<< <i>Im bored so I figured I would try to put 10 Trillion into perspective since I am having a hard time trying to grasp just how large a number this is. So here goes.
Light travels at 186,000 miles per second and since $186,000 is a decent chunk of change I thought the speed of light might be good context. Lets assume that $1 is the same as 1 mile.
In one minute light will travel 11 million miles/dollars. In eight minutes light will travel to the sun, 90 million miles/dollars. In one hour light will travel 670 million miles/dollars. In one day light will travel 16 billion miles/dollars. This is already a very large number and we have been traveling at the spped of light for 24 hours. In one week light will travel 113 billion miles/dollars. In one month light will travel nearly 1/2 a trillion miles/dollars or 2683 round trips from the earth to the sun. In one year light will travel 5.9 trillion miles/dollars. Now were getting somewhere.
Sooooooooooooo......10 Trillion miles is the distance light will travel in 20 months. This is also about 1/2 the distance to the nearest star--Proxima centauri
Dang, 10 trillion is big number!!!! >>
cohodk, that was a great. I love that comparison. Even a moron can understand that. Now I have to go find some morons to convince why we are entering a black hole.
I don’t know how many of you saw the Howard Ruff article the other day on Kitco. But Mr. Ruff has a bunch of his money in this, Central Fund of Canada Ltd CEF:AMEX.
For those that want to play a paper fund while the metals are down this week, this appears to be pretty good, as opposed to SLV and GLD, which may be controlled by the Wall Street boys, or may not have all the bars at all?
What is most interesting about this fund is that its largest shareholder is one of Canada’s largest banks, which paid $10.50 for over $200 million in stock, and I am sure the bars are stored at that bank.
Today’s price is currently $10.49.
CEF : Is both a gold and Silver fund.
Central Fund of Canada Limited (Central Fund) is an investment holding company. Central Fund's objective is to provide investment alternative for investors interested in holding marketable gold and silver related investments. The Company invests virtually all of its assets in long-term holdings of unencumbered, allocated and segregated gold and silver bullion. The Company holds at least 90% of its net assets in gold and silver bullion, primarily in bar form. As of October 31, 2008, the Company's assets were made up of 58.9% gold bullion, 37.4% silver bullion and certificates, 3.7% cash and interest-bearing deposits and other working capital amounts.
The only problem with CEF is that it is a closed end fund with a fixed number of shares and those shares trade at a premium to the underlying asset. CEF's premium fluctuates from 10% to 20%. So you are buying gold and silver at 10% to 20% more than spot.
When CEF issues new shares, it does so to large corporations who buy that stock at the NAV, or at the value of the assets without the premium. If you can buy at that price without paying the premium, its a great deal. I've held CEF in the past but would make a 50/50 investment in GLD/SLV at spot prices instead.
The other thing about producing oil and gas from Shales, is that the production rate tends to fall like a rock. So yes, you might hear of a well that made 1,052 bbls per day... but what was it doing a *week* later? We've had shale wells that looked great initially, but 6 weeks later were producing 95% LESS.
Figures on government spending and debt Friday April 17, 2009, 7:45 pm EDT
Total public debt subject to limit April 16 11,125,587 Statutory debt limit 12,104,000 Total public debt outstanding April 16 11,183,899 Operating balance April 16 257,351 Interest fiscal year 2009 thru February 148,762 Interest same period 2008 198,518 Deficit fiscal year 2009 thru February 764,525 Deficit same period 2008 264,541 Receipts fiscal year 2009 thru February 860,877 Receipts same period 2008 967,153 Outlays fiscal year 2009 thru February 1,625,402 Outlays same period 2008 1,231,694 Gold assets in March 11,041
There still could be some value in TRE properties, but it really looks like Sinclair's romanticised reputation, amoung gold entusiasts had seriously inflated the value of this stock in relation to its peers.
The action on TRE on Thursday and Friday would indicate that it took it's lumps well before the more well known institutionally held miners this past week. It was one of the few miners to gain on Friday, and only 1 of 2 listed on Kitco that exceeded +1% for day (it saw +4%). This while most of the highly rated miners saw drops of -3 to -7% on Friday. TRE has retraced 60-65% of it's gains since the bottom of 2008. It's not that far off the others which have retraced up to 50%. In fact Barrick has seen the same 60-65% retracement. There may have been something to giving JS a dump before the rest of the market. In the end, they have all ended up about in the same place.
WSJ reports U.S. and European banks need to raise $875 billion in equity by next year to recapitalize banks to a level similar to the pre-crisis years - and twice that amount to match the level of the mid-1990s, the International Monetary Fund estimated. The steep funding requirements reflect a financial crisis that the IMF said continues to deepen along with the global recession. The banking sector's woes have spread from the housing sector to commercial real estate loans and emerging-market debt. Overall, the IMF estimates that the U.S., European and Japanese financial sectors face losses of about $4.1 trillion between 2007 and 2010. Of that amount, banks are confronting $2.5 trillion in losses, insurers $300 billion and other financial institutions $1.3 trillion. The banking sector has already written down $1 trillion of those losses, said the IMF, which didn't estimate how much other financial firms such as insurance companies and hedge funds, have written down thus far
Dan Norcini comments on the above chart spreads. What is interesting is that the price diff between the April to June contract has systematically dropped from -$6.5 to -$0.50 over the past 2 years. The chart's trend is trending more sharply following the pummelling of gold from March to July 2008. If the difference goes positive, that's backwardation. Norcini states that this is gold's way of indicating that the demand for gold in the present is continually to overpower the demand for gold in the future. In other words, sell it to the market now and you'll get a better price. The market is asking for more supply to meet increasing demand. All the various price variations can't hide this general trend.
A similar chart comparing the April to December gold spread is also posted on the JS site. It looks similar to the above and shows the price differential falling from -$26 to -$5. Interesting that what used to be the normal one month spread, is now showing up in an 8 month spread. Last contango in Paris?
