Gold anticipates the not-so-obvious and often completely unforeseen economic developments better than any other investment I know of and these days it is telling us that all is not well with the world and that something major is brewing out there. Words: 918
Read More »Monthly Archives: April 2010
The Latest Economic Data is Being Massaged and Sugar-coated
I believe that the worse things get, the better they will sound coming from our nation’s leaders/ pundits. Words: 1132
Read More »Many U. S. Debt Obligations are Unrecognized, Unmeasured, Unmanaged and Unfunded
When people find themselves in a situation where they feel they don't have a decent grip on the risks they face, or where a great deal of critical information is hidden from view, emotions can easily overwhelm rational decision-making. Is it so farfetched to think that a sudden loss of confidence in the United States' ability to manage its finances could evoke similar fears about just how large and widespread the fallout might be? Words: 1026
Read More »Five BIG Reasons Interest Rates MUST Rise
Brace yourself for one of the greatest interest-rate surges in decades — beginning first in the long-term Treasury markets ... later spreading to shorter term Treasuries ... and ultimately enveloping nearly every loan, debt, credit, and money market instrument on the planet. This rise may not begin with great fanfare, nor will it immediately upset the apple cart of the economic recovery, but with the march of time, it WILL gain momentum and reach critical mass. Words: 614
Read More »Soros: New Financial System Needed to Avoid Another Crisis
The crucial factor in the crash of 2008 is that it was not due to some exogenous event or extraneous shock but by the system itself. That means that the prevailing paradigm, the efficient market hypothesis basically has been proven wrong. As such, the task ahead is not to restart the economy and the financial system but to create a new system because the old system has broken down. Words: 1285
Read More »NOTHING Can Stop Coming Inflation: Bank for International Settlements Report
A recent research paper* by the Bank for International Settlements, entitled "The Future of Public Debt: Prospects and Implications" paints a terrifying prospect for the inhabitants of most of the developed world with deficits spiralling out of control for every western industrialized country under study and inflation a foregone conclusion as a result. Words: 1128
Read More »How to Profit From Rising Interest Rates With ETFs (+2K Views)
We've been enjoying historically low interest rates for the last decade ... even more so in the last two years and we know the party is going to end at some point. Well, I'm beginning to suspect the end will come sooner rather than later but you don't have to just sit still and accept it. There are exchange-traded funds (ETFs) that, if used properly, can protect your principal and enable you to profit from rising rates. Words: 871
Read More »Siegel vs. Shiller + Bogle vs. Gross – On the Future of the S&P 500 (+3K Views)
The market is currently slightly over-valued now which is reasonable since stocks offer a much more attractive return than bonds due to low interest rates. Eventually, however, interest rates will get to levels of at least 4% (which is the minimum normal rate on interest rates) and that would justify a P/E closer to 15. I am no prophet but if I had to guess, I would think future returns will be somewhere between Bogle's and Shiller’s estimates, i.e. between 8% and 10%.
Read More »Major Commercial Real Estate Losses to Rekindle Financial Crisis
Over the next few years, a wave of commercial real estate loan failures could threaten America’s already-weakened financial system. Commercial loan losses could jeopardize the stability of many banks, particularly the nation’s 2,988 mid-sized banks that have these dangerous concentrations in commercial real estate lending and, as such, as the damage spreads beyond individual banks, contribute to prolonged weakness throughout the economy. In fact, between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms - and nearly half are “underwater” already. Words: 987
Read More »Will Sovereign Debt Tsunami Drown All the PIIIGS and Then the US and UK?
With all the attention being focused on whether or not there will be a sustainable recovery in 2010, the potential for a wave of sovereign-debt crises following the wake of the global recession has just recently started to appear on people's radar screens - and such a wave should not be surprising. Words: 2541
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