lowrentyieldmakessense(honest!)

I can’t find the thread that first introduced me to k-waves but I have found this one: http://www.greenenergyinvestors.com/index....p;hl=Kondratief

 

This is in the OP of the thread I was looking for http://kondratyev.com/reference/theory_explained.htm

 

BTW, There are several ways to spell Kondratiev (Kondratief, Kondratieff, Kondratyev….)

 

Basically, each season lasts around one generation (15 to 20 years). Winter is said to have started around year 2000 so we should get to the end around 2015-2020

 

this cycle seems to make sense

but would he have argued differently had he known about the worlds latest fad with paper money

and

link

The Kondratieff in the Twentieth Century

 

Nikolai Kondratieff has been hailed by his current adepts as a prophet of the future as well as analyst of the past. Does his cycle fare then better in the twentieth century, before and after his own time? On the contrary, it does not seem possible, but his "cycle" is in even worse shape in our century. It is true that the alleged Kondratieff boom of 1896–1920 for once seems to fit the model, since prices were indeed rising throughout this entire period. But here again, we have to disaggregate and not pay myopic attention only to the years of peak and trough. The 1896–1914 era was the only peacetime period before 1945 when prices actually rose steadily. But the reason was not some mysterious "Kondratieff" force pushing them upward. The cause was much simpler: the burst of the last great gold discoveries in Alaska and South Africa, pushing up world prices in the first two decades of the twentieth century. But, even so, the rise was scarcely enormous, averaging 2.5 percent per year, a figure we would nowadays consider almost idyllic. The really massive inflation only took place during 1914–18, the years of World War I, where once again inflationary war finance drove up the world's money supply and prices. And once more, the boom stopped and was reversed upon the end of the war.

 

Next, there is the alleged third Kondratieff long depression. At first sight, this again seems to fit the model, since surely the 1930s were an authentic depression in every sense, including physical data. But what about the 1920–29 period, the biggest boom decade in American history? How in the world can this period be called a part of a long depression? If the 1920s were not a boom period, what were they?

 

This brings us to one of the Kondratieffites' many problems. Peak and trough dating is based on the wholesale price index, the longest continuous time series available. But the Civil War peak dating is a problem. While prices retreated from their wartime high, there was definitely another economic boom until 1873, with prices peaking and the Panic of 1873 touching off a recession. Similarly, the post-War-of-1812 price peak was indeed 1814 or 1815, and yet there was, at least in the U.S., a surging economic boom until 1818, succeeded by a dramatic collapse in the Panic of 1819. Kondratieff, writing in the mid-1920s, found it easy simply to fuzz over the peak dates, writing that his first peak came in "the period 1810–17," and the second in "the period 1870–75." Add a few more years for good luck on either end, and the anomalies of peak dating can be glossed over.

 

But Kondratieff had the good fortune to publish his work before the cataclysmic 1929 peak. What now? It simply became too much of an evident distortion to mumble something about a "1920–30" Kondratieff peak. Instead, the Russian's later disciples added another critical part of the current doctrine, a way of "saving the phenomenon." There is not one Kondratieff peak, you see, but two, and the period in between is the "plateau" before the "secondary" and really big depression. Well, we now have the "plateau" of the 1920s. It is a bit difficult to call this frenzied boom period a "plateau," but set that aside for purposes of discussion. We can then patch up the 1866-73 period as another plateau before alleged disaster. How about 1814–18? Three or four years is scarcely the majestic plateau of the 1920s, but again let that pass. If we are willing to fudge by shoving in some "plateaus," we can now try to absorb the damaging period of the 1920s into our doctrine. Why in the world should there be this "plateau," which sometimes looks instead like a raging boom, after the alleged main peak has passed? And in what sense has the peak then been passed? Once again, ours not to reason why. Who knows? Perhaps The Force, or whatever is supposed to fuel this mysterious underlying long cycle, needs a few years or even a decade to get a head of steam before it really does us in.

