Van

$1,222. Dow/Gold ratio now 13.1:1. What a turd this gold play is turning out to be.

The concluding act of a 40+ years binge on fiat money is going to play itself out over the next few years.

There has never been a WORSE time in history to commit to a 25 year loan on an asset that has only one way to go.

When it finally goes, the repercussions will be tremendous.

- negative real interest rates

- government guaranteed mortgages

- a dysfunctional vampire economy totally reliant on credit expansion

- public finances that continue to decline month on month, year no year

I have lived enough years to know that these conditions can go on longer than anyone suspects they might, but eventually it will end, and as history has shown, life will not be the same for anyone from that day on.

Leading turnaround sign?

GDX & GDXJ actually rallied and managed to finish +ve.

Is the BOND BOUNCE done?

TLT could not even reach its falling 144dma, and now seems to be getting dragged back down.

The US 10yr treasury rate fell from 3% to 2.5% off the back of the bounce, but is now threatening to climb again.

It will be interesting to see if it can move to a higher high in the next couple of months.

It's time to start getting BULLISH on Silver.

Punched through the 144dma with more conviction this time.

It will flatten out PDQ if we can hold station above it for just a couple of weeks, and even more from next month after the Apr drop falls out of the calculation.

HOD has been $1362, right on the 144dma.

Will it have another attempt?

I like it.

Setup looks like almost a mirror image of Feb when the 76dma crossed the 144dma which signalled the collapse.

Now the 76dma has now turned up.

If it can clear recent highs of ~22.50 and then ~24 it will complete the bottom formation.

Weren't you "itching to buy" at 1255?

 

Recent lows may have been a good time to "scratch".

 

I suspect Dom's article "had" to have been written for the Monetweek masses rather than from his gut.

I luckily went long a small amount right at the bottom around 1255, rode it up, got my stop taken out at in the mini-correction @1311, but I also held silver and managed to catch the most recent highs.

however in doing so I found myself slipping back into old bad habits and breaking my own trading rules, part of the reason I'm on a self-imposed break. I know that if I carry on like that I'm going to completely wipe out my account sooner or later - probably sooner.

Nice summary of the bigger picture here from CC:

http://moneyweek.com/whats-next-for-gold/

I happen to agree with this, and I will continue to be quick to bag profits on the sign of a correction, until we re-establish a long term uptrend.

Down to $1255 in London trading.

Looks very vulnerable now.

Biting my fingers and wondering if I should add to my core holding.

Save this page; http://en.wikipedia.org/wiki/Next_United_Kingdom_general_election

 

The terms of the Fixed-term Parliaments Act 2011 mandate that the election will be held on 7 May 2015 (except in the event of a collapse of government or a two-thirds majority of MPs voting for an early election).^[1]

 

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What is the motive of the current Bank of England Governor?

 

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There are two things to find out if someone wants to do this.

 

Find out the years of Mark Carneys (current Bank of England Governor) rein in Canada as the Central Bank Chief.

 

Find out what happened to interest rates during that time and any government policies created (this will be hard) that stimulated or hindered home prices.

 

We know the Canadian outcome already - Canada had a housing bubble during his rein.

Canada's housing bubble will be spectacular when it collapses. I have heard that something like 10% of total jobs in Canada are now in the construction sector. Even the US at the peak of their bubble only had something around 7%.

Here's the VID - with Max

 

http://www.youtube.com/watch?v=3GHnEpp1B3A

 

"A NATION of Real Estate Agents !"

 

"They think that George Osborne's Help-to-Buy scheme is frigging genius."

"25% of new jobs... are in the Real Estate sector.

"A triangle of fraud, a Bubble... which will pop within 23 months."

"It's WEALTH SHIFTING."

He gives a pretty damning verdict of the UK economy... none of it refutable, imo.

I am not surprised at the recent price action.

We are still in stage 1 - the 144dma is still falling, and we needed and still need a few months of consolidation to build a base.

The good news is that the faster moving 89dma is now flat, and the 144dma will flatten out quickly over the next couple of months as the 1600ish prices from earlier in the year fall out of the calculation. Paitience is required here.

Rock bottom mortgage rates = Peak prices

http://www.telegraph...-of-3.43pc.html

The Bank of England announced that the average mortgage interest rate fell to 3.43 per cent in the three months to June, down from 3.47 per cent the previous quarter, while the average rate for new mortgages fell from 3.65 per cent to 3.47 per cent.

But borrowers have been warned that rates have already started to creep up again since the figures were compiled, meaning the era of all-time low mortgages may be at an end.

*******

I can concur with this. Before I remortgaged last month, the 2.85% deal I was hope to get was pulled, and replaced with a 2.99% deal (Virgin). Still very low of course, but I rather think that we cannot go any lower.