From the I can't believe I read it in the newspaper category:
Cabinet heads were asked to trim $100 MILL off a $3.5 TRILL budget to set a new "tone" in Washington. This is comparable to trimming $2 from a $60,000/yr household budget or asking a "small" $100 MILL company to trim back $3K. While, it's great to watch the millions, why not put the same emphasis on the billions or trillions? The same mindset seems to include the hundreds of TRILLIONS in derivatives which are basically ignored.
"Cabinet heads were asked to trim $100 MILL off a $3.5 TRILL budget to set a new "tone" in Washington. This is comparable to trimming $2 from a $60,000/yr household budget or asking a "small" $100 MILL company to trim back $3K. While, it's great to watch the millions, why not put the same emphasis on the billions or trillions."
Yea, man, you gotta keep putting the message out there and hey, a hundred million looks like something big...we're budget conscious and we're working on it and that's the tone or tune or tarp or hummmmm. And besides, it's media friendly and prepackaged for national distribution so everybody wins here. Oh yeah, the 5 billion "loan" to GM, well, that's 100 million X 50. So, see, it's all good so just drink the koolaid and stop your carping.
Please continue with your regularly scheduled programming.
From the I can't believe I read it in the newspaper category: Cabinet heads were asked to trim $100 MILL off a $3.5 TRILL budget to set a new "tone" in Washington. This is comparable to trimming $2 from a $60,000/yr household budget or asking a "small" $100 MILL company to trim back $3K. While, it's great to watch the millions, why not put the same emphasis on the billions or trillions? The same mindset seems to include the hundreds of TRILLIONS in derivatives which are basically ignored.
roadrunner
I put that in the "how dumb do they think we are?" category.
Just reported that gold ETF inventories increased 469 tons in the 1st quarter. This was a record over the previous quarter (145 tons).
This is pretty bullish for gold in 2 respects:
1. If the IMF were to sell its 403.3 tons of gold, and took the usual 1-2 years to accomplish that, it would have no effect on the market since we supposedly just saw 469 tons being absorbed in a single quarter. And if the IMF were to sell, it would very likely be sold directly to central banks, therefore never being seen by the market.
2. If the ETF's have been sandbagging us and haven't really added a full 469 tons in gold (ie mixed with paper contracts/derivatives), then it will only make real physical holdings all that more valuable.
It is very possible that the shortage of production gold as well as what the ETF's are buying is being made up by MC Hammer and Ed McMahon (ie cash for gold and other such scrap metal promotions). Considering 1/2 to 3/4 of the world's gold is in "scrap" format, that's a huge inventory to tap into. But considering that a relative of mine now wants to get into this business, I have to think that it's possibly past the point of diminishing returns.
The TIC report just out from last week indicated that a -$247 BILLION in net outflows occured in the US current account/trade balance for Jan-Feb. The entire previous 12 months flows are disturbingly low and trending the wrong way. That money has to be made up by printing if foreign govt's or institutions won't pick up the tab.
3.5 trillion bailout. The gov't already admits that at least 10% will go toward fraud because of mismanagement. $350 Billion lost is a given.
It's not "lost". I'm sure that somebody knows where it is.
Cabinet heads were asked to trim $100 MILL off a $3.5 TRILL budget to set a new "tone" in Washington.
It's a new "tone" alright. No wonder that they don't want to teach math in secondary schools. If they ever needed to understand exponential notation, it's now.
Let's review. The banks screw up and are rewarded. The Congressional oversight is clearly corrupt and incompetant - both. The least-able to pay back loans are given a free ride. The sheeple elect a communist/socialist and expect a "fix", which is what they are getting. The auto manufacturers run their businesses into the ground and the unions get their political payback out of (non-existant) taxpayer funds.
Besides all that good stuff, there are a few other shoes left to drop, including both the commercial real estate market and the adjusted-rate mortgages that haven't rolled over and are coming due. Not to mention that nobody wants to buy US debt instruments now (with good reason, since nobody knows how much is going to be pumped out in short order). They are creating so much "money" that it's can't be allocated to various spending projects as fast as it's being created. Yeah, things are going swimmingly.
Best of all - it's just beginnning! If I keep thinking about this stuff, I'll just keep getting more and more pissed. Well - gotta get back to work. Later.
Q: Are You Printing Money? Bernanke: Not Literally
Yes, the administration is on top of office supplies and other such details to the tune of $100,000,000. It's sad that 3,500 times that amount is chalked up to fraud w/o a moment's thought. Wouldn't it make sense to put the 600 or so legislators on capital hill on top of this $3.5+ TRILL in spending for 8-10 hours a day rather than wasting any more time on other trivial issues that will have no where near the consequences over the next 10 years? These people wanted the jobs, let them be tasked with earning their pay and coming up with sensible solutions. Take a complete moratorium away from all the other minutia that occupies political time and just police the money flows for 3-12 months...where and why it's going and who his getting it.
I don't know if it really makes any difference. After all, there are $100 BILL in gold derivatives out there, the majority owned by JPMorgan. That's the equivalent of 3000+ tons of gold. The ETF's and China together are still 30% short of that number. Currently, paper drives the equation just as well as physical gold.....until the day that it doesn't. The majority of the ETF gold is no doubt physically there. But the question is how close to 100% are they? Do you think the current bullishness in silver has anything to do with Ishares turning over control of SLV in which case they need to complete a 100% physical inventory fairly soon? (ie return all the lent out silver).
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Current 2009 data provides daggers to the global warming crowd.
I was reading about the new human-swine-avian flu late last week. When I was commuting home on Saturday I went through DFW. There on the sky train I saw a family of three Mexican Nationals(saw their passport cover) wearing light blue masks heading back to Mexico. I read this morning that millions of Mexicans are staying in their homes. And just now I heard that there are 8 cases in NYC, some in Kansas, San Diego and Texas. When will the CDC issue a no travel alert and when will the DHS shut down the border? Of that's right they can't, on the latter.
If this turns into a pandemic this could prolong our recovery in the economy. Once we start getting US deaths people will "batten down the hatches" in their houses. Not good timing.
I have already heard a conspiracy theory that this unusual strain is doctored and transported via illegal aliens. Some just have too much time on their hands.
