Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we focus on housing bubbles.
Precious Metals:
We’ll start today with this from Frank Holmes: Gold Mining Stocks Are Surging On Global Economic Fears
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And for the chartist believers, there is this from Clive Maund: Gold – Is A sharp C-wave Drop Imminent?
Economy & Finance:
Some polling data, cited by Zero Hedge: America 2050: Inequality Crisis, Automation Threat, Debt Shock
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Michael Snyder: Wall Street Red Flag: A Bond Market Indicator That Has Predicted Every Recession In The Last 50 Years Just Got Triggered
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And at Wolf Street: The Most Splendid Housing Bubbles in America Deflate Further. A snippet:
“The most obvious one was Seattle. Now it’s joined by a second most obvious one, the San Francisco Bay Area. According to the CoreLogic Case-Shiller Home Price Index released this morning, single-family house prices in the five-county San Francisco Bay Area — the counties of San Francisco, San Mateo (northern part of Silicon Valley), Alameda, Contra Costa (both part of the East Bay ), and Marin (part of the North Bay) — fell 1.3% in January from December and are now down 4.3% from the peak last July, the biggest six-month drop since the six-month period ended in February 2012, the bottom of Housing Bust 1.”
Derivatives:
Rick Ackerman – Fed is Crazy, $1 Quadrillion Global Derivative Market Means Deflation
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Have you ever wondered about the relatives size of the global derivatives markets? Check this out: All of the World’s Money and Markets in One Visualization. (Yes, it is hard to imagine $1.2 Quadrillion Dollars. Albeit “notional” value.)
Commodities:
The World’s Largest Oil Company And Petrochemical Company Merge. A brief excerpt:
“The long awaited Saudi Aramco acquisition of Saudi Basic Industries Corporation (SABIC) is finally here. With a statement to the press, Aramco CEO Amin Nasser reported that Aramco has acquired a 70 percent stake in SABIC, with an estimated value of $69.1 billion. Aramco’s CEO Nasser reiterated that the ‘deal is a major step in accelerating Saudi Aramco’s transformative downstream growth strategy’.”
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Venezuela Main Oil Port Shuts Down Amid Blackout
Forex & Cryptos:
Still bouncing around parity: USD/CHF Forecast US Dollar / Swiss Franc
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With The USD Rising, Has The Harvest Time Come Now?
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Staking Startup Claims ‘Up to 30%’ Returns for Just Holding Crypto
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Martin W. Armstrong: Regulating the Virtual & Cryptocurrency World
Investing Information Resources:
Zero Hedge now offers several free subscription options to receive their posts, via e-mail.
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Brandon Smith has launched a new modestly-priced e-newsletter on fighting globalism: The Wild Bunch Dispatch.
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I recommend the McAlvany Weekly Commentary podcast.
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I also enjoy the Armstrong Economics blog.
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often get the scoop on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
Re: Brandon Smith’s new e-newsletter
Thank you for letting us know. Brandon is an awesome financial analyst. His critical thinking and analysis are some of the best exports of The Redoubt.
Re: America 2050
Some observations
Interesting the lack of confidence in politicians. One of the things that has changed in my personal thinking over the last several decades is my view of leaders. With a few exceptions I do not believe our best are in leadership roles at almost any level and particularly in government and big institutions. I think are best politicians are our best politicians. Meaning that their primary skill is simply acquiring power not beneficial decision making. I think we have been duped for virtually all of human history into thinking that our leaders had the answers to our problems. I think our leaders have the answers to some of THEIR problems. I think this applies to some degree in big business as well.
Another thought is about income inequality. Compared to perhaps the 50s through the 70s we currently have pretty big income inequality. Compared to all of human history I do not think that is necessarily the case. Even the poor in the US today live better than Kings of old. I get the concerns particularly regarding the power that accompanies the money, but I think the income inequality focus of today is largely just the politics of envy and an illustration of why we have the commandment “Thou shalt not covet”. If you think about it socialism is the natural result of covetousness and we see the results of that.
Polls in general are of limited value. They have limited predictive capability. Make people place bets on the future and you get better judgement. This has actually been illustrated in some testing done where people are allowed to bet on elections. The people betting usually do better at predicting outcomes than the polls.
Well said!
General observations on the current discussion of the yield curve (the relationship between interest rates on government securities of different maturities. There’s lots of speculation out there that we’re on the verge of a recession/depression/crisis, because parts of the yield curve have inverted. This is overblown. The most important part of the yield curve, the 10 year – 2 year Treasury, is still positive, although only slightly. Historically, when this part of the yield curve inverts (goes negative), a recession is usually 6-18 months away.
Comment on gold-related stocks. Gold mining stocks may be surging, but anything that can go up quickly can go down quickly as well. There are several so-called “royalty” companies in the precious metals space, and they tend to grow almost as well but with less volatility. Some of them even pay dividends! Royalty companies don’t own mines (mining is an incredibly risky business); they purchase the right to sell the output from mines owned by others. Most experts suggest starting with one or more of the largest royalty companies, both in gold and silver. At that point investors with a higher risk tolerance might look for a newer and smaller royalty company for potentially higher gains.
Some royalties can even payout in physical PM.
There are different ways to protect your portfolio from a significant downturn. You can use options, short stocks, use inverted ETF’s, or use out-of-the-market trailing stops. I really like the last option — I have stops on every stock and mutual fund I own. If any security drops to its stop level from its most recent high point, I get a text and an email and I sell it when the market opens the next day. This helps protect gains and cuts losses. If you want to stay in stocks for the next phase of the bull market, this will help protect your money and let you sleep better. You just have to sell when the system tells you to — no second-guessing. I use a website, http://www.tradestops.com (I have no connection with them other than my use.) There are probably others.
RE: All of the World’s Money and Markets in One Visualization
There are an estimated total of 1 billion ounces of silver above ground, or 28,350 tonnes.
There are an estimated total of 187,200 tonnes of gold above ground.
Logic would indicate that it would be wiser to invest in silver over gold.