Of the vast array of things that don't make sense, let's start with borrowing from future income to spend more today. This is of course the entire foundation of consumer economies such as the U.S.: the number of households which buy a car or house with cash is near-zero, unless 1) they just sold a bubble-valuation house and paid off their mortgage in escrow or 2) they earned wealth via fiscal prudence, i.e. the avoidance of debt and the exultation of saving. Read More
We are barely out of the gates in 2018 and the S&P 500 is up over 4%. From just looking around me it is clear entrepreneurs and consumers are optimistic about the future. For much of the last decade the general public wouldn't touch equities with a ten foot pole. Now people are taking on debt to buy as much cryptoassets as possible. I don't share this optimism and primarily look for investments outside of the U.S. and in special situations and investments that may have low or negative correlation to the general direction of the market. Seven reasons why I want to be very careful going into 2018: Read More
Needless to say, we have reached the mane. What drove the US economy for the past three decades was debt expansion----private and public--- at rates far faster than GDP growth. But that entailed a steady ratcheting up of the national leverage ratio until we hit what amounts to the top of the tiger's back---that is, Peak Debt at 3.5X national income. Read More
There is definitely an argument to be made for having a slight overweight to cash when you start to feel wary on both sides of market, viewing both equities and bonds from a peak down. Nine to 12 months of cash reserve, rather than just six months, is the new norm for greater security, and to take some risk off the table and wait for a better opportunity to reinvest, he said.
In late 2018, the bad economic news just keeps rolling in. At a time when consumer confidence is absolutely soaring, the underlying economic numbers are clearly telling us that enormous problems are right around the corner. Of course this is usually what happens just before a major economic downturn. Most people in the general population feel like the party can go on for quite a while longer, but meanwhile the warning signs just keep becoming more and more obvious. I have been hearing from people that truly believe that the economy is “strong”, but if the U.S. economy really was in good shape would new vehicle sales be “collapsing”?… Read More
So we have concluded (perhaps) the bull market in bonds that began in 1981 and that maybe ended in the early days of July 2016 (I think). So it might just be that interest rates are going up because they are going up. It sounds a little bit mysterious and indeed fatalistic, but I’m a little bit less inclined than others to assign causation to people and policies.
RATE AND REVIEW this podcast on Facebookhttps://www.facebook.com/PeterSchiff/reviews/Sacrificed on the Altar of Political CorrectnessI want to spend the rest of this podcast talking about politics; in particular, what's going on with Brett Kavanaugh and his fading chances of sitting on the Supreme Court. It appears that he may be sacrificed on ...…
Kirk Spano, the winner of the first MarketWatch competition to find the world’s next great investing columnist, is a registered investment advisor and founder of Bluemound Asset Management, LLC which seeks to provide investors with greater safety, growth, income and freedom. Kirk’s biography and various business endeavors can be found at KirkSpano.com. Follow Kirk on Twitter @KirkSpano or at the Bluemound Facebook page for his columns, company analysis, letters, trade notes and what he is reading.
McAfee, who hasn't been affiliated with his namesake company since 1994 and lost most of a fortune once worth $100 million in the years since the crisis, was at one point pitching a new ICO every day. And since before last year's boom, McAfee has been a regular on the cryptocurrency conference circuit and is part of what Bloomberg calls "a vast network of social media influences" who have helped ICOs raise billions. Read More
Some nasty dark clouds are forming on the financial horizon as total world debt is increasing nearly three times as fast as total global wealth. But, that’s okay because no one cares about the debt, only the assets matter nowadays. You see, as long as debts are someone else’s problem, we can add as much debt as we like… or so the market believes.
For some this may seem outrageous even to consider. The way I see it is that Japan was quickly catching up U.S. GDP in 1995 and many thought that it would at some point surpass our GDP. This was solidly the number two global economy for many years until China took that place last year. Yet the real estate bust has really been a drag on the economy for years moving forward:
First, more NYSE stocks are bought on margin now than at any time since the 1950s, and Faber interprets this as a sign of overvaluation. Indeed, he finds that stock prices are "out of control," per Money, with the market P/E ratio nearly double its historical average. Once a selloff begins, Faber expects it to become an avalanche in which "asset holders will lose 50% of their assets [and] some people will lose everything," as Money quotes him.
Still, there are a lot of unknowns. Would millions of Americans switching from urban to rural living ignite a baby boom and cure our demographic problems? It’s certainly not out of the question. After all, birthrates are substantially higher in rural areas. Plus, families could dramatically reduce their cost of living by moving out of cities, allowing them to feed more mouths.
