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Housing Has Bottomed – Or Maybe Not

Friday, April 27, 2012, 5:13 PM

I am working extra hard to stay ahead of the spin in my attempts to separate the facts from the fiction that now permeate the news cycles.

We’ve recently talked about the all-in effort to convince us that Peak Oil has been debunked, which is an effort that is principally concentrated in the US and UK press. I’ll have more on that in future reports.

Recently there have been a bevy of articles in a variety of news outlets trumpeting the recent new home sales numbers from home builders as indicative that the long-awaited housing bottom has finally arrived. My view is that it is too soon to make that call.

Here's a recent example:

» Read more


Bill Black (Part II): A Mess of Our Own Making

What's needed in order to restore faith in the system
Thursday, April 26, 2012, 8:19 PM

In Part II of Chris' shocking interview with Bill Black on the extreme vulnerability that our economic system has to fraud (click here for Part I), the discussion deepens, exploring a number of disturbing topics including:

  • Why there is such a crisis of accountability today
  • Why future fraud-driven crises are inevitable if status quo continues
  • What strategies are needed to reduce the prevalence of fraud

The Three Key Indicators to Watch

Tuesday, April 24, 2012, 8:33 AM

Executive Summary

  • Expect the Fed's ability to move the market to weaken from here
  • The three key investment-actionable indicators
  • The most likely direction the dollar will head next
  • Why capital preservation is now of paramount priority

Part I: What Data Can We Trust?

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: The Three Key Indicators to Watch

In Part I, we set aside the suspect “headline numbers” issued by government agencies as metrics of economic health, and as an alternative methodology, we surveyed the income and balance sheets of households and the federal government. We found declining household income and tax receipts, and high debt loads for both households and the government. This data simply does not support the rosy view of “recovery” presented by government officials.

Let's now examine more actionable indicators of economic health. In other words, it’s all well and good to ascertain whether the economy is growing smartly or not, but how does that guide our investment strategy?


Harvey Organ (Part II): The Road Ahead for the Precious Metals

Friday, April 20, 2012, 10:15 PM

In Part II of Chris' fascinating interview with Harvey Organ on the precious metals (click here for Part I), the discussion deepens, exploring a number of popular topics including:

  • All things Silver
  • How much gold is there really backing the major ETFs?, and 
  • Harvey's 2012 forecast for bullion prices

» Read more


The Triggers That Will Spark 'Hot' Inflation

Thursday, April 19, 2012, 9:15 AM

The Triggers That Will Spark 'Hot' Inflation

by Gregor Macdonald, contributing editor
Thursday, April 19, 2012

Executive Summary

  • Rising wages in the developing world create upward price pressure everywhere globally
  • The paradox of safety: Many traditional "safe" assets (e.g., bonds) are horrible places to store capital during 'hot' inflation
  • Money velocity drives inflation -- and it has only one direction to go these days: up
  • Winning and losing assets if 'hot' inflation does indeed break out

Part I: Get Ready for 'Hot' Inflation

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: The Triggers That Will Spark 'Hot' Inflation

Arthur Lewis was an economist from the small, Caribbean island of St. Lucia who went on to win a Nobel Prize in 1979. His work identified the process by which very cheap labor is brought from the countryside to urban areas during phases of industrialization in developing countries. At a certain point, this supply of cheap labor went into decline and wage pressures began to mount.

Now referred to as the Lewis Turning Point, such a phase marks the end of a kind of deflationary boom, in which input costs fall during a phase of hyper-strong growth, and the beginning of inflationary restraints, in which profit margins stop growing. This is exactly what’s happening in China today.


Off the Cuff: Inflation, aka the 'Sinister Tax'

Thursday, April 19, 2012, 1:56 AM

The most sinister of all taxes is the inflation tax and it is the most regressive. It hits the poor and the middle class. ~ Ron Paul

In this week's Off the Cuff with Mish & Chris podcast, Mish has the week off, so Chris takes the mic and delivers an in-depth look at consumer price inflation. He cites a plethora of data that validates what anyone who eats, drives, or visits the doctor already knows: The "official" CPI (Consumer Price Index) numbers released by our government and others around the world are completely bogus.

