drbubb

HOUSE PRICES versus Inflation: Myth versus Reality I think it will track Net Incomes, more than inflation And in fact, if food and or energy prices are pushed up by Cost-push pressures from abroad, then people will have LESS MONEY to put into housing I went back and studying inflation rates during Weimar times - and that is exactly what happened: Food prices had 100X the inflation rate of Rents - I think that is very telling !

I think it will track Net Incomes, more than inflation And in fact, if food and or energy prices are pushed up by Cost-push pressures from abroad, then people will have LESS MONEY to put into housing I went back and studying inflation rates during Weimar times - and that is exactly what happened: Food prices had 100X the inflation rate of Rents - I think that is very telling !

I am watching the 8day MA on GLD - GLD-chart A close above it would be a positive indication

Get those rockets ready ! From DrBubb's Diary

"repayment vehicle" ? Selling the property - what else? But if they lend too high a LTV, it is an inappropriate risk

BvScherff* (& his cronies) may have stolen it *Real name

Correction In Silver Is A Longer-Term Opportunity October 19, 2012 | 69 comments | includes: PSLV, SIVR, SLV As the author of SilverPriceAdvisor.com, I'm now advocating accumulating a large overweight position in silver relative to gold. First of all, just like stocks, high yield bonds, and most investment asset classes, I think precious metals peaked in price short term right after the Fed QE3 announcement. That is why my subscribers and I choose to take profits at the beginning of the fourth quarter, and reduced our precious metals ETF model portfolio exposure from the equivalent of 140% invested down to only 50%. It is also why I was taking profit gains in the mining stocks at the end of the third quarter. Since I now believe there is more opportunity in the silver market over the next two years relative to gold, and my subscribers and I have cash, the 7.4% correction in silver in the last two weeks has been welcome. However, there are three very important things that you must understand about the silver market before purchasing an overweight position in this commodity: The most important thing you need to know about the silver market is that it will trade with about 300% more volatility than gold does. This means if gold is up or down 1%, silver will probably be up or down 3%. The total silver market is a fraction of the size of the gold market in dollar amounts, so the market is less liquid. Relatively small amounts of money in or out of the market will produce sharp price swings. Because there are only a few large institutions, such as JPMorgan and HSBC, that dominate the market making of silver and are also the custodians of the large inventories, it is an easily manipulated market. So before entering the silver market, you have to be prepared mentally for the volatility you will be exposed to. . . . I'm also changing strategy somewhat. Friday, I began buying a new 10% position in Sprott Physical Silver Trust (PSLV). This vehicle trades more like a closed end fund than an ETF although it is technically neither. It currently trades at a 4.16% premium to its net asset value, which basically means you pay $104.16 for only $100 of physical silver, which seems illogical when in the other ETFs, you pay very close to Net Asset Value. However, it does have some advantages over the other major ETFs, like the iShares Silver ETF (SLV) and ETF Securities (SIVR). The iShares Silver ETF uses JPMorgan as its custodian in New York, and because JPMorgan is the largest manipulator of the silver market, I would never invest in this ETF. /more: http://seekingalpha....erm-opportunity

Here it is: (as posted here previously by GF):

You can post it there if you like. Please give us the link to the thread, since I would like to see the reaction

UK Property (in Gold) is still in a clear downtrend : /source: http://gold.approxim...old_charts.html Calculation : xx

This sorts of articles are so funny. They say: "prepare for a pullback, when the pullback is already well underway ... and may be nearly over." What use is that. GEI was saying "prepare for the pullback" when it was about to start, now we are getting set for the upturn. Gold: Still Long Term Bullish, But Prepare for a Pullback BY SY HARDING10/19 After experiencing a remarkable bull market run from $250 an ounce in 2001 to $1,900 an ounce last summer, gold has not. /more: http://www.financial...re-for-pullback Read it, because the upturn is not guaranteed, even though I am expecting it. Sentiment is "too bullish" he says, and "may need cooling."

