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Rick, along with the markets, does not believe the GDP numbers

July 30, 2014

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39 Comments
    Jul 30, 2014 30:50 AM

    Some much prosperity out there… Summer of Recovery 5 (or is it 6?)… Anyhow, need to go buy that Mercedes, that boat, and go tell the main squeeze to max out those credit cards. Ol’ Yellen has my back./ sarc.

    Here is something interesting: http://www.zerohedge.com/news/2014-07-30/deja-vu-gdp-stunner-over-half-us-growth-past-year-inventory-accumulation

      Jul 30, 2014 30:43 AM

      I am leaving here with Kathy about 3 p.m. to do just that!

      32 foot Carver; black Benz; and a whole closet full of new clothes!

      It is the American way!

    LPG
    Jul 30, 2014 30:03 AM

    Avi Gilburt interview on Financialsense.com – dated July 23:
    http://www.financialsense.com/contributors/avi-gilburt/gold-1000-stocks-decline
    Some “scary” numbers mentioned…
    Best to all,
    LPG

      I question Avi’s number…….If you want to see the same charts……go to zerohedge yesterday, and the charts Avi is using are interpreted differently.
      BUT WHO KNOWS FOR SURE…………………..best………………j..ootb

    LPG
    Jul 30, 2014 30:07 AM

    Louise Yamada on conventional mkets and gold on Financialsense, July 28:
    http://www.financialsense.com/contributors/louise-yamada/market-top-tech-stocks-gold

    She’s been pretty accurate on gold for the now several quarters I’ve followed her calls. Not that it means/guarantees something for the future, but something to keep in mind when reading her.
    Best to all,
    LPG

      Jul 30, 2014 30:45 AM

      I met Louise years ago and you are correct. She is very good!

    I AM OUT…………..I AM OUT…………I AM OUT………….
    I am out of the house,,,,,I am out of my mind…………….I am out of comments.

    HERE IS ONE FOR YOU …. 77% of the people have a bad credit report…….

    .

      Jul 30, 2014 30:24 AM

      Hang in there Jerry…….our GDP is not only rising but indicates the economy is as “healthy as as horse”…..yeah, a horse that just broke its leg and was euthanized…BTW, have you heard about all the HORSES BEING EUTHANIZED here at DEL MAR race track…..brutal, absolutely….BRUTAL… horse racing…James, the GREATER…change your ‘game” to poker – a lot easier on the horses….

        Marc………I was just sending out a false signal….hoping Yellen was stupid enough to believe she had scared me out……………Beside, there is no where to hide, and nothing to invest in , that is not over levered………I think Richard Russell has it pegged.

          I think the turning is just around the corner…….when you have 77% of the people with a bad credit score………..THERE IS SOMETHING WRONG…and there is the wake up call, people do not have enough money………period………….

      Jul 30, 2014 30:46 AM

      Source Jerry?

    bb
    Jul 30, 2014 30:54 AM

    Nobody believes 4% growth.
    I beg to differ, I have heard, (sry forget where) 85% of americans believe the Ukraine situation is caused by Putin.
    I think that indicates people believe what they are told to believe.
    That’s why I would think there are a lot of people that believe there is a 4% growth.
    Markets are psychology, or at least psychology influences markets.

    Jul 30, 2014 30:38 AM

    Dollar took off today and cracked the overhead. Got my wish so it was a great day for that. Euro broke first line of support….look out below for gold, this is bad news for metals. I agree with the consensus here and Ricks comments that some hard times lie ahead. Those of us who follow the trends have the gift of time to prepare.

    Nobody knows when but Rick is correct that the heavy debts of today will be resolved when those bad days arrives. Kiss your pensions goodbye because we are all creditors and debtors alike. I mean to say, if your pension owns debt then you could get blown out of the water. Now is the time for storing up nuts for the winter so lets not waste what time we have been given.

    And lets use our heads. What does anyone think a house is worth in a depression (hint:…they can fall to zero). What about diamonds, rubies and sapphires? What about antique cars, boats, motor homes and doll collections? How about racehorses, cottages, commercial land, artwork, household equipment, the sofa set and Grans antique jewelry?

    Well here comes the surprise. It can ALL go to squat when the credit bubble bursts and the reason is that nobody is buying anymore. It is not that there is not money either. But people’s minds get screwed tight like they just ate a whole lemon and the spending just stops dead. Because everyone is part of the herd. Sentiment turns on a dime.

    If the Great Depression is our guide we can be sure that the economy will grind into a serious slowdown in just months. One of the interesting stories I recall reading in a book about that time was how quickly people sold off their assets. Most often at fire sale prices. Plenty of people just walked away from what they owned as well. Unemployment was quite high and most were just trying to raise cash or hoping to move for better opportunities.

    But everyone cannot sell at once so asset prices plummeted.

    It happened in just the first couple years which meant plenty of people had little to show for their lives for the remainder of the depression. All those heirlooms and pianos, clothes and fine furnishings that they had paid dearly for during the booming twenties fetched peanuts when the chips were down.

    Think about that next time you are buying. Is it really all that valuable? Is it good for trade? Will it fetch a nickel if you are broke? Fact is, even at the best of times an auction yields just ten to fifteen percent on sale goods. But when times harden and all your neighbors are selling too then most stuff becomes worthless. If you doubt it then go try to pawn the TV and see what reception your beloved flat screen gets.

