The classical or orthodox gold standard alone is a truly effective check on the power of the government to inflate the currency. Without such a check all other constitutional safeguards can be rendered vain. - Ludwig Von Mises, "The Theory of Money and Credit"
Well, we saw evidence last week that Von Mises was right about fiat currency and constitutional safeguards when nearly every Congressman voted in affirmation - and Obama immediately signed - a law which makes it illegal to have an organized protest in any location where Secret Service personnel are going to be hanging out: LINK Punishable by up to 10 years in prison. Think about this Occupy and Teabag people, if the Government knows in advance of one of your protest gatherings, they'll send some Secret Service people to that location and this law says the local police can arrest you if you show up to have your gathering. I guess in the course of his Constitutional Law studies, Obama forgot to study the 1st Bill of Right - aka the 1st Amendment. Bush referred to the Constitution as merely a piece of paper, Obama has waged a serious war against the Constitution.
(Note: subsequent to my writing this, new home sales for December were reported: plunged nearly 8% and the seasonally adjusted annualized number missed expectations by nearly 20,000 homes)
The housing market has been highly promoted by the media, the Government and Wall Street as "in recovery mode." I've been working on an in-depth piece on the housing market but it's taking more time than I expected. In the course of my research, I've come up with some interesting tidbits that I'll share now. First, it was reported yesterday that Robert Shiller, regarded for some reason as the foremost housing market expert (I guess in the same vein that Bernanke is considered the leading expert on Depression avoidance), stated that the housing market decline could resume: LINK Ya no kidding. In fact, without the help of $100's of billions of Government and Fed subsidies since 2009, it's likely that housing would already be a lot lower.
I want to present just one chart that refutes the notion that the average person in this country is in any kind of position to help support any kind of meaningful housing recovery:
Consumer Debt (click on chart to enlarge)
Hmmm...what happened to the idea that consumer was "deleveraging?" This chart - from the Fed database, seems to refute that notion. We know that the size of the labor force continues to shrink. We also know that on an inflation-adjusted basis, real income is declining. Now we see that consumer debt levels are rising quickly. Let me ask this simple rhetorical question: how on earth can there possibly be any kind of real housing market recovery given the above facts?
One more quick note on yesterday's jobless claims number. The Government report noted that the data included "estimates" of the jobless claims filings in California, Virginia and Hawaii. There's no way in hell that yesterday's supposedly "good" report had any kind of statistical validity. It's just another example of the media spin and an increasingly Orwellian Government.
Before I finish for the weekend, I thought I'd leave you all with some Friday chart porn:
(click on chart to enlarge)
In other words, don't sweat this latest attempt by the Government/Fed to knock down the price of gold and silver, the trend is your friend and this is nothing but another in the long line of tremendous buying opportunities. Unlike the extreme hubris exhibited by Obama/Bernanke, we all should be a little grateful that these attacks on honest money occur because it enables us all to exchange our increasingly devalued fiat dollars for true money. Have a great weekend.