Last Friday Bernanke delivered a speech spouting off the best news he’s given since the economy took a nose-dive.
“Economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good,” Bernanke said at an annual Fed conference in Jackson.
Big Ben was cautious about his optimism, stating that the recovery was likely to be “relatively slow at first.”
“Although we have avoided the worst, difficult challenges still lie ahead,” he told the gathering of bankers, academics, and economists. “We must work together to build on the gains already made to secure a sustained economic recovery.”
Critics mentioned that Bernanke’s positive tone and optimistic outlook may have been motivated by his job’s expiration in early 2010. “When you go on an interview, you never speak of your shortcomings“, stated Richard Yamarone, economist with Yargus Research.
Whatever the case may be, the economy does seem to be turning a corner and we are certainly reading more positive articles. Whether the turnaround is genuine (or sustainable) remains to be seen. We like to remain cautious and most importantly, realistic.
What does this mean for local real estate? Our feeling is that opportunities will be around for a while for buyers. Maybe not low interest rates or tax credits, but the ability to buy low with less competition from other buyers will remain as long as credit remains tight. If your plan is to buy and hold long term, this is a good time.
-Excerpts taken from Jeannine Aversa, Associated Press, “Fed chief upbeat on world economy“, published on Saturday, August 22, 2009.
Want some dismal news to balance Bernanke’s economic assessment? Check out Robert Kiyosaki’s “Preparing for the Worst“.
Bernanke in action