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Expect $2,000 Gold & A Massive Squeeze In A Key Commodity Today a legend in the business told King World News, “... we are going to see an incredible squeeze,” in a key commodity that nobody is watching. Keith Barron, who consults with major gold companies around the world, and is responsible for one of the largest gold discoveries in the last quarter century, also said this commodity is, “... going to go parabolic.” Barron also said we will see $2,000 gold within months. Here is what he had to say: “Certainly the gold price has been moving up nicely over the past couple of weeks. Part of this rise has been in anticipation of this Jackson Hole meeting in a few days time. Everyone is expecting that Bernanke is going to come through with an announcement for QE3.” Keith Barron continues: “Nobody really knows what they have up their sleeve, whether it’s going to be direct asset purchases, but something needs to happen. The jobs situation is not improving. Global economic indicators are continuing to turn down, and things are not getting any better for the American people. There is an even worse situation in Europe right now... “People believe the ECB is going to throw around a lot of money to help ease the dilemma in Europe. Greece really has an incredible problem right now because they are going to have to roll over their debt in a matter of weeks if not days, and nobody knows how they are going to do it. So the ECB is going to have to step in and somehow bail this situation out. Of course they are meeting incredible resistance from Germany. The Finns are also now talking about pulling out of the euro. But I think if Finland does that it might be the end of the euro. It will start to unravel very, very quickly. . . . Barron gave this forecast for the next 6 to 12 months: “Over the next six to twelve months I expect to see an incredible amount of money printing. I also believe we will see a turnaround from talk of deflation, and it will flip very rapidly and in dramatic fashion towards inflation. The inflation will be jump-started by this incredible amount of money printing. All of the money printing that’s going on right now is not having enough of an impact to turn the interest rates and inflation around. But at some point it will. It always has in history. It will flip the other way and it will do so drastically. /more: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/29_Expect_$2,000_Gold_%26_A_Massive_Squeeze_In_A_Key_Commodity.html

"Well someone had to " No doubt, it looks like an important breakout. And it came at a seasonally favorable time (out to early October, in most years) I grabbed a part of the image for this:

True Mo.: Rt'mov : London : Rest of UK %chg / Nt'wide : H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx 2012 J. : : 224,060 : 438,324 : 146,967 - 0.28% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% : F. : : 233,252 : 449,252 : 149,658 +1.83% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% : M : : 236,939 : 455,159 : 151,853 +1.47% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% : A : : 243,737 : 464,944 : 152,815 : +0.63% / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% :149.8% : M : : 243,759 : 469,314 : 152,803 : - 0.01% / 166,022 = n/a = 160,941 161,785 : £163,904 : +0.77% :148.7% : J. : : 246,235 : 477,440 : 153,332 : +0.35% / 165,738 = n/a = 162,417 163,240 : £164,489 : +0.36% :149.7% : Jl : : 242,097 : 460,304 : 151,633 : - 1.11% / 164,389 = n/a = 161,094 162,619 : £163,504 : - 0.60% :148.1% : A : : 236,260 : 454,875 : == ? == : =n/a= / 164,729 = n/a = ====================================== mom:- 2.41% : - 1.18% : Est.DI :: 144.5% / +0.21% = n/a = :- 0.81% : - 0.38% : - 0.60% : But this is normally a weak month, so the upmove is surprizing, and Rightmove was down over 2%

A bit of a shocker (especially after the Rightmove declines) Despite UK house prices rising by 1.3 per cent in August to £164,729, house prices are still 0.7 per cent lower than one year ago, data from Nationwide has revealed. Data from Nationwide’s monthly house price index showed August’s rise was the largest monthly increase since January 2010, reversing the declines recorded in the previous two months. Robert Gardner, Nationwide’s chief economist, was surprised by this rebound, “given the difficult economic backdrop”, but warned that too much should not be read into monthly price changes as these can be impacted by a number of one-off factors /more: http://www.ftadviser.com/2012/08/31/investments/economic-indicators/nationwide-reports-largest-house-price-increase-since-YmL3CJUa3fgDz0iB1NlsXI/article.html

