Politicans Correct: Economy Improving!

• 

  Jack Goss

  Sales Of New Homes Fell 13.4% In July
• 

  Brad Gibson

  Durable Goods Orders Fall Sharply In July

Realtors are required to say happy things about the market. I think it is in our ethics (yes, I am new broker.  Call me).  I hear about how sales are up (never about from when). Happy talk is annyoing and works at tricking people.

Prior happy talk actually was so lame most people ignored it. There were press releases about great jumps in the real estate business - like from hell, level 7, to hell, level 3. Still, it is happy talk.

In addition, gains have the product of artificially low interest rates. The rates have been kept low by the FED making new money. Inflation is to follow. Values are unknowable, really.  Value depends upon the dollar's value in the world, the cost of fuel, the increase in interest rates, the continuation of the over 20 percent, real unemployment rate. Also, investors, including banks, are sitting on huge inventory hoping for an increase in prices - seems a gamble to me; then again, if the currency devalues, house prices go up, but that makes little investment sense, so I am moving on.

This juggling will come to an end.  The result of this massive shift away from happy talk is something I cannot fathom.  I would expect a jump in sales when people realize the free money is over, but, then, the home prices will fall inversely with the increase in interest rates.  There will be few "regular" buyers, a term I just made up and don't feel like explaining. 

We will be in a new territory.  If you can figure it out and bet on you projection, you will see large gains.  In spite of many good reasons, I still like silver, as we don't have enough.  

When you read the Goss article, you will blur over with happy talk comparisons.  Here is an familiar example: Democrats (& GOP subversives) will say they passed a spending was cut when they mean the rate of increase slowed - actually spending went up. More like  Goofy Talk.  Always recall, there is danger is assuming the past is the track of the future. And, never assume any statistic provides a truthful analysis, which, sadly, is true 73.2% of the time.

As for durable goods, oh crap.