrigerator and hang appointment calendars or family message boards inside closets or cabinets. Consider removing overtly religious or ethnic art or objects as well. Contrary to what some might think, this isn't to avoid offending buyers or to protect your family's privacy. It's simply to create a "blank slate." When buyers come into your home, they immediately begin wondering where they'll put their favorite chair or hang their own family portraits. By removing yourself from the home, buyers will be able to imagine themselves and their own families living there. Let the Sun Shine In Proper lighting is essential to staging your home. Make sure that all the curtains and blinds are open to let in as much natural light as possible. Consider replacing heavy drapes with airy sheers. Also make sure that you have plenty of lamps and other lighting. Some buyers may want to see the home in the evening, so make sure it's well-lit. Replace all the bulbs in your fixtures with the highest wattage allowed for the fixture. Make sure there are no dark corners by moving lamps around in the room for the most coverage. Also clean all of your windows. Removing dirt and grime from the outside, as well as smudges and fingerprints from the inside, will improve the quality of light and enhance the overall feeling of brightness. Keep it Clean It might seem self-evident, but when you're showing your home, you need to keep it spotless. Do a big "spring cleaning" before you begin showing. If you're short on time or if you just hate to clean, many house-cleaning companies offer a one-time deep cleaning session. Call around to get an idea of price and decide if it's worth the money to avoid that task. Once your home is clean, dedicate twenty or thirty minutes a day to maintaining. When you're selling your home, especially in a down market, you'll want to be able to show your home to buyers at the drop of a hat. If a buyer requests a showing and you ask them to wait until the next day so you can clean up, they may just move on to your neighbor's house, taking their money with them. Focus on the kitchen, bathroom, and floors. These are the most obvious "dirty" areas. Make sure you wipe down all counters, appliances, sinks, and mirrors in the kitchen and bathrooms. Vacuum all rugs, fluff cushions and pillows, and run a dust cloth over shelves and televisions. Make sure you make all the beds each morning and pick up any accumulated clutter. If you take the time to stage your home before you put it on the market, and spend a bit of time maintaining your staging, you can sell your home quick and profitably, even in a buyer's market.
About The Author
David Beart is the owner of Professors House . Our site covers staging a house, household finances, family forums, recipes and other household.
Article Source: Ezine Articles
 

Home Staging Secrets

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Front of Home | Cindy Wallace | Signature Real Estate Group | Utah Luxury

W
hen it comes time to sell a home, nothing beats the top three rules. Price, Curb Appeal, and Staging. If you price your home right, you will beat your local competition and win over buyers. If they show up to the home and anything seems a little off, they might just turn and leave. Here are a few tips to help you bring those buyers to your home and how to keep them in your home.

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Are You Ready For A Remodel And Do Not Know Where To Start?

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Front of Home | Susan Matheson | Utah Luxury | Photo © Copyright Spotlight Home Tours
By Travis Barkstedt
Some good areas to focus on when remodeling are: Kitchens: Updated Kitchens can dramatically increase the value of your home. Not only is it a wise investment for many but for most, what you put into your kitchen remodel, you get in return. Options are endless with more products than ever in the market place with new appliances and countertop options on the rise as well. New cabinets will be one of the bigger deciding factors for the overall look of your kitchen. Do not be overwhelmed by the vast amount of choices because there are professionals that can make this whole process run seamlessly. If you already have newer cabinets and want to spruce up your kitchen, then adding new flooring and a backsplash is a good way to improve the overall look of your kitchen. The right lighting can also add a dramatic look to your kitchen. Baths: Updated Baths are also a great way to increase your home's value. A Master Bath remodel is one of the best ways to increase the value of your home. Remodeling an existing bath is a simple way to give an updated look to your home. For most bath remodels, it is wise to replace everything because it is outdated and can turn potential buyers away upon resale of your home. For others that may have tiles that are newer, you do not need to replace the tiles. Grout cleaning or grout replacement is another alternative to give your existing tiles a new and fresh look. You can update a look by simply adding new moldings, mirrors, lighting, new sink/counters, fixtures, and toilets. Accents such as area rugs, decorative paint finishes, and lighting some candles can create a beautiful oasis.
AJ Construction - Master Bathroom - Utah Luxury - Photo © Copyright Danny Lee Photography
Living & Family Areas: Living/Family areas are some of the best areas where you can add some personality to your home. The Kitchen, Living & Family areas are some of the most used spaces in the house. Spice up the room with a new Fireplace mantel, wainscoting, and/or some crown moldings and start to hear the complements roll in. Built-Ins are also a fantastic way to add value because they have a wide possibility for use and storage. Besides your home being the envy of your town, you are increasing the value by just adding some simple touches. Brighten up the space with fresh paint and do not be afraid to pick a bold color. Buy a new lamp and some throw pillows (accent colors are important) and Enjoy!! Basements: Utilizing unused space such as a basement can increase the square footage of your home. Anywhere you can gain livable space you should take advantage of it. Basements have great potential being utilized as a home gym to a home office. Many remodel their basements to use for their children's playroom. A great use for space in your basement could also be a Wine Cellar. Basements are a great way to add some extra space in which otherwise is used to store unused items. As you can see, the possibilities are endless..
An Amazing Kids Playroom - Jensen and Sons - Utah Luxury
Exterior: Curb Appeal is very important in the overall aesthetics of your home. It is the first thing people see when they pull up to your home. First, you should always keep a manicured lawn and keep your grass well hydrated during those warm summer months. Planting some flowers and shrubs are some quick ways to help aid in the process of adding curb appeal. Painting the exterior of your home or simply just cleaning up the exterior with a power washing can dramatically help. Adding shutters to the front of your home and/or garage, installing a decorative fence, and adding trim to your home (around your door, Etc.) are all great ways to increase the curb appeal as well.
For more helpful information regarding your next home improvement, visit us online at http://www.travisrobertrenovations.com Our photos section has many examples of how we have helped homeowners increase the value of their homes. Feel free to contact us with any questions.
Article Source: http://EzineArticles.com
 
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