Tag Archives: economy

2015 – How is the World Doing?

It might be helpful to take a reading on various countries at the beginning of 2015 to help investors decide where to place their bets in the coming year. Some trends are affecting all major world economies while others are country specific.Continue Reading

Investors Seek the Fed’s Guidance on the Economy

What do the latest Fed minutes tell us? Since the recession began, the Fed has set two goals for the economy. Perhaps the foremost objective is to maintain inflation at or near the 2% level. The one crisis point would be a drop in inflation below the flat line. This would indicate that the economy is teetering on the brink of recession. The entire quantitative easing program is aimed at keeping the economy growing. We are seeing the effects of stagnation in Europe with the introduction of negative interest rates to stimulate the economy. So far, the US economy has been expanding, albeit very slowly. The latest 2nd quarter GDP numbers came in better than expected at 4.6%. The media has jumped on this number and is prodding the Fed to raise interest rates. However, all is not that great. The 1st quarter GDP actually fell 2.1% after a brutally cold winter in the Northeast. When taken together these numbers indicate a moderate expansion in the economy. According the Fed’s statistics, inflation in August was at 1.7%. However, this number does not include food, energy and shelter.Continue Reading

Currency Info: How Does the Strong US Dollar Affect Your Portfolio?

Currency fluctuations affect a country’s economy and, in turn, the individual investor. Here we want to examine how a strong or weak currency will permeate the economy. Always remember that currency fluctuations are relative depending on the countries involved.Continue Reading

Where is the Price of Gold Headed?

The markets have turned in a strange performance over the past several weeks. The numbers on the economy came in weaker than expected with GDP down -.1% in April. Unlike other recoveries, spending growth has decelerated. Each year it takes a step down. This is not the way it should be. In all past recoveries, spending growth increased as the economy grew. Discretionary spending was up but 90% of that was due to inflation, especially in food and energy. Consumers are being forced to spend more. Our US deficit is running at about $17.3 trillion. The US Federal Reserve’s Balance Sheet has grown to $4.9 trillion. Surprisingly, the US stock market made a new all time high in the Dow and S & P. Gold, on the other hand, fell to its lowest level in the past 15 weeks.Continue Reading

High Speed Trading

In the early days of stock trading prices came across a ticker tape. It posted the stock symbol and the volume. The tape ran at one speed and traders would follow the buying and selling by analyzing the tape. The great traders were able to mentally track price action and make instant trading decisions, almost like a card counter does in Blackjack. One popular past time was for investors to gather in a large sitting room and watch the ticker tape during trading hours.Continue Reading

Investing in Robotics-2nd Installment

It’s here and growing rapidly. It’s the new robotic revolution. Increasingly, businesses are developing and using robots to replace human jobs. Much of it started with the military and now mainstream business is building on that success. Some analysts believe that it is following Moore’s law, doubling every two years.Continue Reading

Investing in China – A Time for Caution

The Chinese economy is in a state of transition from an export driven boom that preceded the US stock market crash of 2008-09 to a consumer driven economy that draws upon its citizens’ thirst for material goods. Much like the heydays of the housing boom in the US, China has had its own real estate frenzy. There has been rapid expansion both in infrastructure and local housing growth. Like in the US, now the roosters have come home to roost. China is now faced with a similar situation that preceded the US housing bubble. Risky loans were made, some with no collateral. Banks have had to either try to sell them at a hefty discount or keep rolling them over on bank balance sheets, thus hiding the true amount of losses.Continue Reading

Gold-The Long View

We always have considerable news and information about gold. Since its spectacular rise from its 2002 lows, gold has captured the imagination of investors worldwide. Unlike other assets gold has its own peculiar characteristics. Some of these are quite mysterious, yet when understood; make investing in gold more predictable.Continue Reading

Two Markets in the Cross Hairs

This week the energy market and the S & P are in focus. Taking the energy market first we saw a technical breakout on the September futures on July 5th, with a close of $103.05 per barrel. This came after a long sideways movement going back to Feb 14th when the close came in at $99.13 per barrel. Given a rather sluggish economy you are wondering what caused this spike. To begin with we must recognize that the oil market is at best mysterious. We have production, exports and imports going on simultaneously in every major country from North America, to Europe and Asia. For this reason it is difficult to pinpoint a single factor that triggered the rise.Continue Reading

The Crisis in Europe is Bubbling up Again

On this Independence Day we are seeing a world in chaos politically, socially and economically. Starting in Europe we see increased social and political turmoil. With recessions deepening from a prolonged reign of austerity, the future of Europe is gathering storm clouds once more. The hot spots are still Greece and Portugal. In Greece the governing troika of the Euro zone is demanding that Greece show actual numbers of layoffs and privatization. Otherwise they are threatening to withhold further bailout monies.Continue Reading