Survival And Prosperity

CNBC Tries Calling Out Peter Schiff Over Gold Price

Anyone remember those “Peter Schiff Was Right” YouTube.com videos that went viral right after the U.S. housing bubble popped and the global economic crisis really reared its ugly head in the fall of 2008?

Here’s probably the most popular one out there.

Well, I’m convinced a clip or more of Thursday’s installment of the CNBC show Futures Now, hosted by CNBC Reporter Jackie DeAngelis, will be included in a future “Peter Schiff Was Right About Gold” YouTube video. From an exchange between DeAngelis and the CEO and chief global strategist of Euro Pacific Capital:

SCHIFF: You’re talking about investors’ demand for gold going down. I would disagree. Because I own a gold company too, Euro Pacific Precious Metals. And we’ve never had more demand from our clients in the history of my company than we have now. I would say speculators, speculative demand, is what went down. I think a lot of people who came late to the gold rally were speculating in gold. They were simply buying it because the price was rising. They wanted to hop on that train. They use ETFs. They use futures markets. So I think the speculators have been flushed from the market in this pullback. But the investors- they’re still there. Because all of the reasons they’ve been buying gold for the past 10 or 12 years- those reasons have never been stronger. And so investor demand continues. We’ve flushed away the speculative demand. But I think the speculators will come back in the next rally.
DEANGELIS: Alright. Well, Peter, let’s step back for a second because you kind of jumped in there on the conversation we were having and I definitely appreciate your opinion on that. But I want to talk about the gold price that we’re looking at right now. $1,383.60. That is the price that we’re looking at at this point. We’ve had you on the show multiple times before, you said that gold was going to skyrocket, you say it’s going to be a bumpy ride and you can’t tell us exactly how we’re going to get there. But tell me today, Peter, why have you gotten it wrong?

(Editor’s note: Bold added for emphasis)

SCHIFF: I don’t think I have gotten it wrong. You just said I said it would be a bumpy ride. Look, it’s been bumpy, but I’ve been on this ride since gold was under $300 an ounce. It’s not like gold is down from that point. It’s off its highs. But I think what’s going on right now is you’ve got a false narrative out there that the U.S. economy is improving. It’s not. All the data points have been negative. A deluge of negative data came out today. The only evidence of a rebounding economy, is the stock market going up, or the real estate market going up. But that’s not because the economy is sound. That’s because of all the cheap money created by the Fed. That’s the same reason why stock and real estate prices were going up in 2006 or 2007. It is a bubble. The economy, meanwhile, is actually getting worse. And all this talk about the Fed getting ready to take away the punch bowl is all talk. They’re going to spike it even more. They’re going to up the size of QE. But people who are speculating of an early end are getting it wrong. Gold is going through a correction. All bull markets have a correction. It is a buying opportunity.

“Schiff: Gold a Generational Buy”
CNBC Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Tags: CNBC, gold, gold ETFs, gold prices, home prices, housing prices, Jackie DeAngelis, money printing, Peter Schiff, Peter Schiff Was Right, Peter Schiff Was Right About Gold, QE, quantitative easing, speculation, speculators, stocks, YouTube

Robert Shiller: 10 Years From Now, ‘Home Prices Will Be About Where They Are Now, In Real Terms’

I can’t believe it’s been 8 months since I last blogged about Yale economist and housing expert Robert Shiller. Back on September 18, I wrote that Dr. Shiller, who was out there in the mid-2000s warning anyone who would listen about the housing bubble and subsequent crash, wasn’t sure residential real estate in the United States had bottomed-out just yet, noting there already had been 4 attempts at a housing recovery since the subprime crisis struck.

On April 30, Robert Shiller appeared on Yahoo! Finance’s business show The Daily Ticker. Speaking to host Henry Blodget, Dr. Shiller had this to say about where he thought home prices were heading:

BLODGET: And so you have studied home prices going back hundreds of years. You’ve watched the bubble form here. You called the top of that. You called the crash. What do you think will happen to house prices over the next 5 to 10 years?
SHILLER: Yeah, well I wrote several New York Times columns about this. I think it’s hard to say. It could go up. It could go down. You know, in the 20th century, typically, in a decade, real inflation-corrected home prices went up 15 percent or down 15 percent. Usually not because of any bubble or anything like that. It’s just supply and demand, right? The existing home stock might be in the wrong location and the economy is moving somewhere else. So it loses value. Or, then it might be some new interest in owning a home. These things are hard to predict.

