Wednesday, January 4, 2012

Morning Update/ Market Thread 1/4 - Food will be the Final Bubble…

Good Morning,

Equity prices are lower this morning after yesterday’s ridiculous gap over resistance. The dollar is higher, reversing yesterday’s move, bonds are slightly lower, oil is slightly lower after moving to $104 yesterday, gold is higher, silver lower, and food commodities are slightly lower.

Speaking of food commodities, ever since the latest massive European “rescue,” food commodities have moved almost non-stop higher. In fact, corn has moved higher in 12 of the last 13 sessions, or about 15% higher in just the past two weeks!

In the past week I have begun hearing many stories about the “riches” being made in the farmland sector of real estate. In Iowa, farmland has been selling for record prices. There’s no question that foodstuff is inflating rapidly in price, much faster than advertised by our money printing central criminals at the “Fed.”

History shows that when inflation really begins to set in, the government and those in control of producing the money simply lie. That is in progress. But at some point the math of the printing begins to create pain for those in the lower income brackets where wages simply fail to keep up with the inflation. Attempts to create energy from agriculture are also losing propositions that only aggravate these effects. These result in loss of confidence and the expectation that inflation will continue. Larger and larger segments of the population fail to keep up. When this is seen, you are looking at the final stages of monetary and political control. We are getting closer and closer, keep an eye on food and farmland prices, it’s the last bubble because it will result in revolt.

The completely conflicted and hypocritical MBA says that Purchase Applications fell dramatically in the past week. Once again, worthless data with giant sized meaningless one week moves, the result of an industry that is only a fraction of what it once was and the shifting of the way they report to only report percentages without the underlying data. Here’s Econoexcuses:
The weeks may have been short and the seasonal adjustment difficult but mortgage application activity definitely declined during the two weeks ended December 30 (December 23 week included due to holiday). This is the conclusion of the Mortgage Bankers Association whose purchase index over the two week period fell a very steep 9.7 percent. The drop interrupts what had been a steady stream of good news out of the housing sector.

Down 1.9 percent is refinancing which makes up the great bulk of mortgage activity, at 82 percent for the highest share of 2011. Homeowners are increasingly refinancing their mortgages as rates sink. For the lowest rate of 2011, the average 30-year conforming mortgage ($417,500 or less) was 4.07 percent in the period.

“Steady stream of good news out of the housing sector?” LOL, talk about self-deluded, wow.

Supposed Factory Orders is released shortly and will be reported inside of today’s Daily Thread.

Here’s Bill Still’s latest, in my opinion one of the most on the mark discussions from Bill to date – good job, Bill!

I, Nathan Martin, no longer consent to the lies.