WEAK DEMAND, despite lower mortgage payments (due to financial repression): Richard Donnell, director of research at Hometrack, said: "The balance between housing demand and supply is widening, suggesting further downward pressure on prices. "Demand is up by 10% over the year to date while supply has grown by 19%." Meanwhile, Halifax has mortgage costs at a 15-year low, with typical payments for both first-time buyers and home movers taking out a new loan at 26% of take-home pay in the second quarter of this year. Affordability has significantly improved in each of the UK's 12 regions since 2007 and typical mortgage payments as a proportion of earnings have seen the biggest falls in Northern Ireland, where they have dropped by around two thirds. Payments have nearly halved in Wales, Yorkshire and the Humber, and Scotland since the peak of the market five years ago, according to the findings. The study put the increased affordability down to static and falling house prices coupled with low mortgage rates by long-term standards as the Bank of England maintains the base rate at a historic 0.5% low. Even in London, where house prices have remained relatively strong due to strong overseas buyer demand, potential payments for a new borrower have reached around 35% of disposable earnings compared with 56% five years ago.

Gold is at an important level. Talking won't get it through Resistance. Buying might

KWN: "Today King World News is reporting on the stunning developments taking place in the gold and silver markets. Acclaimed commodity trader Dan Norcini told KWN that in the metals markets, “... we’ve had a huge amount of short covering.” Norcini also stated, “Those shorts got hit hard this week, and a lot of them ran for the exits. These guys got caught with their pants down.” Hmm. Why don't they talk about something more important, like: GLD/ Gold has run up to an important Resistance level, and will need Fresh Buying to punch through it GLD ... update KWN is heavily biased (as a Bull) They always give the Bullish news, and you don't here about the Bearish parts of the story until AFTERWARDS, when the price is lower, and they are trying to talk it back up again. Is that type of "news" really helpful? On GEI I try to do better, and talk about things that will move the market BEFORE the move occurs.

"I argue that there is 6,500 tons of demand and 4,000 tons of supply (each year), and the extra 2,500 tons is coming out of central banks that are leasing it. Imagine if they just stopped leasing it. Who knows where the price would go? You would get such chaos (disorderly upside trading in gold)." Whomever bought it from the CB's might lease it. Or more gold miners could sell forward Gold

I like it, CS. We need a new thread: Freedom is... Starving the Monster While exiting "the system" Or something like that - Your own title could easily be better Can you start it, using the post above? I will happily contribye

I call it the "stupid tax". Don't pay it. Let stupid people pay it. How do you do that? Get rid of your car. But that means living somewhere that cars are not necessary. This is what is benefitting London, the Great Walkable City

Another Frigging Lie ! New builds worth more than period properties 24 August 2012 Period properties have slipped down the value scale according to a new survey. The research by CBRE has found that new build flats in London are worth approximately 30% more than older ones. The gap is most pronounced in Kensington & Chelsea where new builds were sold for 55% more than older flats. “New builds are outperforming old properties for several reasons,” Jennet Siebrits, Head of Residential Research, CBRE. “For the buyer, new builds come with the reassurance of the NHBC 10 year guarantee. For the seller, particularly in prime boroughs where land values are high, properties need to look and feel contemporary in order to secure the best prices.” London boroughs showing largest new build premium on flats sold in 2012 Q2 /see: http://www.londonlovesbusiness.com/property/residential-property/new-builds-worth-more-than-period-properties/3280.article === === I hate this type of distortion : It needs to be called the GARBAGE that it is! This only tells us that buyers are paying TOO MUCH for newbuildings. The only way that New builds "outperform" are in the Excessive prices that Builders achieve when they sell them. This story is spun to have the exact opposite meaning from what the numbers really show: Newbuildings are priced too high ! Does any one believe this ridiculous spin? Shame on the spinning liars at CBRE. (comment from there): 4. drewster said... New-builds are being bought by overseas investors; native Brits tend to go for the period properties. That alone could account for the difference. However I suspect the real truth is that so few new-builds are erected these days that the numbers are statistically insignificant. I can't imagine that a new-build in Hounslow would be worth more than one in Richmond; therefore it must be statistical noise.

