December 2018
Retirement Accounts Are For Retirement, Not Everyday Spending
If you’re like many Americans with a 401(k), IRA, or other type of retirement account, the last few years of stock market gains may have sent your paper wealth soaring. There are more 401(k) millionaires in the United States today than ever before. But with the sums in retirement accounts piling up ever higher, and American households more indebted...
The Yield Curve Inversion Has Started: What Are You Waiting For?
One indicator that market analysts look to for signs of an impending recession is an inverted yield curve. Because of uncertainty about the future, investors demand more yield from longer-term investments. That’s why you’ll see higher interest rates on longer-term bonds than shorter-term bonds. An one-month bond may yield 3% interest while a 10-year bond may yield 5%. When...
The US Government Spent a Record Amount of Money on Interest in 2018 – How Does That Affect You?
In the aftermath of the 2008 financial crisis the Federal Reserve engaged in a massive amount of quantitative easing (QE). In addition to pushing interest rates to near zero, the Fed also purchased nearly $2 trillion worth of US government debt. That incentivized the US government to take advantage of the low interest rate environment to issue trillions of...
With an Economy This Fragile, Investors Need to Be Prepared
Building up a nest egg for retirement is only one half of retirement planning. The other half consists of planning to safeguard and maintain that wealth well into the future. Business cycles have been a regular part of the economy for over a century. The booms and busts that occur with regularity are something that need to be taken...
Has President Trump Successfully Cowed the Fed?
Stock markets soared last week in the aftermath of Fed Chairman Jay Powell’s speech to the Economic Club of New York. In contrast to Powell’s statement in October that the Fed was still a “long way” from the neutral interest rate, Powell last week stated that interest rates now “remain just below the broad range of estimates of the...
Russia Ditches Dollar in Response to US Sanctions
Russia has announced its decision to forgo use of the US dollar in response to US sanctions against the country. While the Russian government would prefer not to have to take that measure, it feels that it has no option, seeing what has happened to Iran and not wishing to be cut off from world financial markets if it...
November 2018
Relying on Social Security Is Like Playing Russian Roulette
For nearly 80 years the Social Security system in the United States has been paying benefits to retirees. Generations of Americans have grown up and gone to work in the expectation that the Social Security taxes they paid throughout their careers will be repaid with interest once they retire. But as demographic changes alter the makeup of American society...
President Trump Continues to Attack the Fed: Will Powell Fold?
One of the more disappointing aspects of President Trump’s tenure is the evolution of his criticism of the Federal Reserve System. While candidate Trump rightfully criticized the Fed for artificially depressing interest rates, President Trump has morphed into attacking the Fed for raising its target federal funds rate. While he correctly identified the Fed’s political motivations for keeping interest...