 

But the Kondratieffites' problems have only begun. Their real difficulties come after the alleged Kondratieff trough of 1940 – the last trough so far. The entire boom-bust "long" cycle is approximately 54 years in length. Allow a few years here and there. But still: It has already been 44 years since the Kondratieff trough. A 44-year boom! So where's the peak? The peak is getting long overdue. Most of the Kondratieffites confidently predicted that the peak would arrive in 1974, just 54 years after the previous peak. Previous peak-to-peak stretches had been 52 (from 1814 to 1866), and 54 (1866 to 1920). So where indeed is the peak? It is now 1984 and counting. We are ten years past the confident prediction and we still have inflation. The Kondratieffites have been forecasting imminent deflation since the magic 1974 year, but still . . . nothing!

 

The severe 1973–75 recession filled the hearts of the Kondratieffites with joy: the peak had arrived on schedule! But inflation still continued. The next big recession came swiftly, but still there seemed to be always recovery, and inflation continued throughout. What price Kondratieff now?

 

But, as in the case of Joachim of Fiore and other mystics, the Kondratieffite gurus have hardly given up – instead they have rushed to change the date. Or rather to announce: the peak already was! The 1973–75 recession was the peak. For now we are on the "plateau," the false boom, and soon, very soon, we will get the secondary depression, the Big Bang. Very soon now we will have our 1819, our 1873, our glorious 1929.

 

Well, here we are, ten years after the "primary peak," so surely the time for the Big Bang is Now. And yet, instead of that, the economy seems to be bubbling along, recovering nicely. Inflation is still continuing, despite all the propaganda about the problem being over.

 

Time is inevitably running out on the Kondratieffites. For there will be no Big Bang, no repeat of 1929. Pointing to problems in the economy, to stagnation, to stagflation, to falling commodity prices, to secular rises in the unemployment rate, while interesting and significant is not enough. It does not demonstrate the Kondratieff. After all, there are always economic problems. The point is that there is no permanent depression, and there is not, and will not be, any deflation. The idea that we are right now in the midst of a Kondratieff depression, but that the deflation is being masked by inflationary bank credit, cannot be the way out. For that is simply the mystic's fudge factor so that you can never prove him wrong, regardless of the evidence. No, the Kondratieff is dead, and now it is simply a question of how long it will take the Kondratieffites to lie down, to admit defeat and slip away into the night. How many years will it take before everyone sees that there has not been and will not be a "fourth peak"? And without such a peak, there can be no cycle.

 

Cycles of War?

 

To the criticism that "Kondratieff peaks" are simply the results of war-borne inflation, the Kondratieffites have an answer: "Ahh, but this analysis is superficial, for the wars themselves are caused by the arrival of the Kondratieff peak!" Well, in a sense: the War of 1812–Napoleonic War, the Civil War, World War I, major wars all, came at (i.e., brought about) Kondratieff peaks. Can we then say which was cause and which was effect – the war or the cycle? Aside from the fact that we would again have to postulate some mysterious force that drives men mad and on to war during Kondratieff peak periods, there is one mighty counter-example that destroys this theory totally: World War II, which came, not at the end of a Kondratieff boom, but rather – in stark contrast – at the end of a Kondratieff depression.

 

This example indicates another gross error in the Kondratieff analysis. Where real cycles exist, in physics, astronomy or biology, the scientist concludes that there are cycles after hundreds, if not thousands, of mutually confirming observations. But in the alleged "Kondratieff," there are, at very most, only three-and-a-half cycles. What kind of analysis builds a cycle theory on only three-and-a-half observations?

 

Why Business Cycles?

 

If "the Kondratieff cycle" is a myth and a chimera, why are there business cycles at all? There is no space here to present a positive solution to the business-cycle phenomenon. But we have already seen (1) that since the market is interrelated and a seamless web, there can be no multiple "underlying" and interacting cycles; there is only one business cycle. And (2) the real business cycle is in no sense periodic, but is a continuing, wave-like motion that varies considerably in length and intensity.

