Housing Prices Will Lead to Double Dip Recession: 3 Short Plays

Alas, the double dip recession has arrived. It seems that everyone and their mother in financial media predicted this moment. It goes without saying that this was a long time coming. However, I am certain that I will be among the first to give a glimpse to what exactly the bottom may look like (whenever it arrives) and the new reality that maybe the U.S. home market.

http://seekingalpha.com/article/269375-housing-prices-will-lead-to-double-dip-recession-3-short-plays

Housing crash is getting worse: report

By Brett Arends

New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.

Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.



And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.



Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.





http://www.marketwatch.com/story/housing-crash-is-getting-worse-2011-05-09

Presidential candidate Ron Paul Warned us of Coming Social and Political Chaos

Back in Febuary 2010, Ron Paul warned the pople of what is now near ubiquitous knowledge. The enevitable collapse of the US currency and the resulting social and political chaos is coming soon.



As melodramatic as this sounds, this isn't just media hype. This has already happened in Weimar Germany, Argentina and Zimbabwe. Their currencies became entirely worthless, and they experienced an “end of the world as we know it” in their nations. The ongoing "Arab Spring" & all the unrest in the mid east was brought about by inflation (one Farmer fed up with food prices started it all). And We'll probably see something similar in Greece and other euro-zone nations soon. Do you really think that the USA won't be far behind?

http://www.youtube.com/watch?v=sPQs6ri7Dt0

The End Of The World As We Know It

TEOTW Is Foolishness – TEOTWAWKI Will Happen Soon
by Russell D. Longcore

The world media was all abuzz last weekend with the prediction by radio preacher Harold Camping of Family Radio who made a prediction that the world would end on May 21, 2011. But Mr. Camping was mistaken once again. No, this is not his first time making this prediction. Still, it was very entertaining while it lasted.

The phrase “The End of the World” is a connotation phrase- No one ever seems to define it. The term “End of Days” is used interchangeably. But whatever they mean, they do not mean exactly what they say. The end of days would literally mean that time stood still, the earth stopped spinning on its axis and there were no more days. No one believes that will happen. Even if Harold Camping would have been right, the world would not have ended. Even the Mayan predictions of the “end of the world” do not include the destruction of the earth in 2012.

So what is TEOTWAWKI? (The end of the world as we know it)

READ MORE

Steve Forbes: "The US Will Likely Have A Gold Standard Within The Next Five Years"

by Tyler Durden

"A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills. “What seems astonishing today could become conventional wisdom in a short period of time,” Forbes said.

Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending.

TheModernSurvivalist: Thoughts On Urban Survival

By FerFAL

EDITORS NOTE: Like most of my postings, this article has been trimmed in content for space allowances. This particular article is VERY VERY long and chalk full of great info. At best, all I can do is pick out some key paragraphs in each section and reorganize them - even then it is long. Please read the riginal article as time allows.


My brother visited Argentina a few weeks ago. He’s been living in Spain for a few years now. Within the first week, he got sick, some kind of strong flu, even though climate isn’t that cold and he took care of himself. Without a doubt he got sick because there are lots of new viruses in my country that can’t be found in 1st world countries. The misery and famine lead us to a situation where, even though you have food, shelter and health care, most of others don’t, and therefore they get sick and spread the diseases all over the region.

What got me started on this post is the fact that I actually saw this coming, and posted on the subject here, months before the new viruses spread over the country and the news started talking about this new, health emergency, which proves that talking, thinking and sharing ideas with like minded people (you guys), does help to see things coming and prepare for them with enough time.

More Americans now willing to take "extreme measures" to get money.

By Zee

50% of Americans Couldn't Come Up with $2,000
By Caitlin Dickson

Nearly half of Americans are living in a state of "financial fragility," a new paper by the National Bureau of Economic Research reveals.

Harvard Business School asked survey participants whether they would be able to come up with $2,000 for an "unexpected expense in the next month." 22.2 percent predicted they would be "probably unable" and 27.9 percent said they'd certainly be unable to foot the unplanned bill. But, it was the participants' method of coping that really determined their fragility. 25.7% of respondents who were asked about coping methods (equal to 18.6% of all respondents) would come up with the funds for an emergency by resorting to what might be seen as "extreme measures."

http://www.theatlanticwire.com/business/2011/05/50-americans-couldnt-come-up-2000/38058/

If you are wondering what "extreme measures" are, consider that it must be more extreme than "those who would pawn their possessions, sell their home, or take out a payday loan" because that was a seperate question. Starting to sound scarry huh?