But seriously, this could really hamper our recovery if it gets prolonged. If its "1918" all bets are off.
<< <i>I was reading about the new human-swine-avian flu late last week. When I was commuting home on Saturday I went through DFW. There on the sky train I saw a family of three Mexican Nationals(saw their passport cover) wearing light blue masks heading back to Mexico. I read this morning that millions of Mexicans are staying in their homes. And just now I heard that there are 8 cases in NYC, some in Kansas, San Diego and Texas. When will the CDC issue a no travel alert and when will the DHS shut down the border? Of that's right they can't, on the latter.
If this turns into a pandemic this could prolong our recovery in the economy. Once we start getting US deaths people will "batten down the hatches" in their houses. Not good timing.
I have already heard a conspiracy theory that this unusual strain is doctored and transported via illegal aliens. Some just have too much time on their hands.
But seriously, this could really hamper our recovery if it gets prolonged. If its "1918" all bets are off.
Ren >>
John M. Barry's "The Great Influenza - The Epic Story of the Dealiest Plague in History" is well worth reading if you can pick it up at the local library. Public authorities vastly underestimated the threat and efforts to curtail public events came too late. This influenza strain in Mexico is quite similar to Sept-Oct 1918 in terms of the spike in deaths among young adults. Their strong immune systems worked against them. Fortunately, unlike 1918, secondary infections (the real killers) can be more effectively treated. Unfortunately, unlike 1918, our means to distribute the virus through air travel are much more efficient. Allowing flights out of Mexico City to continue is asking for trouble.
For about two weeks in Sept-Oct 1918 some US cities all but ceased to function. Anything even close to 1918 would be unimaginably bad. The recession would deepen.
Jim O’Neill, chief economist at Goldman Sachs Group Inc. in London, "I find myself these days difficult to be that bearish on the dollar, which is the base for me for the past 25 years. It’s really quite a big change.”
Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories, fixed investment, and staffing. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time. Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.
So, the FOMC is telling us it could get better...and, just what is "economic slack"? And for a follow up question: Just how much BS can you put in a one paragraph statement without actually saying anything?
"Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued."
...sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability.
The FED's track record on price stability is pretty poor considering that they've "stabilized" the US dollar all the way to a nickel over the past 96 years, with most of that "stabilizing" coming over the past 35 years.
The GDP number released today was about 50% worse than expected and barely better than last quarter. Little news today was good yet the market partied like it was 1999. The Flu epidemic defcon was increased from a #4 to a #5, so maybe that's what rallied the markets. If anything increases, it's worth a rally. PPT and GS/JPM are working overtime in the financial markets.
I read "economic slack" as excess capacity and disequilibrium between demand and supply.
The upmove in the market today was probably the result of fund managers trying to play catch up at months end. Almost every stock or index is up against the 150 or 200 dmas or a trendline. I expect a 500-1000pt move (up or down, perhaps both) in the DOW over the next few weeks. Its gonna get wild again after a relatively benign last 4 weeks.
'economic slack' translates into .....go ahead and take Thursday and Friday off Joe and call me Sunday night to see if I have anything for you on Monday.
very interesting link! anyway to double check what that guy says is true????????
I conclude that smart money is being placed for a massive rise in the gold price in the next 30 days and silver in the next 60 days (which probably means within 30 days for both metals) and again by December. I wouldn’t be surprised to see a pullback in between the two events. This money could not go in to the futures market without blowing the lid off the price as it would represent such a large increase in open interest. Going into the out-of-the-money option market allows flying below the radar.
The CALL/PUT ratio on the stock market is usually a contrarian indicator because the average, unsophisticated retail investor will buy options and the average retail investor gets it wrong and chases the market move most of the time. Only sophisticated traders tend to be in the precious metals option market so when there is a huge build up betting on a particular direction that is typically a directional indicator as I have shown was the case for the last two big moves in the precious metal bull.
The flat contango in gold and silver suggests there is a shortage developing of precious metals for delivery. We know that two large banks hold almost 100% of the commercial net short position. They need desperately to cover their exposure if the market is about to make a big move. It looks as if that is precisely what is happening.
Adrian Douglas
April 29, 2009
Singapore & Hong Kong March/April Hong kong/Long Beach JUNE Table #838 MACAU emgworldwide@gmail.com Cell: 512.808.3197 EMERGING MARKET GROUP PCGS, NGC, CCE & NCS, CGC, PSA, Auth. Dealer
The CALL/PUT ratio on the stock market is usually a contrarian indicator
Yes, so if calls are spiking and puts are dropping, why do you expect a rise?
Based on those charts, I would be nervous except that I'm not trading short-term. And secondly, I'm not sure that any of the old rules apply these days.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>The CALL/PUT ratio on the stock market is usually a contrarian indicator
Yes, so if calls are spiking and puts are dropping, why do you expect a rise?
Based on those charts, I would be nervous except that I'm not trading short-term. And secondly, I'm not sure that any of the old rules apply these days. >>
The author makes the distinction that it is a contrarian indicator because in the equity market options traders are "unsophisticated", but in the commodity markets traders know what they are doing.
Several of the usually heavily shorted miners are showing similar overweightings in their calls to puts in May and January. Yamana, Coeur D'Alene and Hecla stand out. The last 2 have been favorite whipping posts of the commercial shorts in the latter half of 2008. Yet now Coeur and Hecla have been making huge moves over the past 8 weeks while the vast majority of miners have floundered. Very odd. Both have heavy call positions in May and even heavier ones in January (5-1 and 6-1). CDE alone has 130,000 call options at a strike price of $2.50 (currently $1.46). Yamana shows a huge 70,000 call position in January over the range of upper strike prices (7-1 ratio to puts). I don't play with options so maybe this is all very explainable. It wouldn't cost much money to buy those options, especially if you're one of the ones getting billions via govt bailouts.
The silver miner moves seem to be saying something is coming down the pike. Adrian Douglas may have meant to refer to the traders in the options commodity pits as being more "sophisticated" than those in the general stock market. It's probably true that there is a far greater concentration of amateurs/retail in the general SM side than there are traders in the gold/silver futures options. We already know that 2 banks have held 96% of the Comex silver futures shorts, and I have no reason to believe that the minds behind those traders are experts or at least well enough connected to know where the market is going to be pushed to next.