But my guess that is, 10 years from now, home prices will be about where they are now, in real terms.

Dr. Shiller also had this nugget for real estate investors:

So it looks like there’s a tilt toward rentals. What that suggests to me that if you want to invest in housing, you want to look toward housing that is suitable for conversion to rental.

You can watch the entire interview on the Yahoo! Finance site here.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Tags: home prices, housing bubbles, housing prices, rentals, Robert Shiller

Peter Schiff Warns Of ‘Phony Jobs In A Phony Economy’

“Total nonfarm payroll employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, food services and drinking places, retail trade, and health care.”

-U.S. Department of Labor, Bureau of Labor Statistics, May 3, 2013

Peter Schiff, the CEO/Chief Global Strategist of Euro Pacific Capital who correctly called the U.S. housing bust and “Panic of ’08,” was critical of the latest U.S. jobs report in his latest entry on The Schiff Report YouTube video blog. Schiff pointed out:

The fact of the matter is, all of the jobs that were created, the reason they were created was because of QE. QE is the only reason we’re creating these jobs. And if the Fed ever were to taper it back, the jobs would disappear. As a matter of fact, the Fed is going to have to up the size of the QE to sustain these jobs. Just like with any drug, you develop a tolerance. And so the more you use, the more you have to use. So we’re going to need ever-increasing doses of QE to maintain these phony jobs.

Meanwhile, the data itself, was not even good.

(Editor’s note: Schiff’s look of disgust after saying this= priceless)

I mean, sure, it beat expectations. Because the bar had been lowered so much. It only created 165,000 jobs. All of those jobs were in the service sector. We didn’t create one manufacturing job. Zero. So we’re not creating the jobs that make us richer. We’re creating the jobs that are actually going to drain our wealth because we’re borrowing money to create them…

The bottom line is the media is going to cover this- the unemployment rate has gone down to 7.5 percent. It’s like a four-year low. We’re creating jobs. They’re going to say that things are getting better. They’re not. They’re not getting better, they’re getting worse. Government statistics don’t tell the whole story. In many cases, they tell the wrong story. And eventually, of course, when the music does stop, these jobs are going to disappear. Along with the phony economic growth that went along with it. One way or another, it’s going to happen.

“Jobs And Stocks — Behind The Numbers Lurks A Bubble Disguised As A Recovery”
YouTube Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Tags: government statistics, manufacturing sector, Peter Schiff, QE, quantitative easing, service sector, service sector jobs, The Schiff Report

Redfin CEO Identifies Most- And Least-Vulnerable Metro Housing Markets To Experience Another Bubble

Last week in my Sunday paper, I spotted yet another great article by Chicago Tribune real estate reporter Mary Umberger. It was an interview with Glenn Kelman, chief executive officer of Redfin, a real estate brokerage doing business in 20 U.S. housing markets.

Apparently, Redfin recently ranked 15 major metropolitan areas it perceived as most- and least-vulnerable to experiencing another housing bubble. Kelman told Umberger:

We’ve looked at several factors: income to home-price ratios, ratios of sale price to listing price, the frequency of flips (resales within 18 months of purchase), incidences of bidding wars, and rates of going under contract within two weeks of listing.

From looking at those things, we think there are four markets that are in mini-bubble territory, at risk of price correction: Washington, Los Angeles, San Diego and San Francisco.

At the other end of the list, the least likely to see a correction is Atlanta, followed closely by Chicago, Las Vegas and Dallas.

A new housing bubble. Something I’m starting to hear more of these days.

