Dear Readers,
The Royal Wedding was watched by well over 2 billion people live, meaning a quarter of the globe tuned in to watch a good bit of love and UK pageantry. We wish the Royal newlyweds the very best and we hope all of you have enjoyed the abundance of British sunshine as much as we have.
Welcome to the May Monthly Update. There’s a fair amount shifting in the financial world at the moment, so let’s get right to it:
Inflation
The inflation figures for April have just come out and are causing a quiet stir. They are the lowest for over a year, since March 2017. However, this fall may be short-lived. I heard my neighbours bemoaning the rising cost of fuel last weekend. You may have noticed too.
“The average price of petrol has risen to 127.22p a litre and diesel to 129.96p following a rapid rise in the cost of oil. That means the fall inflation could be short-lived, according to analysts.
“The recent weakness in the pound and the rising oil price are a concern and could quickly reverse the drop in inflation,” said Kevin Doran, chief investment officer at AJ Bell (BBC).
Italy and (the continuing under-reported) eurozone crisis
Only last week I somewhat presciently wrote a piece on The Italian Job gold heist. This week, Italy is back, centre stage in the Euro crisis. But only if you are awake above the headlines. Indeed, what Euro crisis, I hear you ask? The one that continues barrelling along underneath the detour headlines of the Brexit crisis.
Nothing has changed in the quagmire that is European debt. And this became, once again, all too apparent this week as Italy settles into it’s new leadership. Did you know that Italy has just asked for:
“$250 billion in debt relief from the ECB.” Yes, that’s $250 billion, not million! This will have also escaped the notice of many but there was “also a demand for developing a mechanism for countries to leave the euro, according to a, now discredited, report from Reuters,” (Zerohedge).
That is interesting. In a week when Brexit has once again been lambasted as the pariah of the BBC, Guardian and most left-leaning media, we see other countries within the eurozone trying desperately to re-negotiate their membership possibilities in the same breath as asking for truly colossal debt relief.
That is akin to saying “This boat is filling up with water. I need you to help me bail out the water. I also need you to untie me so I can jump off this sinking ship when I choose.”
And the new Italian leadership are aware of the gravity of the economic crisis within the eurozone, even if the general European public are not.
“Draghi understands how bad things truly are and that Italian leadership knows they have the upper hand in debt negotiations. They are prepared to push Brussels hard to get what they want. And well they should.” (Zerohedge)
House Prices
House price and Gold price tend to live in an oscillating cycle with each other. So any moves downwards in the property market foretell of good news in the Gold market. This is a historical pattern with very little variation.
Quietly, house prices and even customers moving house has fallen once again. “The most up-to-date Land Registry sales figures for England show the number of completed house sales in January fell by 12 per cent to 50,583, compared with 57,498 a year earlier.
Kevin Roberts, Director, Legal & General Mortgage Club, said: ‘Whilst some may talk of a slowdown, the softening in house price growth should be welcomed by all,” (Daily Mail). Um, I wouldn’t put it quite like that.
If inflation falls and so do house prices, while interest rates are kept at ridiculous historical lows, vast swaths of uninformed members of the British public will either enter the housing market on high percentage mortgages or re-mortgage – unaware of the perfect storm that lies in wait a few years down the road. Negative equity, sky-high mortgage repayments and the feelings of desperation involved affect real lives up and down the country.
Consider owning some physical Gold and Silver to offset falls in house prices over the coming years. It is no secret that the current housing market is over-inflated. That means house prices are under extreme pressure to fall, as they are now beginning to do.
But, look how it is reported: “Scott, chief property analyst at Yopa, said: ‘We can expect to see small monthly changes and a reducing rate of annual increase over the next few months.”
Yikes.
He added: “The London market remains difficult, due to the continuing effects of stamp duty changes and Brexit worries. Prices are still increasing in all other regions of the UK, and are unlikely to go negative in the next few months.”
Look how he states “the next few months” twice. Everyone knows summer is the most popular time for unwitting members of the great British public to want to move house. A quick Google on how house prices are doing, therefore, leads many into a false sense of (temporary) security.
Instead of re-mortgaging, this is the time to pay down a mortgage, aggressively. And it is a time to seriously consider placing some of one’s wealth into physical Gold and Silver, while the prices of both sit in a correction plateau of a few years duration.
Call Bleyer on 01769 618618 to talk through your Gold and Silver purchases now. We encourage our readers not to be caught out by rising prices. Personal and thorough Gold Education is key. Call a member of the Bleyer team now (01769 618618) to chat through your current investment choices. Or simply order online at bleyerbullion.co.uk at a time of your convenience, day or night.