OK, just to sum up...Banks aren't letting their cash go so no small business or expansion loans and growth is stiffled, muted, or diminished; large financial interests are buying options on physical metal as miners begin to get their game faces on in anticipation of good prices after seeing solid demand over the last two quarters (CDE) and likely into the next two; oil is dead until worldwide commercialism and production escalate considerably from the current status quo so "no play" West Texas Intermediate WTI historic ppb while big R&D buks go to solar via grants, loans, and self funded enterprises (EVSO); Kitco has removed the delayed delivery disclaimer on its masthead so metal may be more available while the premiums seem to have stabilized and/or retreated; the US stock indexes are showing life but not much; China has backed away from trashing the buk as they mega-fill their commodity warehousing needs, but the USD is still the only game in town ('cept metal) even as the shiny new Bens are spewing, still moist, from the printing machines...everybody loves them and the rumor about the introduction of the Globero or Globettes seems to be little more than just that; so maybe things do make a little sense as the pieces of the puzzle start to be revealed.
Maybe it's just me but it seems like we have a playable lie. I do believe that things are evolving very quickly and the potential for 10%-20% shifts in the value of measured financial things should not seem irrational, in fact, they should probably be anticipated but when and what and how fast and for how long...still a mystery. One thing for sure we are reaching critical mass in metals and equities and cash and something should be coming over the horizion in short order; hummmmmmmm what will it be?
Maybe it's just me but it seems like we have a playable lie.
It's a brave, new world mhammerman. A game of global currency chicken. Who's gonna blink first? All I can say is that somebody's gonna end up very unhappy before it's over.
Q: Are You Printing Money? Bernanke: Not Literally
I've never paid much attention the extra fees on my 2 credit cards before because they have never applied. But I received a notice today from BoA about upcoming changes in June that I thought was rather striking. 4% finance changes would be added to any type of cash advance or balance transfer ($10 min) which includes "ATM cash advances." Unless I read this wrong does this mean if you hit the ATM for $50 or $100 you are coughing up $10? A foreign transaction fees have been expanded to include any US dollar transactions made or processed outside of the US (3%). This would include a purchase from a foreign internet source.
An apparent change was made to claims on services/products costing >$50. BoA will only consider claims made from purchases in your home state or with merchants located within 100 mi. from your current mailing address (unless merchant is owned or promoted by BoA). It would seem that most internet purchases are not covered.
I didn't see this mentioned here yet from last week so I'll post it. But the cost of the 2nd "Air Force 1" NY City photo op low altitutude fly by (with military escort jet) cost approx $330,000. Since the president had been asking for suggestions from J6P on ways to save money in the budget I suggest spending a few thousand into a high quality photo editing software and graphics and skip future on-scene photo ops with the Statue of Liberty and other national landmarks. It's much easier to photo shop Air Force 1 into desired scenario (Grand Canyon, Mt. Rushmore?) and likely no one would be able to tell the difference except the photo editor. That $100 MILL in savings that the administration was looking for just went up to $100,330,000.
Not to be outdone by the Dow/Gold ratio, here's a couple of charts depicting what gold has done vs housing over the past 90 yrs. Based on these, there is another factor of 2X to 2.5X still needing to be worked in. That would imply for example only: a gold price 70% higher from here ($1500/oz) and home prices down another 15% from current levels. Or another choice would be home prices down another 10% and gold up 80% ($1585). Even if home prices were to stay put at current levels, that would imply gold 2X higher.
So the credit card companies flip us off like we were a piece of lint on $5000 suit with no sign of arrogance, it's their just and legal right...they don't have to loan money because they already have a bunch of folk hooked up to the debt machine for about 28% of their unpaid balance and they are administering the colonoscopy with enthusiasm and don't forget the little demerol injection so you don't feel or remember anything...yummy. Hey...you guys are the bozos for signing up for the onerous terms in the first place...the only way to cripple these credit card buzzards is to stop using them, choke the bastds to death; you can do it! CASH IS KING
The new credit card holders rights...what a cruel, laughable joke; kind of like the major policy statement about saving 100 mil on office supplies while they gift 5 bill to GM...yep the joke is on you mr/mrs citizen and you love it don't you...YOU LOVE IT, DON'T YOU!". Soon, most folk will be bent over the table and slowly they might just begin look up and wonder..."Hey, how did I get so bent over and why can't I get up?"
Questions for 2010: "Do you have a job?" "Do you have a house?" "Do you have any money?" "Can you get a car loan or better yet...do you even have a car?" "How's your IRA?...401K...trading account?"...this is going to be very sobering for a lot of folk. Of course no one thought that when the big O said he was gonna spread the wealth around a little that he meant he was gonna take your money and give it to the corporations that are too big to fail because everyone thought he was going to take the tax money and redistribute it amongst the people...hee hee, cruel joke indeed but hey it's not so bad being bent over.
Edited to add: CC bill of rights...how about 19.9% maximum interest rate, $10 late fee, $10 over limit, miss three full payments in a row and your account is cancelled across all cc lenders for 1 year...that'll stop all this silliness immediately. Hey...wise up, get a debit card linked to your primary checking or an american express and shove the CC predatory lenders out into the street. I can just hear the banks howling already.
RR -- regarding housing/gold, you could look at those charts and say we are not at historic lows, but I think the more compelling conclusion would be that compared to long term norms, either housing is cheap or gold is expensive.
Also, the author correctly points out that some caution needs to be exercised due to the changing nature of a house; especially with new houses, square footage is up, and amenities (air conditioning, number bathrooms, type of kitchen, etc are up).
In any case, if we did hit the 1980 low, the message would seem to be to go short gold and long housing. The low didn't persist very long.
The price of Homes in So Cal likely to head lower. A lot of NEG Amort. Arms still in play in CAL. over the next 3 years.
In the back of my mind, I think gold is headed lower in the short term. If it costs 4-500 to mine, why does it cost $900 to buy? That question keeps popping up in my head.
