Posts Tagged ‘real estate ira’

What Dr. Copper Is Telling Us About Self Directed IRAs

Tuesday, July 24th, 2012

Background

Historically, copper foreshadows what is and will be happening in our economy. It is often stated that copper is the metal with a Ph.D. in economics, and the data for the most part bears this out. When copper is down, the US economy is in recession; when the indicator is up, the US economy is expanding. As can be appreciated, copper does better during economic expansions. The metal typically peaks during recessions before heading into a down trend. Its because of this correlation to economic activity that copper has earned the name Dr Copper – meaning how healthy is the economy.

Current Analysis Of Copper Prices

  • Copper generally peaks during recessions. At present copper is currently putting in a lower high and is trading below its 40 week moving average; copper peaked over 1 year ago.
  • Investor sentiment not only tracks price but it often precedes it by a couple of weeks. The current price structure for the Bullish Consensus is bearish.
  • Recent bearish patterns in the price structure of the Bullish Consensus have been bullish owing to central bank intervention. In essence, central banks have prevented a recession from unfolding.
  • It should noted that each central bank intervention has provided less and less benefit to the markets. When looking at copper, we see that Operation Twist did not produce gains that were seen during QE2. It’s as though the markets have become resistant to the effects of monetary stimulation.
  • The breakdown in the price structure of the Bullish Consensus for copper strongly suggests lower prices for copper, which in all likelihood implies a recession. Central bankers have been timely in their implementation of recent quantitative easing, and we could easily make the case that their interventions have thwarted the onset of a recession on more than one occasion. Copper will need to reverse from the current levels and investors will need to embrace that risk. This will be heralded by a reversal in the Bullish Consensus.

Self Directed IRA Action Plan

The current analysis and forecast for copper is that demand or consumption is dropping. Dropping demand suggest dropping prices. These trends are currently present and evident in copper prices. The forecast for demand and consumption is flat to down. This means recession.

Recessionary conditions would suggest that precious metals or real estate will be counter to the prices of copper. We are looking are hedging against uncertainty with hard, tangible and in-demand assets. We continue to support precious metals and real estate in self directed IRAs.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

June Housing Starts And Its Impact On Your Self Directed IRA

Wednesday, July 18th, 2012

The June 2012 housing starts are out and they show a month-to-month gain of 6.9%. We should note that although that seems a like its a significant number, one number does not make a trend. This means that even though there is an increase of in the number, there are not enough numbers, of any significance, to indicate that this increase is statistically significant. The housing market continues to be off by 67% from the high back in 2006. We are not advocating or suggesting that we should return to those levels, but what it does reflect is the devastation in the housing market.

Apartment Starts – the annualized pace of change in quarterly apartment starts was a contraction of 11.2% in the second-quarter, versus annualized growth of 70.6% in the first-quarter.  That tended to offset the annualized quarterly growth in single-unit structures of 29.0% in the second-quarter, versus annualized growth of 12.7% in the first-quarter.

What does this mean for your self directed IRA?

The housing starts continues to show bottom bouncing, meaning that there is not a clear recovery trend developing. The bad news is that until housing recovers the economy will not recover. The good news is that housing may be at a bottom, and prices do not seem to be going up much. This still appears to be a good buying opportunity to secure real estate in your self directed IRA.

The housing numbers also continue to help paint the picture of a recessionary status for the economy. This would suggest that you continue to make sure that you get an appropriate allocation of precious metals in your self directed IRA.

Disclaimer:
The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

Hyperinflation Watch And Self Directed IRA Portfolios

Tuesday, July 17th, 2012

As a general statement our predictions and outlook for hyperinflation remains unchanged. As we just reported, we are seeing significant signs of economic contraction from retails sales and consumer sentiment.

We believe that its a misstatement of fact that the economy actually recovered and that we are now slipping back into recession. We contend the the “recovery” is nothing more than government manipulation and slight of hand from printing, Fed tricks (QE1,2, operation twist), and general government misreporting of key economic figures such as inflation, and unemployment.

The bottom line is that the governments fiscal problems have not been resolved by one dime. The deficit is still running at $5 Trillion (according to GAAP methods), and there is zero sign of any political will from anywhere in Washington.

With the economy weak enough to hide Fed intervention and printing in support of a  still-struggling banking system, the next easing by the Fed likely will trigger a massive dollar selling crisis and begin the process of a rapid upturn in domestic consumer inflation.

What should you be doing with your self directed IRA?

First and foremost, check your allocation of precious metals and make sure that your self directed IRA is properly balanced with precious metals. Secondly, start looking for other counter cyclical investments that can do well in an inflationary environment.

Disclaimer:
The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

Retail Sales Contraction And The Self Directed IRA

Tuesday, July 17th, 2012

The June 2012 retail sales numbers are out and they show a 0.5% decrease vs. May 2012. This translates into a Q2 decrease of 0.20% which extrapolates into a 0.78% annual decrease.

This downturn was the first for retail sales since Q1-2009. This can be viewed in light of the consumer sentiment index which also turned down

These are some of our first official government reported figures that confirm what we have been saying which is we are in a recession, and we would argue that we never actually came out of recession.

What does this mean for your self directed IRA?

These figures are starting to show confirmation of a weakening, slowing economy. We already heard from the Fed today, that they recognize that the economy is weakening and that they are at the ready to use their tool. We know that this will all translate into government intervention, printing and inflation. These are all factors that support investing in hard assets such as real estate and precious metals. So, look over your self directed IRA portfolio and determine if your are properly positioned for this recession.

Disclaimer:
The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

How June Jobs Numbers Will Impact Your Self Directed IRA

Friday, July 6th, 2012

Well, the June 2012 jobs numbers are out and they are terrible, as expected. There were on;y 80,000 new jobs created. May was revised upwards to 77,000 from the initial 69,000. Overall, the unemployment rate is steady at 8.2%.

The numbers are starting to reinforce the a pattern that will become statistically significant. The implications being that the employment picture has never really improved in a significant way for 4 years, but it may actually be worsening. One of the key components that unemployment has not and does not capture are the under employed and the stagnant wages, relative to inflation. This is the unreported story.

What this data is pointing to is that jobs are not getting better, wages are not maintaining pace with inflation. We are starting to see signs consumers are reducing their spending which is causing some price deflation. At some point in time, soon, we will likely hit that tipping point where the markets finally see the problem.

What this means to your self directed IRA

We are seeing a storm developing that is made up up more money printing, flat to down consumers spending, and potentially hyperinflation. The hyperinflation will likely manifest itself when all of the money starts finding its way into the hands of the consumers and businesses. This is a sign for investing your self directed IRA in precious metals and real estate.

So, check your self directed IRA portfolio and determine if you are properly invested.

Disclaimer:
The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.