Peter Pays Paul

Inside commercial hard money lending.

2 Nov

Paul Kedrosky: Funny Money: U.S. GDP Growth Net of Mortgage Withdrawals

Category: Finance, Investing, Life-in-General, Real Estate Finance, Real Estate Investing

Paul Kedrosky has an interesting graph from John Mauldin up in the link below that highlights the difference in the GDP if you were to subtract mortgage equity withdrawals.

Paul Kedrosky: Funny Money: U.S. GDP Growth Net of Mortgage Withdrawals.

What does this mean?

Much of the growth in the US economy from 2001 t0 2006 was fueled by money borrowed from our houses.

Now that home equity has disappeared for many homeowners, discretionary spending will decrease.

Companies that depend discretionary spending (retailers) will feel the pinch by the loss of this discretionary spending money.

(HT:Tom Vanderwell

Tags: Economy, GDP, Real Estate Investing, Residential Mortgages


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Posted Sunday, November 2nd, 2008 at 5:55 pm
Filed Under Category: Finance, Investing, Life-in-General, Real Estate Finance, Real Estate Investing
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