 

We can only sum up the correct answer to the problem of the business cycle. We have already seen a hint of the solution: that inflation and the inflationary boom are caused by bank credit expansion generated by governments. In fact, government's central banking system provides the key causal element for all business cycles, a cause exogenous to the market economy. Continuing government intervention sets in motion business cycles by generating inflationary booms. Because these booms distort the signals of the market place in interest rates and in relative prices they bring about grave distortions of production and prices, which must be corrected by recessions and depressions.

 

In short, government intervention cripples the market economy, and recession or depression is the painful but necessary adjustment by which the market reasserts itself, and liquidates the distortions committed by the government's inflationary boom. After each depression, the government generates inflation once again, because it is the government's natural tendency to inflate. Why? Quite simply, whoever is granted a monopoly of printing money (e.g., the Fed, the Bank of England) will use that monopoly and print – to finance government deficits, or to subsidize favored economic groups. Power will tend to be used, and the power to create money out of thin air is no exception to the rule.

 

And so we see – and this is the great insight of the "Austrian" theory of the trade cycle – that micro and macro economics are in harmony after all. The free market does tend to adjust harmoniously without boom and bust, without incurring clusters of severe business losses. It is government intervention in the market that creates the business cycle, and unfortunately makes the corrective adjustment of recessions necessary. The cause of the boom-bust cycle is not some mystical periodic Force to which man must bend his will; the fault, dear Brutus, is not in our stars but in ourselves, that we are underlings.

And what will there be without government? A peaceful paradise?

Ten Bears: It's sad that governments are chiefed by the double tongues. There is iron in your words of death for all Comanche to see, and so there is iron in your words of life. No signed paper can hold the iron. It must come from men. The words of Ten Bears carries the same iron of life and death. It is good that warriors such as we meet in the struggle of life... or death. It shall be life.

This song is simply beatiful...

 

Good Night!

 

From:

some more music

and for those who want less war, less debt and less consumption/waste then the gold standard would help move us in the right direction

http://petitions.number10.gov.uk/TheGoldStandard/

From: http://www.youtube.com/watch?v=Jpz5eD9L4dA

http://www.youtube.com/watch?v=Jpz5eD9L4dA

it is.

 

no-one would deposit anything in a bank knowing that the receipt they received was going to be instantly devalued by fractional reserving unless the interest on the receipt made up for the devaluation - meaning there'd be no point.

 

fractionallly reserving deposits only works if the depositor doesn't understand the system.

let the free market sort out those banks who want to be the riskiest (without the central bank back stop)

http://www.bloomberg.com/apps/news?pid=206...d=aEVdnjdCm1W0#

 

Why paying debt off for decades if you can inflate it away?

 

Anway, I read that the world has $6.5 trillion in currency reserves (presumably at present exchange rates). Central banks apparently hold 30,000 tonnes of gold. I conclude that the equilibrium price of gold is $6,738.33/oz at CURRENT exchange rates. Those might change of course, and also the general circumstances (that are still pretty rosy right now).

seems about right at that price

you get to a similar Figure if you value all the cash deposits held in the US - in the past gold has at least balanced out at or above this level

edit to add

A Reading by Dominic Frisby of his essay on gold for The Idler Magazine .

 

 

Something A Little Different. Enjoy.

 

http://commoditywatch.podbean.com/2009/07/...-free-and-idle/

 

http://idler.co.uk/

 

Download Essay

Why_Gold_Is_the_Currency_Of_The_Idle_and_Free.pdf

like it

and agree with consumption taxes - if we have any taxes at all

only 12 so far

http://petitions.number10.gov.uk/TheGoldStandard/

Dear Mr. XXXXXXXX

 

We trust you are well since the last time you have done business with CoinInvestDirect.

 

This email is related to your user accounts registered at CoinInvestDirect.

 

We were informed by our accountants that you have 2 active user accounts at CoinInvestDirect.

