Reuters reports that according to the National Association of Realtors, sales of existing US homes surged 4.5 percent to a record high in April and median home prices rose 15.1 percent, the biggest annual gain in almost 25 years. This is a hot pace, and no wonder that National Association of Realtors Chief Economist David Lereah was quoted by Reuters as saying yesterday: "Prices are now becoming a concern. There's a speculative element in home buying now."
It all looks in such sharp contrast to what is happening in Germany.
German investor confidence falls
German investor confidence plunged to its lowest point in six months in May, according to economic think tank ZEW. The organisation said confidence had dropped from 20.1 points in April to 13.9 points in its May survey of 298 analysts and institutional investors.
Separately, the OECD lowered its growth forecasts for Germany...
The Prudent Investor posted an interesting chart yesterday that shows that, over the last 30 years, oil prices and the Fed funds rate tended to move together. Over the last few years, however, the two have diverged. A sure indication that economic relationships have changed recently, and that the inflation problem we face today is not the same inflation problem we faced in the 1970s.
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