Thread: immigration illegally and the houseing market

My question to all is IF we were to have kept companies from outsourcing
And controlled the borders. Would we be in a houseing crunch? And the markets what do you think they would be like – thanks group.

I think the increase in immigration has caused a rise in housing prices, but there may be a significant bubble which is now popping. Much of the subprime mortgage crisis is due to loans made to unqualified buyers--including illegal immigrants. But it has allowed people to move out of their homes to something better, as their starter homes are purchased by immigrants.

With the Federal Reserve lowering interest rates way down it has stimulated a lot of home purchases and home construction. The construction jobs though have gone mostly to illegals, at least in huge portions of the country. So it ddn't really help American workers--just American entrepreneurs able to capitalize on cheap illegal alien labor. And it is obvious now that it has created a lot of concerns about credit.

The longer the Fed feels obligated to keep interest rates low, the shakier the US dollar becomes on world markets--and it is already under attack by groups like Al-Qaeda which has urged Islamic countries to dump the US dollar as reserve currency. Oil is traded in US dollars which helps maintain its value, but there has been quite a lot of talk of opening up other Petroleum Exchanges--trading in other currencies like Euros or Russian rubles. America's enemies would like to see anything that weakens the US dollar. But apart from that, merely the fact that low Fed reserve rates translate into low interst paid on US government bonds, too--this makes other governments mor reluctant to finance our debts via bond purchases.because they won't gt such a high interest rate for them.

Could there have been sufficient economic stimulus without ultra low interest rates? That's the 64 million dollar question. In the 1980's with prime rates at 12 or 13 percent commercial expansion was dead. But does it have to be below 7 percent to encourage growth? I think if the US is going to try to employ 10 to 20 million extra people then yes--but if just maintaining American jobs, I think were flirting with disaster.

You might want to go to the DailyReckoning.com for a contrarian view of the US economy.

Another problem is that contractors overbuilt because there was a housing boom, especially here in my area. They built houses before they had buyers and now they are sitting empty.