 

Due to the HM Customs & Excise regulations regarding gold investment it is not possible to purchase more than 5.000 GBP worth of gold in one single order or more than 10.000 GBP in several orders in 12 months and ship those orders to the UK. As an investment company we need to keep track of all the gold purchases done by our customers.

 

Therefore, first of all we will be forced to block your user account "XXXXXXX" which was never used to place any orders with us as we can only allow our customers to have 1 active user account at CoinInvestDirect.

 

We will also be forced to temporarily suspend your user account "XXXXXXXX" until we eventually receive the certified proof of ID and address required to all our customers who intend to invest more than 10.000 GBP in 12 month period. At the moment your user account has several invoices allocated to it which come to a total amount superior to the 10.000 GBP in gold allowed by the HM Customs & Excise and we can't accept any further orders without scknowledging the documents.

 

We trust you understand this situation and we would like to ask you to acknowledge this email as soon as possible.

 

We would also like to take this opportunity to inform you that should you wish to unblock your user account and purchase more gold items through CoinInvestDirect you should send us, as soon as possible, certified copies of your documents, i.e., a certified copy of your passport as a proof of ID and a certified copy of an utility bill and/or bank statement not issued more than 3 months before the date you send us the documents.

 

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makes you proud to be British

Gold rises as China eyes bullionJune 25, 2009 - 2:46PM

 

http://business.theage.com.au/business/mar...90625-cxrn.html

we have the communists buying gold

and the "free" world selling, leasing and naked shorting it

what a joke

I stumbled across this guy a few months ago -

 

http://www.drschoon.com/default.asp

 

He has some very good views IMO, so maybe worth a look.

 

He's also a strong believer in Gold and Silver

 

http://www.drschoon.com/articles/EconomyTi...ldAndSilver.pdf

 

http://www.drschoon.com/articles/TheYellowBrickRoad.pdf

 

The full list of articles -

 

http://www.drschoon.com/articles.asp

yep im a fan

and this sums up a lot

LosersInTheCasinoOfPaperMoney

Time to cash in your gold?

 

http://news.bbc.co.uk/1/hi/uk/8104479.stm

they are making this up surely

are there any parties for selling overpriced property

Big moves over the last couple of months gold down to £575 from £700

And £ up 30cents against the dollar - a 20% move!

 

I suspect that this cannot be sustained and a reversal is surely on the cards given that the UK is in even worse shape than the US. Got a large amount of cash (in pounds sterling) coming my way and thinking now is the time start moving that in to gold and perhaps some gold mining stocks. I know even the gold bulls in here have not been buying gold of late. Do any of you now think this could be the time to accumulate again especially if you are holding pounds?

I plan on buying more later this month

and some more miners this summer

anyone been to Fort Knox

link

Murphy: At the GATA African Gold Summit, in May 2001, Frank Veneroso, who is a consultant of ours, delivered a brilliant presentation that said they would run out of gold in 7 to 10 years, based on his work. Well, that's about where we are.

 

In addition, European central banks can sell 9.7 tons of gold per week as part of the Washington Agreement. But they're not even selling 1 ton.

 

So we believe demand is 1,000 to 1,200 times greater than mined and scrap supply. That deficit was being met by the Gold Cartel's surreptitious selling of central bank gold. But now instead of getting 500 tons from the European central banks to help, their supply is drying up. They don't want to sell anymore.

 

Crigger: A few weeks ago, Brad Zigler wrote an article pointing out that banks have lopsided positions in all sorts of commodities contracts, and that large concentrations of short positions by banks are not necessarily an indication of manipulation. Do you want to comment on that?

 

Murphy: I totally disagree with that. As far as I know, there's nothing like it, in the sense of what J.P. Morgan and HSBC have in the silver market specifically. That concentration is far greater than any other position a bank or any other firm has. It's very abnormal to have this size of concentration for the open interest.