So what exactly do "extreme measures" entail? Selling a kidney? Identity theft? Scam artistry? Shoplifting? Rob a bank? Mug someone? Home robbery? Blackmail? Extortion? Kidnapping?

When Argentina's robust economy collapsed in 2001, people turned to making money though various crimes, including, increasingly, kidnapping, mugging & home break ins.

Is the US next?

Belarus Just Devalued Its Currency By 56%

The National Bank of Belarus (NBB) is sharply devaluing the official rate of Belarusian ruble. The exchange rate as of May 24 was set at 4,930 rubles per dollar. a decrease of 56% from the 23 May.

The National Bank of Belarus has officially confirmed a sharp depreciation of the currency. On its website it has published the official exchange rate of Belarusian ruble: $ 1 - Br4930 (a decrease of 56,3% to the rate on 23 May)

http://www.zerohedge.com/article/belarus-just-devalued-its-currency-56

QUOTE OF THE DAY

"To sit back hoping that someday, some way, someone will make things right is to go on feeding the crocodile, hoping he will eat you last - but eat you he will." - Ronald Regan

Going Gold

If buying gold is just a fad trend; if buying gold is just being paranoid; If buying gold is a bad investment - Then why are all the central banks starting to do it BY THE TON?

Zimbabwe To Trade Diamonds For Gold As It Prepares To Launch Gold-Backed Currency
by Tyler Durden

A week ago we presented the idea floated by once hyperinflationary Zimbabwe, oddly jeered by most, that the country is seeking to move to a gold-backed currency, adding, somewhat surrealistically, that the "days of the US dollar as the world's reserve currency are numbered." And if anyone should know a hyperinflationary basket case, it's Zimbabwe. Well, today this bizarre story just went fuller retard, after the country announced that it may exchange diamonds for gold "so that it can have a gold-backed currency, according to a recent proposal from the governor of Zimbabwe’s central bank." Indeed we speculated previously why: "Zimbabwe, a country rich in natural resources, took so long to figure out that it was nothing but a puppet in the hands of western monetary interests." Well, others are now getting this idea.

http://www.zerohedge.com/article/zimbabwe-trade-diamonds-gold-it-prepares-launch-gold-backed-currency



China Becomes World’s Larest Gold Buyer - Buys 93.5 Tonnes Of Gold Coins / Bars in Q1 - Gold Ownership Rising From Miniscule Levels
By GoldCore

Gold and silver are higher again today with the debt laden dollar, euro and yen all being sold. News that China has become the world’s largest buyer of gold bullion and has seen investment demand double continues to reverberate in the markets and may have contributed to this morning’s strength.

Chinese investors bought 93.5 tonnes of gold coins and bars in the first quarter. China produced 340 metric tons of gold last year and consumption was about 700 tonnes

http://www.zerohedge.com/article/china-becomes-world%E2%80%99s-larest-gold-buyer-buys-935-tonnes-gold-coins-bars-q1-gold-ownership-ri


PIMCO's largest holding is now in GOLD
by International Business Times

Anne Gudefin, PIMCO’s global equities portfolio manager, likes gold.

“The largest position in [our] fund is gold, which we think is a very good form of protection against what can go wrong,” said Gudefin in an interview with Fortune published on May 12

http://uk.ibtimes.com/articles/144859/20110512/gold-pimco-gudefin.htm

Japanese Economy Collapses

by Tyler Durden

Yes, this is officially a recession. Of course, anyone reading Zero Hedge would have been perfectly aware of this outcome. And for it to be short, it means that the BOJ will be forced to print a few hundred trillion in Yen asap. Which in turn means that the USDJPY will surge and shift the Japanese recession even faster over to the US. And yes it means that the turbo print button among the central banks will get the F5 treatment as the second round of currency devaluation completes a lap.

There she is. The most glorious of the black swans, followed by the four horsemen right behind it.

http://www.zerohedge.com/article/japanese-economy-collapses-q1-gdp-drops-double-consensus-rate-epic-nominal-plunge-52

Think prices are high? Just wait ’til summer

By John Crudele

Prepare yourself for a summertime inflation shock.

An expert who helps put together the government's Consumer Price Index (CPI) says that the closely-watch inflation gauge could rise abnormally "after June."

If gasoline prices should rise, then the jump that's already baked into the summer CPI numbers will be even more pronounced.

