malvern hills

'The end game is in sight' ... 'ftbs are priced out' ... 'market cannot defy gravity forever' ... 'banking crisis threatens housing market' ... 'mortgage rates rising' ...

 

Boy oh boy - it's deja vu every day for the last TEN YEARS. I find it amazing how anyone can keep it up for 10 years. Surely we really are into 'end of the world tomorrow' territory.

I guess the theory is 'there has never been a bubble that has not burst'

Housing in uk was definitely a bubble therefore......

up 2.7 % so far today.

any news or just a big reaction off the lows?

In case anyone was wondering........

 

It seems total mortgage debt is about £1.3Trillion give or take a £100Billion or so, whilst value of all residential private housing seems to be somewhere between £3.5Trillion and £4.5Trillion.

 

So add in the other housing, as the report did, and I'd guess you're not too far off the 20%LTV they suggested, April 1st or not

I think I read that 60-70% of all privately held property is in fact mortgage free. \its the rest which you would work the ltv out on .

This to me is exploitation - a rentier class. I am not dead-against this, after all I do own some shares, but I do feel that it is somewhat immoral to 'generate' rent by effectively forcing other people to work for you. Partly for this reason, I am happy to keep wealth in gold.

Regarding the fakes issue, it has been dealt with many times, yes it is a risk, but nothing is risk-free (even the "risk-free rate", lol!!). To me , it's about mitigation (e.g. use reputable sources, store it in several places etc.) and due-dilligence.

I feel your repugnance at 'making' other humans work for your living because they have no choice.

But but but, this is capitalism.

People who accumulate money, tend to accumulate more. Those who earn and spend, don't.

I feel the same as you, and it is probably why I am still not rich. I really wish I could get over it, but it seems I am past saving.

Every time I see a multi-millionaire government appointed toad trying to sell time with the PM for £250k, I want to vomit on his head.

Oh well. Back to the telly.

Sometimes links from postimage stop working for some reason.

http://postimage.org/image/tl8xxmgnb/

Great chart Van. Does it work with silver?

MORE from the guy who sees the Global economy as a machine

 

http://www.ftense.com/2012/03/economist-interview-ray-dalio.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ftense%2FsymR+%28The+Future+Tense%29

 

His HF's performance shows he understands that machine rather well

Fascinating to see how a great investors mind works.

He says we are going through a long term deleveraging, and that the average of banks assets to equity is 15-1, higher in Europe. Anyone know what the long term average is? and where the figures are reported. Then we could possibly see how far we are into the process and when the banks are likely to start lending again.

Sure. It essentially comes from the notion that not all growth is good growth - there are malinvestments that are created because of government interventions in the free market, in particular interest rates and money supply. In a free market economy the collective choices of the people are reflected in market interest rates, which are reflective of individuals' time preference, reflecting their choice between consumption and saving (ie deferred consumption).

As the BoE has not allowed the free market to operate, the economy has become structured in such a way that it now needs ZIRP and QE to sustain it. Without government policies in artificially supressing rates and printing money, we would see many firms racking up huge losses and going bust. These firms are malinvestments that have been allowed to build up in the last few business cycles.

 

 

 

What do these malinvestment mean? They mean that the market is not aligned with the natural wants of the people. If the people had massive demand for financial services, then the sector should be able to support itself without the government policy help. But in keeping these firms going, all the current policy does is deprive other sectors of the economy of resources that the would otherwise have available. The output from the factors of production as they are now will be loss-making in a truely free market - this tell us that these companies are actually value destroying - the resources could be used profitably elsewhere. Profitable companies in a free market are a sign that those companies are actually productive and are serving the wants of the people.

 

In effect, government policy is forcing us to take actions that we would not normally want to take - that are not aligned with our natural wants - therefore the companies and sectors that service this artificial demand do not build wealth. They merely exist as a part of the system that is required to destroy value by bring forward consumption in order to maintain macro GDP numbers.

 

But in an increasingly state-intervened market, GDP itself is increasingly a flawed measure of economic growth. All GDP measures is the number of transactions in an economy, yet if those transactions are artificially stimulated then they do not represent the voluntary exchange of private goods.

 

I would strongly advocate researching the Austrian theory of the business cycle for a fuller explaination, and I promise that it will all make perfect sense - why we are where we are now and why we cannot have growth without restructuring and allowing the market to operate freely.

That is a fantastically clear line of thought which I have not read before.

Thanks a lot. I'm watching the videos now.

What chance has world peace with this sort of craziness around

Because the economy is now aligned in a way that is value destroying.

Could you expand on this Van?

Because I don't think I 'know'. It has to do with the nature of knowledge, which most seem to be happily ignorant of these days. Nobody 'knows', all we have is theory/ hypothesis. This a point I often come back to, and where I have an argument with the 'dogmatists'. A hypothesis ['as if'] should be taken as only provisionally true, and never as 100% guaranteed. The strength of one's hypothesis should then be evaluated on the basis of predictive and explanatory power. Sinclair doesn't really offer a theory but a simplistic dogma or faith which is easy enough for people to buy into [based on another form of money illusion - monetarist illusion - where money is mathematically equated/ divided with the number of units]. The problem is its lack of sophistication as a falsifiable theory... not to mention its weakness in predictive power.

