If you’ve ever read mainstream financial advice, you’ll notice that gold is hardly ever mentioned as an investment asset. At best, you might find some advisers who recommend holding 4-5% of a portfolio in gold, or more likely in a gold ETF or gold index fund. Most advisers look down their noses at gold, repeating the old saying that...
US stock indexes tumbled today, posting their worst losses in nearly three weeks. There were a wide number of reasons for the fall, starting with the slide in financials. The Dow Jones Industrial Average dropped by 234 points, with 55 points of that loss coming solely from the drop in Goldman Sachs’ share price. Bank stocks overall were down...
Many Americans put money into their retirement accounts and never bother doing anything more than briefly looking through their annual statements. They are the very definition of passive investors. But in the event of a market crash, those passive investors will lose significant amounts of their savings. Given that stocks and bonds are well into bubble territory right now,...
Retirement accounts of American workers have benefited greatly this year from the stock market’s successes. Many nearing retirement age are undoubtedly viewing their portfolios happily and making plans for how they’re going to use all that money. But with dark clouds of a financial crisis on the horizon and the potential for a war in Asia, they shouldn’t treat...
Nearly a decade after the financial crisis, American workers are still facing financial difficulties. Rather than getting better, their financial situation is actually deteriorating. Nearly 78% of full-time workers report that they live paycheck to paycheck, up from 75% last year. And 71% of all workers report that they are in debt, up from 68% last year. Thankfully, it’s...
The Phillips Curve is an economic concept that posits a stable and inverse relationship between inflation and unemployment. As inflation rises, unemployment falls, and vice versa. Many free market economists had thought that the Phillips Curve had already died in the aftermath of the stagflation of the 1970s when both inflation and unemployment rose together. Certainly, the academic arguments...
Analysts at a number of large banks are warning of an economic downturn. Their warnings are based on observations of various technical data, none of which look very rosy. One of Morgan Stanley’s chief strategists has noted a breakdown in the correlation of the prices of various assets. Higher correlations tend to indicate bullish sentiment, as various asset prices move...
In the aftermath of the failure of the post-war Bretton Woods monetary system, the dollar’s position as the world’s reserve currency was strengthened by the development of the petrodollar system. Middle Eastern oil-producing countries agreed to price their oil in dollars, accept only dollars as payment for oil, and invest their dollars in US government debt. In exchange, they...
The German government finished its planned repatriation of gold holdings by transferring the last bars held at the Banque de France in Paris back to Germany. The German government’s plan was to hold at least 50% of its gold within Germany, a task which has now been completed through transfers from New York and Paris. Those gold holdings are...
Treasury Secretary Steven Mnuchin recently visited the United States Bullion Depository at Fort Knox. According to Bloomberg, Mnuchin stated that “The last time anybody went in to see the gold, other than the Fort Knox people, was in 1974 when there was a congressional visit. And the last time it was counted was actually in 1953.” It’s interesting that...