Will HELOCs cause another crash?

Back in June, the Wall Street Journal published a chart very similar to the mortgage payment shock chart that alerted me to the original subprime crisis back in '05.  This time the payment shock is on tens of billions in home equity lines of credit.

The magnitude is roughly the same as the subprime crisis, except since these are second mortgages and the housing market has barely recovered, there is almost no collateral behind them.   Wells Fargo is most at risk.

I continue to be invested in gold because of two things I learned from the last crash.  I found out that the system was even closer to total collapse than I thought and I was lucky that I didn't get wiped out be being "too" right.  I also learned that if I had simply invested in gold, I would have made just as much profit as all of my risky perfectly timed derivative trades and short sales, but with no risk of a systemic collapse wiping me out.

long gold.

good luck!

Bull Markets 1871 to July 2014

Source: http://greenbackd.com/2014/08/04/bull-markets-1871-to-july-2014-duration-and-magnitude-update/

Rent vs Buy calculator

The New York Times updated their rent vs buy calculator.   They were the first ones to allow a house price fall in their model, back in 2007.

Check it out:

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

I'll have a permalink on the right side of the blog.

Where is the gold?

In Jan 2012, Germany announced it planned to repatriate 700 tons of gold held on their behalf (for free . . . how nice of them) from the US Federal Reserve and the Central Bank of France.  They were shockingly told it would take 8 years.  So far, they have received only 37 tons.  In the mean time, China has imported 2,000 tons of gold.

http://www.zerohedge.com/news/2013-12-24/year-later-bundesbank-has-repatriated-only-37-tons-gold-700-total

Four Horsemen documentary

This documentary starts out explaining that all empires go through 6 phases (typically spanning 250 years)

1. Pioneer
2. Conquest
3. Commerce
4. Affluence
5. Intellect
6. Decadence

It would seem that we have been in the decadence stage since the '70s.

I think we are also concurrently in the pioneer phase of the internet replacing traditional roles of government (e.g. bitcoin, on-line education, bike sharing and ride sharing for public transportation).
Hopefully we will smoothly transition to a new more robust and democratic world based on that otherwise we face a totalitarian world government and global currency rising from the ashes of the current system and starting the cycle again leading to another round of debt slavery.

-Voltron

Spy Magazine on Short Selling

Here is the article from 90's humor magazine "Spy" that introduced me to short selling as an undergrad (and also warned me about the dangers of Scientology)

Fiat Money