Financial topics

[aeden]

Get off the digital lawn, go read books.
https://duckduckgo.com/?q=451&t=hj&ia=web
And they worshipped the dragon which gave power unto the beast: and they worshipped the beast, saying,
Who is like unto the beast? who is able to make war with him?

[Higgenbotham]

April 2011...

Why did you sell your inflation hedges now?

I was primarily a real estate investor for a long time. My expertise is there. In the early 1990s I saw gold and silver were cheap relative to real estate, especially silver. It may have taken 30,000 ounces of silver to buy the median priced home. Those are the terms I think in having worked in real estate.

This became more true 10 years after that. At that point, it may have taken 40,000 ounces of silver or 600 ounces of gold to buy the median priced home. I sold my real estate and put some of the proceeds into gold and silver. In 2007, I reduced that, selling about 60%.

Today it takes perhaps 3,000 ounces of silver or 100 ounces of gold to buy the median priced home. Gold and silver are no longer cheap vis a vis real estate. In fact, they are extremely expensive vis a vis real estate on a historical basis. Therefore, for my money, any inflation hedges I do buy in the future will be residential real estate, which also will produce an income, though less if there is deflation.

Real estate priced in gold and silver has already crashed 80-90 percent.

Since the low in the ratio of the price of a median home to the price of an ounce of silver 7 years ago when this was posted (in fact the low occurred during the exact week this was posted), the price of a median home has risen about 50% while the price of silver has dropped about 70%. It now takes about 22,000 ounces of silver to buy the median priced home, the highest level since real estate prices crashed post 2006.

The Dow silver ratio reached a high of approximately 2600 in the early 2000s. The low in 2011 was about 250. It currently stands at approximately 1800, also a high since the stock market crashed in 2008.

The question in my mind is whether these ratios will ever return to their highs that occurred in the early 2000s. My guess is no. Therefore, it is also my guess that silver is about as relatively cheap as it will get vis a vis real estate and stocks. Of course, if there is a severe deflation, silver will still likely fare poorly.

I would also note that the Dow silver ratio hit a post stock market crash high of 1300 in 2016 and that received quite a bit of comment as to how high it was getting. But not much since. That would be a cue for me to think silver is honing in on a relative low.

[John]

> Since the low in the ratio of the price of a median home to the
> price of an ounce of silver 7 years ago when this was posted, the
> price of a median home has risen about 50% while the price of
> silver has dropped about 70%. It now takes about 22,000 ounces of
> silver to buy the median priced home, the highest level since real
> estate prices crashed in 2006.

> The Dow silver ratio reached a high of approximately 2600 in the
> early 2000s. The low in 2011 was about 250. It currently stands at
> approximately 1800, also a high since the stock market crashed in
> 2008.

> The question in my mind is whether these ratios will ever return
> to their highs that occurred in the early 2000s. My guess is
> no. Therefore, it is also my guess that silver is about as
> relatively cheap as it will get vis a vis real estate and
> stocks. Of course, if there is a severe deflation, silver will
> still likely fare poorly.

> I would also note that the Dow silver ratio hit a post stock
> market crash high of 1300 in 2016 and that received quite a bit of
> comment as to how high it was getting. But not much since. That
> would be a cue for me to think silver is honing in on a relative
> low.

I was speaking on the phone just this morning to someone in
California. She said that the prices of homes in California have been
crashing for several months, and even rents are falling, because
nobody can afford them. Hearing this was a big surprise to me because
I listen to CNBC, FBN and BB, and I can't recall anyone ever
mentioning this, which presumably they would have if this is true.

[Higgenbotham]

I was speaking on the phone just this morning to someone in
California. She said that the prices of homes in California have been
crashing for several months, and even rents are falling, because
nobody can afford them. Hearing this was a big surprise to me because
I listen to CNBC, FBN and BB, and I can't recall anyone ever
mentioning this, which presumably they would have if this is true.

I haven't heard that, though I have heard that, while home prices are holding up in California, sales volumes in California have been declining the past few months.

[Higgenbotham]

https://www.zillow.com/ca/home-values/

California home values have gone up 7.3% over the past year

Although it can be seen on the long term graph that price increases have definitely slowed in the past few months, but prices are still rising.

Also, prices are rising steeply in San Jose and somewhat steeply in San Francisco, but have leveled off in most major metros in the state.

[Higgenbotham]

General comment on "median home price to silver" and "Dow to silver" ratios.

The failure of these ratios to get anywhere near their highs of 15-20 years ago indicates that the economy peaked 15-20 years ago. And a lot of other statistics corroborate that, such as the employment to population ratio.

[Higgenbotham]

Now you might say to yourself that since the employment to population ratio is being skewed by all the baby boomer retirements, that "prime age" workers must be making out better than they were 15-20 years ago because, after all, births fell in the US from 1957 until the mid 1970s before rising again and therefore that cohort is relatively scarce. Nope, not the case.

[Higgenbotham]

Then you might wonder if the economy is as terrible as I say that there must be more age 65 and over boomers working because they can't afford to retire. And that is indeed the case, not to mention the fact that employers, if they are smart, avoid Gen X like the plague due to the continuous debacles they create, as well as their more severe drug and alcohol addictions and other problems.

[Higgenbotham]

https://www.telegraph.co.uk/news/2017/0 ... l-working/

Nearly one in five Americans age 65 and over still working

Associated Press
5 MAY 2017 • 10:50PM

Nearly one in five Americans aged 65 or over are still working,

The last time the percentage was this high was when John F. Kennedy was in the White House.

Last month, 19 percent of Americans in this age group were still working, according to government data released on Friday. That's the highest rate since 1962, and it caps a long trend higher since the figure bottomed out at 10 percent in 1985.

As America grows older and as life expectancy gets longer, some workers keep heading to the office because they like it and still feel engaged. But many others are continuing to work for a simpler, darker reason: They can't afford not to.

More than a quarter of workers age 55 or older say they have less than $10,000 in savings and investments, according to the latest retirement confidence survey by the Employee Benefit Research Institute. Perhaps because of slim nest eggs, nearly a third of workers in that age group say they expect to work until at least 70, if they retire at all.

Older workers still heading for jobs may also be the lucky ones. Many older Americans would like to work but say they can't find a job, whether because they lack the skills or because employers are looking for someone younger. The unemployment rate for workers age 65 and over was 3.7 percent last month. That's a tick higher than its median over the last 30 years, though it's down from earlier this year.

Given that people have been living longer, there is a MUCH higher percentage of 65, 66, and 67 year olds working now than there were in 1962 because in 1962 there weren't a lot of people 80+ like there are now. Probably close to half of those age 65-70 are still working.

[aeden]

H the system will follow cults. Bezmenov was over 96 percent correct and promptly ignored.
Debt is no different than the elimination mice so then the all cats go hungry.
Asian credit markets is cats of any color chasing mice.
Americans are still comatose to their future unless they awake.

https://www.zerohedge.com/news/2018-08- ... os-exposed