Our government is pitching 'economic recovery' and that means real estate too. We all know the story of real estate and how it has been ground zero for the terrible economics of the past decade. We all understand too, that for real estate to recover, it needs rising interest rates. What's that? Oh yeah, that's insanity talking. But look what's happening. If you 'sell' recovery long enough, some people begin to believe. If you 'manifest' happy news long enough, some people begin to believe. If you make the stock market rise long enough with free money and insider manipulation, some people begin to believe. Under that belief, the stock market is paved with riches and bonds are a losing bet. Investors and believers sell bonds pushing real interest rates higher. I was in the bank this morning and the manager literally erased the past week's 30-year mortgage rate of 4.75% and changed it to 4.92%. Yes, that's still historically low but debtor nations need low interest rates. Rising bond yields will pressure mortgage rates higher and that can't be good for real estate. Unless of course, the Federal Reserve wants real estate to go higher. I believe they do and they will 'assist' it in a move that will defy logic in the coming year.
The chart below shows the UUP etf that corresponds to rising US dollar valuations. You can see by the lower green vertical bars that volume has been increasing noticeably on days that experienced hard bond selling. The war is on. Investors don't want to hold bonds when rates are rising and inflation is soaring. The Fed has done a good job selling the recovery so we all believe it is true. Down with bonds and up with stocks. Why include the UUP? Our Asian friends hold a lot of Treasuries and they no doubt get nervous when their portfolios fall. Our Federal Reserve friends know that we are now dependent upon our Asian friends to loan us money to give to our big banks like Goldman and Citigroup so they can buy larger chains with which to enslave us. So, the Fed no doubt jumps in with massive buy programs for the dollar and the bond. The war is on between the buyers and sellers. Who will win?
The Treasury is scheduled to issue another $500 billion in fresh debt in the first quarter of 2010. The Senate will pass the trillion dollar tax package they call 'health care reform' in another week. I have to believe that all this selling pressure will eventually win and interest rates will rise. I have to believe that our government will continue to lie about every single economic statistic to keep the recovery sales job going. After all, they are not battling an intelligent population. Look around. All you can see is clueless as far as the eye can focus. Remember this. Health care from our government is a tax. It is a political sham. Senator Nelson from Nebraska threatened to vote 'no' until the authors of the pilfering agreed to let the other 49 states pay for Nebraska's portion of Medicare. I would urge everyone with a functioning brain cell in America, although that is a very small minority, to go to the polls and vote against every politician in office. Vote everybody out on both sides. Vote 'NO'.
Our government has turned on us. This much is clear. They are coming for everything we have. They will tax us to poverty and impose eminent domain over our land and take that too. Let me give an example of the preposterous governmental lying concerning inflation. A local restaurant serves a chicken dish that I like. The menu I have from last year has a price of $6.95. I just ordered the same dish last week and the new menu lists the price at $8.75. That's not only inflation. That is an increase of 26%. As I have been saying for years, inflation is running in the 20% plus range. How much longer will even the stupidest American listen to the lying idiots in Washington? Meanwhile, the average pay is dropping and living standards are falling. Bernanke's printing press is killing Americans and destroying a country from the inside out. Surely the Brits will 'Knight' him too like the did the last imbecile that held his post. Just look at the chart. This is the battle that will determine stock direction in the coming year. Be prepared for a roller coaster of a ride.
Like everything, let me solve a problem. Health care reform. We already have the greatest health care and health care professionals in the world. We just can't afford it. Like my chicken dish, it just keeps getting more expensive. Like my chicken dish, let me solve the problem of 26% inflation. STOP PRINTING SO MUCH MONEY!!!!!!! Geeze - do I have to think of everything???
Chart courtesy StockCharts.com