Too many government employees in London? YE-AH !! Actually, it is a good point, which is easily forgotten. With London being the CENTER of UK government there are loads of government-created jobs there - and ontop of that there is a multiplier effect, where businesses that sell to government (contractors of various sorts) and parasitic hangers-on (like lobbyists and media) want to be close to their "customers" and so they are in London too. Home prices are falling all across the UK, apart from London, and taxes are being collected from places where home prices are down. These taxes are feeding the bubble in London. If the UK really wants to do something about high house prices, then they should be finding a way to shift tax-supported government jobs away from the capital. Many other countries have done that. Why does the UK resist this obvious "fix"? Is it because too many powerful people benefit from London's hosueprice inflation? If I lived outside the capital, and was watching my home price collapse, while my taxes go up, to feed the centre - I would not be happy. Isn't that what we saw in the Hunger Games - an imperial city at the centre, where all the wealth and power is concentrated, at the expense of the poorer districts: What happened there, eventually, was a Rev01ution

Where are you located? There have been plenty of falls in the UK, you don't need to cross the channel to find them

Er, are you really so angry? Or joking? I do live in HK, and so find it objectionable. Instead of getting angry, I started a thread on a Hong Kong chatboard, and entitled it: Avoiding overpriced London property My purpose: Tell the truth, as an antidote against Estate Agent lies... much like on GEI. One of the bulls, who may be an EA for all I know, started his own thread: Central London Property Outperforms ... Bit-by-bit, I plan to pull his arguments to pieces, and expose the false notions beneath them. Anyone want to help?

Why not... so long as you wait for a pulback on light volume

"No one has ever managed to export a house" TRUE But the next best thing is getting a bloody foreign to buy your overpriced new stock, since the loss will then go overseas, and the property remains at home, as available supply. It is a sophisticated Con Game, that has been played for years. But eventually, the suckers figure it out - But maybe not until after the losses appear. The latest Galliard project being brought to HK

Short EXCERPT ==== I suppose I also shouldn’t be surprised that both the government and Alastair Darling put forward housebuilding as one of the solutions to this problem of a lack of growth. Neither seems to have considered the following factors: 1. An obsession with home 'ownership' (with a 100%+ interest only mortgage-hence the inverted commas) was part of the cause of the financial crisis; 2. In the most successful economy in Europe-Germany-less than half the population own their home; and 3. No one has ever managed to export a house.

It is a headache for the Government and ministers are only too aware that the NewBuy programme to help first-time buyers get on the housing ladder and the Funding for Lending Scheme aimed at boosting mortgage lending are not enough to kickstart a housing boom. It’s ridiculously expensive for people to buy houses in this country,’ said Housing Minister Grant Shapps. ‘The housing bubble locked a generation out. I’m in complete agreement there’s a housing crisis.’ . . . We are very pleased to get ourselves in such a strong position.’ But despite the bullish updates – which have been echoed in recent months by rival builders including Barratt Developments and Taylor Wimpy – experts reckon just 100,000 homes will be built this year. ‘We haven’t been building this few houses outside wartime for 100 years,’ said Bovis boss Ritchie. The big problem is mortgages – or the lack of them – and the men in hard hats say they will only build more homes if they can sell them and that means freeing up the mortgage market. It is a view shared by Shapps. ‘You can’t solve this by building homes that no one can afford to buy,’ he said. The Government introduced NewBuy last March to protect banks against losses if they offer mortgages to buyers with only a 5 per cent deposit as long as they are buying new-build houses. Dim politicians ! Look at the chart: The problem isn't MORTGAGES - it is that at current levels of LAND PRICES, there is only one easy way to make money... Why take the risk of buildings loads of New homes all across the UK, when you can make better money selling homes branded as London "Prime" in 2nd-tier locations to gullible foreign buyers - who then just rent them out to house-hungry locals. They will keep on buying until they discover their fingers are getting burned. It is time for some SHOCK therapy. Take The Hit that should have been taken long ago, as the USA and Ireland have down. ALLOW home prices to Go Down! That will push land prices lower, and allow surviving Builders to replenish their land banks more cheaply, then they can get back to doing the business they should be doing.

