Tag Archives: inflation

Inflation: The Silent Killer of 2016

With all the attention placed on Trump, Sanders and the other candidates, it amuses me how clueless the vast majority of Americans are. Most people are focused on the wrong thing. They focus on the inflammatory remarks made by Trump, on they believe in the panacea fantasy described by Clinton and Sanders.

Virtually no one is focussed on the real problem. The country is bankrupt. Does it really make sense for Clinton and Sanders to deliver on their promises if they will make the country’s finances even worse? Trump does not provide details or a plausible plan either, probably because he knows that if he did large numbers of people would not like it.

Chart courtesy of ShadowStats

Nobody talks about QE Infinity or the inflation that has been accelerating over the last decades. Nobody cares that the country is bankrupt or that the party is followed immediately by major financial upheaval. Continue reading

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Is this a good time to buy gold?

Many people think that this is a great time to buy gold. However, the same people who are saying that now were saying it when gold was at $1,800 per oz.

The price of gold has fluctuated over the last 5 years.

The price of gold has fluctuated over the last 5 years.

Personally, I think it is better to hold gold than dollars. The dollar is collapsing, and I think it will continue to collapse over the next decades. However, that does not mean that everyone should go out and buy gold.

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On Record Highs: The Dow and Paranoia

flickr--creative commons

flickr–creative commons

We’ve just witnessed a historic event.

Last Tuesday, the Dow — a benchmark for stock market strength — cruised to 14,285, well passed the former record set in Oct. 2007. As of Friday, the Dow rested at 14,397. And there was a collective shoulder shrug.

That reaction was in contrast to the heady days of stock market gains in the 1980s and 1990s when each Dow and Nasdaq record was reported breathlessly for days. It was a moveable feast.

So, what’s different about this record?

First, people are paranoid because the last record in Oct. 2007 was soon followed by an almost complete economic collapse. Within months of this record the Dow plummeted, losing half of its value and bouncing along those bottoms for years. Investors are wary of the same happening again.

They have statistical reasons to be wary. Raw economic numbers — GDP growth and employment, for instance — are not even close to the strength that led up to the rally in 2007. The housing market? It’s still a basket case. Also, the stock market gains are based a lot on government — especially the Fed — tampering with the numbers. Cheap dollars have fueled the rally.

However, it may be a mistake to hold this view on the economy exclusively. Remember fear can be just as damaging to your portfolio as greed. Also, remember that time has a way of balancing prices. What was up, might come down a little; what was down, may end up higher.

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A Brief History of Bitcoin

Bitcoin is the first and most popular crypto-currency. It has some very interesting characteristics that make it similar to a commodity and a fiat currency. It even has had a history of a typical bubble.

Image courtesy Bitcoin Charts

As you can see from the chart above, Bitcoin has undergone a typical bubble. Does that mean that Bitcoin is dead? I don’t think so. It has stabilized since November 2011. In addition, there are thousands of companies that accept Bitcoin as payment has been growing steadily. (Apparently the site is having an issue with its SSL certificate, so you may get a warning).

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Oil Prices and Rental Properties: Financial Quick Bits

Image courtesy H Elise from Creative Commons.

It’s been an interesting week for investors. Usually, when someone says the week has been “interesting,” it means that it’s been scary. That holds true in this instance.

The Fed has moved away from another round of quantitative easing. The government released some oil from its strategic reserve. In the past eight weeks, the Dow has fallen seven times.

How’s that for interesting?

One way an investor (and we’re all investors technically) can prepare for our interesting future, is to get educated. The good thing is there’s always quality content online.

Here are some of the things I’ve been reading:

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The End of the Dollar

Last week’s tax and unemployment package was just one of a long series of events that will destroy the dollar. While most people are blissfully unaware, the government is working to undermine the U.S. dollar. I have written about this massive change that will affect all of our lives many times before.

Photo by dcJohn

This latest act of congress makes it clear why the dollar has no hope for survival: our government has no desire to be financially responsible. America is a country of debtors. We have the lowest saving rate of any developed country. Why would our elected representatives be any more responsible than we are?

How did this happen?

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The Truth about Government Statistics

Nearly every day the government reports valuable information to us about critical details about our economy. Numbers like unemployment and the Consumer Price Index are the most well know. These numbers are supposed to educate us about what is happening in the economy, and how well our country is doing.

The True CPI is Far Higher

There is just one small problem. Many of these values are not true. The government simply makes them up. The result is that they make us feel better and make the government look better. It seems that President Obama believes that people should be treated fairly and that the government needs to support its citizens. I think these government lies would be a great thing for him to clean up.

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Is the Dollar Dead?

After reading this article on Bloomberg about the end of the dollar, I thought about some important points that the author brings up. First, the dollar is declining as gold rises. This is a trend that has been going on for years, but most people are totally unaware of it.

I think it is interesting to note that even though the information is available to everyone for free, most people choose to ignore it. When we get our information from the “news”, we don’t learn about what is really important. This includes ideas like the dollar will soon become nearly worthless and the fact that the savings of a whole country is disappearing.

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Is Now a Good Time to Buy Gold?

As gold continues to soar, more and more people want to get into the market. However, they feel that gold has gone up so much that it is overpriced. How do we know if gold is too expensive and going to get cheaper, or if it is going to continue to go up?

Will Gold Continue to go Up?

You have probably guessed, but the answer is nobody knows. However, we can still make an educated guess. And, using other principles of successful traders, we can even make money in the process.

How can we make an educated guess?

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Does The Fed Have Anything Else in its Bag of Tricks?

The economy is much more sluggish than the members of the Federal Reserve Board and experts, in general, expected.

Economists are ratcheting back GDP growth expectations. What started out as optimistic has turned to rational. And, now, the projections for GDP growth are tenuous.

The Fed is suggesting growth will be in the 3 to 3.5 percent range.

What’s troubling is that the Fed and every other governmental budget officer has spent their wad on propping up the economy. Is there anything else they can do?

The answer is, “yes.”

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