Monthly Archives - October 2018

Central banks still hold trillions of dollars worth of assets

If QE Ending Causes This Much Pain, What Happens When QE Unwinds?

Stock markets have been topsy-turvy in recent weeks, with investors continuing to remain nervous about the direction of markets as interest rates continue to rise. President Trump has blamed the Federal Reserve and its raising of the target federal funds rate for weakening the economy and unnerving markets. But if merely raising rates has caused this much unease in markets, how much worse will markets get when central banks around the world start to really unwind the massive positions [...]

Are you ready for a roller coaster ride in stock markets?

Tired of the Stock Market Roller Coaster? Look to Gold

Recent weeks have seen stocks all over the map. From reaching new highs near 27,000 earlier this month to finishing last week over 2,000 points below those highs, investors have been plunged into an uncertainty they hadn’t experienced since February. Back then, many investors didn’t know what to do, as markets plunged but then seemed to recover. Once the new highs were reached again in October, many financial commentators claimed that the bear market was over. Even today, now [...]

Stock markets saw a dead cat bounce

Beware the Bounce: Stocks Won’t Be Going Any Higher

The rebound in stock markets earlier this month had many investors believing that the turbulent and volatile behavior of markets that has occurred since the highs reached in February was finally over. The Dow Jones and S&P 500 reached new highs and commentators everywhere were touting that as proof that the economy was on fire and markets were poised to go even higher. But the massive slide two weeks ago and the continuing correction since then has shown that [...]

Fed's balance sheet drawdown will upset stock markets

The Fed Will Not Be Able to Work Any Miracles

Despite the wishes of many investors, stock markets will not continue to march onward to new highs. The massive growth of stock market indexes over the past few years had its roots in the Federal Reserve’s easy monetary policy that grew to enormous heights in the aftermath of the financial crisis. Cheap, readily available money inflated yet another stock bubble, with investor euphoria rising to new highs. In fact, while many professional investors are pulling their money out of [...]

Saudi Arabia and the petrodollar

The Saudi Crisis Is a Major Factor That Could Blow Up Markets

Unless you’ve been living under a rock for the past three weeks, you’ve undoubtedly heard of the furor surrounding Saudi Arabia’s alleged torture and murder of dissident journalist Jamal Khashoggi at the Saudi consulate in Istanbul. The reaction from the West has been strong and steady, with numerous luminaries pulling out of a major investment conference that had been scheduled in Saudi Arabia. But while there have been threats of “punishment” in the event that Saudi Arabia is found [...]

Stock markets are due for a correction

Big Stock Gains Won’t Protect You Against the Coming Crash

Eight months after the stock market turbulence that rocked markets in February, the markets are at it again. Near-record drops, severe slides, and big bouncing recoveries are back again. But while many mainstream financial analysts continue to urge investors to buy the dip, arguing that stock markets are still a great investment, those who remember the events of 2007-2009 and the suffering that stock market investors had to endure would argue otherwise. Markets are still near all-time highs and [...]

The Fed's loose monetary policy is to blame for a weak economy and crashing stock markets

The Fed Is to Blame for Crashing Stock Markets, But Not for the Reasons That President Trump Thinks

President Trump last week placed the blame for crashing stock markets on the Federal Reserve and its decision to continue raising interest rates. The President thinks that’s crazy and wants the Fed to keep interest rates low to keep the economy humming along. And while Trump stated that he doesn’t want to fire Fed Chairman Jerome Powell, the public pressure on Powell from Trump will undoubtedly grow stronger in the coming weeks and months, particularly when stock markets continue [...]

Crashing stock markets are trying to send a message

Markets Are Sending a Message – Are You Listening?

If weakness in the stock market earlier this year didn’t wake up investors and make them realize the underlying weak fundamentals of the US economy, hopefully last week’s stock market declines did. Just as much of the stock market’s growth over the past few years has been driven by tech stocks, so has much of the decline been driven by those stocks too. And with tariffs starting to affect international trade and drive up prices for consumers, economic growth [...]

How best to save for retirement

What’s Keeping Most People From Saving for Retirement?

The dream of every American is to retire comfortably and securely. After decades of working in an office, at a factory, or in a school or hospital, people want to be able to relax and enjoy their golden years in retirement, seeing the sights and having the experiences that they didn’t have time for while they were working. But for more and more Americans that dream is moving further and further away from reality. Why is that occurring, and [...]

A stock market crash is around the corner

All Signs Are Pointing Towards a Crash – Are You Prepared?

Those of us who criticize the Federal Reserve’s conduct of monetary policy are often ignored and sidelined during boom times. We’re supposedly the ones who are crashing the party, harshing the market’s vibes, always predicting doom and gloom. Well, there’s a reason for that, and that’s because the Fed’s inflationary monetary policy will always end in a recession or depression. A boom that is artificially induced through creation of new money and credit will always end in a bust, [...]