There is also a lot of other tricky financial stuff going on right now. If, for instance, Congress stumbles in trying to raise the nation's debt limit -- well, nobody really knows what will happen to the economy, inflation and interest rates. But it won't be good.

http://www.nypost.com/p/news/business/think_prices_are_high_just_wait_e8UQsYRLzapNcvWe0cgEIO

Forget the Mayan's Dec 21 2012, this group thinks the world will end this Saturday!

(CNN) - For months they’ve been spreading the word, answering the biblical call of Ezekiel 33 to sound the alarm and warn the people.

Their message, which they say the Bible guarantees, is simple: The end of the world is near.

And now, it’s suddenly really near - so near that if these folks are right, you should probably pass on buying green bananas.

May 21, 2011, according to loyal listeners of Family Radio, a Christian broadcasting network based in Oakland, California, will mark the Day of Rapture and the start of Judgment Day (which, they say, will last five months). Those who are saved will be taken up to heaven, and those who aren’t will endure unspeakable suffering. Dead bodies will be strewn about as earthquakes ravage the Earth, they say. And come October 21, they’ll tell you, the entire world will be kaput.

http://religion.blogs.cnn.com/2011/05/18/tick-tock-goes-the-doomsday-clock/

TheModernSurvivalist: Preparing for Economic Collapse

by FerFAL

Today's contributor is Fernando "FerFAL" Aguirre. Many of our readers have expressed interest in hearing accounts from those who have lived through economic collapse. FerFAL experienced the hyperinflationary destruction of Argentina's economy in 2001 and continues to blog about his experiences and observations of its lingering aftermath. His website and his book Surviving the Economic Collapse offer windows into the probable outcomes to expect during a collapsing economy.

“How can I prepare for an economic collapse?” is one of the most common questions I get. It usually takes me a second to start to explain how complex such a question is. It’s like asking an auto mechanic, “Say, how do you build a car?” or asking a computer engineer, “What’s all that stuff inside my laptop?”

I do have some first-hand experience in this matter, though. The economy in my country, Argentina, has gone through various crises, but none as large as when the economy collapsed in 2001 after a decade of apparent prosperity. The currency devaluated, and Argentina defaulted on its USD$132 billion debt, the largest default ever. The middle class took to the streets after bank accounts were frozen, and the president was forced to resign, escaping the presidential building in a helicopter.

What I’ll do is, provide five quick foundational steps, based on what I know, for you to follow so as to be better prepared if something like what happened in my country ever happens in yours.

Step #1: Secure a percentage of your savings in bullion.
Step #2: Stock up on food.
Step #3: Acquire the essentials by putting together a survival/emergency kit.
Step #4: Improve your personal and home security.
Step #5: Embrace a different mindset. (become more positive, more active - survive!)

Some common questions regarding hyperinflation:

How quickly does it happen?
These events occur fast, but there are warning signs
How does the populace react?
Violently, as you’d expect when your life savings are stolen from you.
What happens to the capital markets?
The stock market dropped like a rock, then shut down.
Does violence and crime become an immediate concern?
Yes it does. While stores were the more common targets, houses were looted, too. The best thing to do was stay home, have a defendable position and be armed.

http://www.chrismartenson.com/blog/preparing-economic-collapse/57744

Mexico Quietly Buys Gold While The Dollar Tumbles

by Jack Farchy

The central bank of Mexico bought nearly 100 tonnes of gold in February and March, the latest emerging market country to turn to bullion as a means of diversifying away from the faltering dollar.

The purchase is one of the largest by a central bank in recent history. The gold, worth $4.6bn at current prices, is equivalent to about 3.5 per cent of annual mined output.

The central bank has not publicly announced the move, but has reported it both on its own balance sheet, posted online, and to the International Monetary Fund’s statistics on international reserves.


http://dumpdc.wordpress.com/2011/05/09/mexico-quietly-buys-gold-while-the-dollar-tumbles/

The global economy is heading toward another double-dip

By Andy Xie

The global economy is heading toward another double-dip scare, possibly in the third quarter, in what could be a repeat of summer 2010.

Financial markets may stumble in a few months, and that could prompt the U.S. Federal Reserve to introduce a third round of quantitative easing or an equivalent, which would be another step down the path toward stagflation. In this scenario, China's current monetary tightening policy would be difficult to sustain.

A decline for the U.S. property market is accelerating. It could fall another 20 percent over the next 12 months.

These factors contributing to a double-dip scare may push the U.S. Federal Reserve to launch another round of stimulus, although it may not be called QE 3. At the same time, the scare may cause oil prices to dip, easing inflation concerns.

