http://silverbearcafe.com/private/05.11/bottom.html
The foreclosure problems in the US and Spain are beyond believability. In the US monthly inventory for sale is normally 4 to 5 months, presently it is 3-1/4 years and should be four plus years by the end of the year. In Spain the visible inventory is 50,000 homes, but in reality it is much higher than that. Worse yet, the banks are lying about it just as they are in the US. Even at 30-year fixed mortgage rates of 4.61% people do not quality to buy. Home prices will fall at least 10% by yearend and more next year and into 2013. Then they will bump along the bottom for years. In the US lending has dried up and it is more difficult to get loans than it has been. Housing debt is unbelievable and is unpayable. There is no recovery in sight in spite of spending of more than $2 trillion on QE2 and stimulus 2. We can assure you QE3 or something like that is on the way, otherwise it is collapse. The Fed has to come up with $1.3 trillion to purchase Treasuries and Agency securities, June to June just to stay even. Our guess is that figure in reality will be $2.1 to $2.5 trillion, as the dollar reaches new lows. The flipside is in spite of government manipulation, gold, silver and commodities will move much higher in the flight to quality and safety. There is absolutely no reason to believe that debt will be repaid nor will there be any recovery. Every single day people all over the world are losing purchasing power due to inflation and the profligate policies of their governments. There has to be a well planned or orchestrated plan for default by all nations collectively. This is why your investible funds have to be in gold and silver coins, bullion and shares. That is the only place investment funds are safe. Just look at the last 11 years during which gold and silver rose by more than 20% on average versus nine major currencies annually. Is that not enough proof to convince you where your funds should be? Quantitative easing has to continue and so does the upward valuation of gold and silver coins, bullion and shares.
Food and oil demand continues to increase as the third world experiences more prosperity and growing populations. That is one of the results of free trade; globalization, offshoring and outsourcing hadn't planned on. Having created these conditions they now talk of reducing world population, a condition they call a surplus of useless eaters. As a result banks and hedge funds are again leveraged as they were in 2008. Fortunately most are presently short gold and silver related assets.
Once it becomes visible through the veil of government propaganda that conditions are deteriorating real interest rates will rise sending bonds down and the stock market will follow. What else can they do with no recovery, a falling dollar, 22.2% real unemployment, 10% inflation, a minus GDP and exponential creation by the Fed and the Treasury of money and credit. As the printing presses roll on we see shortages in physical gold and silver, which soon lead to higher cash prices. As we have predicted correctly for 11 years, no matter what the Illuminists do they cannot arrest the flight to quality in gold and silver.
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