    So it is cash that gets you across to the other side. Not physical assets except those that are productive and keep bringing a return. Like an orchard or a farm. Like beehives and small manufacturing. And goods like fuel, basic household supplies, alcohol, cyclinders, materials for repairs, raw products and the like.

    Your wife’s diamonds will bring 10 cents. Soap might fetch more.

      Jul 30, 2014 30:57 AM

      Great post Bird, what is your thought on medicine and medical care through a depression? How about stocks in the medical field through the same?

        Jul 30, 2014 30:54 PM

        Excellent idea. First thing I would say is this….get your teeth done well before the dung hits the propellers and then keep them up to date. Same with any surgery or anything similar that maybe you have been putting off.

        Keep in mind that serious economic downturns virtually always result in shortages. Keep your shelves stocked in advance and include medicines on the list. When shortages hit by the way you might not know what follows next so let me give a tip. It is laws against hoarding and penalties can often be severe. Governments are keen to distribute everything equally at such times to keep the people from rioting. So if you stock up on supplies, keep it quiet.

        About medical stocks?….well I like technology in general but keep in mind that major sell-offs take the whole works down and price recovery can be expected to be very slow if the past is our guide.

        After the crash of 29 it took almost two decades for the Dow to see its highs again. More precisely it was 1956 if my memory is correct. During that time a lot of companies went bust and disappeared altogether rendering their stocks utterly worthless.

        That was not what most people worried about though. Unemployment had become so severe that most typical families had sold off their equity holdings well before the depression ended just to make ends meet and put food on the table or pay the rent. This is part of the reason that stocks could not mount a recovery for so long as so many were selling throughout the depression.

        Take this piece of advice if you care about your future and believe a major stock crash might resemble the Thirties…..you do NOT want to be short of cash when it arrives. You do NOT want to be forced to sell anything when prices are low and falling. You o NOT want to go into it sick and unable to take care of yourself or get basic needs met.

        What you do want is to be a buyer and you cannot do that if you are up to the eyebrows in debt like everyone else!

          Jul 30, 2014 30:26 PM

          Hey Jerry……the funny part is nobody even believes we are heading into deep waters that could get as bad as I suggest. What I am talking about sounds crazy to most. These long credit cycles leave them confounded. We could probably talk to our grandparents about this stuff and get a better reception. They lived through it. This next depression will be worse than the first though because the excesses are more extreme this cycle. Maybe the only safe place to live is on an Island with your own farm.

            bird……….the point that you made on the extremes is well made. The cycle of extremes in the real estate market is beginning again…………The long credit cycle, is not over, and can only get worse. There is a great article at Watchdog , concerning the next game that is going to be played with the real estate market.

      bird………..a house may fall to zero…..but, the dirt it sets on will have value……..

    bb
    Jul 30, 2014 30:52 PM

    Good points Bird.
    Par chance did you see Bo Polny interview on kitco? I caught it at Silver Doc, but he is saying no crash just yet. Gold to 10k by 2020.

    Jul 30, 2014 30:21 PM

    Still have not gotten around to looking at Bo’s site, bb. I stick with the tried and true and suffer less confusion that way! About 10k gold…..who really knows? 2020 is a long way off but I suppose it is possible. What I am learning bit by bit is most people cannot even figure how much gold will be tomorrow so seven years out is either a lot easier or it is just crazy talk.

      Jul 30, 2014 30:59 PM

      Bird, you won’t see much at his site.

      Really all you need to know about guys like this is he is so full of himself (my interpretation) that he has no qualms, no shame in charging the investment public $20,000 dollars a year to read his chart work. The same material you can get anywhere for a couple of hundred dollars a year, or even free.

      Now let me say, I don’t blame Bo Polny for charging those outrageous fee’s, he’s free to do whatever he chooses in the world that functions as a market place pricing mechanism.

      Whats stunning to me is, if he is charging that much money to view his squiggly lines on a chart, he must have subscribers who are willing to pay it.

      Me personally, I’ve got about three thousand other things to do with $20,000 dollars than to give it to a former chiropractor turned unaccountable chart technician.

      Now having said all that, Bo Polny may turn out to be 100% right. For his subscribers $20,000 dollar investment gamble, he better be.

        Jul 30, 2014 30:44 PM

        He charges 20,000 dollars each!?? Holy crap man. That is so crazy I burst out laughing. Almost pissed myself. Makes me wonder why I blog since most of the folks around here get gold better than just about anyone professional other than a few select guys (and gal). But Bo is so wrong on 2000 dollar gold. Guess you can just post any crazy stuff and the subscriptions roll on in.

    bb
    Jul 30, 2014 30:37 PM

    $20,000, unreal!
    Well,if ya got the money why not?
    Personaly, for that cash I would send Mickey Fulp to mines I was considering investing in and get that report.
    Anyway, I was more interested in the Bo prediction of we get a drop in price coming up and then a fair increase to about $2000 gold by the end of this year.
    His other point, we are in a 21 year bull market for gold, we just completed 14 years of it I guess.
    I just find it interesting as David Morgan was saying 2020 a few years back too.