Think Monopoly But THE Bank hands out more than $1500, and the printed home prices increase
My neighborhood just reached the July 2004 selling price. JUST. To make up the next two years of 33% increase, representing about 25% of all buyers (new and second equity loan types), you need another four to five years, just to break even with the highs of 2007. By then, all those derivatives would be well by definition, and the banks would take it home, you guessed it, to the bank.
Bernookie is already shoveling a trillion a year to keep bonds low, then after milking that market dry, jawbones the tapering effect so that although banks still get money at 1/4%, joe six pack gets a 25% pop in interest rates to pay banks MORE. A few scuttle through the door end of June, as seen by the market selloff, there's not enough raises and people working to sustain the pop, and voila, we head to double dip.
It doesn't help silver that the recovery on the industrial side is lower than low, and it doesn't help the currency side to "call off" QE anything. I have been out of SLW/SLV since about $29 SLV. I don't see any other strategy for the near future as lucrative than either daytrading, or selling covered calls against your position, you can make about 20% a year that way, and on a portfolio of $500,000, a nice LIVING. You can't beat that with a stick.
Now to the fabricated drama of FOMC, IMF, and all the rest of this nonsense.
Except for a few quarters over the last 30 years, subtracting federal deficit spend from GDP will yield a negative number meaning all "growth" over the period has been borrowed from the future. The future is now and we are required to account for all that borrowing plus pay interest. Interest plus other entitlements are going to bring this country to its knees soon I am afraid, and the fed trying to save face will do much more of the same exacerbating the problem.
At this point, the fed is "borrowing" a $trillion (6% of GDP) a year and the government is borrowing a similar amount and GDP is "growing" sub 2%. That is not overall economic growth and it is not recovery, it is an economy in contraction. As you say, the Fed will have their fabricated drama which is nonsense, but over time enough people will realize the scam and lose faith in the whole system. At that point we will some real change we can believe in.
Part of that "Change we can believe in" will be the realization that what cannot be paid, will not be paid. People having faith in their government pensions, government entitlements, government services including Obama care are going to find they either do not exist or they are reduced to the point where they are meaningless. Look to Detroit as a leading indictor of what may happen.
I guess I'm on the other side of the trade. I added to my miners position again yesterday.
These are not trades. And they are predominantly AU. I'm of the school that the printing will continue and the Fed induced coma will continue to move the 2%ers book value up. Also, I'm of the school that Yellen is all but a shoo in and she is more dovish than a nobel laureate on heavy doses of benzos.
I'll wait it out now.