Monthly Archives: May 2013

The Great Reflation

Posted on May 31, 2013 by admin

In his latest commentary, Peter Schiff explains why the supposed recovery of the real estate market is just another bubble caused by the Fed’s interest rate manipulation and buying of mortgage-backed securities. In fact, the true fundamentals of the housing market are much worse than reported. Smart investors should learn from the mistakes of the last housing crash and invest in something that doesn’t depend on government stimulus this time around.

“The ‘wealth effect’ from rising home prices combined with the similar influence of rising stock prices creates an aura of recovery. In fact, this week’s revisions to first quarter GDP revealed that consumer confidence and spending are up despite real discretionary per capita incomes plunging at a 9.03% annualized rate. That is worse than the largest plunge during the 2008-2009 crisis (7.52%). Additionally, the household savings rate fell to an abysmal 2.3%, the lowest since the 3rd quarter 2007. Debt-financed consumption supported by inflated asset prices is what led to the financial crisis of 2008. It’s amazing how willing we are to travel down that road again.

Of course rising asset prices are completely dependent on continued Fed support. As we have seen time and again, whenever the Fed even hints at tapering its massive QE programs the stock market sells off. The housing market is even more dependent on that support. Given the risks, it is arguable that no private market for home loans would even exist without government intervention. The bubble that popped in 2008 consisted mainly of government-guaranteed mortgages. This time, the mortgages are not merely government-guaranteed, but government owned.”

Read the Full Commentary Here

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Today’s Key Gold Headlines – 5/31/13

Posted on May 31, 2013 by admin

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Jim Rogers on Madness at the Fed (Video)

Posted on May 30, 2013 by admin

This week on CNN Money, investor Jim Rogers had a friendly debate with University of Pennsylvania Professor Jeremy Siegel about the true cause of the booming stock market. Rogers, like Peter Schiff, knows the Fed’s money printing is the only thing supporting this so-called bull market.

“This [bull market] is because of money printing… This is the Federal Reserve and the central bank in Japan and the central bank in England and the central bank in Europe printing staggering amounts of money. This is unprecedented. Never in world history has every major central bank printed money at the same time and desperately tried to debase their currency.”

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Today’s Key Gold Headlines – 5/30/13

Posted on May 30, 2013 by admin

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Another Housing and Stock Bubble (Video)

Posted on May 29, 2013 by admin

Peter Schiff appeared on CNBC Asia last night to talk about the possibility of a bubble in the housing and stock markets. He also stressed that it doesn’t matter whether the Fed sells its Treasuries or allows them to mature for the Treasury to sell – either way, the bond market will be devastated.

“What you have is a lot of speculators taking cheap money from the Federal Reserve and gambling on real estate… When interest rates rise…the air is going to come out of this bubble. Beneath the surface, the real fundamentals of the economy continue to deteriorate.”

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Today’s Key Gold Headlines – 5/29/13

Posted on May 29, 2013 by admin

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Ron Paul on Gold’s Volatility and Enduring Value

Posted on May 28, 2013 by admin

Forbes just published an exclusive interview with Ron Paul, conducted by Kitco News. Paul spoke about how precious metals investors shouldn’t get caught up watching the short-term trends in gold. Instead, he keeps an eye on the failing purchasing power of the dollar.

“‘It is up and down, and it has been doing that a lot lately,’ Paul said. ‘If (investors) are in gold for a short time to make a quick killing that ought to make them very nervous,’ he said of gold’s recent correction in April…

Paul said that historically there have been high periods of volatility but it is important to look past these short-term corrections. Looking back, Paul reflected that in the 1970s gold went up to almost $200 an ounce then plummeted back down to close to $100 an ounce two years later.

‘Everybody thought the world had ended for gold,’ he said. Paul added these should have been seen as simply corrections in a roaring bull market.”

Read the Full Interview Here

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Today’s Key Gold Headlines – 5/28/13

Posted on May 28, 2013 by admin

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Jim Grant: Gold Is a Bet against Fiat Money (Video)

Posted on May 24, 2013 by admin

Enjoy this interesting CNBC interview with Jim Grant in which he analyzes the ambiguous statements coming out of the Fed this week. He doesn’t think the Fed is likely to unwind QE anytime soon, and that this experiment in unprecedented money printing will likely end in disaster. However, Grant does point out that gold is the perfect hedge against a collapsing currency.

“[Gold is] money. It certainly is a hedge against unscripted outcomes of monetary affairs. It is an investment in the tendency of government issued paper money to depreciate in value. It’s an investment in that…”

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Today’s Key Gold Headlines – 5/24/13

Posted on May 24, 2013 by admin

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