London Property Slide Worsens With Biggest Drop Since 2009

By Mark O’Byrne – Re-Blogged From Gold Eagle

3.8% fall y/y in Q1, the seventh straight decline in values – Nationwide
– Nationally, U.K. real-estate market remains ‘subdued’
– Some of the weakness relates to Brexit as economic uncertainty impacts sentiment

London continued to lead the U.K.’s weakening property market at the start of 2019, with prices falling the most since the financial crisis a decade ago.

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What They Don’t Want You To Know About Prices

By Keith Weiner – Re-Blogged From Gold Eagle

Last week, in Part I of this essay, we discussed why a central planner cannot know the right interest rate. Central planner’s macroeconomic aggregate measures like GDP are blind to the problem of capital consumption, including especially capital consumption caused by the central plan itself. GDP has an intrinsic bias towards consumption, and makes no distinction between consumption of the yield on capital, and consumption of the capital per se…between selling the golden egg, and cooking the goose that lays golden eggs.

One could quibble with this and say that, well, really, the central planners should use a different metric. This is not satisfying. It demands the retort, “if there is a better metric than GDP, then why aren’t they using it now?” GDP is, itself, supposed to be that better metric! Nominal GDP targeting is the darling central plan proposal of the Right, supposedly better than consumer price index and unemployment (as Modern Monetary Theory is the darling of the Left).

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Gold Stocks Gather Steam

By Adam Hamilton, CPA – Re-Blogged From Gold Eagle

Gold stocks’ young upleg is gathering steam, marching steadily to higher lows and higher highs. These bullish technicals are gradually improving sentiment, fueling mounting interest in this contrarian sector. That’s helping the gold stocks regain lost ground relative to gold, the driver of their profits. Fundamentals are growing more favorable as gold itself powers higher. All this portends much-bigger gold-stock gains coming.

Despite a strong rebound upleg in recent months, the gold miners’ stocks are still flying under the radars of most speculators and investors. They aren’t aware the gold stocks are running again, and likely don’t realize how massive gold-stock uplegs can grow. That’s unfortunate, because the biggest gains are won early in young uplegs before they are universally recognized. Buying low early on is the key to multiplying wealth.

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Who Knows the Right Interest Rate

By Keith Weiner -Re-Blogged From Gold Eagle

On January 6, we wrote the Surest Way to Overthrow Capitalism. We said:

“In a future article, we will expand on why these two statements are true principles: (1) there is no way a central planner could set the right rate, even if he knew and (2) only a free market can know the right rate.”

Today’s article is part I that promised article.

Let’s consider how to know the right rate, first. It should not be controversial to say that if the government sets a price cap, say on a loaf of bread, that this harms bakers. So the bakers will seek every possible way out of it. First, they may try shrinking the loaf. But, gotcha! The government regulator anticipated that, and there is a heap of rules dictating the minimum size of a loaf, weight, length, width, depth, density, etc. Next, the bakery industry changes the name. They don’t sell loaves of bread any more, they call them bread cakes. And so on.

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Silver Price Outperforming Gold Price

By Adam Hamilton – Re-Blogged From Silver Phoenix

Silver recently started outperforming gold again, a watershed event.  For long years this white metal has mostly lagged the yellow one, relentlessly battering silver sentiment.  But gold surging into year-end 2018 finally sparked some life into moribund silver.  This is a bullish sign, as silver has soared in the past once rising prices reach critical mass in attracting new investment capital.  Silver looks to be nearing that point again.

Despite a good finish, 2018 was a rough year for silver.  Its price slumped 8.6%, way worse than gold’s -1.6% performance.  And that still masks miserable intra-year action.  At worst in mid-November, silver had plunged 17.3% year-to-date.  That was 2.2x gold’s comparable loss, and at $13.99 silver languished at a major 2.8-year low.  A soul-crushing 96% of its early-2016 bull market had been reversed and lost!

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President Trump’s Trade Tantrum Triggers Slump

By Alasdair Macleod – Re-Blogged From Silver Phoenix

For decades, Western governments have been pursuing a policy of transferring wealth from the public to themselves, their licensed banks and the banks’ favoured customers by means of interest rate suppression and monetary inflation. Consequently, inflation of financial asset prices has benefited the financial sector to the detriment of those employed in the productive economy. Over time, this has badly weakened productive capacity and the long-term ability of the market economy to fund future government spending.

It is a situation which seems bound to eventually lead to major economic and monetary problems. Additionally, global economic prospects have worsened considerably as a result of President Trump’s tariff wars against China and others. Empirical evidence from the 1930s as well as economic analysis illustrate how trade tariffs have a devastating effect on domestic economic activity, a prospect wholly unexpected by today’s economists.

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‘Big Mac Index’ Shows US Dollar Strongest in 30 Years

Re-Blogged From Newsmax

The U.S. currency is at its strongest level in 30 years, according to the Economist newspaper’s January 2019 “Big Mac Index.”

The newspaper’s “lighthearted guide to exchange rates” measures the purchasing power of currencies against each other. The gauge also compares the prices of McDonald’s flagship hamburger, the Big Mac, in different countries with the actual exchange rate between the currencies to determine whether a currency is over- or undervalued.

For example, “a Big Mac costs 3.19 pounds in Britain and $5.58 in the United States. The implied exchange rate is 0.57 [pound per dollar]. The difference between this and the actual exchange rate, 0.78, which suggests the British pound is 27% undervalued,” the Economist said.

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