There is a Silver Lining in All o f This!

Perhaps that light at the end of the tunnel some claim to see is a lit fuse!

Consumer Spending?
A key measure of consumer sentiment fell more than expected in February, to the lowest level since its 1967 inception, as Americans remained wary of spending amid the weak economy and rising unemployment.

The Conference Board, a New York-based business research group, said its Consumer Confidence Index fell to 25 in February from a revised reading of 37.4 in January. The index has been touching historic lows since September. Economists had been expecting a reading of 35!

Consumer sentiment is a really vital statistic because it is a barometer of future spending which represents 70% of Gross Economic activity in this country.

Housing market?


The S&P Case-Shiller National Home Price Index reported that prices sank a record 18.2% during the last three months of 2008, compared with the same period in 2007.

National home prices have dropped 26.7% since they peaked during the second quarter of 2006.

“One bright note is that the sector that led the economy into this morass is about to turn the corner, perhaps as soon as this summer, and will start to lead us out,” Dr Scott Anderson, Chief Economist, said in the report released by Wells Fargo Friday.

NOT!!

There is nothing in the data suggesting a turn around any time soon.

My forecast as you know is that home prices will plummet to pre-bubblle levels, reflecting the realities of the current economic reality.

On the other hand, silver will move up as house prices move down until you will be able to buy a house with 1,000 oz or less of silver! Today, with silver at $14 oz, it would take about 14,000 oz. Tomorrow, with silver at say, $100 oz and houses at $100,000, that would do it!

The last time this happened was in the early 80's with silver at $50 and homes at $50,000, so it is not as far fetched as it sounds. It illustrates how way out of line home priced got at the peak of the boom when it took almost 40,000 oz of silver!

Go to http://silverpros.blogspot.com/2008/11/why-silver.html for more information
on "why Silver" including a video by Robert Kiyosaki on Investing in Silver.