 

Crigger: What about platinum and palladium? In those markets, the banks only have short positions, right?

 

Murphy: That's basically what they have in the silver market also. But you're talking many banks, versus just one or two. Now if there were 10, 15, 20 firms with these positions, good for them. But in silver's case, it's just J.P. Morgan and HSBC. Their short position stands out far more than anyone else's.

 

Crigger: Assuming the price of gold has been kept artificially low, how much has the price been altered as a result? You threw out $2,000 earlier - where did that figure come from?

 

Murphy: This is a pretty commonly used number, even in the mainstream world. Had the price kept pace with U.S. inflation, it would be $2,300 per ounce, let's say between $2,000-$2,400 an ounce.

 

Back when we had our Gold Rush 21 Conference [in 2005], the price was $436, and I said it was going to take $3,000-5,000 an ounce price to clear the market. And I think that's the kind of price you're going to see in the years ahead. Once it takes out $1,000, gold's just going to take off like you won't believe.

 

Crigger: But what about manipulation? Won't that keep the price down?

 

Murphy: They'll lose control. That doesn't mean they won't do whatever they can to calm things down again, with whatever gold they have left. But that's the problem: They keep letting loose the gold they have left.

 

Nobody knows how much U.S. gold is left [in the U.S. Gold Reserve]. We're trying to find out through the Freedom of Information Act, and the Fed and Treasury won't tell us. They keep redacting or holding back information. Now if gold's just sitting there, and they've never done anything with it as they say, then what's there to hold back?

I don't have a dog unfortunately. But the foxes are so common and unafraid round here now it's astonishing.

 

Another tactic is, I am told, to pee nearby but it doesn't really seem to work.

good for compost though - apparently

Ben Bernanke on Wednesday called on Congress to take action now to bring down long term US budget deficits, warning that the bond market was concerned about rising US government debt

:lol:

Ill be a wee bit pissed if gold goes to $1200 and the pound is $2.00 and gold GBP is still £600.

 

I found this site to be interesting. http://arabianmoney.net/

dont be greedy after the 2008 performance in GBP

Gold % Annual Change
   USD 	AUD 	CAD 	CNY 	EUR 	INR 	JPY 	CHF 	GBP
2001 	2.5% 	11.3% 	8.8% 	2.5% 	8.1% 	5.8% 	17.4% 	5.0% 	5.4%
2002 	24.7% 	13.5% 	23.7% 	24.8% 	5.9% 	24.0% 	13.0% 	3.9% 	12.7%
2003 	19.6% 	-10.5% 	-2.2% 	19.5% 	-0.5% 	13.5% 	7.9% 	7.0% 	7.9%
2004 	5.2% 	1.4% 	-2.0% 	5.2% 	-2.1% 	0.0% 	0.9% 	-3.0% 	-2.0%
2005 	18.2% 	25.6% 	14.5% 	15.2% 	35.1% 	22.8% 	35.7% 	36.2% 	31.8%
2006 	22.8% 	14.4% 	22.8% 	18.8% 	10.2% 	20.5% 	24.0% 	13.9% 	7.8%
2007 	31.4% 	18.6% 	10.4% 	23.0% 	17.9% 	17.5% 	24.7% 	21.5% 	29.2%
2008 	5.8% 	32.5% 	32.4% 	-1.1% 	11.9% 	30.4% 	-14.9% 	0.2% 	44.3%
Average 	16.3% 	13.3% 	13.6% 	13.5% 	10.8% 	16.8% 	13.6% 	10.6% 	17.1%

thought this was worth posting

6,000lbs of food from 10% of an acre

http://lewrockwell.com/orig10/spirko5.1.1.html

The individuals putting in gardens today are not thinking solely about today’s recession, they are thinking about tomorrow’s possible depression along with probable future food shortages. They are thinking long-term and understand that while today’s cash outflow is a break-even, next years and subsequent years represent independence from at least some portion of the “food system.” They also realize that long term much of our global agriculture system is in real trouble and it may not be very long before capacity of production becomes heavily eclipsed by the most basic need the global population has, the need to eat every day.

