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'Now Is The Time To Prepare For Next Crisis' Says World Bank As IMF Warns Of Housing Crashes

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Today’s AM fix was USD 1,261.75, EUR 932.90 and GBP 749.66 per ounce.          

Yesterday’s AM fix was USD 1,262.50, EUR 932.63 and GBP 751.76 per ounce.  


Gold rose $0.20 or 0.016% yesterday to $1,261.00/oz. Silver fell $0.02 or 0.1% to $19.21/oz.

Markets are jittery with Asian shares down and European shares mixed due to concerns about the global economy and oil prices rising again, this time due to escalating violence in Iraq.



Palladium in U.S. Dollars - 20 Years (Thomson Reuters)

Palladium held steady near a more than 13-year high on Thursday, as supply concerns due to industrial unrest in South Africa and the risk of Russia restricting supply led to buying from industrial users and investors.  The precious metal broke above resistance and rallied to $862.50 an ounce on yesterday, its highest level since February 2001.

The record nominal high in January 2001 was $1,095 per an ounce and this seems likely to be reached in the coming weeks given the very precarious supply, demand equation. However, palladium has risen nearly 20% this year and recent gains have been rapid meaning that a correction may be imminent.

Sunni militants overran the Iraqi city of Tikrit overnight and closed in on the biggest oil refinery in Iraq, making further gains in their rapid military advance against the Shi'ite-led government in Baghdad.

The sudden and rapid escalation of the conflict in Iraq shows how volatile and unstable the entire Middle East remains. Geopolitical risk emanating from Iraq, the Middle East, Eastern Europe and amongst leading world economic powers should support gold prices.


IMF Warns Of Housing Crashes - World Bank Says 'Now Is The Time To Prepare For Next Crisis'

Yesterday, the IMF and World Bank issued warnings about the global economy.

The International Monetary Fund (IMF) warned that the world must act to contain the risk of another devastating housing crash. The World Bank warned that the anticipated rise in interest rates will hit global growth this year - and presumably house prices too.

"We are not totally out of the woods yet," Kaushik Basu, the World Bank's Senior Vice President and chief economist and he warned that "now is the time to prepare for the next crisis."

The warning from the IMF came as it published new data showing house prices are well above their historical average in many countries as covered in the Financial Times today. The data shows how an acceleration in house prices in many countries from already high levels has emerged as one of the major threats to global economic stability.



Financial Times

House prices “remain well above the historical averages for a majority of countries” in relation to incomes and rents, Mr Zhu said in a speech to the Bundesbank last week, which was only released on Wednesday because it clashed with a European Central Bank announcement. “This is true for instance for Australia, Belgium, Canada, Norway and Sweden,” he said.

 


 
Financial Times

In the wake of the global recession central bankers have cut interest rates to record lows, pushing house prices to a level that the IMF regards as a significant risk to many economies.

There was no mention of the housing bubbles in important financial centres such as New York or of the London property bubble. The clear warnings by the two institutions were not covered by much of the non specialist financial media and the majority of the public will not be aware of them - nor will at risk house buyers in many countries.

The World Bank’s chief economist is offering important advice to investors and savers when he said that "now is the time to prepare for the next crisis."

One important way to do that is to own gold in the safest way possible: 7 Key Allocated Gold Storage Must Haves

 

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Fri, 06/13/2014 - 03:11 | 4851769 Obamanism
Obamanism's picture

This is  a coded smoke signal to all of the elite, start off loading and reducing debt as soon Interest rates in the Boom Countries will Rise. Then there will be real smoke and fire due to the violent protests and revolution

Fri, 06/13/2014 - 02:07 | 4851694 walküre
walküre's picture

Stop hoarding, start spending. Money is worthless.

The "smart" money is not under the mattress this time. Draghi issued the next EU template. After Cyprus bailins, they're now taking money from eveyone holding funds.

Only time wiill tell how Europeans react and respond to this. Will Fed follow suit?

Thu, 06/12/2014 - 23:27 | 4851435 honestann
honestann's picture

The world economy cannot survive WITHOUT a housing crash.  Think about it.

A house is the number one expense for most families.  Every extra dollar spent on a house is one less dollar for every other expense.  And every other expense is a synonym for... the economy.

The only scumbags who benefit from higher home prices are banksters.  Why?  Because the more people cannot afford basic expenses, the more they borrow.  Which means more money for banks, more people become debt serfs, and more generations of debt serfs into the indefinite future.

LOW PRICES ARE GOOD FOR THE ECONOMY.

And low prices on the biggest expenses are especially beneficial.

Thu, 06/12/2014 - 23:50 | 4851488 flacon
flacon's picture

Agreed! 100% correct! We need a massive housing BUST, and the sooner the better! 