$1,900 Gold - At the Crossroads Monday October 15, 2012 11:02 Figure 1 – Oil Volatility Relative to Gold & Recent Gold Highs Oil volatility, or vol, relative to gold is shown by the gray squares and lines. Superimposed on this plot for comparison is a scaled Comex gold price history in yellow diamonds with its one-month moving average in dashed black lines. On Oct. 4 gold made its latest high 2.8 months after the 4.50 times super-spike as volatility descended below parity at 0.87 times (green box and arrow). Price has since trended down and bearishly crossed below its one-month average (red ellipse) as volatility now appears to be leveling out at the 0.74 times level (green ellipse). If vol reverses to the upside from here, history suggests the rally is over. On the other hand, a further decline in vol may indicate that gold is only pausing as it awaits new impetus for the next leg up. My last commentary suggested that gold was on track to reach $1,900 per ounce by mid-November (large yellow diamond in Figure 1) if vol does continue to fall and the value of the yellow metal maintains its favorable relation with global commodities oil and copper and companion metal silver (Ref 2). As measured by my Eureka Miner’s Gold Value Index© (GVI), an aggregate value based on all three commodities, gold still meets two conditions for higher-highs: 1. Gold value will be historically high relative to commodities copper, oil and silver – The Friday GVI was an elevated 98.82; the “high-value” benchmark is 100 2. Gold value will be above the six-year trend line relative to these same three commodities – The Friday GVI is above the 6-year trend; 98.82 versus 98.48 The $1,900 per ounce prediction was based on exponential fits of previous benchmark records that occurred after oil/gold super-spikes. /more: http://www.kitco.com/ind/RichardBaker/20121015.html

METALS OUTLOOK: Gold's Weakness Could Continue Next Week 19 October 2012 In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, six see prices up, while 13 see prices down, and five are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts. Gold prices fell this week as some market participants became disenchanted by the yellow metal’s inability to take out the $1,800 level. In recent weeks the metal saw a lot of buying interest in anticipation and confirmation of a third round of quantitative easing, but there wasn’t enough momentum to push it through the psychological ceiling of $1,800. Coupled with improved U.S. economic data, some market participants began to question future U.S. quantitative easing expectations, analysts said. Further, several industry watchers said with three weeks to go before the U.S. presidential election there’s a bit of hesitancy to put on positions until afterward. Frank Lesh, futures broker at FuturePath Trading explained gold’s recent downward move. “Gold is still suffering from long liquidation as traders lock in profits from the $200 move we have had since August. The dollar has found support and is turning higher with the euro hitting resistance and now turning lower,” Lesh said. Friday’s close under $1,729 made it the lowest close in a month and Lesh said because of it, he forecasts gold testing how strong of support there is at $1,700. “The fact that we could not exceed last week’s high of $1,759 … is also negative. Comex gold stocks are the highest since March. A large shift in sentiment for gold is the loss in perception of safety,” Lesh said. /more: http://www.kitco.com/reports/KitcoNews20121019DeC_outlook.html

From DrB's Diary

Nothing wrong with that. It may be one of the few safe places to hide, depending how the Redesign of the Global currency goes. I am looking at this very, very carefully - it may prove to be a vital matter for us all: Sound Money, and the Redesign of Our Global Currency: http://www.greenener...showtopic=16879 I strongly recommend that you listen to the Project Camelot interview with the Insider

Well-informed elites, who saw the Gold price upswing coming, and were operating on a long term time horizon "I have to admit that the above list of country's has shocked me." The BRICS and other non G10 countries may indeed be planning a new currency, as Ben Fulford has written

You can say that, and believe it, only if the trend does not continue

SLV at 18% of GLD should be a BUY GLD : x18% $170 : $30.60 $168 : $30.24 $166 : $29.88 $164 : $29.52 $162 : $29.16 $160 : $38.80 Silver-to-CRB : Low due soon at 10% ( 0.10 Ratio ) ?