 

So what are the biggest threats we have to our food supply today? They include…

 

* Grain production has been maxed out and we have failed to meet global grain demands for 6 of the past 9 years.

* Enough U.S. produced grain to feed a half billion people for a year will be converted to ethanol in 2009.

* Many nations are now creating long-term contracts with other nations to lock up the grain being produced by the few remaining large net exporters.

* China, India, The U.S., The UK, Malaysia, South Africa and Japan are now all “net importers of food.” Translation: a combined population of over 2.7 billion can no longer feed themselves without foreign dependence.

* Many shallow aquifers have been fully depleted and the largest fossil aquifers in the world are now being depleted. 70% of global water usage is for agriculture and we are running out of the water used for that purpose.

* Companies such as Monsanto are altering food at a genetic level taking massive risks with our food supply by releasing altered genetics into the biosphere via cross pollination.

 

These six threats are just the beginning; we have also lost a huge portion of genetic diversity via the practice of “monoculture,” soil is losing fertility faster then it is being replenished and soil erosion is turning previously fertile land fallow. In short global population and demand for food is rising while the long-term trend of increasing food production is flattening and threatening to soon go into a decline.

 

This is an area where many modern survivalists are finding common ground with an unlikely ally, those heavily into the eco movement. The two sides are sill miles apart on many issues; survivalists tend to be conservatives or libertarians and the eco crowd tends to be quite liberal and tends toward a socialist or statist viewpoint on many issues. Even on the issues of gardening and permaculture there are often huge differences on why the need exists but what is agreed upon is the need itself.

 

Hence even some of those of the edges of both movements are finding a common bridge in understanding the need to create individually managed sustainable agriculture. In other words it doesn’t mater if it is “global warming” or “incompetent politicians” that will be the cause of a coming food shortage; either way the solution is individual action. That action is as simple as beginning to produce just a portion of your own food. The potential production on even small suburban lots is shocking. One family led by a self-proclaimed “agrarian revolutionary” named Jules Dervaes is currently producing about 6,000 lbs of food per year on 1/10th of an acre! While that is the extreme, if perhaps 30% of suburban homes would produce even 10% of what Mr. Dervaes is producing, can you see how large the impact would be?

 

(This video of Mr. Dervaes’ home is quite inspiring and well worth the 10 minutes required to view it.)

 

Here is the real beauty in producing some of your own food via sustainable agriculture and long-term permaculture techniques…

 

* You can do it now even with containers if you are an apartment dweller

* It has an immediate impact on your personal situation

* It has a positive impact on your health and property value

* It provides insurance against a future shortage of food (personal or global)

* Entering into your second year the savings of cash is significant

* It reduces your dependence upon several systems (agriculture, distribution, etc.)

Willie - on one...

 

Hitmen Contracts to Bust COMEX - http://news.goldseek.com/GoldenJackass/1243519200.php

 

 

 

Lordy!

 

Well, don't know about all that - but I do know I'm thinking the odds of me hedging against another round of deleveraging by selling 1/4 of my silver for $ being a good choice are seeming less favourable...

what pete waterman is gonna sort them out

The neighbours I have are as good as gold, they even suggested to me to get a cockerel, the downside is that they are always trying to buy eggs from me - lol - but I’ve got a good relationship with them, so no hassle there.

 

The place I’m renting is in a fairly rural location, the garden is a fair size.

 

Dimensions are approximate (Ft)

 

Chicken coup 15 x 10

Contains 6x chickens (One of which has recently turned "Broody")

 

Main Veg Patch 30 x 8

Containing

25x Sweet corn (aiming for at least 50 heads of corn)

8x courgette

Section of Chard

Section of Beetroot

5x Runner beans (I've had 5 failures)

 

And still a little it of space to put in some more veg

 

 

Green house 8 x 6

6x Cucumbers (have started harvesting, 2no so far)

4x Strawberry (First ones are nearly ready)

10x Tomato (Moneymaker and Roma)

4x Tomato (Bush type "Tumbling Tom")

Also...