Anyone remember “crash prophet” Peter Schiff’s warning from last September? I blogged on September 18, 2012:

In his September 14 entry on the The Schiff Report YouTube video blog, Schiff, who correctly-predicted the bursting of the U.S. housing bubble and 2008 global economic crisis, explained to viewers what QE3 was really about:

This is the plan that Ben Bernanke has. Ben Bernanke’s plan to revive the U.S. economy, and create jobs, is to inflate another housing bubble. That’s it. That’s what the Fed’s got. That’s what it came up with. As if the last housing bubble worked out so well for the economy, that the Fed wants an encore.

You can read Umberger’s entire exchange with Redfin’s Kelman on the Tribune website here. Interesting stuff.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Tags: Atlanta, Ben Bernanke, California, Chicago, Dallas, Georgia, Glenn Kelman, home prices, housing bubbles, housing prices, Illinois, Las Vegas, Los Angeles, Nevada, Peter Schiff, Redfin, San Diego, San Francisco, Texas, Washington D.C.

S&P/Case-Shiller: Chicago-Area Home Prices Fall For Sixth Straight Month

Good news on the housing front this morning. At least outside of the Chicago metropolitan area. Leah Schnurr reported on the Reuters website:

Single-family home prices rose more than expected in February, posting their best annual rise since May 2006 in a fresh sign the housing recovery remains on track, a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 1.2 percent on a seasonally adjusted basis compared to January, topping forecasts for 0.9 percent.

Chicago-area home prices are still stuck in a recent downward trend however. From Crain’s Chicago Business ChicagoRealEstateDaily.com this morning:

Chicago-area home prices dipped again in February, the sixth straight monthly fall for a closely watched index.

Single-family home prices fell 0.8 percent locally in February compared with January, according to the S&P/Case-Shiller indices released today.

At the same time, Chicago-area home prices are still up 5.1 percent compared with February 2012.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

“Chicago home prices fall for 6th straight month.” ChicagoRealEstateDaily.com. 30 Apr. 2013. (http://www.chicagorealestatedaily.com/article/20130430/CRED0701/130439996/chicago-home-prices-fall-for-6th-straight-month). 30 Apr. 2013.

Schnurr, Leah. “February home prices see best yearly rise in almost seven years: S&P.” Reuters. 30 Apr. 2013. (http://www.reuters.com/article/2013/04/30/us-usa-economy-homes-index-idUSBRE93T0LZ20130430). 30 Apr. 2013.

Tags: Chicago, home prices, Illinois, S&P/Case-Shiller Home Price Indices

Project Prepper: House Hunting In The Chicago Suburbs

It’s been years since I’ve been this busy. As I mentioned the other week, in addition to having a family member in the hospital, house hunting is taking up a lot of my time these days. You may recall from a number of earlier “Project Prepper” posts that my girlfriend and I planned some time ago to move out of Chicago to the northwest suburbs by late spring.

The big picture looks to be “purgatory” in Illinois for a couple of more years before eventual “sanctuary” in southeastern Wisconsin.

(Editor’s note: Related posts here, here, and here)

Well, it’s spring now, and not only have we looked at a number of single-family residences out in the ‘burbs, but we’re now “under contract” to purchase one of these homes.

Ironically, the very first one we looked at.

After crunching the numbers, it made more sense for us to buy rather than rent. And while we would have liked to live as close to my girlfriend’s place of employment as possible, the situation is a lot like what I blogged about back in November:

Unfortunately, the prices of many homes within walking distance of my girlfriend’s place of employment are extremely high, and considering that this suburban residence may only be temporary for us, I’m not sure buying makes a whole lot of sense here. Because my girlfriend is open to incurring a small commute time, the purchase of a house in an adjoining suburb that has more affordable housing and lower property taxes might be a better option. Plus, should we move into the subdivision of that neighboring suburb that we’ve been looking at for some time now, my girlfriend would be very close by to several members of her immediate family. Renting hasn’t been ruled out either.

In a nutshell, the single-family residence we hope to close on in a month or so is in that neighboring suburb with the more affordable housing and lower property taxes. While not in the same subdivision as her family, we’re right next door.

But more about the house. At least as it relates to “Project Prepper.” Some time ago I put together a “wish list” for what I’d like a Chicago-area property to have. This includes the potential for:

• An emergency water supply
• A food garden
• Effective layers of security
• Going “off the grid”

Oh, I almost forgot to mention a fenced-in yard for a guard or watch dog.

