Financial Sense Blog

Sales of existing single-family homes increased 11.1% to an annual rate of 300,000 units in March after an upwardly revised reading for February (270,000 vs. 250,000 in earlier report). The largest gain in sales of single-family homes was registered in the Northeast (+66.7%) followed by the West (+25.9%) and Midwest (+12.9%) and a virtually unchanged level in the South. The important take away from Chart 1 is that the level of homes sales is barely higher than the record low of 270,000 units registered in February 2011.

Using that as the cover ratio, gold would need to climb all the way to $3,675 an ounce to cover all paper currency and coins. If you use a broader—and more common—measure of money (M2), gold would need to rise all the way to $7,931 in order to cover the outstanding amount of U.S. money supply.

Over the next fifty years, as we add another 4.5 billion people to the world’s population, global demand for food will increase almost 70% if population growth predictions are correct.

Faced with largely the same set of facts when it comes to their inflation outlook, some of the world’s major central banks have come to markedly different conclusions about the appropriate policy.

Kleptocracy is a word from Ancient Greek that means “thief” and “rule” or rule by thieves. Kleptocrats seek to create systemic schemes that take advantage of governmental corruption to extend the personal wealth and political power of government officials and the ruling class.

As we approach Warren Buffett’s the Berkshire Hathaway (BRKA) annual shareholder’s meeting next weekend (April 30th) in Omaha – attended by thousands of investors who are seated in a sports arena with the overflow seated in other venues - several interesting academic issues arise regarding the company and Mr. Buffett. Ranking as one of the wealthiest individuals in the world Mr. Buffett is widely regarded as one of the most successful investors ever. He is commonly referred to as the "Oracle” or "Sage” of Omaha or as the “Legendary Investor” or “The Master” due to his investment expertise.

Lately just about the only things not soaring in price are US houses and electronics beginning with “i”. Raw materials, for instance, have had a good week based on the price action of this commodities ETF:

What's behind the disturbance in the financial Force? QE, ZIRP, the dollar peg and inflation, to name a few factors. There is a great disturbance in the world's financial Force. Many sense it as a storm on the horizon, something not yet visible but telegraphed by a rising, swirling wind and a new electric scent in the air.

Inquiring minds are reading The “Miracle” of Compound Inflation by John Mauldin. Here are a few paragraphs worthy of a closer look. Mauldin is correct about the "insidious nature of inflation". Unfortunately, Mauldin then provides an example that suggests inflation is a "tried and true" way of dealing with debt. Let's quickly dispel such thinking starting with a look at interest on the national debt and health-care costs.

Market bulls made a strong stand last week. The optimists of the market sneered at bad news and bought stocks. Negative headlines to start the week gave way to better than expected earnings reports and continued strength in the metals complex. The market has been able to absorb a wide variety of seemingly crushing body blows and continue to move higher. The proverbial wall of worry is out there and the bulls have continued to buy all pullbacks.