Monday, May 30, 2011

Pending Home Sales Index Tanks - Economy Is In Peril

The Pending Home Sales index tanked over 11% from March.  Although no one in the media pointed this out, March's number was revised downward so the drop in April was probably even uglier.  Here's the LINK in case you want to read the retarded gibberish of Larry Yun, the National Association of Realtor's mentally debilitated chief economist about why the weakness is temporary.

The fact of the matter is that all phases of the economy that have been benefitting from the trillions in Government/Fed support, including substantially relaxed credit standards, are starting to fade quickly and now we're looking at GDP contraction on a "real" basis, or measured nominal "growth" less an adjustment for "actual" inflation, where "actual inflation" is defined as the cost of living for most Americans based on what Americans spend money on everyday, including food and energy.  Let's not forget that there seems to be a determined effort to cut spending and raise taxes, which will further hammer growth if either of those two goals are accomplished (I doubt they will be).

Precious metals analysts who I think are worth paying attention to (there's only a few) are now thinking - as am I - that we could see a surprise, counter-seasonal move in gold that will take us quite a bit higher by the time the seasonal Indian buying kicks back in at the end of August.  I suspect more and more Americans are beginning to understand why gold and silver are necessities and I don't expect that the Chinese demand will subside.  In fact, as I was mentioning to someone yesterday, I believe the Chinese are getting closer to "pulling the plug" on the dollar and they need to buy a lot more gold to make it worth their while.

Could be an interesting week ahead, especially if tomorrow's Comex gold report shows more than 10,000 open June gold contracts still standing for delivery...


  1. ...about that supply...?lol...exact opposite of housing...and every shill on tv won't admit it!

    Jim Sinclair’s Commentary

    Any way they can get it. The more gold mining entities the Chinese
    own, the less gold that will come to market.

    China National Gold Seeks Africa Investment as Bullion Trades Near Record
    By Bloomberg News – May 29, 2011 8:02 PM MT

  2. It certainly feels like we are headed for a "counter-seasonal move" in gold. The economic global rot is moving faster and faster through global veins like poison.

  3. You think this might start changing how people think and feel about coinage?..

    Utah Law Makes Coins Worth Their Weight in Gold (or Silver)

    Now, however, Utah has passed a law intended to encourage residents to use gold [GCCV1 1539.10 2.80 (+0.18%) ] or silver [XAG Unavailable () ] coins made by the Mint as cash, but with their value based on the weight of the precious metals in them, not the face value - if, that is, they can find a merchant willing to accept the coins on that basis.

    The legislation, called the Legal Tender Act of 2011, was inspired in part by Tea Party supporters, some of whom believe that the dollar should be backed by gold or silver and that Obama administration policies could cause a currency collapse. The law is the first of its kind in the United States. Several other states, including Minnesota, Idaho and Georgia, have considered similar laws.

  4. Maybe we should buy gold brick houses...?

    Egon von Greyerz and James Turk discuss how gold can preserve your wealth

    James asks Egon what his target for the future gold price is. Egon thinks that gold will reach $8,000 per ounce by 2013-15. His original target was 6-12 thousand $/oz, however, he thinks that in view of current developments, this previous estimates is likely too conservative. They discuss the coming monetary crisis and the importance of holding gold outside the banking system. They remark that the gold price is rising despite the fact that only 1% of world financial assets are in precious metals and that when fund managers rush to buy gold, the price will experience a parabolic rise.

  5. I think that more and more people are starting to understand the fix we are in. Here were are at the start of summer. I doubt that it will be remember as The Summer of Love 2. Hope that you had a good weekend.

    Bill O.

  6. Yeah - dealing in real estate is a bitch these days - I have undeveloped waterfront property that I can't give away to anyone.

  7. I'll say one thing..if there was a bubble in hard assets.... when this guy testified in front of ron paul 6 weeks ago it'd be sro... not an empty boycotted room!
    You can bank on that!

    Jim Grant and James Turk discuss gold, the Fed & the fiscal situation of the USA