Will Russia Affect Interest Rates?

We are blessed to have the problems that we have and the problems that I'm dealing with the last couple weeks and the debilitating back pain. It just makes me start thinking about how minor that is compared to everything else that's happening. I'm gonna think about this in terms of housing because that's the world I live in and what impact this has on our interest rates.

Right now, we're watching the 10 year bond, which was up over two. Remember in our 30 year fixed rate, went over four. Now it's starting to come back down. It had come down to just below two. It was at 1.97. Uh, Russia started to invade Ukraine, uh, and there was this fear of higher inflation. So it was this tug of war of whether or not the 10 year was gonna benefit from that of this flight to a safety as people move their money away from stocks and into bonds, or if we were going to continue to go up with this risk, uh, and threat of inflation, which was pushing rates up to who's gonna win well today, today risk wins today. There continues to be a flight to safety.As we see in Russia, there's a run on the banks right now, as Russia just increased their Central Bank Rate. What we call fed rate. They increased theirs from nine to 20% overnight because of this run on the banks. People don't wanna keep their money in the savings account. So what they're trying to do is raise that interest rate on the savings account and say, "Please keep your money here". They wanna pull it out and they wanna put it somewhere. The Ukrainians are turning to Bitcoin and they're putting their money in Bitcoin today to get it out of its government currency to yield it somehow. And somehow that's the easiest access is to buy Bitcoin. Bitcoin is the beneficiary of that. It's going up, but I can't quite figure out if that's really a safety net. I mean, gold used to be, which is kind of dismissed today. And, asI look at this and try to think of Bitcoin as the answer. I can't wrap my head around that.  I feel like the Ukrainians are pushing the value up and they're buying it at an increasing cost. And as they buy it at an increasing cost and they push a price up, will that price drop back down again and lose a lot of their value? 

So as inflation continues to go up, this fixed cost of a mortgage payment is gonna help you offset rising rates. If, as a hedge of inflation, real estate continues to be rockstar it's at the top of the investment pile in my book and with interest rates as low as they are now, seemingly going lower this morning, we're at 1.77 on the 10 year treasury. So the today risk is that inflation could come back. The fed has said that the 50 B increase in March is probably off the table as Powell has to figure it out. Did he wait too long?

The answer is yes, but you couldn't have known that. Hindsight's 20/20, right?

Did he say that inflation was temporary for too long?

Did he dismiss it as just this passing of this coronavirus and, and say that the economy was gonna come back, and everything was gonna be fine?

And then of course the timing of Russia invading Ukraine. Who could could have known the timing of that. And the impression on that on trying to curb inflation when oil prices are going up and the cost in Russia. Russia is the number one supplier of fertilizer. So the cost of our vegetables and our produce in the spring is gonna go up. The cost of microchips, if China decides to back Russia and take Taiwan, Taiwan is the number one supplier of microchips, that's gonna increase the cost of everything.

The world's events and tragedies affect us all beyond finances and interest rates. The emotional effect also plays into our economy, even though it's "not happening here" it's still happening and affecting millions of people. Please listen to this episode as we talk about how this affects what we personally can control, our financial empire through real estate. Please tell me the thoughts you have on this current situation in Ukraine.