I live in the further Greater Toronto Area and it's fuking mad how many new developents are going up - tearing up farmland to build brand new cookie-cutter "homes" for God-knows who. Blackberry is defunct and they are still building like MAD in my city. It's fucking lunatic! 

Fri, 06/13/2014 - 02:12 | 4851706 tulip_permabull
tulip_permabull's picture

Ha, it's worldwide. I live in a village on the edge of a 4th tier city in East Java, Indonesia. Just down the road, real estate developers are putting the best farmland in the world (mostly rice, cane, soy, peanuts) under tracts of modern-style butter-box homes the size of a two-car garage.

Anyway, this place where I live is pretty much the end of the earth guys. Bleating goats. Chickens on the potholed roads. It's five hours to an airport. I reckon that if the property bubble has reached this place there can't be many other places it can go.

Fri, 06/13/2014 - 19:30 | 4855286 honestann
honestann's picture

Right... and the only way to afford those houses is what?  To borrow so much that you are guaranteed to be a life-long debt slave.  Which is their goal.  Slavery via debt, and debt made necessary by insanely high prices, plus endless advertising, plus a population too stupid to realize what's being done to them and REFUSE.

Thu, 06/12/2014 - 20:05 | 4850855 SweetDoug
SweetDoug's picture




Well those numbers above are a bullshit lie.

Toronto’s home prices jumped 11.4 % YoY in May. Canada's was up 8%.

http://www.huffingtonpost.ca/2014/06/04/toronto-house-prices-sales_n_544...

Don’t believe a word the IMF says. No wonder they get it wrong all the time.

When these bubbles pop, it will be epic.

 

OH, and what else does canada have a bubble in?

Real estate agents.  http://business.financialpost.com/2014/05/09/canada-housing-bubble-agents/

 

1 for every 140 people in Toronto!

 

 

 

•?•
V-V

Thu, 06/12/2014 - 22:00 | 4851186 Imminent Crucible
Imminent Crucible's picture

1 for every 140 people in Toronto!

Then you can go a lot further before the train wreck. 1 in 50 Californians was a "realtor" before that dumpster blew up.  And they're back at it again.

Thu, 06/12/2014 - 18:22 | 4850492 CheapBastard
CheapBastard's picture

When I look at my old beat-up house that is Zillowed 300% higher then in 2004, I have no doubts that housing will see a 50-80% correction while some underpriced items [like gold] will see a 100-200% increase when the Fed prints it's Butt off tyring to protect the NAR, Bankers, and all those weasles who hold MBS's.

Thu, 06/12/2014 - 17:55 | 4850367 BeetleBailey
BeetleBailey's picture

These fuckin guys are not on the same page

Here's Carney after todays "hawkish" BOE statement;

"Mark Carney told households, companies and financial markets that the tightening cycle “could happen sooner than markets currently expect”. Mr Carney also outlined that measures to cool down the housing market in the UK will act as a substitute for gradual rate rises.

...AND TO ADD ASININE TO THE ALREADY MORONIC....

Carney added, in an attempt to justify future rate hikes, that “growth has been much stronger and unemployment has fallen much faster than either we or anyone else expected.”

This, after the GBP went full retard at 4pm....bizarre that they would affect their own shit-currency after their markets are closed.

Look for some pissed off "Russell Crowes" AND HIS LAB RATS tomorrow morning in London

Thu, 06/12/2014 - 16:45 | 4850081 kurt
kurt's picture

For People with No Money we Need Houses that Cost Nothing

Thu, 06/12/2014 - 16:33 | 4850033 TVP
TVP's picture

They can keep things going as long as they can steal with negative interest + inflation.  I've noticed many trolls on infowars and other sites recently, saying things like "COLLAPSE IS IMMINENT, ARRHHHA!!!".  Such transparent fear-mongering.    

One can't help but be alarmed by all the false flags of late, though...and the increased effort to demonize the resistance.  Something may be afoot.  

Something's still going on in China, as well, if memory serves...

Thu, 06/12/2014 - 14:59 | 4849669 dontgoforit
dontgoforit's picture

Sold the mini-mansion in '07; crusin' to retirement in the flat - modest and manageable by any standard.

Thu, 06/12/2014 - 14:25 | 4849521 disabledvet
disabledvet's picture

Collapse in the housing market...er, pardon me..."double dip"...(newspaper no longer prints list of those in default in lieu of back taxes btw) will obliterate the muni bond market.

The "downsizing" will be epic.

Think of "a hundred financial Stalingrads."