RR -- regarding housing/gold, you could look at those charts and say we are not at historic lows, but I think the more compelling conclusion would be that compared to long term norms, either housing is cheap or gold is expensive.
Gold has made it a habit of eventually fully correcting (and over correcting) for inflation/monetary effects. It has yet to even balance off the govt's stated CPI changes from 1980 so we are still at effective gold prices from the late 1970's. It makes no sense that the #1 and #2 bell ringers (gold/silver) for monetary/currency/govt confidence issues are still back at 1970's levels. But they've had a lot of headwinds to battle with $400 TRILL in short IR swaps, $100 BILL in short gold derivatives, and $190 BILL in short silver derivatives. Selling anywhere from 5,000-15,000 tons of CB gold hasn't hurt the bankers cause either. But eventually, the metals will overcome these obstacles. Considering gold is 3.5X times higher than in 2002 suggests it's done remarkably well in the face of those challenges. What would it have done with those not present and a defunct gold carry trade in the l996-2007 period? Recall that Volcker took no steps to defuse gold in the 1970's and it rose by a factor of 24X. But I would give you that since gold was last fixed at $35/oz. in 1971, it would likely have been worth closer to $60-$100 from 1969-1971 if allowed to float sooner.
The current downward trends on those housing/gold charts look very unfinished and not typical of completed patterns indicative of bottoms. At some point a shift to be long RE and short gold would make sense. But we finished the first big wave of alt-A, subprime, prime, liar loan refinancings in 2006-2007. 2008 and part of 2009 is a lull period. The next big wave crests in 2010-2011 so it's unlikely we've seen anywhere near a bottom in residential RE. The 1989 housing market glut took 5-6 years to fully work itself out and it's problems were a pittance compared to today's. How many years did it take housing to recover from the 1930's? Those $400 TRILL in interest rate swaps will have a big effect on future interest rates and therefore housing unless expertly defused. Though there seems to be a significant group of currency/bond/financial experts who state there is no such way to make them go away w/o massive damage. No, this RE market isn't recovering in 3 years (2007-2009) considering the problems are a magnitude or more greater than the last one.
The last great deals I saw in real estate were in 1996 when I bought my current house. And we are miles still from those levels. It would take much more attractive levels from here to induce me to jump in (ie another 25% cut from here or a net 40% drop from the 2007 peak).
Vehicle sales in the USA this year are projected to be about 9 million units. In 1929 there were 5 million vehicles sold. Population in 1929--121 million, in 2009--303 million.
Comments
<< <i>Im bored so I figured I would try to put 10 Trillion into perspective since I am having a hard time trying to grasp just how large a number this is. So here goes.
Light travels at 186,000 miles per second and since $186,000 is a decent chunk of change I thought the speed of light might be good context. Lets assume that $1 is the same as 1 mile.
In one minute light will travel 11 million miles/dollars.
In eight minutes light will travel to the sun, 90 million miles/dollars.
In one hour light will travel 670 million miles/dollars.
In one day light will travel 16 billion miles/dollars. This is already a very large number and we have been traveling at the spped of light for 24 hours.
In one week light will travel 113 billion miles/dollars.
In one month light will travel nearly 1/2 a trillion miles/dollars or 2683 round trips from the earth to the sun.
In one year light will travel 5.9 trillion miles/dollars. Now were getting somewhere.
Sooooooooooooo......10 Trillion miles is the distance light will travel in 20 months. This is also about 1/2 the distance to the nearest star--Proxima centauri
Dang, 10 trillion is big number!!!! >>
cohodk, that was a great. I love that comparison. Even a moron can understand that. Now I have to go find some morons to convince why we are entering a black hole.
Ren
I don’t know how many of you saw the Howard Ruff article the other day on Kitco.
But Mr. Ruff has a bunch of his money in this, Central Fund of Canada Ltd CEF:AMEX.
For those that want to play a paper fund while the metals are down this week, this appears to be pretty good, as opposed to SLV and GLD, which may be controlled by the Wall Street boys, or may not have all the bars at all?
What is most interesting about this fund is that its largest shareholder is one of Canada’s largest banks, which paid $10.50 for over $200 million in stock, and I am sure the bars are stored at that bank.
Today’s price is currently $10.49.
CEF : Is both a gold and Silver fund.
Central Fund of Canada Limited (Central Fund) is an investment holding company. Central Fund's objective is to provide investment alternative for investors interested in holding marketable gold and silver related investments. The Company invests virtually all of its assets in long-term holdings of unencumbered, allocated and segregated gold and silver bullion. The Company holds at least 90% of its net assets in gold and silver bullion, primarily in bar form. As of October 31, 2008, the Company's assets were made up of 58.9% gold bullion, 37.4% silver bullion and certificates, 3.7% cash and interest-bearing deposits and other working capital amounts.
When CEF issues new shares, it does so to large corporations who buy that stock at the NAV, or at the value of the assets without the premium. If you can buy at that price without paying the premium, its a great deal. I've held CEF in the past but would make a 50/50 investment in GLD/SLV at spot prices instead.
I have included a CEF premium calculator
CEF premium
When the last deal was announced on April 7, the CEF price was $11.24 and the deal was at $10.50. CEF price now $10.50
plus the number of farm animals, if we could tap into
every ones methane production, we could fuel the world.
Camelot
<< <i>Considering that the USA has 300,000,000 people
plus the number of farm animals, if we could tap into
every ones methane production, we could fuel the world. >>
They wanted to tax methane production.