 

 

 

Sure, but there are alternatives to simply shouting hyper-inflation. What's needed is a more nuanced view which can take into account all the phenomena in the current economy. Something like combining the insights of those who see depreciaitng currencies with those who see an on-going debt deflation. Synthesis added to analysis. As said before, I don't think Sinclair should either be revered or ridiculed. In so far as you value your independence as a critical thinker, you should take him with a heavy dose of salt.

I wasn't defending Sinclair. As I have said elsewhere I do not frequent his site and only read what others have posted about him, and I don't like his crass delivery.

I agree that no one can know the future and so that applies to you also, hence my 'how do you know' comment.

However it seems to me he has been right in 1980 and right in the last ten years, and so maybe that is enough to warrant respect for his theory that the amount of monetary units divided by gold hypothesis will prevail again.

Sinclair's predictions are based on the dubious idea, since we are in a debt deflation, that gold is an investment/ commodity/ inflation hedge - a sponge to soak up that deluge of money that's supposed to be coming upon us.

And how do you know different?

The money is getting deposited in the CB's accounts. It will not be extinguished. At some point it will be lent. The question is will the economic output of the world be equal to it. Wait and see, but if there is no major advance in technology or energy production then we will see inflation of horrendous proportions and gold will take on the mantel of the only honest money.

In the last few days I have listened to people call into London radio stations giving opinions that I thought were outside the mainstream. 'Fractional reserve banking','money out of thin air', 'crony bankster capitalism', 'fiat money'. These phrases I have not heard in my day to day life outside these forums, but I hear them now. I don't think it will take too long for everyone to realise what QE really means. Everyone runs away from getting robbed.

The birthers wanted him to release the "Certificate of Live Birth." He finally did. As was totally predictable, the birthers now say that document was forged - which is why he resisted releasing it in the first place - you can't reason with conspiracy theorists.

 

No other US president has had their qualifications challenged in this manner. Why?

Probably because they were all born in Amerika.

Chinese aren't hlding as high a percentage of $bonds as previously, could trigger raising of $ interest rates by Us which could be bad for gld?

 

Could of been reason for gld isolated drop ?

 

Regards

 

ML

http://news.goldseek.com/GoldSeek/1330693200.php

The above might have something to do with it.

It will be interesting to see if GLD/Gold ... update

 

 

...will be still above $140 at the end of April. I expect that at least 90% of our regular posters would expect to see that. My own guess now would be that there is a more than 20-30% chance that GLD will at least touch $140 within Q2 2012.

 

What do others think the odds of that happening would be?

FWIW I think there is massive support at $1500 to $1600, and that would align with the large H and S forming on the charts. One thing that did surprise me about this recent price drop was that equities did not drop atall in comparison. From my past experience they have been correlated at the inflexion points.

I would have thought the stock markets would have dropped in lockstep if loss of further prospects for loosening policy was the trigger.

If all those worshiping Gold-rampers were to disappear, this site would only get better,

since that may leave independent thinkers with their own informed opinions

 

Today;s drop should be seen as a wake-up call, not something to shake off lightly.

Dr Bubb, please do not take what I am about to say as an attack, but I honestly think that you are acting emotionally rather than rationally.

Whatever you feel about Sinclair or what he is doing really does not matter, and should not be pushed onto the other posters here. The posters make the site and have their own views. There would be no site without them, as there would be no site without you.

You have made your opinions clear wrt Sinclair. Leave it at that and let the events unfold.

By shouting loudly all the time, it does not do your dignity any service, especially as you can see that many here do not agree, and will do as they please in any case.

Your sense that Sinclair is not to be trusted has been duly noted. Could you leave it at that?

Indeed. Chanelling you-know-who for a second, TPTB can't afford paper gold to decouple so badly with physical otherwise real gold will 'go in to hiding'. This will drive the stock-to-flow ratio of gold to infinity, create dollar hyperinflation and destroy the USD Reserve system there and then. This is why we get the managed ascent of paper gold. I suspect the central banks are targeting the minimum paper POG possible to ensure the ongoing flow of physical.

 

I think we're going to smash through the 1980-SGS CPI price in physical gold without breaking sweat. 1980 was just a dress-rehearsal for the end of the USD reserve system, with a superspike that I believe was caused by panic buying in size by the Middle East and some central banks (Iran, ironically enough) bidding for gold in the open market. Where is Volcker this time? Who is willing and able to impose mass poverty on the West with 20% interest rates?

 

 

 

Let me give you some interesting reading Malvern Once you understand that hyperinflation is a demand side phenomenon and printing is the supply side response, it becomes somewhat clearer. The question of "how do you get the money into people's hands" is practically irrelevant and misleading.