It is a headache for the Government and ministers are only too aware that the NewBuy programme to help first-time buyers get on the housing ladder and the Funding for Lending Scheme aimed at boosting mortgage lending are not enough to kickstart a housing boom. It’s ridiculously expensive for people to buy houses in this country,’ said Housing Minister Grant Shapps. ‘The housing bubble locked a generation out. I’m in complete agreement there’s a housing crisis.’ . . . We are very pleased to get ourselves in such a strong position.’ But despite the bullish updates – which have been echoed in recent months by rival builders including Barratt Developments and Taylor Wimpy – experts reckon just 100,000 homes will be built this year. ‘We haven’t been building this few houses outside wartime for 100 years,’ said Bovis boss Ritchie. The big problem is mortgages – or the lack of them – and the men in hard hats say they will only build more homes if they can sell them and that means freeing up the mortgage market. It is a view shared by Shapps. ‘You can’t solve this by building homes that no one can afford to buy,’ he said. The Government introduced NewBuy last March to protect banks against losses if they offer mortgages to buyers with only a 5 per cent deposit as long as they are buying new-build houses. Dim politicians ! Look at the chart: The problem isn't MORTGAGES - it is that at current levels of LAND PRICES, there is only one easy way to make money... Why take the risk of buildings loads of New homes all across the UK, when you can make better money selling homes branded as London "Prime" in 2nd-tier locations to gullible foreign buyers - who then just rent them out to house-hungry locals. They will keep on buying until they discover their fingers are getting burned. It is time for some SHOCK therapy. Take The Hit that should have been taken long ago, as the USA and Ireland have down. ALLOW home prices to Go Down! That will push land prices lower, and allow surviving Builders to replenish their land banks more cheaply, then they can get back to doing the business they should be doing.

Thanks to Wed.2 for this: http://mhanson.com/archives/1013?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MarkHansonAdvisers+%28Mark+Hanson+Advisors%29

"housing will go into a ”triple dip” in the next couple of quarters" So the US Property Bust... is not yet over

To get from Gross Yield (cf. 5.20%), to Net Yield, he takes off 1.60% = 3.60% And then he subtracts 20%, for an After Tax return of 2.90%. He then assumes a 5% mortgage interest rate, to arrive at a negative return. === This is unrealistic. In a time of financial repression, it is tough to find a reliable return as high as 5%, so borrowing less, and getting a lower interest rate makes great sense. Also, if you live in the property, you eliminate some costs: + The void period + The agents fee for renting it + The tax With these amounts added back, the investment looks much more compelling, especially if you think rents will rise.

After threatening to breakout to the upside (on big profits) BDEV ... update UK BUILDERS may be signalling that something Bearish is underway Looking Good, Bill Ray ! BDEV : -3.78% PSN- : -2.01% Ch-ch-changes !

Is the Peak Profits Party Over ? So what did we see yesterday ? A nice dramatic reversal in Persimmon (Har-de-Har-Har = a full-throated chortle) PSN : 697.00 - 8.00P / -1.13% O: 705.00 / H: 717.00 / L: 678.75 Vol.: 2.05 million BDEV : 153.40 +1.20P / +0.79% O: 153.00 / H: 154.40 / L: 152.20 Vol.: 4.55 million Will BDEV follow PSN down today / Wednesday?

You will enjoy this, MM