Knowledge is the enemy of fear
Friday April 17, 2009, 7:45 pm EDT
Total public debt subject to limit April 16 11,125,587
Statutory debt limit 12,104,000
Total public debt outstanding April 16 11,183,899
Operating balance April 16 257,351
Interest fiscal year 2009 thru February 148,762
Interest same period 2008 198,518
Deficit fiscal year 2009 thru February 764,525
Deficit same period 2008 264,541
Receipts fiscal year 2009 thru February 860,877
Receipts same period 2008 967,153
Outlays fiscal year 2009 thru February 1,625,402
Outlays same period 2008 1,231,694
Gold assets in March 11,041
Link
The action on TRE on Thursday and Friday would indicate that it took it's lumps well before the more well known institutionally held miners this past week. It was one of the few miners to gain on Friday, and only 1 of 2 listed on Kitco that exceeded +1% for day (it saw +4%). This while most of the highly rated miners saw drops of -3 to -7% on Friday. TRE has retraced 60-65% of it's gains since the bottom of 2008. It's not that far off the others which have retraced up to 50%. In fact Barrick has seen the same 60-65% retracement. There may have been something to giving JS a dump before the rest of the market. In the end, they have all ended up about in the same place.
roadrunner
WSJ reports U.S. and European banks need to raise $875 billion in equity by next year to recapitalize banks to a level similar to the pre-crisis years - and twice that amount to match the level of the mid-1990s, the International Monetary Fund estimated. The steep funding requirements reflect a financial crisis that the IMF said continues to deepen along with the global recession. The banking sector's woes have spread from the housing sector to commercial real estate loans and emerging-market debt. Overall, the IMF estimates that the U.S., European and Japanese financial sectors face losses of about $4.1 trillion between 2007 and 2010. Of that amount, banks are confronting $2.5 trillion in losses, insurers $300 billion and other financial institutions $1.3 trillion. The banking sector has already written down $1 trillion of those losses, said the IMF, which didn't estimate how much other financial firms such as insurance companies and hedge funds, have written down thus far
Knowledge is the enemy of fear
By that method, the USA and India will basically corner the
market. To hell with PMs, we will have the world supply of
B.S...........Oh wait a mo, Congress has already cornered that
market.
Camelot
Dan Norcini comments on the above chart spreads. What is interesting is that the price diff between the April to June contract has systematically dropped from -$6.5 to -$0.50 over the past 2 years. The chart's trend is trending more sharply following the pummelling of gold from March to July 2008. If the difference goes positive, that's backwardation. Norcini states that this is gold's way of indicating that the demand for gold in the present is continually to overpower the demand for gold in the future. In other words, sell it to the market now and you'll get a better price. The market is asking for more supply to meet increasing demand. All the various price variations can't hide this general trend.
A similar chart comparing the April to December gold spread is also posted on the JS site. It looks similar to the above and shows the price differential falling from -$26 to -$5. Interesting that what used to be the normal one month spread, is now showing up in an 8 month spread. Last contango in Paris?
From the I can't believe I read it in the newspaper category:
Cabinet heads were asked to trim $100 MILL off a $3.5 TRILL budget to set a new "tone" in Washington. This is comparable to trimming $2 from a $60,000/yr household budget or asking a "small" $100 MILL company to trim back $3K. While, it's great to watch the millions, why not put the same emphasis on the billions or trillions?
The same mindset seems to include the hundreds of TRILLIONS in derivatives which are basically ignored.
roadrunner
page turning
at the four post mark
Yea, man, you gotta keep putting the message out there and hey, a hundred million looks like something big...we're budget conscious and we're working on it and that's the tone or tune or tarp or hummmmm. And besides, it's media friendly and prepackaged for national distribution so everybody wins here. Oh yeah, the 5 billion "loan" to GM, well, that's 100 million X 50. So, see, it's all good so just drink the koolaid and stop your carping.
Please continue with your regularly scheduled programming.
roadrunner
I put that in the "how dumb do they think we are?" category.
Box of 20
This is pretty bullish for gold in 2 respects:
1. If the IMF were to sell its 403.3 tons of gold, and took the usual 1-2 years to accomplish that, it would have no effect on the market since we supposedly just saw 469 tons being absorbed in a single quarter. And if the IMF were to sell, it would very likely be sold directly to central banks, therefore never being seen by the market.
2. If the ETF's have been sandbagging us and haven't really added a full 469 tons in gold (ie mixed with paper contracts/derivatives), then it will only make real physical holdings all that more valuable.
It is very possible that the shortage of production gold as well as what the ETF's are buying is being made up by MC Hammer and Ed McMahon (ie cash for gold and other such scrap metal promotions). Considering 1/2 to 3/4 of the world's gold is in "scrap" format, that's a huge inventory to tap into. But considering that a relative of mine now wants to get into this business, I have to think that it's possibly past the point of diminishing returns.
The TIC report just out from last week indicated that a -$247 BILLION in net outflows occured in the US current account/trade balance for Jan-Feb. The entire previous 12 months flows are disturbingly low and trending the wrong way. That money has to be made up by printing if foreign govt's or institutions won't pick up the tab.
roadrunner
It's not "lost". I'm sure that somebody knows where it is.
Cabinet heads were asked to trim $100 MILL off a $3.5 TRILL budget to set a new "tone" in Washington.
It's a new "tone" alright. No wonder that they don't want to teach math in secondary schools. If they ever needed to understand exponential notation, it's now.
Let's review. The banks screw up and are rewarded. The Congressional oversight is clearly corrupt and incompetant - both. The least-able to pay back loans are given a free ride. The sheeple elect a communist/socialist and expect a "fix", which is what they are getting. The auto manufacturers run their businesses into the ground and the unions get their political payback out of (non-existant) taxpayer funds.
Besides all that good stuff, there are a few other shoes left to drop, including both the commercial real estate market and the adjusted-rate mortgages that haven't rolled over and are coming due. Not to mention that nobody wants to buy US debt instruments now (with good reason, since nobody knows how much is going to be pumped out in short order). They are creating so much "money" that it's can't be allocated to various spending projects as fast as it's being created. Yeah, things are going swimmingly.
Best of all - it's just beginnning! If I keep thinking about this stuff, I'll just keep getting more and more pissed. Well - gotta get back to work. Later.
I knew it would happen.
roadrunner
But in another thread, many say there really isnt any gold--just a bunch of numbers on a piece of paper.
Which is it?
Knowledge is the enemy of fear
-------------------
Current 2009 data provides daggers to the global warming crowd.