Thu, 06/12/2014 - 14:07 | 4849436 skbull44
skbull44's picture

Go Canada! My home and native land is rockin'! Our bust will be spectacular. Thanks so much Mark Carney, former head of the Bank of Canada!!
http://olduvai.ca

Thu, 06/12/2014 - 14:13 | 4849469 Seer
Seer's picture

Sigh, my wife had told her nephew up "north" to wait to buy and he went ahead and did (tired of renting).  I think that the price-tag is in the $300k+ range ($375k?)- WOW!

And full recourse mortgage loans to boot! (same with Australia, which is in an identical boat)  They sure lured them in!  Going to get really ugly up (and down) there.

Thu, 06/12/2014 - 15:23 | 4849777 cifo
Thu, 06/12/2014 - 13:58 | 4849368 Uchtdorf
Uchtdorf's picture

And now a message from our sponsor, the IMF:

Dear Hoarders,

Would you please hurry up and die so we, your Benevolent Leaders, can absorb all your wealth via taxation of your spawn? It's for the children, after all, so they'll be prepared for the next crisis (of our making).

Warmest regards, 

Thu, 06/12/2014 - 13:36 | 4849231 DerdyBulls
DerdyBulls's picture

A warning that Keynesian policy must be ramped up more or else.

Thu, 06/12/2014 - 14:02 | 4849403 daveO
daveO's picture

Exactly. They've stolen demand fron the future by artificially low rates. Now, house prices are guarateed to fall by the same amount. 

Thu, 06/12/2014 - 13:28 | 4849189 moneybots
moneybots's picture

"We are not totally out of the woods yet," Kaushik Basu, the World Bank's Senior Vice President and chief economist and he warned that "now is the time to prepare for the next crisis."

 

We are in the deep dark middle of the forest, not even close to getting out of the woods. Adding 30 trillion dollars to global debt digs a deeper hole in the middle of the dark forest.

Thu, 06/12/2014 - 14:08 | 4849441 Seer
Seer's picture

Look on the bright side: better to be deep in a forest than deep in some big city!  In the city you'll be chasing rats for supper.  In the forest it'll be squirrels, and though this is likely a minimal improvement at least you'll have cleaner air (and, likely, water)!

Thu, 06/12/2014 - 13:32 | 4849214 WhiteWolf
WhiteWolf's picture

MoneyBots,

Clearly you have not kept up. We were near a complete Collapse, but the infallible and all knowing Fed fixed it. We had tremendous growth came out of a recession..poof. It was wonderful, everyone employed, money flowing to all. You mus have missed it.  I SURE did. MORE MOPE. Still in DEPRESSION, except of course the SANHEDRINS...Dimon,Blankfein,Geitner,OBAMA,CLINTONS,etc..

Thu, 06/12/2014 - 13:20 | 4849150 Sick
Sick's picture

I have purchased many homes in my life but currently lease.  I am able to purchase but will not with the inflated property prices even though there are low interest rates.

If you purchase during a low interest rate period and then interest rates go up (which they must as they are way too low), the home price will come down.  When the property prices come down, you are stuck owing more than you can sell the home for.

Conversely if you have honest interest rates not affected by the printing of dishonest money then you can have honest property prices.  If you have to sell you do not have to hope for a greater fool.

I will wait for honest interest rates and reasonable, logical home prices

 

Thu, 06/12/2014 - 14:05 | 4849422 Seer
Seer's picture

"I will wait for honest interest rates and reasonable, logical home prices"

One goes up and the other goes down.  Net: no difference; except, you'll be older and STILL waiting to pull the trigger.  I do not advocate to buy (or not) because it really depends on your goals.  For myself I sold at the top of the market and then bought near the low-end of the interest rate curve after property prices dropped (before the next kick up); I bought Ag land (w/simple/cheap home)- had been my plan and it has wroked out well through several years now (read "it's holding up just I'd expected").  As they say, timing is the thing, and if you're looking to hit tops and bottoms you're going to have to depend on a lot of good luck: better to be close.

NOTE: Everything is "dishonest" because humans are deceptive; and, because the entire human social/economic paradigm is based on a PONZI- perpetual growth on a finite planet.

Thu, 06/12/2014 - 13:42 | 4849266 The Alarmist
The Alarmist's picture

Don't hold your breath ... TPTB will allow a total societal collapse (ca. 2017) before they let rates go up appreciably.  Do you think they are up-armoring the local constabularies because they can't find a better use for your taxes?

Fri, 06/13/2014 - 19:44 | 4855313 honestann
honestann's picture

The predators-that-be WILL NOT let interest rates rise.  They can't, because they are all becoming just like Japan (overwhelmed by debt).  When debt gets that high, the predators-that-be CANNOT allow interet rates to rise, because tax revenues couldn't even pay interest on the debts.