Emotions are the biggest challenge when a bear market hits. After spending years scrimping and saving to find money to invest and watching it grow slowly but steadily, it's painful to see stock market declines wipe out a significant chunk of your portfolio. Even for seasoned investors, the kneejerk reaction is often to want to put those losses to an end quickly and sell.
Bill Pawelec taught me the meaning and importance of predictive programming. As a result, I am going to reveal a partially redacted, but very relevant email from a member of my audience about the extreme relevance of predictive programming. And then I am going to allow the predictive words of my late friend, CIA contract agent and former Air Force Intel operative, Bill Pawelec, who revealed what is coming and I fear we will not have to wait very long this to happen.
First I said I believed the US stock market would plunge in January, but I also said that January would not be the biggest drop, but just the first plunge that begins a global economic collapse: the big trouble for the economy and the stock market, I said, would show up in “early summer.” That’s when the stock market crash that began in January would take its second big leg down, and global economic cracks would become big enough that few could deny them. Read More
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Rather than write on a planned topic, I received at least 20 e-mails yesterday on the same subject so had to switch gears. The e-mails were all panicky because an analyst who works in the precious metals industry suggested that silver will not perform as gold will in the coming reset. I feel the need to address this because I believe it is faulty analysis and may have motivation behind it. I will not name the analyst but can be easily discerned.
In fact, there is remarkably little evidence of organized bear raiding on the U.S. market following the October Crash. In order to dispel the myths, the economist of the New York Stock Exchange, Edward Meeker, published a book, entitled Short-Selling, in 1932. Meeker claimed that bears had not precipitated the crash. In November 1929, the NYSE found that around one hundredth of one percent of outstanding shares had been sold short. A later study in May 1931 found the short interest had risen to 3/5 of one percent of the total market value. More than ten times as many shares were held on margin. Nor could the stock exchange identify any bear raids in the subsequent market decline.
I think you need to look at how the population is growing. Only 1 group is growing and if you look at the high school and college graduation rates of that group it spells real trouble for our future prosperity as a society. Hopefully at some point they assimilated into our culture, but if they continue with the culture they came from that doesn’t emphasize education then it will only increase our welfare state. These people aren’t going to buy a lot of homes if they can’t graduate from High School and in the end it will mean spend more money on prisons and there will be even less for housing. I’m also curious if they fiasco of the last 20 years has anything to do with why Japan’s birth rate has gotten so low. If you really feel that each generation is going to have to lower their standard of living and your kids would be worse off than you and your parents wouldn’t that impact your decision to have kids at all?
The pattern of boom and bust has continued in the post- war years. Inevitably the bears have been blamed during every major downturn…Japanese authorities complain[ed] that mysterious foreign interests were responsible for the decline in their stock market, following the great boom of the bubble economy. (In 1998, the Japanese imposed restrictions on short-selling in an attempt to shore up their market).
To present a methaphor, under Title I FISA authority, Carter Page was essentially ‘patient zero’ in an Ebola pandemic. Labeling him as a foreign agent allowed the FBI to look at every single person he came in contact with; and every single aspect of their lives and their activities in growing and concentric circles; without limits to current time or historic review.
The result is banks and their attending insiders are a de facto Committee of Central Planners in the great Soviet style. What is fashionable and exciting to them can happen, and what they dislike or disapprove of for any reason can never happen. And once on a completely fiat system, this is how capital is allocated through our entire system: badly. Read More
JOIN PETER at the New Orleans Investment Conferencehttps://neworleansconference.com/conference-schedule/NAFTA was the Worst Deal in World History?I want to talk about Donald Trump's new trade deal. When Donald Trump was running for President, he said that NAFTA (North America Free Trade Agreement) was the worst trade deal ever negotiated ever b ...…
I am sure you remember the lead up to Q1 2016. The US economy and stock market were transitioning from a Goldilocks environment and narrowly avoiding a bear market while the rest of the world was still battling deflation. Precious metals and commodities were in the dumper and try though US and global central banks might, they seemed to fail to woo the inflation genie out of its bottle at every turn.
I’m in the inflation camp. I think it’s coming. I have thought this for a while. People have looked all over for it as if looking for a lost sock or a hairpin: Where did it go? Where is that thing? But I do believe that the central bankers who have been kind of begging for inflation will be surprised at the generosity of the inflation gods over what they will ultimately be handed.