Lowest solar activity since 1913 - on track to break records
roadrunner
If this turns into a pandemic this could prolong our recovery in the economy. Once we start getting US deaths people will "batten down the hatches" in their houses. Not good timing.
I have already heard a conspiracy theory that this unusual strain is doctored and transported via illegal aliens. Some just have too much time on their hands.
But seriously, this could really hamper our recovery if it gets prolonged. If its "1918" all bets are off.
Ren
<< <i>I was reading about the new human-swine-avian flu late last week. When I was commuting home on Saturday I went through DFW. There on the sky train I saw a family of three Mexican Nationals(saw their passport cover) wearing light blue masks heading back to Mexico. I read this morning that millions of Mexicans are staying in their homes. And just now I heard that there are 8 cases in NYC, some in Kansas, San Diego and Texas. When will the CDC issue a no travel alert and when will the DHS shut down the border? Of that's right they can't, on the latter.
If this turns into a pandemic this could prolong our recovery in the economy. Once we start getting US deaths people will "batten down the hatches" in their houses. Not good timing.
I have already heard a conspiracy theory that this unusual strain is doctored and transported via illegal aliens. Some just have too much time on their hands.
But seriously, this could really hamper our recovery if it gets prolonged. If its "1918" all bets are off.
Ren >>
John M. Barry's "The Great Influenza - The Epic Story of the Dealiest Plague in History" is well worth reading if you can pick it up at the local library. Public authorities vastly underestimated the threat and efforts to curtail public events came too late. This influenza strain in Mexico is quite similar to Sept-Oct 1918 in terms of the spike in deaths among young adults. Their strong immune systems worked against them. Fortunately, unlike 1918, secondary infections (the real killers) can be more effectively treated. Unfortunately, unlike 1918, our means to distribute the virus through air travel are much more efficient. Allowing flights out of Mexico City to continue is asking for trouble.
For about two weeks in Sept-Oct 1918 some US cities all but ceased to function. Anything even close to 1918 would be unimaginably bad. The recession would deepen.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
A buddy of mine just flew back from Mexico. According to him, there was no news of the problem until he returned to Mexico City for the flight home.
The dollar is “the best-looking horse in the glue factory
Jim O’Neill, chief economist at Goldman Sachs Group Inc. in London, "I find myself these days difficult to be that bearish on the dollar, which is the base for me for the past 25 years. It’s really quite a big change.”
Knowledge is the enemy of fear
How one man could help bring down the system
Knowledge is the enemy of fear
HE>I
Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories, fixed investment, and staffing. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time. Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.
Knowledge is the enemy of fear
Economy shrinks at 6.1 percent pace in 1Q
"Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued."
The FED's track record on price stability is pretty poor considering that they've "stabilized" the US dollar all the way to a nickel over the past 96 years, with most of that "stabilizing" coming over the past 35 years.
The GDP number released today was about 50% worse than expected and barely better than last quarter. Little news today was good yet the market partied like it was 1999. The Flu epidemic defcon was increased from a #4 to a #5, so maybe that's what rallied the markets. If anything increases, it's worth a rally. PPT and GS/JPM are working overtime in the financial markets.
roadrunner
The upmove in the market today was probably the result of fund managers trying to play catch up at months end. Almost every stock or index is up against the 150 or 200 dmas or a trendline. I expect a 500-1000pt move (up or down, perhaps both) in the DOW over the next few weeks. Its gonna get wild again after a relatively benign last 4 weeks.
Knowledge is the enemy of fear
There is a lot of slack going around these days.
<< <i>Said the spider to the fly...Copy of post from the Kitco gold boards >>
very interesting link! anyway to double check what that guy says is true????????
I conclude that smart money is being placed for a massive rise in the gold price in the next 30 days and silver in the next 60 days (which probably means within 30 days for both metals) and again by December. I wouldn’t be surprised to see a pullback in between the two events. This money could not go in to the futures market without blowing the lid off the price as it would represent such a large increase in open interest. Going into the out-of-the-money option market allows flying below the radar.
The CALL/PUT ratio on the stock market is usually a contrarian indicator because the average, unsophisticated retail investor will buy options and the average retail investor gets it wrong and chases the market move most of the time. Only sophisticated traders tend to be in the precious metals option market so when there is a huge build up betting on a particular direction that is typically a directional indicator as I have shown was the case for the last two big moves in the precious metal bull.
The flat contango in gold and silver suggests there is a shortage developing of precious metals for delivery. We know that two large banks hold almost 100% of the commercial net short position. They need desperately to cover their exposure if the market is about to make a big move. It looks as if that is precisely what is happening.
Adrian Douglas
April 29, 2009
Hong kong/Long Beach JUNE Table #838
MACAU
emgworldwide@gmail.com
Cell: 512.808.3197
EMERGING MARKET GROUP
PCGS, NGC, CCE & NCS, CGC, PSA, Auth. Dealer
Yes, so if calls are spiking and puts are dropping, why do you expect a rise?
Based on those charts, I would be nervous except that I'm not trading short-term. And secondly, I'm not sure that any of the old rules apply these days.
I knew it would happen.
<< <i>The CALL/PUT ratio on the stock market is usually a contrarian indicator
Yes, so if calls are spiking and puts are dropping, why do you expect a rise?
Based on those charts, I would be nervous except that I'm not trading short-term. And secondly, I'm not sure that any of the old rules apply these days. >>
The author makes the distinction that it is a contrarian indicator because in the equity market options traders are "unsophisticated", but in the commodity markets traders know what they are doing.
That made me laugh.
Knowledge is the enemy of fear
The silver miner moves seem to be saying something is coming down the pike. Adrian Douglas may have meant to refer to the traders in the options commodity pits as being more "sophisticated" than those in the general stock market. It's probably true that there is a far greater concentration of amateurs/retail in the general SM side than there are traders in the gold/silver futures options. We already know that 2 banks have held 96% of the Comex silver futures shorts, and I have no reason to believe that the minds behind those traders are experts or at least well enough connected to know where the market is going to be pushed to next.
roadrunner
Maybe it's just me but it seems like we have a playable lie. I do believe that things are evolving very quickly and the potential for 10%-20% shifts in the value of measured financial things should not seem irrational, in fact, they should probably be anticipated but when and what and how fast and for how long...still a mystery. One thing for sure we are reaching critical mass in metals and equities and cash and something should be coming over the horizion in short order; hummmmmmmm what will it be?