Tray of leaks ready to go in the ground

 

 

The Patio 10x10

6x various Potatoes being grown in tyres

3x hanging baskets of "Tumbling tom"

1x large tub of Carrots

1x trough of lettuce

1x green courgette

1x small Cherry tree (Netted)

 

Around the garden

8x Tomato (Money maker)

1x White grape (not expecting much from this for at least a couple of years)

 

Has some failures, both Brussels sprout & broccoli seedling didn't really work out, and first batch of sweet corn also failed (my suspicion on the corn could be that of a rabbit problem) also lost 5 runner beans as the weather hasn't been to good.

 

Lessons learned this year...... is not to put your seedlings in the ground to early, and don't sow the seeds until very late march. (I started in mid Feb)

struggled with sweetcorn last year - only one per plant

just planted rocket, toms, broccoli, sage, sprouts and courgettes - courgettes did the best last year

have planted three apple trees, two cherries, one pear, one plum, thornless blackberry (two years ago doing very well) thornless loganberry - not doing as well, strawberrries in planters - but not great yields last year

also have an old greengage in the garden (very good for crumbles)

Good luck,

 

The only draw back to rescue chickens is that they'll obviously be past thier "peak production" but i'm sure they'll very much enjoy being outside.

 

I feed mine on Layers Pellets and a couple of handfulls of corn per day and any left over scraps from the kitchen table. The chickens I got go crazy for leftover dog food if the dog refuses it. I wouldn't throw them any peelings, thats really for either a wormery or a composter.

 

Look forward to hearing how you get on with the chickens

got them last week

very nervous at first but now more confident - the hens that is not me

getting three eggs a day from three chickens

SCHIFF ON Gold 26 May 2009

http://www.lewrockwell.com/blog/lewrw/archives/026949.html

i have a similar percentage ownership

The Dow chart "bears" posting.

 

 

What do you think will happen to the price of gold when the Dow tests new lows? Hint.... the smiley is giving the wrong hint.

another chart worth posting

http://www.kitco.com/ind/maund/may252009.html

Well, the economists' favourite joker, Anatole Kaletsky begs to differ, again.

another joker - but at least we know his motive

dont panic

By Duncan Weldon

 

S&P, the ratings agency, has placed the UK’s AAA bond rating on ‘negative outlook’. This means they are ‘considering’ downgrading it in the future. The full S&P statement is here.

 

In the context of the large expected rise in public sector debt, this is not surprising.

 

First off – let’s not panic.

 

They are talking about moving us, at some point in the future, to AA, the second highest rating. They are not saying we are heading for bankruptcy/the IMF whatever. Let’s keep some perspective.

 

Second, at 10.30am this morning (after the negative outlook), there was bond auction. We sold £4.5bn of 5 year gilts at an average interest rate of only 2.91%. Clearly the markets are not as paniced as the right is about to suggest they are. We received £13bn of bids, in other words there were plenty of people willing to lend to us.

 

Third, it’s worth reading the actual S&P release (my emphasis):

 

"We note that there is support across the political spectrum for additional fiscal tightening. However, the parties’ intentions will likely remain unclear until the next administration is formed after the general election, due by mid-2010. How quickly the government can stabilize and then reduce the government debt burden will also depend on the timing and shape of the economic recovery and whether the cost of government support of the banking system is higher than we currently assume, areas where we also see continued downside risks.

 

The rating could be lowered if we conclude that, following the election, the next government’s fiscal consolidation plans are unlikely to put the U.K. debt burden on a secure downward trajectory over the medium term,” Mr. Beers said. “Conversely, the outlook could be revised back to stable if comprehensive measures are implemented to place the public finances on a sustainable footing, or if fiscal outturns are more benign than we currently anticipate.”

