Ali Noorani
Coordinator and Production Assistant
US Desk
Press TV
BOB CHAPMAN : HOW IT WILL ALL END - Debt Jubilee or WWIII
Many banks are insolvent, yet are allowed to stay in business. Being allowed to keep two sets of books is obscuring their real estate loan problems. This is the shadow inventory you sometimes hear about. Those millions of homes “that exist, but they don’t.” They presently admit to owning some 1 million homes they cannot sell, which is almost 25% higher than last year. If you put everything together you could be looking at an 8-year supply. Making matters worse lenders are holding homes on the books at values 40% higher than what they are worth. This is very similar to what is going on in Spain
As we predicted in June of 2005 that the housing market would crash we also predicted a 10 to 40 year fall and consolidation in housing. Most people can reflect on these past six years, but cannot perceive the future for housing. Market activity has fallen by almost 1/3rd, as housing prices fell ever lower. Although we do not see an increase in official interest rates we can easily see mortgages at 5-5/8% by the end of the year and 6-1/2% at the end of 2012. Lenders are going to have to demand 10% to 20% down. That will not only further decrease sales volume, but it will further depress prices. These rates may seem high, but inflation will be between 14% and 30% over that 1-1/2 to 2 year span.
Since 2006 house prices are down 32% and over the next year they will probably fall close to 40% from their highs. The Fed may have temporarily saved banking and Wall Street, but little has been done to solve the unemployment problem. If you have no job you cannot buy a house, not with real unemployment at 22%. As a result new home sales fell 28% in February, as their inventories rose to 8.9-month’s sales. Our question is with such a tremendous home inventory overhang, why are builders building more homes, some 550,000 a year. They have to be dumber than rocks. Existing houses for sale rise every day plus there are more than a million in the foreclosure crisis. House prices still have to hit bottom and that is probably 30% lower and probably 3 years away. It is hard to get real estate going with unemployment at 20% and forced part-time employment at 10 million workers. Deceptive government statistics can only hold back reality for so long. People are finally seeing the truth of what unemployment and under-employment really are. Labor deterioration is accompanied by gas and food inflation. People at work paying steeply higher prices are in no position to buy a home. Feeding the family comes first. As a result of forced Fed policies we also have a falling dollar that increases prices for imported goods.
Everyone seems to think things are just great in China China China ’s actions make us think that perhaps they are taking orders from Washington
We believe the issuance of money and credit will increase to keep the world economy from collapsing and inflation will continue to grow, eventually ending in hyperinflation a few years hence. It is the only game governments know and you can be assured they play it again, as they have in the past. There is nothing transitory about what is going on inflation-wise, and policy makers all know this. All they are doing is kicking the can down the road to buy time, hoping hope against hope, somehow there will be a miracle. The only solution they have, like their predecessors, is to have another war. A 50% reduction in world population would suit them just fine. What we are seeing has been in the works for years by our master planners, who create these situations to maintain control. A combination of falling currencies versus gold and silver for the last 11 years by more than 20% should be a lesson for those who want to safely invest their wealth. As we have said for many years investing in gold and silver shares, coins and bullion is a lock. An un-losable bet that has been a reality for 11 years. Soon China and other dollar holders will almost totally back away from the US
Since August 15, 1971 the dollar has lost 98% of its purchasing power and now in each family there has to be two breadwinners, because one no longer suffices. Over those almost 40 years bondholders have been losers, which proves the point that without gold backing a world reserve currency cannot work. As a result sovereign nations are buying gold. China and Russia Argentina , Mexico , Brazil , Iran , India China China China China
Consumer prices rose 3.3 percent from a year earlier after a 2.2 percent gain in February, Statistics Canada said today in Ottawa . Prices were up 1.1 percent on a monthly basis, the fastest since January 1991. Both gains exceeded the highest forecasts in Bloomberg surveys of 25 responses, which had median estimates of 2.8 percent for annual inflation and 0.6 percent for the monthly figure.
The report exceeds the Bank of Canada’s April 13 forecast that inflation would reach 3 percent by June, driven by temporary factors such as energy costs and higher provincial sales taxes. The economy has “material excess supply” that will lead overall and core inflation to converge at the 2 percent target in mid-2012, the bank projected.
“It definitely puts the pressure back on the Bank of Canada to raise interest rates,” said Sheryl King, head of Canada economics at Bank of America Merrill Lynch in Toronto . “It’s not going to be the end” for inflation pressures, she said, adding the economy may already be operating at full output, compared with the central bank’s prediction this will happen in the middle of next year.
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