It's a brave, new world mhammerman. A game of global currency chicken. Who's gonna blink first? All I can say is that somebody's gonna end up very unhappy before it's over.
I knew it would happen.
Government Motors: Only the Beginning
Getting dang near mind boggling.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
An apparent change was made to claims on services/products costing >$50. BoA will only consider claims made from purchases in your home state or with merchants located within 100 mi. from your current mailing address (unless merchant is owned or promoted by BoA). It would seem that most internet purchases are not covered.
I didn't see this mentioned here yet from last week so I'll post it. But the cost of the 2nd "Air Force 1" NY City photo op low altitutude fly by (with military escort jet) cost approx $330,000. Since the president had been asking for suggestions from J6P on ways to save money in the budget I suggest spending a few thousand into a high quality photo editing software and graphics and skip future on-scene photo ops with the Statue of Liberty and other national landmarks. It's much easier to photo shop Air Force 1 into desired scenario (Grand Canyon, Mt. Rushmore?) and likely no one would be able to tell the difference except the photo editor. That $100 MILL in savings that the administration was looking for just went up to $100,330,000.
Historical Gold/Housing ratios
Not to be outdone by the Dow/Gold ratio, here's a couple of charts depicting what gold has done vs housing over the past 90 yrs. Based on these, there is another factor of 2X to 2.5X still needing to be worked in. That would imply for example only: a gold price 70% higher from here ($1500/oz) and home prices down another 15% from current levels. Or another choice would be home prices down another 10% and gold up 80% ($1585). Even if home prices were to stay put at current levels, that would imply gold 2X higher.
roadrunner
The new credit card holders rights...what a cruel, laughable joke; kind of like the major policy statement about saving 100 mil on office supplies while they gift 5 bill to GM...yep the joke is on you mr/mrs citizen and you love it don't you...YOU LOVE IT, DON'T YOU!". Soon, most folk will be bent over the table and slowly they might just begin look up and wonder..."Hey, how did I get so bent over and why can't I get up?"
Questions for 2010: "Do you have a job?" "Do you have a house?" "Do you have any money?" "Can you get a car loan or better yet...do you even have a car?" "How's your IRA?...401K...trading account?"...this is going to be very sobering for a lot of folk. Of course no one thought that when the big O said he was gonna spread the wealth around a little that he meant he was gonna take your money and give it to the corporations that are too big to fail because everyone thought he was going to take the tax money and redistribute it amongst the people...hee hee, cruel joke indeed but hey it's not so bad being bent over.
Edited to add: CC bill of rights...how about 19.9% maximum interest rate, $10 late fee, $10 over limit, miss three full payments in a row and your account is cancelled across all cc lenders for 1 year...that'll stop all this silliness immediately. Hey...wise up, get a debit card linked to your primary checking or an american express and shove the CC predatory lenders out into the street. I can just hear the banks howling already.
Also, the author correctly points out that some caution needs to be exercised due to the changing nature of a house; especially with new houses, square footage is up, and amenities (air conditioning, number bathrooms, type of kitchen, etc are up).
In any case, if we did hit the 1980 low, the message would seem to be to go short gold and long housing. The low didn't persist very long.
clark on gold
i kinda wonder though when folks look to some of these charts for advice...
in the stars and other places
In the back of my mind, I think gold is headed lower in the short term. If it costs 4-500 to mine, why does it cost $900 to buy? That question keeps popping up in my head.
according to the white house.
My position on this ideology is well known. I don't need to illuminate it any further.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Gold has made it a habit of eventually fully correcting (and over correcting) for inflation/monetary effects. It has yet to even balance off the govt's stated CPI changes from 1980 so we are still at effective gold prices from the late 1970's. It makes no sense that the #1 and #2 bell ringers (gold/silver) for monetary/currency/govt confidence issues are still back at 1970's levels. But they've had a lot of headwinds to battle with $400 TRILL in short IR swaps, $100 BILL in short gold derivatives, and $190 BILL in short silver derivatives. Selling anywhere from 5,000-15,000 tons of CB gold hasn't hurt the bankers cause either. But eventually, the metals will overcome these obstacles. Considering gold is 3.5X times higher than in 2002 suggests it's done remarkably well in the face of those challenges. What would it have done with those not present and a defunct gold carry trade in the l996-2007 period? Recall that Volcker took no steps to defuse gold in the 1970's and it rose by a factor of 24X. But I would give you that since gold was last fixed at $35/oz. in 1971, it would likely have been worth closer to $60-$100 from 1969-1971 if allowed to float sooner.
The current downward trends on those housing/gold charts look very unfinished and not typical of completed patterns indicative of bottoms. At some point a shift to be long RE and short gold would make sense. But we finished the first big wave of alt-A, subprime, prime, liar loan refinancings in 2006-2007. 2008 and part of 2009 is a lull period. The next big wave crests in 2010-2011 so it's unlikely we've seen anywhere near a bottom in residential RE. The 1989 housing market glut took 5-6 years to fully work itself out and it's problems were a pittance compared to today's. How many years did it take housing to recover from the 1930's? Those $400 TRILL in interest rate swaps will have a big effect on future interest rates and therefore housing unless expertly defused. Though there seems to be a significant group of currency/bond/financial experts who state there is no such way to make them go away w/o massive damage. No, this RE market isn't recovering in 3 years (2007-2009) considering the problems are a magnitude or more greater than the last one.
The last great deals I saw in real estate were in 1996 when I bought my current house. And we are miles still from those levels. It would take much more attractive levels from here to induce me to jump in (ie another 25% cut from here or a net 40% drop from the 2007 peak).
roadrunner
Vehicle sales in the USA this year are projected to be about 9 million units. In 1929 there were 5 million vehicles sold. Population in 1929--121 million, in 2009--303 million.
Knowledge is the enemy of fear