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The Ratio of Housing to Precious Metals Sentiment

The last time housing market sentiment and precious metals prices lined up this way, we were on the cusp of massive volatility and collapse. Housing had reached the end of its long great credit driven rope. At the same time, defaults began to create tremors deep below the house of cards. Silver and gold had recently been pummeled in the same not-for-profit manner that has riddled these markets for more than 40 years in the modern era (and perhaps much longer throughout the history of the monetary metals).

At that time, the market was coming to terms with the reality that markets – especially ones fueled by credit expansion and massive subsidy – do not go in one direction forever. Emergency measures were reigniting the same false sense of security and prosperity we are witnessing in the equity market and extending to major metro centers. This is being hailed as the great return by the mainstream media. Despite this, we are on the cusp of yet another wake-up call.

As many will recall, the housing bubble was re-inflated with mark to market accounting changes, the direct bailout of government sponsored entities, and financial intuitions. All of this was to get us back to where we were without correcting any of the imbalances that led to the original fragility. Renters and savers were punished, while the political class cheered the efforts of the monetary masters.

In contrast, gold and silver were deemed bubble each time they ascended from lows celebrated and ridiculed by the mainstream financial press.

Source Gold Seek

Housing and precious metals are once again so far away from each other that they practically rhyme with very recent history.

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