Jim Sinclair - Gold to Exceed $12,500 to Balance US Debt

http://kingworldnews.com/

Jim Sinclair Audio

With continued volatility in gold and silver, today King World News interviewed the legendary Jim Sinclair to get his take on the markets.  Sinclair surprised KWN by discussing a price target for gold that to some would seem unimaginable.  When asked about trading for gold this summer Sinclair stated, “I think most of your analysis of secular trends will look and say no, no, summer time doldrums nothing happens.  Well we could have something very significant happen and for a very clear reason.  It’s becoming obvious even to our talking heads that this great recovery which we’ve questioned for a considerable period of time is in fact more in people’s minds than in reality.  The economy is turning down again and turning down hard, there’s no question about that.”

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Sinclair continues:

“Quantitive easing is the only tool that the Fed has had available to them.  The Fed has pumped in trillions of dollars and the result of that pump-priming in the monetary sense has been only at best a modest recovery, and certainly making trillionaires out of some bankers, billionaires out of many of them.

We’ve come to a point now where if QE were to be stopped, you would see an implosion in the general equity markets...And yes gold would go down, the market would go down hard.  The dollar would go up slightly to begin, but then fall back down again as the management of the economy was seen to have been ineffective and inefficient. 

Gold would then start moving back up again and I think if QE was to cease, the recovery on gold from a modest reaction would be multiples upon multiples of that reaction and would lead the way to Harry’s $2,400, to Alf’s $3,000 to $6,000.

You can’t stop quantitive easing.  If you stop quantitive easing the stock market will return to its recent low or lower.  That alone by its impact on decision making will cause an economic implosion.  We’re tied into this monetary stimulation, there is no way out of monetary stimulation.  If there was any attempt to get out of monetary stimulation it would cause an economic accident which would require central banks to go right back where they were.  That would be again, loss of control...

More Americans Think Economy Will Never Recover

The mixed signals regarding the economy's health are taking a toll.

Getty Images About 10 percent of Americans say they never expect their spending to return to pre-recession levels.

Americans are growing increasingly doubtful about direction of the US economy, according to the latest survey from business-advisory firm AlixPartners.

In fact, an increasing number, some 61 percent, say they don't expect to return to their respective pre-recession lifestyles until the spring of 2014, if ever.

What's worse, a full 10 percent said they expect they will never return to pre-recession spending.

That's a more pessimistic view than last year, when those surveyed expected that they could be back to pre-recession spending levels by the middle of 2013.

"Americans continue to push their expectations for return to a pre-recession 'normal' further and further into the future—close enough for comfort, but far enough away to seem realistic," said Fred Crawford, CEO of AlixPartners. "But as that happens, more and more it seems normal is actually where we are right now."

The latest employment report, which showed that U.S. employers hired far few workers than expected in May, only serves to reinforce these attitudes.

"It's a vicious cycle," Crawford said. "Americans need to see a significant decrease in unemployment to feel confident in the economic recovery, but companies are waiting to see increased demand for their products and services before they begin hiring and making job-creating capital expenditures."

In the latest survey, some 63 percent of Americans said they feel "not good" or "bad" about the state of the US economy, representing a significant increase from May 2010 when only about 49 percent of those polled felt this gloomy.

The survey also found that Americans overwhelmingly expect to delay by at least 12 months major purchases and expenditures such as spending on new cars, home repairs and vacations.

There have already been signs of this in the latest retail sales reports that came out earlier this week from a handful of major retailers.

Overall, sales at stores open at least a year rose 5.0 percent in May, which is below the 5.4 percent increase that Wall Street expected, according to Thomson Reuters data.

While some analysts used a number of excuses, including high gasoline prices, poor weather, and lackluster merchandise, to explain away the disappointing results, the findings of the survey may suggest that consumers are hunkering down amid the uncertainty.

The view was expressed Thursday by Target CEO Gregg Steinhafel, who said that traffic at Target stores slowed in the second half of the month.

"Our guests continue to shop cautiously in light of higher energy costs and inflationary pressures on their household budgets," Steinhafel said, in the company's monthly sales press release.

AlixPartners is by no means the first organization to recognize this growing pessimism.

Goldman Sachs economist Jan Hatzius said the number of consumers who believe they have a chance to bring home more money one year from now is at its lowest level in 25 years, based on his analysis of the University of Michigan and Thomson Reuters consumer sentiment poll.

Original source 

U.S. Housing Continues Downward Trend It Started 2005

http://wealthcycles.com/blog/

The big story in the headlines today is that housing has officially entered into a double dip downturn. The housing market has surpassed its previous lows and now is roughly at 2002 prices.
The big issue that everyone is missing here is, of course, value. Everyone still talks about price in nominal terms.  That is to say, a home, priced in dollars, has surpassed its previous lows.
This is the chart you probably saw everywhere today:

(Source: Business Insider)
This is the chart you should have seen everywhere today:

You’ll see in this chart U.S. Housing divided by the gold price, that real estate values have been falling against real money since 2005, a few years ahead of the infamous housing collapse.
In other words, pricing houses in dollars is deceptive, because the value of our dollars is steadily eroding. As the second chart shows, the true value of housing, as measured in the amount of gold ounces required to purchase a median-priced, single-family home, fell to 1987 levels in 2009 and kept dropping—even as home prices measured in dollars recovered slightly.
Remember, for the true picture of any market, always think in terms of value—not the nominal price.