Money expansion is a cornerstone of modern central banking strategy. With so much outstanding total debt, increasing the money supply (i.e., inflation) becomes increasingly essential for perpetuating the system.

Today, Chris focuses on the question, What is going to happen when that strategy no longer works?

» Read more


True Prosperity

Tuesday, April 17, 2012, 8:28 AM

True Prosperity

by Chris Martenson 
Tuesday, April 17, 2012

Executive Summary

  • Why once you understand the oil situation, you understand how systemic change is inevitable
  • Why to expect a major financial crisis this year
  • Why now is the best time to understand what true prosperity is (beyond just money), and how it should shape your priorities in advance of the coming changes
  • Our guidance on where to focus your efforts most for the greatest returns

Part I: The Trouble with Money

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: True Prosperity

In understanding material wealth, the role of energy -- and particularly oil, in today's world -- is hard to underestimate. 

Primary Wealth

This point cannot be made often enough: Oil is responsible for everything we see around us.

This means that oil is responsible for most everything we might think is delivered by our economy. Which means that oil is the source of nearly all wealth.

As Gregor Macdonald recently penned for us in an excellent report


Off the Cuff: Death and Taxes

Friday, April 13, 2012, 8:27 PM

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris opine on:

  • The Death of the Bull Market?

    • Is the market at an important turning?
  • Painful Math
    • The US is only a 'bright spot' if you close your eyes to the data.
  • Taxes!

    • Why we get so little bang-for-the-buck from the taxes we pay.

Chris and Mish's calls for caution over the past weeks are increasingly looking like very sage advice. A nasty week in the stock market finishes with depressing technical indicators for what's to come next. Add to that the ugly progress the economy is making when you take a more macro view, and top it off with the taxman's coming arrival. It's enough to make you reach for the Pepto-Bismol -- or a stiff drink.

» Read more


Central Follies

Wednesday, April 11, 2012, 5:48 PM

Note: Mish was unavailable for our podcast today, so I am writing up the topics I had hoped to cover for my portion.

Perhaps not enough has been said about the folly of central planning, with 'folly' being a relatively neutral word along the spectrum of possible nouns that might describe what the central banks have been doing. Others might be 'insanity' or 'absurdity.'

For many it is axiomatic that when the government tries to direct an economy by favoring this company over that one, or trying to pick a technology over another, it stands a better than even chance of doing it inefficiently.

But nothing can be more ruinous than attempting to steer the entire economy by fooling around with the price of money itself, as the Fed has been doing. » Read more


Why A Near-Term Market Rollover is Probable

Wednesday, April 11, 2012, 11:44 AM

Why a Near-Term Market Rollover is Probable

by Charles Hugh Smith, contributing editor
Wednesday, April 11, 2012

Executive Summary

  • A plethora of technical indicators show a breakdown is in progress
  • The key charts you need to be aware of
  • Time to place your bets: higher equity prices or higher interest rates?
  • Why a defense strategy in the near term is critical for those holding stocks and bonds

Part I: Are We Heading for Another 2008?

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: Why a Near-Term Market Rollover is Probable

In Part I, we summarized the global financial meltdown of 2008 as recognition that the collateral beneath an enormous inverted pyramid of leveraged debt had vanished, while all the monetary and fiscal tricks of central banks and governments failed to sustain the illusion of sufficient collateral.

Once again we find that massive, sustained intervention in global financial markets is being touted as successful – everything has been “fixed,” markets have been “stabilized,” and a global “recovery” is well underway,

If we believe this, we might be exposed to a dramatic downside should 2012 turn out to be another 2008, when markets realized that intervention did not create collateral, but instead a temporary illusion of sufficient collateral.