 

http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post.html

http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post-part-2.html

http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post-part-3.html

http://fofoa.blogspot.com/2011/04/big-gap-in-understanding-weakens.html

http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html

 

And folks, please do drop by the golbu.gs chat room to share your forecasts, charts, pictures of rockets - whatever - as we watch this gold market unfold.

Thanks Quiff, will do.

http://www.zerohedge.com/news/bob-janjuah-markets-are-so-rigged-policy-makers-i-have-no-meaningful-insights-offer

Good article from Bob Janjuah, coming to to much the same conclusions as many on GEI.

The big kahuna or the bursting of the latest liquidity driven bubble 'could, be 5 days, 5 weeks, or 5 quarters'. He also says he expects the DOW/Gold ratio to resolve at 7000 in a deflationary credit collapse rather than at 14000 and hyperinflation, because Bernak and Draghi will loose their mandate from the population to print before the public looses faith in the currency.

Hmmmm....- I think I got a new catchphrase.

Why not? But it all depends on our politicos and banksters, and how much they will pump.

So what we are saying is that gold will appreciate with respect to houses and fiat, and that houses will depreciate relative to fiat, such that we get a nominal fall. Therefore houses will do the worst of the three.

Hmmmm.

double post from housing thread

If the price of houses in gold goes towards 100 ounces, surely this will mean that if gold is also to rise, houses priced in fiat will not see a nominal fall.

You can't have gold going up in terms fiat as well as houses if they are to fall relative to gold as well surely?

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9084492/Interest-only-mortgages-Lloyds-and-Halifax-tighten-lending-criteria.html

 

WHAT? What are these turds thinking they're doing? House prices will crash & burn! I hope these banksters will pay themselves a nice bonus for this.

If the price of houses in gold goes towards 100 ounces, surely this will mean that if gold is also to rise houses priced in fiat will not see a nominal fall.

You can't have gold going up in fiat as well as houses if they are to fall relative to gold as well surely?

Why not? A couple of months back when you started posting, you came across as someone who does not know anything. I took almost 2 years to formulate opinions about most financial gurus and now I know whom to listen and whom to avoid.

 

I wonder what was it about Sinclair which turned you off? You can choose to not answer, but I would like to hear your opinions as there may be an angle I have not explored. Thanks in advance.

I can understand why some don't like Sinclair. The 'Dear extended family' bit comes across creepy.

But you can't take away the fact that he made an almost unbelievable call on gold $1650 from ten years out. Ok, he was a few months amiss , but anything could have happened in a decade.

I for one think he knows what he is on about, even though I might not like his communication style.

You all are "my children", some in need of... / haha, just kidding

:lol:

There are suburbs and there are suburbs. The fact that you can't get around without a car, is I think, peculiarly a North American trait, fuelled(pardon the pun)by cheap Saudi oil . The suburbs of London are comparatively well supplied with public transport and the retail areas are still mostly accessible without a car.

I grew up in a city a suburb and in the country. I much preferred the country to the city and the suburbs were a nice compromise, considering employment options for my Father. I now live on the edge of suburb/country, and I think this is the perfect compromise for adults and children alike.

The fact that they may or may not be bankrupting the USA is not the overriding criteria for them being the first choice of families trying to bring up the next generation.

It is the fact that you can, to a certain extent, control you immediate environment ,privacy and security that makes suburbs a good choice for families, rather than trying to run the gamut of air and noise pollution caused by the high density of people and vehicles in inner city areas. Not to mention the low income ,low aspiration, crime and drug ridden ghettos that scar all cities around the globe.

The suburbs are not to blame for some of America's ills. It is the malinvestment and lack of planning for dwindling resources that makes them a liability, and that is not the fault of the families that live there.

Wait till he has kids

Forgive me for being presumptuous, but I honestly don't think he is the kids type.

If we start confiscating gold in Britain, we'll destroy the reputation earned over what - 400 years? - for respecting financial property rights in the City. That means no CNY trading hub for the Chinese, no more LCH.Clearnet, LIFFE, LME, LBMA, no more investment banking and no more scared billionaires seeking safe-haven. In the words we'll destroy the only remaining 'industry' in which we're a global powerhouse. Britain will never ever harm its banksters.

 

There are places to store your private property that have survived two world wars without so much as a broken hinge, so I don't even think a 'Mad Max' scenario is a threat to your stash. I'd be more worried about corrupt or incapable police officers on fishing expeditions. After Operation Rize I wouldn't trust the Met police for example, so my gold is in the City of London.

I agree, that's why mine is in a vault in a small landlocked European country, where I can freely buy and sell at 0.5% commission.

...get the metal into your hands and then place it someplace only you, and/or your trusted confidants, know about.

 

This is not difficult.

So that only you and your confidant know when its been stolen?

I hope you are talking about a secure facility with insurance. Otherwise it will be confiscated or illegal to trade anyway. If Mad Max happens you and me are fooked unless we are able and willing to use a gun. Keep a little hidden and a lot where it is safe, I say.