Monthly Archives - August 2017

retirement accounts doing well but rocky times ahead

Retirement Accounts Are Doing Well, But Rocky Times May Be Ahead

Retirement accounts of American workers have benefited greatly this year from the stock market’s successes. Many nearing retirement age are undoubtedly viewing their portfolios happily and making plans for how they’re going to use all that money. But with dark clouds of a financial crisis on the horizon and the potential for a war in Asia, they shouldn’t treat that money as a given. Retirement Accounts in Better Shape Than Ever Data compiled from over 20,000 companies comprising over 15 million [...]

Paycheck to Paycheck

Break Out of the Paycheck to Paycheck Lifestyle

Nearly a decade after the financial crisis, American workers are still facing financial difficulties. Rather than getting better, their financial situation is actually deteriorating. Nearly 78% of full-time workers report that they live paycheck to paycheck, up from 75% last year. And 71% of all workers report that they are in debt, up from 68% last year. Thankfully, it’s not impossible to dig yourself out of a paycheck to paycheck existence. Many of the same financial strategies and good [...]

Phillips Curve

Time to Bury the Phillips Curve

The Phillips Curve is an economic concept that posits a stable and inverse relationship between inflation and unemployment. As inflation rises, unemployment falls, and vice versa. Many free market economists had thought that the Phillips Curve had already died in the aftermath of the stagflation of the 1970s when both inflation and unemployment rose together. Certainly, the academic arguments against the Phillips Curve were strong, and the Curve was taught more as a piece of economic-historical curiosity than as [...]

Economic Downturn Coming

Wall Street Banks Warn of Economic Downturn

Analysts at a number of large banks are warning of an economic downturn. Their warnings are based on observations of various technical data, none of which look very rosy. One of Morgan Stanley’s chief strategists has noted a breakdown in the correlation of the prices of various assets. Higher correlations tend to indicate bullish sentiment, as various asset prices move together in response to positive economic data such as increasing manufacturing output. The breakdown of correlation means that investors are [...]

China Saudi Relationship

Is Saudi Arabia Turning to the Yuan?

In the aftermath of the failure of the post-war Bretton Woods monetary system, the dollar’s position as the world’s reserve currency was strengthened by the development of the petrodollar system. Middle Eastern oil-producing countries agreed to price their oil in dollars, accept only dollars as payment for oil, and invest their dollars in US government debt. In exchange, they received copious amounts of military hardware and military assistance from the US government. Those countries that tried to buck the [...]

Gold Bar Repatriation

Germany Finishes Gold Bar Repatriation Ahead of Schedule

The German government finished its planned repatriation of gold holdings by transferring the last bars held at the Banque de France in Paris back to Germany. The German government’s plan was to hold at least 50% of its gold within Germany, a task which has now been completed through transfers from New York and Paris. Those gold holdings are now in Frankfurt, securely stored underneath the Bundesbank’s headquarters. Each of the bars that recently arrived was tested upon arrival [...]

Fort Knox

The Curious Case of Secretary Mnuchin’s Visit to Fort Knox

Treasury Secretary Steven Mnuchin recently visited the United States Bullion Depository at Fort Knox. According to Bloomberg, Mnuchin stated that “The last time anybody went in to see the gold, other than the Fort Knox people, was in 1974 when there was a congressional visit. And the last time it was counted was actually in 1953.” It’s interesting that Mnuchin said that because it doesn’t jibe with Treasury’s official public stance. On June 23, 2011, Congressman Ron Paul’s Subcommittee on Domestic [...]

PE Ratios

The Russell 2000’s Price to Earnings Ratio is Higher Than You Think

In what will likely come as a shock to many investors, the price to earnings ratio of the companies in the Russell 2000 index of small-cap stocks has been shown to be much higher than normally reported. Most publications that report the Russell 2000’s P/E ratio apparently fail to take into account the earnings of companies that are losing money, since they have negative P/E ratios. Unfortunately, one-third of the companies within the Russell 2000 are losing money, so [...]

Housing Bubble About To Burst

Housing Bubbles in Major Cities Sound the Alarm

Housing prices in Denver, Houston, Miami, and the Washington, DC metropolitan area are officially considered overvalued. While that’s probably not news to the people who live in those areas, it’s yet more evidence that the housing market in the United States is reaching, if not already well into, bubble territory. Surprisingly, markets in San Francisco and New York City are considered to have “cooled,” despite the fact that they Bay area’s housing prices still rose 5.3 percent in June. Overall, [...]

Saving For Retirement Is Important

Sound Financial Planning Prepares for More Than Just Retirement

Millions of Americans actively plan for retirement and arrange their finances with that end in mind. But as daunting as retirement and the loss of steady income can seem, for most people that won’t occur for decades. The more pressing reality, one which most Americans will face and which few are prepared for, is job loss. In many cases, the loss of a job occurs suddenly and unexpectedly. That’s why it’s important that your financial planning prepare you just [...]