Silver into the USD21-22 range. If gold should fall to 1000 as some predit, where does this leave silver?

Silver is always more volatile that Gold... $1000 gold means $15ish silver imo.

Personally I am not convinced that we will make new lows. Just as everyone was talking about reclaiming $1500 a couple of weeks ago, now everyone is talking about sub-$1000. It's typical bottom-forming sentiment. Don't be surprised to see a strong rally in the next couple of weeks.

our friend the 144 dma is now resistance

And what's more, the 144dma is still heavily downward sloping. I would be very surprised if the price can go straight up from here; more likely we'll have to be a little more patient until the 144 has at least flattened out a little. In the meantime we need to hold the 1350 area for the intermediate trend to remain bullish.

I said at the start of the year that I thought UK property would RISE 5% or so. It is not a surprise at all when you consider how cheap money is. You can get a 2yr fixed for 1.5% for christ sake!!

City AM have declared the Great Bond Market Crash of 2013:

http://www.cityam.com/article/1378429690/winners-and-losers-great-bond-market-crash-2013?utm_source=website&utm_medium=TD_EditorsLetter_Homepage&utm_campaign=TD_EditorsLetter_Homepage

"DON’T say you weren’t warned. The great bond market crash is upon us and it has further to go. The cost at which the US, UK and some other governments can borrow is shooting up, with the 10-year gilt and the 10-year Treasury bond both breaching the symbolic 3 per cent yesterday. Mark Carney and the monetary policy committee are not hiking interest rates – but the markets are doing the work for them."

This could be a very significant breakout.

Government borrowing rates to spike?

Just watching the yield on the US 10yr.. looks likely to take out the old highs, maybe in the next few sessions:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=BX%3ATMUBMUSD10Y&insttype=Bond

You can be sure that Bernanke and his successor will not stand for this.

As pointed out by the ASI, Where America leads, Britain follows:

http://www.adamsmith.org/sites/default/files/research/files/burningdownthehouseWEB_0.pdf

Like the British government does today, the American

government once waded into the mortgage guarantee

business through a number of government-sponsored

private enterprises (GSEs) – particularly the Federal

National Mortgage Association, known as Fannie Mae, and

the Federal Home Loan Mortgage Corporation, known as

Freddie Mac, both of which played a central role in the U.S.

housing market for decades by purchasing mortgages and

pooling them for securitisation. The primary benefit of

GSE involvement in providing liquidity to the residential

mortgage market was that the strength of the AAA

American sovereign credit was implied upon the GSEs,

reducing interest rates for, and increasing liquidity to, the

housing sector, widening access in much the same way the

government proposes to do with Help to Buy.

Just because market rates rise web qe is withdrawn does not automatically mean bank rates will rise. I've elected not to fix my massive mortgage but have linked to BoE base rate which I am gambling will stay low.

Thing is, fixed rates are generally as cheap as variable discounted rates mortgage rates now.

According to

http://www.money.co.uk/mortgages

best 2yr tracker mortgage is 1.94%

best 2yr fixed rate is 1.64%

doesn't make any sense to go with the tracker - none at all.

Gold is an emotive subject, because if you hold gold and believe in gold as money, it says a lot about your social and political beliefs.

These days I just look at the charts. I'd prefer if the I could somehow blank the chartnames that I regularly look at and just display the graphs.

A feb-2013 article:

http://www.bbc.co.uk...siness-21381921

"The average five-year mortgage deal has come down in cost substantially in the past two years.

Recent statistics from the Bank of England showed that in December 2012 the average interest rate being offered on a five-year deal was 3.89%.

That compared to an average rate of 5.15% two years ago, in February 2011."

What a rate !

 

Grab it !

(That's one advantage of being a homeowner, I suppose.)

 

What will your mortgage cost be vis-a-vis renting? (Just curious)

The market rate for our flat would be about £1300/month gross or £15,600 pa, subtract service charge and some running costs.. call it £14,000 pa net.

market value... roughly £270k... Interest on a 100% loan @ 2.99% (of course, you couldn't get 100% LTV at this rate) would be £673pm.. £8076, pa, so I am saving effectively 6kpa vs renting.

2.99% isn't even the lowest rate; if you have 40% equity there are a few lenders who will do 2.5% 5 year fixed, but rates for lower LTVs are also much lower than they were 2-3 years ago.

Homeowners are making hay, private renters are being squeezed to death, and we continue to tie up all our capital in an unproductive housing stock and pay for them through the mcJobs that such an economy produces. It's a very unhappy country of haves and have-nots, all as a result of the government protecting the homeowner.