THE HOUSING MELTDOWN CONTINUES
BY DAVID WINSTON – Sr. Trader AGT American Silver & Gold
Consumer prices are drilling a hole in the pockets of Americans; in January 2008 prices reflected big increases in the cost of food and health care. Your cost of living will be higher in 5 years guaranteed. What is also guaranteed is inflation, maybe hyper-inflation; Oil just hit $100 a barrel an all time record high! Gold, Silver and Platinum are the answer to maintaining the value of your money.
The Consumer Price Index posted a gain of 0.4 percent last month, higher than economists had expected. Core inflation, which excludes food and energy, (the government no longer allows food or energy in the Consumer Price Index calculation) how stupid is it to have an Index that excludes 70% + of what Americans consume, food and energy. The Consumer Price Index increased 0.3 percent, the biggest jump in seven months. The cost of clothing, education, lodging and tobacco also rose higher. Gold is reflecting this dollar weakness by staying above $900 and hit record highs of $946.
This Inflation Monster is rattling the attention of the Federal Reserve, which has cut interest rates aggressively to avoid an immanent recession. The Fed believes a sharp economic slowdown would keep inflation pressures from rising. The can and will print more money that is all they can do. The Iraq War is costing $2.5 billion dollars a day. We are printing more money at a faster pace than at any other time in history. Precious metals are a safe haven, from this financial chaos.
Ian Shepherdson, chief economist at High Frequency Economics, a private consulting firm, said “the worse-than-expected news on inflation may prompt the Fed to cut interest rates by only a quarter-point at its next meeting on March 18 rather than the half-point move that markets have been expecting.”
The crash continues in housing. Commerce Department states construction of new homes and apartments rose by 0.8 percent to an adjusted annual rate of 1.012 million units in January. That was the first increase since October and followed a plunge of 14.8 percent in December. Applications for building permits, considered a good sign of where construction is headed, fell by 3 percent to an annual rate of 1.048 million units, the lowest level since November 1991. We are in a hyper-inflation, dollar crash course at full speed and few people realize it!
Here’s the thing, what it means is, this is clear evidence that the America’s hemorrhaging construction and housing markets are still crashing and have yet to hit bottom. Platinum hit an all time high of over $2,100 per ounce, on a crumbling economy and severe supply shortages. The U. S. Mint has suspended Platinum Eagle Sales for the third time since October 2007. Precious metals is a safe place for any money tied up in low yield financial like t-bonds, CD’s, Money Market Funds, Mutual Funds, Savings or Stocks.
Here is the idea, picture all the money you have on you dining room table in cash, and next to it the same amount in Gold, Silver and Platinum. Which would you rather have? Do you follow?
What conventional wisdom dictates, i.e. common sense, is that 15% to 25% of all you money should be in hard assets. In this market with this crumbling, hyper-inflation, $100 barrel oil, you should have up to 50% to protect the value your money.
The continued and yet to explode melt down of the sub prime markets will prolong the continued decline in housing, with falling sales and weak prices, creating a severe spiraling drag on the overall economy. Growth slammed short to a near standstill in the final three months of 2007, rising at an annual rate of just 0.6 percent. Friend that is 6/10th’s of 1% annual growth. Market experts and some economists see growth in the next 6 to 18 months as negative, fulfilling the classic definition of a recession. To combat the economic weakness, Congress passed a $168 billion economic stimulus package to provide tax rebates to more than 130 million American families.
This stimulus package is a joke, what you are going to do with $1,600.00 not much, maybe a few trips to get groceries and gas. Which of course groceries and gas are not included in the Consumer Price Index. The government really believes American is idiots. Can you see the clear picture of how fast the dollar is melting down? Your buying power is melting down; precious metals will protect your buying power!
The Federal Reserve acted in January to aggressively cut interest rates with more rate cuts expected. You know when a pressure cooker whistles, the pressure building right? This same pressure cooker whistle is howling at the Fed policymakers of having to solve the crisis of both weaker growth and rising inflation. The 0.4 percent rise in consumer prices was led by increases in the prices of food, energy and health care.
Food prices jumped by 0.7 percent last month, the biggest increase in 11 months and up sharply from a 0.1 percent rise in December. Prices for vegetables, fruits, poultry and pork all showed big increases. The rise in food costs has been blamed in part on rising demands for ethanol, which has pushed up corn prices. Also higher transportation costs with diesel fuel at over $3.00 a gallon.
Energy costs were up 0.7 percent in January with gasoline costs rising by 1.2 percent. Analysts said more price increases in this area are in the pipeline, given the spike in crude oil prices on Tuesday with a barrel of oil closing above $100 for the first time in history.
Excluding food and energy, core inflation rose by 0.3 percent, the first increase at this level since last June after a string of more modest 0.2 percent gains. Over the past 12 months, core inflation is up by 2.5 percent, which is over the Fed's comfort level for gains in core inflation in the range of 1 percent to 2 percent.
Medical costs showed a 0.5 percent increase, up from a 0.3 percent rise in December. Prescription drug prices shot up by 0.7 percent, the biggest rise in a year, while hospital prices were up by 1 percent.
New car prices fell by 0.3 percent in January, reflecting a weak demand as motorists struggled with soaring energy costs. But airline fares were up by 0.8 percent, reflecting higher fuel costs.
Every thing is and will continue to go up in price further devaluating the dollar. How long do you think China the largest holder of dollars in the world is going to hold on to the devaluating, hyper-inflation, U. S. dollars? Not long! Move your IRA into Gold, Silver and Platinum. Call for FREE IRA information package. We have below a recommended starter portfolio, which you can build to your needs of $50,000 to $500,000+. Call David Winston Now at 1-800-950-9000 to build your precious metals portfolio.
Free people cannot control their own destiny unless they control their own currency. The Federal Reserve must be abolished. (Ask about FREE information on a PRECIOUS METALS IRA)
THE ONLY THING WORSE THAN FAILURE IS REGRET!
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