From Chart of the Day:
While the market has rallied sharply since March 2009, some sectors have begun to break below support of their post-crisis uptrend. One such sector is the all-important real estate sector. For some perspective, today's chart illustrates the current trend of the Dow Jones Wilshire REIT Index. While REITs have been trending up sharply for ten months, REITs currently trade 50% below their February 2007 peak. As today's chart illustrates, the Dow Jones Wilshire REIT Index has just broken below support (green line) of its upward sloping trend channel.
Comments:
It appears from this chart, that all is not as wonderful as the bulls would have us believe.
While some would point to the Case-Shiller index to support a real estate turn around, the reality is powerful deflationary forces are at work to bring Robert Shiller's index back to 100 from its present level of 140.
The question that remains unanswered, is this:
Will the current Fed Chairman Bernanke or a future appointee, be willing to take Quantitative Easing to unprecedented levels, flood the system with cash in a desperate attempt to defeat inflation, "save" the declining housing market and instead throw us into a severe inflationary depression?
If so, tangible assets are, in my view, the best way to protect against such an onslaught.
Strategies
Another Strategy
While the market has rallied sharply since March 2009, some sectors have begun to break below support of their post-crisis uptrend. One such sector is the all-important real estate sector. For some perspective, today's chart illustrates the current trend of the Dow Jones Wilshire REIT Index. While REITs have been trending up sharply for ten months, REITs currently trade 50% below their February 2007 peak. As today's chart illustrates, the Dow Jones Wilshire REIT Index has just broken below support (green line) of its upward sloping trend channel.
Comments:
It appears from this chart, that all is not as wonderful as the bulls would have us believe.
While some would point to the Case-Shiller index to support a real estate turn around, the reality is powerful deflationary forces are at work to bring Robert Shiller's index back to 100 from its present level of 140.
The question that remains unanswered, is this:
Will the current Fed Chairman Bernanke or a future appointee, be willing to take Quantitative Easing to unprecedented levels, flood the system with cash in a desperate attempt to defeat inflation, "save" the declining housing market and instead throw us into a severe inflationary depression?
If so, tangible assets are, in my view, the best way to protect against such an onslaught.
Strategies
Another Strategy
The system is already full of liquidity everywhere:USA,UK,EU,Japan,China...
ReplyDeleteBut people and companies are in debt and broke.Bernanke can do nothing to stop deflation,only make it longer.
Only Congress can give money to people and THAT is road to inflation and destruction of currency.Short of that,get ready for Japan style economy.