So what will they do?  They will force their predator-partners in the central bank to hold interest rates near zero.  If that isn't enough, they'll have the central-bank lend directly to the government to reduce the actual interest rate to zero (rather than 1% to 3% for 5 to 30 year bonds).

That will cause hyperinflation, which is what they want.

So yes, house prices will not fall in terms of DOLLARS.

But they WILL fall in value (the price in grams of gold).

This will UTTERLY SCREW owners of real estate... even as many of them believe they won the lottery because their home is worth more dollars (but less gold).

Why do I say owners are utterly screwed?  Because they ACTUALLY lost on their real-estate, but they will pay taxes on the fictional profit because they receive more dollars than they paid for the real-estate.

Owners lose three times over.

#1:  Their real-estate lost value in real terms.

#2:  They will pay ever more inflated property taxes.

#3:  They pay taxes on their false profits (in dollars).

Thu, 06/12/2014 - 13:09 | 4849095 moneybots
moneybots's picture

How can there be a next crisis?  The bailouts were supposed to have fixed everything.  Another 30 trillion dollars of debt was flooded into the world.

Bernanke built a bigger bubble.  How can the IMF be warning of another crisis?

Some 45 million people or so are on food stamps and the IMF is warning of another crisis.  But the current one isn't over.  Are we headed for 65 million, 75 million on food stamps?  Or perhaps 100 million?

Shouldn't the IMF be phrasing it as a deeper crisis, rather than another crisis?

Thu, 06/12/2014 - 17:50 | 4850348 Raging Debate
Raging Debate's picture

Moneybots - They can't do that because they said the recession ended in 2011. This next round is deflationary which is not good for gold (since Goldcore published this article). A lot of people will lose dough on assets but commodities will drop.

As Jefferson said "first by inflation then by deflation." They mnew these things then. I doubt the revolution was about a 4% luxury tax. It was about ending the colonies mutually beneficial banking system and installing BOE. Once that happened within seven years the economy went from prosperous to catastropic. That is why other warning by Jefferson were made clear like "if they tax us in food or drink" meaning loose monetary policy, currency dillution stoking inflation.

But round two of the bust is the deflation stage which we're entering. The general population will be happy about the drop in energy prices but won't be happy to see home and stock values decline. I don't expect collapse but correction. 10%-15%. The knock off effects on confidence will hurt business for a year or so afterward. This is why I said I will look at stocks again in 2016 (a few times now). I say it so you profit not to increase bitching. For those with an ear.

Thu, 06/12/2014 - 16:25 | 4850000 lynnybee
lynnybee's picture

'How can there be a next crisis?'  ...  How can there be a next crisis? ..... BECAUSE A GANG OF CRIMINALS IS RUNNING THE SHOW, that's how !   a gang of criminal bankers is trying to take over there world & bankrupt all of us & steal our assets & harm our kids & grandkids & kill off the baby boom generation so they don't have to pay us what was promised when we fell for the 401k scam & the social security scam even tho we paid into it !   they want us dead & they want to own all the productive assets for pennies on the dollar ....... that's how there's gonna be a next crisis.   I hate to say it, but, those bankers better watch out, cause the "next crisis" is going to be them losing the paper banknote scheme to the real money, the gold & the silver.   

Thu, 06/12/2014 - 19:35 | 4850769 Kassandra
Kassandra's picture

Hey lynnybee..good to see you!

Thu, 06/12/2014 - 13:34 | 4849223 Tao 4 the Show
Tao 4 the Show's picture

I don't remember a warning from the IMF before the 2008 crash. Anybody else remember one?

Warnings are coming from many directions, but does the SHTF with this much talk?

Thu, 06/12/2014 - 17:09 | 4850167 Citxmech
Citxmech's picture

I'm not so sure if the shit give a flying fuck how much folks are talking or not.  Watch prices at the pump and hedge accordingly.

Thu, 06/12/2014 - 16:01 | 4849926 donsluck
donsluck's picture

"does the SHTF with this much talk?" Probably not :)

Thu, 06/12/2014 - 14:07 | 4849439 daveO
daveO's picture

Sorta like Cary Grant in North by Northwest, where he's hanging onto the top of Mt. Rushmore by his fingertips.

Thu, 06/12/2014 - 15:00 | 4849677 dontgoforit
dontgoforit's picture

Or Sly Stallone in 'Cliff....' oh, never mind.

Thu, 06/12/2014 - 21:41 | 4851146 old naughty
old naughty's picture

"I don't remember a warning from the IMF before the 2008 crash."

No, i don't.

But have this to say to them: "What crisis? You guys are executing it according to plan, no?"

FO.

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