 

This downgrade, if it happens, will not happen until after the election. At that point it will be imperative for the government to set out a credible plan to return the finances to balance, I favour doing it mainly through tax rises, the Tories through mainly spending cuts. Either way, the new Government will be forced to act very quickly in setting out plans.

 

I am not trying to ignore the significance of all this. But let’s keep some perspective.

slightly related

commercial not resi

http://news.sky.com/skynews/Home/Business/...ish_Land_Wipes_

UK property giant British Land has seen £3.2bn wiped from the value of its portfolio, sparking new fears that banks will suffer huge losses from their commercial mortgage lending.

 

Britain's second-largest property firm, which owns most of the City's Broadgate office development, said its net value had tumbled by almost two thirds.

 

Its land portfolio is now valued at £8.63bn, 28% down on the valuation for the end of March 2008.

Yet chief executive Chris Grigg said the firm's performance has shown "real resilience".

 

The figures will be uncomfortable reading for many of Europe's largest property lenders.

 

Jeff Randall Live

 

Banks such as Royal Bank of Scotland Commerzbank and Lloyds Banking Group are sitting on billions' worth of vulnerable commercial property mortgages at risk of being devalued.

 

Last week, British Land's larger rival Land Securities blamed a record 2008 slump in the UK property market for slashing £4.74bn from the value of its assets.

 

UK banks have so far broadly turned a blind eye to borrowers breaching the terms of their lending agreements so long as they have been able to meet interest payments.

 

Yet an uncertain economic outlook has cast doubts on their ongoing ability to collect rent from tenants struggling to cope with recession - ramping up the risk of default

real resilience

orwellian speak

US housing still over valued never mind the UK

link

The authors of the Case-Shiller index had assigned the index a value of 100.0 in January of 2000. This figure does not represent a dollar value for home prices but is simply a benchmarking tool. In December 2008, after a severe 28% decline from its June 2006 peak of 226.29, the Case-Shiller 10 City index stood at 162.1. However, if home prices had followed the 3.4% annual 100-year trend line from December 1997 (when the index was at 82.3), then the index would have arrived at only 118.92 in December 2008.

 

This would suggest that the index would need to decline an additional 27% to get back to the historical trend line. Extrapolating along the sunnier 50-year annual average increase would put the index at 132.2 by December 2008. This would still put the trend line 18.5% below current prices.

 

A cursory look at the chart below should disabuse anyone of the notion that home prices have now hit bottom. Policymakers and economists should by no means rely upon projections that see home prices turning around in the near term.

Looks like i'm not the only one scratching my head thinking why hasn't gold moved up? £ has, oil has, euro has...

 

http://ftalphaville.ft.com/blog/2009/05/20...d-bug-reaction/

watch out

http://jsmineset.com/2009/05/20/it-is-now/

This is without a doubt the most important piece of information we will present to you this year. What you will read ahead addresses the pivot point of the literally thousands of missives we have posted here on www.JSMineset.com telling you this is coming. It is happening here and now. Be prepared and stay strong.

 

We are approaching the beginning of the final drama in this unfolding OTC derivative meltdown. This is the beginning period for the 5th leg of Alf Field’s correct analysis.

 

This is the re-acceleration of the long down wave in Martin Armstrong’s Business Cycle analysis. This is the approach of the acceleration of the gold price into my price objective of $1650 by January 14, 2011.

 

Sure the US dollar will be defended at the .8100 level that has been put out there as support by the major investment banks TA departments, but it will not reverse what is now in place.

 

Yes, the COMEX gang is too short of gold for it to launch here, so the battle to prevent it will be Titanic, yet fail miserably and soon.

 

You can see the shorts of the junior gold shares doing everything known to mankind, from dirty tricks to pounding on any small gold reaction to destroy share prices, but they too will fail miserably and soon.

 

All the paper gold and share demons will accomplish is an increase in their short positions. They will not get the panic selling follow through to cover that they so desperately want.