US REAL ESTATE - Puru Saxena is getting Bullish Turning to the world’s largest economy, it is encouraging to note that its housing market seems to be bottoming out. Amidst all the doom and gloom, at least this is one bright spot and a sustainable recovery in this sector will surely improve consumer sentiment. At this stage, there is no way to know whether America’s housing has already hit rock bottom, but the recent uptick in housing starts and permits are positive signs. Over the long run, income and household formation determine the state of every real estate market. Generally, property prices rise in line with household incomes. During a real estate boom, both valuations (price to income ratio) and new construction rise above their historic trend. Furthermore, the availability of cheap credit and relaxed lending standards fuel the euphoria and rising prices generate a herd mentality. During the final phase of a real estate boom, property becomes a national obsession and people delude themselves into believing that ‘this time is different’. After several years of rising home prices, the participants become convinced that their market is somehow special, therefore not subject to the laws of economics. Interestingly, such misplaced optimism is almost always accompanied by the usual misconceptions (land is scarce, home supply is limited, central banks cannot print houses, affordability does not matter etc.) Unfortunately, no real estate boom lasts forever and the quality of the hangover is alwaysproportionate to the extent of the indulgence i.e. the bigger the boom, the bigger the bust. After the boom has turned into a bust, the opposite occurs during the downturn. Both, valuations and new construction fall below their historic trend. Furthermore, credit becomes scarce, property transactions evaporate and there is a buildup of unsold inventory. Last but not least, optimism and euphoria are replaced by outright despair. Whether you agree with it or not, mean reversion is the most reliable feature for any real estate market. Although real estate is one of the most cyclical assets (prone to extreme booms and busts), the property cycle is lengthy in duration and quite difficult to read. For instance, most market participants are unable to tell where they are in any given cycle. In terms of the US real estate market, history has shown that its gyrations follow a somewhat regular pattern. In fact, between 1960 and 1990, real US home prices peaked every 10 years (in 1969, 1979 and 1989). Thereafter, a long 17-year interval occurred before the next top in 2006 and it appears as though Mr. Greenspan’s easy money policy extended the most recent real estate cycle. Today, inflation adjusted real estate prices in the US are well below trend and mass euphoria has been replaced by abject despair. Thus, it is conceivable that America’s housing market is now bottoming out and getting ready for the next upswing which may last for at least 10 years. ==== /more: http://www.kitco.com...a/20121012.html

I started a New thread around this Call

Welcome, Gallivant It is always good to have a new "long term lurker" onboard/ It will be interesting to see your future posts on the Gold or Silver threads, and whatever else may appeal to you, even in The Fringe Section, if the material there interests you. New ideas, and new posters are welcome here

Surprise question at the Presidential debate - 'Has the Fed sold all its gold?' Wednesday, 17 October, 2012 From: "Gray, Jeremy" (StanChart) ===== I spent yesterday going through the recent World Gold Council data on central bank purchases over last 12 months. The numbers are staggering and it’s the new buyers that are the surprise. Take Turkey - in the last 12 months (July ’11 – July ’12) they have bought up exactly 100 tonnes of gold. To put that in perspective that is about the same as what the gold industry will add each year for the next 4 years from the 56 greenfield gold projects and 70 brownfield expansions that are currently under construction around the world. Even Mozambique is joining the action and is now the 3rd Central bank in Africa out of their 56 to own gold. If you annualize the first half purchases of these 10 countries they could account for 370 tonnes of demand this year. So far China has net imports of 302 tonnes up to August. In this chart we take out China to show you what the next 10 big buyers look like. Who would have thought the Philippines would buy 35.3 tonnes in the 1st half of 2012 (Philippines now has 92 times more gold than Hong Kong). It really makes you wonder, where is all this physical gold coming from when the industry can only deliver around 100 tonnes of extra gold a year while Central bank buying is now running at around 600-800 tonnes this year. You have probably seen Eric Sprott’s recent article called Do Western Central Banks Have Any Gold Left. Of course he is biased running one of the largest gold funds in the world but it’s an interesting read. Ten Biggest buyers of Gold in last 12 Months (ex China)

Sure - rising now at something like 0.5% PER WEEK ! Thanks to those low rates - but HK has none of those debt problems that the UK and the US have

From the Central London Property thread... Residential property is very heavily exposed to the risk of rising rates - that worries me 10 Year UK Gilt Rates - just off the long term lows

Residential property is very heavily exposed to the risk of rising rates - that worries me 10 Year UK Gilt Rates - just off the long term lows