Economy

This post takes a look at the appreciation (or in some cases, depreciation) of home prices in 11 developed markets. New Zealand, Canada and Australia are in a league of their own at the top, while Germany, Ireland and Japan are at the bottom. Where are the U.S. and the U.K.? Read on!

With the Middle East now lurching towards yet another major war, it’s easy to envision a supply disruption that sends oil back to its previous high or beyond. So the question becomes, what would that do to today’s hyper-leveraged global economy? Bad things, obviously. Here are just 4 things that would likely happen.

Janet Yellen and the Federal Reserve are so behind the inflation curve, and many other market implication curves, that we probably are staring at a 35% chance of a Hyper-Inflationary period by the time the Federal Reserve realizes that "noise" is actually real inflation!

I believe that the economy is headed toward a deep recession and that the stock market is extraordinarily overvalued based on unrealistically high expectations for economic output and corporate income...

Before this great financial crisis ever comes to a close, you'll see the Federal Reserve copy Europe and also implement negative deposit rates to try and get commercial banks to lend money into the economy. I have absolutely no doubt about it - and it will have three chief consequences for the markets. Let me explain.

America’s and the world’s appetite for drugs is insatiable. Billions upon billions of dollars have been spent on both the consumption of illicit drugs and fighting the war on drugs. At first glance as an investor, you probably don’t think this affects you (that is, if you don’t use or sell drugs) but a closer look will reveal the enormous economic impact that the war on drugs has on America. Prepare yourself for some very alarming numbers.

Below is some interesting research by Doug Peta of BCA Research regarding the Fed Funds Rate Cycle, and what that research - as well as our own in-house research - could mean for gold to help you understand the positivity we see for the precious metal looking towards 2015.

A change in monetary, fiscal, and regulatory policy is necessary to beat back the forces of recession and deflation. If the messages of falling gold prices and falling interest rates are not enough to gain the attention of policy makers, I suspect that the specter of future falling stock prices throughout the world will be. That is what is in store for us if the recessionary/deflationary bias in the world economy that gold and bonds are signaling, reasserts itself.

When there is lots of economic activity, there is lots of money changing hands. When there is not very much economic activity, the pace at which money circulates through our system slows down. That is why what is happening in the U.S. right now is so troubling. Let me explain.

I believe that the inflation and price charts paint a clear picture, and that until inflation in the world picks up significantly, there will be no meaningful rallies in precious metals...[While] I am bullish on gold and silver long term, the short-term pressure is still evident and might take them lower in the next couple of months.