The main aim of a QE 3 would be the same as QE 2 – to support U.S. stock and property markets. While it may succeed in reviving these asset markets, it would also yield surging oil prices and inflation.

A real double dip would occur if either the U.S. Treasury bond market crashes or appreciation expectations for China's currency reverse on expectations of depreciation. The timing for this scenario could be fourth quarter 2012, possibly after the U.S. presidential election and Chinese Communist Party's 18th Congress.

Loose monetary policy is the cause of inflation, and its intended purpose is to stimulate growth. But when such policy is sustained despite inflation, it signals deeper problems. When stimulus fails to revive growth, it suggests structural problems.

In today's world, deep structural problems are impeding economic growth. But most governments don't have the political will or power to deal with them. Instead, they pursue easy solutions such as printing money, which leads to stagflation.

But the U.S. government is trying to simulate the demand side to solve a supply-side problem. That doesn't resolve the problem but instead creates a new one – inflation. No amount of monetary stimulus by the Fed can bring high growth back to the United States, in my view.


http://siliconinvestor.advfn.com/readmsg.aspx?msgid=27363012

Steve Forbes: "The US Will Likely Have A Gold Standard Within The Next Five Years"

by Tyler Durden

"A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills. “What seems astonishing today could become conventional wisdom in a short period of time,” Forbes said.

Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending.

Muni's loosing their tax exempt status?

By JASON ZWEIG

Every few years, Congress floats the idea of reducing or eliminating the muni-bond tax break, long favored by investors looking to shelter income from Uncle Sam. Analysts and investors say that tax overhaul has to be part of deficit reduction—and that the tax exemption on muni-bond interest is fair game.

"We can no longer afford to dismiss it as if it can't happen," says Edward Reinoso, a 40-year veteran of the muni market and chief executive of Castleton Partners, an asset-management firm in New York. "It could happen."

http://online.wsj.com/article/SB10001424052748704810504576307233579693982.html

It's not about speculators?

Gasoline and Onions
by John Stossel

The speculators are ripping us off!

"The skyrocketing price of gas and oil has nothing to do with the fundamentals of supply and demand, and has everything to do with Wall Street firms that are artificially jacking up the price of oil in the energy futures markets. ... (T)he same Wall Street speculators that caused the worst financial crisis since the 1930s through their greed, recklessness and illegal behavior are ripping off the American people again by gambling that the price of oil and gas will continue to go up."

Here we go again. That quote was Sen. Bernie Sanders doing what some always do when the price of oil spikes: complain about speculators. Now, President Obama says he'll investigate them: "We are going to make sure that no one is taking advantage of the American people for their own short-term gain." I assume that his new Financial Fraud Enforcement Working Group, like its predecessors, will uncover nothing untoward.

In America, we don't have a free market -- we have a government-saturated economy in which oil companies and other corporations have a cozy relationship with politicians and bureaucrats. That's wrong, but even that can't explain the recent run-up in prices. Oil companies today are no more greedy or clever than they have been all along.

We have to look for a better explanation -- and it isn't hard to find.

Read more at:
http://www.humanevents.com/article.php?id=43310

Sticker Shock: The Fed may deny it, but Americans know that prices are rising. Inflation is back.

by Joshua Roberts

“I can’t eat an iPad." This could go down in history as the line that launched the great inflation of the 2010s.

Back in March, the president of the New York Federal Reserve, William Dudley, was trying to explain to the citizens of Queens, N.Y., why they had no cause to worry about inflation. Dudley, a former chief economist at Goldman Sachs, put it this way: “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful. You have to look at the prices of all things.” Quick as a flash came a voice from the audience: “I can’t eat an iPad.”

To ordinary Americans, however, it’s not the online price of an iPad that matters; it’s prices of food on the shelf and gasoline at the pump. These, after all, are the costs they encounter most frequently. And with average gas prices hitting $3.88 a gallon last week, filling up is now twice as painful as when President Obama took office.

Maybe in June, when the Fed stops quantitative easing (its program of injecting cash by buying government bonds), inflation will recede. Maybe high fuel prices will, as Goldman Sachs predicts, slow the economy and revive the specter of deflation.

Maybe. Or maybe inflation expectations started shifting when the guy from Goldman—a Marie Antoinette for our times—seemed to say: let them eat iPads!


http://www.newsweek.com/2011/05/01/sticker-shock.html