AUD, go long my friends, LONG

When will housing bottom ?

Great question ? The question on many American's minds. Young couples waiting to buy their first home, Reitred couple waiting to move to quiet part of the US (or aboard), many without a job forced to sell the only assest they have. Here is what you really need to understand , LEVERAGE. Never in the history of the world has there been so much leverage, inflating assests of every kind. The past 15 years of growth has been fasle, based on credit, auto, home, personal, educational loans. Growth built on a house of cards that contuines to fall.

.DOWGOLD INDEX, heading to 1 ?

This is a chart of how many ounces of Gold it takes to buy 1 "share" of the Dow . The Dow Jones Industrial Average is a price weighted index that contains 30 blue chip companies. This chart is measuring what the DOW is really worth. If the US government prints money and inflates prices, the index will rise (there are other factors here, ie. usd fx rate, leverage of the companies). This causes a problem. How does one know what the DOW is really worth if it is measured it a FIET currency ? Price it against the hard currency of gold. Since 1999 the index has loss 80% of its value and 57% in just the last 2 years. From a high of 44 to closing yesterday at 8.34. Many and myself included believe this index/ratio will fall to 1.

(chart source: Bloomberg)

cont. Civil Unrest

Here are just a few articles: becoming more unstable by the day. My thought- The world will be lucky if it comes out of this crisis without a major war.
French riot police arrive in Martinique
http://www.miamiherald.com/news/americas/haiti/story/900876.html
‘Time Bomb’ Ticks in Hungary as Roma Tension Rises
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKxCuUOn3h50
Google "civil unrest in China" for date range past month , 53,000 results
Factory closures, layoffs stir unrest in China
http://www.usatoday.com/news/world/2008-12-02-china-protest_N.htm
Capitalism Freezes in Worldwide Winter of Discontent
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ai1qca78_ezs
Iceland ‘Like Chernobyl’ as Meltdown Shows Anger Can Boil Over
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2gMphgAVl3U
Economic Crisis Fuels Unrest in E. Europe
http://www.washingtonpost.com/wp-dyn/content/story/2009/01/26/ST2009012600532.html

Books added to Library

Will write a short review on both when time permits.

Coming up Next week

When or will housing bottom ?

AUD vs. GOLD (which one is under/overvalued)

Where is Gold going and what currency does the USD weaken against if any ?

Civil Unrest- put it on your radar

There is civil unrest now in China. The Chinese goverment has moved millions of people out of the hinder land to work in factories. Promising them a higher standard of living if they work relentlessly, manufacturing the goods the world buys. Guess what ? No one is buying those goods and Chinese workers are in overcrowded cities with no means of purchasing or producing food. They gave up their small farms, for a better life. When riots become a bigger issue in China the goverment can easily shift blame on the Americans. "Look it is Their flaut, the Americans, they do not what us to have a life as they do. We will prepare for battle"(just a thought)

Riots have also broken out in Latvia, Iceland, Greece, Lithuania, Bulgaria, Estonia and Mexico. If you ask why, Why do I not hear about this sir. My answer to you is WAD (works as design) Do some research you will find plently of information.