This suburban property definitely has the potential for all these things. Partial brick construction, spacious backyard, an area all ready set aside for gardening, and more.

As such, I sure hope everything works out and I’ll be able to move into the official “Project Prepper” lab later this spring.

More soon.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Tags: Chicago, Chicago suburbs, dogs, emergency food, emergency water, Illinois, renting, suburban living, suburbs, Wisconsin

Illinois Public Pension Funding Gap Now Over $100 Billion?

It’s been depressing to watch the public pension funding gap keep growing here in Illinois.

The last time I blogged about the subject (March 4), the unfunded debt to the five state pension systems amounted to $96.8 billion.

When I first reported on the public pension crisis on April 28, 2011, state employee pensions were underfunded by more than $80 billion.

And this weekend, I saw on the Crain’s Chicago Business website that the pension shortfall has now passed the $100 billion mark. Paul Merrion wrote this weekend:

Sometime this month, Illinois probably exceeded $100 billion in pension debt, a sorry milestone in the state’s long slog to fiscal hell.

Illinois would be only the second state to reach the 12-digit mark. But California, the previous epic fail, has a much larger tax base and is on the mend.

Pension statistics tend to make eyes glaze over, and the $100 billion moment is an unofficial, back-of-the-envelope calculation. But it’s an undeniably big and potentially symbolic number as state legislators wrestle with the shortfall in money owed to current and future retired teachers, judges, state workers and even lawmakers themselves.

(Editor’s note: Italics added for emphasis)

“A sorry milestone in the state’s long slog to fiscal hell.”

Nicely-worded. And something the state’s residents really need to digest, seeing that “every man, woman and child living in Illinois” is on the hook for $7,767 for this debt according to Merrion.

I’ll tell you one thing. Hearing this latest fiscal faux pas makes me question the wisdom of buying a home in the state this spring considering what looks to be coming down the pipeline. Which sucks, because rents are astronomical for suitable property in the areas where my girlfriend and I prefer to live.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Merrion, Paul. “Illinois hits a sorry milestone.” Crain’s Chicago Business. 25 Mar. 2013. (http://www.chicagobusiness.com/article/20130323/ISSUE01/303239976/illinois-hits-a-sorry-milestone). 25 March. 2013.

Tags: Illinois, pensions, public pensions, rental prices, renting, state government, State of Illinois

Jim Rogers: ‘This Is Artificial Floating Of Assets And It’s Going To End Badly’

Lots of Americans these days probably think higher stock and home prices reflect the economic reality of the times.

A strong economic recovery in America?

Try fiat currency printing presses around the world working overtime.

The famous investor Jim Rogers sat down with CNN International’s Nina Dos Santos, host of World Business Today, last Friday. From their exchange:

ROGERS: It’s the first time in world history, recorded history, when all major central banks at the same time are printing a lot of money. The Japanese in December said “we will print unlimited amounts of money.” So the Americans said “we can do that!”
DOS SANTOS: You don’t agree with that strategy?
ROGERS: No, of course not. Debasing your currency sometimes works in the short-term. It has never worked in the long-term. And it doesn’t ever usually work in the medium-term. Debasing your currency- lots of politicians like to do it because it’s an easy way. But then the Americans said “we’ll print money.” And then the English said “well, we’ll print money.” And the Europeans of course. This is artificial floating of assets and it’s going to end badly.

“Rogers: Printing money is unsustainable”
CNN International Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Tags: central banks, currency debasment, Eurozone, fiat currencies, home prices, Japan, money printing, United Kingdom

Peter Schiff: Fed Creating Another Housing Bubble, ‘Day Of Reckoning’ Early In Obama’s Second Term

First it was “crash prophet” Jeremy Grantham warning:

Courtesy of the above Fed policy, all global assets are once again becoming overpriced.

Now, Peter Schiff is saying the same about housing.

And that America’s “day of reckoning” is right around the bend.

