Federal Reserve Market Invtervention In Extremis

For all of you who are still trying to figure out why the stock market has shot up like a bat out of hell despite the fact that the Fed has reduced (at least temporarily) the amount of monthly money printing, please take the time to read this article written by former Assistant Treasury Secretary and highly respected academic Paul Craig Roberts:  Manipulations Rule The Markets

It's no secret that the economy in the U.S. is starting to fall apart again, along with that of the rest of the world. In order for the Fed and the Obama Government to keep feeding us the lies about the economy, it is important that the Fed - in conjunction with the U.S. Treasuries Exchange Stabilization Fund - keep the stock market moving higher and the price of gold capped at an extraordinarily low manipulated level (I'm currently working on an article that will demonstrate how the Fed manipulates the gold market using Comex paper gold futures).

Meanwhile,China keeps hoovering up all of the physical gold that is being stored in NYC and London vaults:  What's Happening To All The Gold?  That's a video interview on Bloomberg News with an analyst based in London who recently toured the primary gold vaults in London. Guess what?  They are becoming quite empty...

Finally, I just published two separate articles which explain why the housing market - based on both new and existing home sales - is getting ready to plunge back into a nasty bear again. You can read those here:  The Housing Market Bear Is Growling  and here:  November Existing Home Sales - Look Out Below.

Based on everything I observe and research, I have two holiday recommendations:  1)  if you no longer trust the Government and understand just what a Ponzi scheme our system is, start taking as much phony paper money as you can afford and quickly accumulate physical gold and silver that you keep outside of the banking and financial system - that last point is of critical importance;  2)  if you think you are going to list your home for sale in mid-January and get the same price your friendly local real estate broker quoted you back in July, forget about it - get your home listed and price it to sell if you really want to move or recapture any equity value it has right now. By this time next year I believe people will be shocked at how much the housing market has fallen apart.

One more point on housing. While the FHA did not make a big public announcement about this, starting Jan 1 it has lowered the size of mortgage it is willing to guarantee in 650 counties. In some cases the reduced mortgage size is substantial. The FHA now funds over 20% of all new mortgages, including a wide swathe of subprime-quality borrowers. Essentially you can kiss that part of market demand good-bye unless prices fall by a significant amount.

At any rate, have a great weekend and if you are taking most of next week off, Buon Natale. If you are traveling,  auguri e buon viaggio!