INDECISION: That Feeling You Have About The Economy & The Markets Right Now

SD Midweek Update: Everywhere we look, to gold, to silver, to housing, to stocks, to autos and more, indecision reigns supreme, but the clock is ticking…

Indecision.

That’s the feeling.

Preventing the change.

Preventing change to the economy.

And also preventing change to the markets.

I’m not really sure why people are indecisive right now.

It probably has something to do with the changing of the seasons.

Let’s dive into a specific example of what I mean when I say “indecision”.

Hopefully I can explain this indecision without sounding like a idiot.

Lord knows I’ve never been one who has benefited from hope.

My example pertains to any economic or market decision.

Let’s use this one: Should one buy a house or not?

Well, let’s assess the current situation.

My argument is one should not.

For several reasons.

First of all, interest rates are rising, and rising interest rates means higher monthly mortgage payments, and higher monthly mortgage payments means either putting more cash down on the house, buying less house, or sellers dropping their prices, but since Americans don’t have any savings, people won’t be putting more money down on a house, and as evidenced by the “go large or go home” American-style super-sized SUVs I see hogging all the roads, I doubt that Americans will buy less house of a house, so this leaves the third option, which I think is the most likely option, and that option is that sellers drop their prices.

Why?

Because it is the easiest way to entice the buyer.

Why is it important to entice the buyer?

Because it is still a seller’s market.

But when the market flips?

Competition for buyers.

Such as price drops.

Self-reinforcing.

A doom loop.

For sellers.

So, well.

No.

Right now is not the time to buy a house based on rising interest rates.

Another reason I feel that now is not the time to buy a house has to do with changes in the tax laws, for the Tax Cuts and Jobs Act, in part due to the way the law changed state and local tax deductions, and in part due to higher standard deductions, essentially takes out the whole, “buy a house because it’s good for your taxes” argument, and this dynamic is still being priced-in to the cost of housing, so while the changes to the tax laws make up those hard to qualify and hard to quantify indirect effects on the housing market, unlike the direct effects of rising interest rates, the changes are indeed coming, and they’re bringing price drops with them.

So, well.

No.

Right now is not the time to buy a house based on changes to the tax laws.

Finally, the housing market “recovery” is long in-the-tooth, with basically nothing but rising prices for nearly a decade.

In other words, we are due for a drop in prices if for nothing more than  “normal” market behavior.

Additionally, you get to the point where there are less buyers than sellers.

Which means that, at least in theory, prices are coming down.

So, well.

No.

Right now is not the time to buy a house based on the correctionless recovery and based on a shrinking pool of buyers.

But one could just as easily argue that now is the time to buy a house.

How so?

Well, the Fed will bail-out the housing market to keep prices artificially elevated, and the government will come in with some otherwise idiotic home-buying program to get people who really shouldn’t own houses, into, you guessed it, houses!

But could it really be that simple?

Ahh, that is a dilemma which brings on the indecision.

It’s like time stands still, but the clock is still ticking.

A decision will need to be made very soon.

For the economy won’t just wait around.

Nor will the markets wait around.

In all things, it matters not.

Gold, silver, stocks.

Bonds and more.

Have waited.

Indecision.

Choices.

The US stock market has stalled in its indecision:

Buy now in anticipation of fresh record highs, or sell ahead of the crash?

Ahh, the indecision.

The VIX has been sufficiently sedated:

 

 

Does that mean it is safe, once again, to pile into the US stock market?.

Ahh, the indecision.

People had been calling for a break-out in yield:

Do I act based on rising interest rates, or will the Fed & the government heavy-handily walk interest rates back down?

Ahh, the indecision.

We are fast approaching a full year of the US dollar index bouncing between 94 and 96:

Buy that cheap Chinese TV and cheap Vietnamese blue jeans right now, or will those goods become even cheaper?

Ahh, the indecision.

Crude oil has stalled for at least a month now:

Therefore, do I buy a smaller car based on rising fuel costs, or do I buy that SUV because prices will stay low?

Ahh, the indecision.

Copper is hoping government infrastructure spending get underway:

Do businesses stock-up while copper’s cheap, or will the demand and therefore the price for copper collapse along with the economic?

Ahh, the indecision.

The gold-to-silver ratio is back above 85 again:

Should people even buy gold right now, or should all metals purchases be only silver purchases?

Ahh, the indecision.

Gold has held-on despite the beating:

Buy an ounce here, or see if the gold price drops to $1250?

Ahh, the indecision.

Silver is looking very cheap right now after the latest cartel beatings:

Risk premium creep to see if there will be a lower spot price, or just buy now while silver’s plentiful?

Ahh, the indecision.

Platinum is ready for a sweet break-out or a total break-down:

Should I try to get in now on the platinum-to-gold ratio arbitrage play?

Ahh, the indecision.

Palladium could be pulling-back just as easily as making new highs again:

Invest in palladium now to ride this wave higher, or see if price corrects lower?

Ahh, the indecision.

See how it works?

People have held off on making decisions, but those decisions can’t be put-off forever.

Everything is about to change, and decisions will need to be made very soon.

Have you already made your decisions, and were they the right ones?

Have I made the right decisions and positioned myself properly?

Sometimes people make the right decisions in life.

Sometimes people make the wrong decisions.

Right or wrong decisions aren’t the point.

The point is that one can not win.

In investing, life, or anything.

Without making decisions.

Mistakes will be made.

But not acting?

Guaranteed.

To lose.

Stack accordingly…

– Half Dollar


 

About the Author

U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.

Paul’s free book Gold & Silver 2.0: Tales from the Crypto can be found in the usual places like Amazon, Apple iBooks & Google Play, or online at PaulEberhart.com. Paul’s Twitter is @Paul_Eberhart.

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