From a March 1 entry posted on The Schiff Report YouTube video blog:

The Fed influenced the housing market during the bubble predominantly by influencing the short end, making it easier for people to take out ARMs. Today, the Fed is influencing the housing market not predominantly by influencing adjustable rate mortgages, but by outright buying 30-year fixed-rate mortgages to drive mortgage interest rates down to record lows. But in both cases, it was the Fed’s interference that inflated the prices, inflated the bubbles, and there’s going to be a disastrous consequence when this bubble bursts. Although this bubble, is not going to be, I think, as large as the previous bubble. I think the consequences will be much bigger, as the Fed is not going to succeed in elevating home prices. But what they are succeeding at doing is transferring significant percentages of bad mortgages from the private sector to the Federal Reserve. In fact, the federal government has never been more involved in the housing market than it is today. Not only does the government insure over 90 percent of the mortgages, through the FHA, through Fannie, and Freddie. But now the government owns the mortgages. The Federal Reserve is financing them. The Federal Reserve is buying $45 billion worth of mortgages every month. So the government is the housing market…

Now President Obama, we’s got a bigger bubble going during his presidency, and he ain’t getting out of Dodge either. Only this time, I think, the bubble is going to burst not late in his second term, but early. And the difference is going to be- there are no more bailouts. This is the last bubble. This is the biggest bubble. In my book, The Real Crash: America’s Coming Bankruptcy: How to Save Yourself and Your Country, I call it the “government bubble.” That’s what we have. This is the final bubble, and there is no bailout. We’re finally going to have to deal with the consequences of our profligacy. And the problem is, because we’ve kicked the can down the road for so long, right? We’ve papered it over with so much inflation, that the problems have gotten that much worse, which means when we finally are forced to confront them. And again, we’re going to be forced to do it. We’re not going to do it on our own. We’re not going to voluntarily check into rehab. We’re going to have to be forced to do it, because we’ve hit rock bottom, and the world has done an intervention. This “day of reckoning” is coming. And it’s not because of the sequester. Everybody is making a big deal about how painful this sequester is supposed to be. Well this is nothing compared to what’s really going to happen when we really have to swallow the bitter tasting medicine to restore health to an economy that is virtually going to be on its deathbed as a result of all the bad medicine that has been forced-fed it over the years by the Federal Reserve, by Congress, to mask the symptoms while the underlying disease gets that much worse.

“Bernanke Almost Comes Clean On ‘Exit’ Strategy”
YouTube Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Tags: 2013 sequester, 30-year fixed-rate mortgages, adjustable rate mortgages, ARMs, Barack Obama, Congress, government bailouts, government bubble, home prices, housing bubbles, housing prices, Jeremy Grantham, mortgage interest rates, mortgages, Peter Schiff, sequesters

Peter Schiff: ‘Gold Bears Are Making Much Ado About Nothing’

There’s been quite a bit of talk these past couple of years about the Federal Reserve tightening monetary policy due to an economic recovery finally arriving that I’m going to have to agree with “crash prophet” and Euro Pacific Capital CEO/Chief Global Strategist Peter Schiff on this.

The Fed is bluffing.

Unless Fed officials are now starting to worry that growing their balance sheet is not in their best interest anymore.

Schiff, who correctly-called the 2008 global economic crisis, wrote in the March issue of his Gold Letter that was published Friday:

Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: “We could exit without ever selling by letting it run off.” What Bernanke means here is that the Fed could simply hold its Treasuries and agency bonds until they mature, at which point the government would then be forced to pay the Fed back the principal amount. Through this process, the Fed’s unprecedented and inflationary position will be gradually and placidly unwound.

Growing rumors last month of a potential “tightening” of monetary policy – seemingly confirmed by the Fed minutes released on Feb. 20th – have spooked the precious metals markets, leading to a 5.8% correction in gold and 10.2% in silver.

However, these fears are preposterous on two counts…

You can read the entire article (“The Fed’s Tightening Pipe Dream”) on the Euro Pacific Precious Metals website here.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Tags: Ben Bernanke, central banking, gold, government bonds, Greece, home prices, housing prices, Operation Twist, Peter Schiff, Peter Schiff's Gold Letter, QE, quantitative easing, silver, Treasuries, U.S. dollar