Yearly Archives - 2019

The Federal Reserve’s QE4 Will Wreck the Economy

If you thought that quantitative easing was a thing of the past, a response to the financial crisis that was dead and buried, think again. Not only is it not a relic, it is a policy response that has now become the Fed’s number one policy tool. Every time something potentially negative affects the economy, the Fed will now resort to quantitative easing. You could be forgiven for thinking that QE4 hadn’t gotten underway yet, as the Fed hasn’t made [...]

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Why Gold ETFs Are a Bad Idea

A major trend in investing over the past decade has been the tremendous growth of exchange-traded funds (ETFs). ETFs have sprouted up to offer investors the ability to invest in a number of different assets, some of which they otherwise would have great difficulty investing in. That has opened up the range of investment options and allowed ordinary investors to enter new markets, diversifying their portfolios and giving them greater opportunities to grow their wealth. Gold is one of those [...]

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Global Manufacturing Has Contracted Spectacularly

While the mainstream financial media tries to put a rosy spin on the economy and make us believe that everything is going well, under the hood things aren’t looking so good. Forget about mainstream employment numbers such as the unemployment rate or the number of jobs created. The real gauge of the economy’s strength is how much is being produced by industry, and those numbers are decreasing. It appears that global manufacturing activity peaked at the end of 2017 and [...]

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Russia Issuing Yuan-Denominated Debt Means Another Nail in the Dollar’s Coffin

The time is coming when the dollar will no longer be the world’s reserve currency. In all likelihood it will be the Chinese yuan that replaces the dollar, as China is making moves to internationalize its currency, make it more convertible, and use it in foreign trade with more and more nations. The progress made by the yuan is slow and steady, but the end goal is clear. Every day brings more and more news that indicates that the dollar’s [...]

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Corporate Debt Continues to Spiral Out of Control

The biggest bubble in the United States today is also the one that hardly anyone knows about, recognizes, or cares about. It’s well known that the response to any financial crisis is to take action to ensure that such a crisis doesn’t occur again. But that means that we’re always fighting the last war. So while the Federal Reserve and other federal regulators may have taken steps already to prevent another housing bubble from bringing the economy down, they’re [...]

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Think You Can Count on a Pension? Not So Fast

To younger workers the idea of a pension hearkens back to days gone by, when employees spent their entire career with a single company from first hire to retirement. In the modern workplace, with workers ready to jump from company to company in search of better pay or benefits, the idea of a pension seems almost antiquated. And with the development of 401(k) programs that have allowed workers to save up for their own retirement, many may not feel [...]

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Latest Job Market Numbers Show the Economy Is Slowing

With an intensifying trade war with China, volatility in stock markets, and a yield curve that inverted months ago, all the signs are there that the economy is on rocky footing and heading towards a recession in the near future. But despite all those negative signs, many market analysts continue to point to the job market as a sign that the economy is still healthy. With job growth continuing and more job openings than job seekers, many economists think [...]

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Hopes Fading for a China Trade Deal

Every week seems to bring new news that dampens hopes for a resolution to the trade war with China. With President Trump blacklisting more Chinese technology firms due to alleged human rights abuses, China is bound to hit back soon. The country has already reacted to a single tweet by the Houston Rockets’ general manager by cutting back its ties with the NBA, something that stands to cost the basketball league millions. And with a Chinese delegation due to [...]

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WeWork IPO Implosion Highlights the Fact That We’re In Tech Bubble 2.0

One of the major factors contributing to sky-high stock valuations in recent years has been the performance of tech stocks. Much of the gains in stock markets has come about due to the performance of Apple, Amazon, Facebook, Google, and Netflix. Nearly two decades after the burst of the dotcom bubble, investors have forgotten all about the lessons learned back then, and that will come back to harm them. But in a worrying sign that portends the coming of the [...]

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Corporate Stock Buybacks Still at Record Highs: When Will the Bubble Burst?

One of the most frustrating things for investors to see today is that, despite the fact that the US economy is rapidly heading towards recession, stock markets remain at unusually high valuations. While those investors who have already invested in gold to protect their assets are happy about gold’s performance, especially as stocks have plateaued in recent months, they’re still puzzled to see stocks not dropping like everyone knows they’re going to. Why is that? As with much of the [...]

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