If you haven’t heard of the latest ploy to monetize America’s debt, read onward. In the last few weeks an obscure idea has come on with a vengeance. Supported by left-wing politicians, economists, bloggers and even some people formerly considered rational, the idea of the $1 trillion coin as an answer to America’s debt problems is spreading like wildfire. If you’re not already wary at the mere mention of a coin valued at $1 trillion, it’s a sign of the sorry state of the country. Birth of a Bad Idea According to WIRED magazine, the idea was first broached in 2010 in what the … [Read more...]
Archives for January 2013
VIDEO: Fed Heading in Wrong Direction – Feldstein
Gold Today, Gold Tomorrow
In the last five years the price of an ounce of gold has increased 93%. Easy monetary policies and the downgrade of many sovereign debt ratings, including that of the U.S., have contributed to the high demand for the safe-haven precious metal. Since May 16, in the lead up to September’s Federal Reserve announcement of QE infinity, the market pushed the price of gold up by 12.6%. The price of the yellow metal has been consolidating but could break out at any moment. Gold should be a component of all investment portfolios today as a hedge against profligate fiscal and monetary policy because … [Read more...]
Investing in Real Estate: Americans Done Cashing Out Their Home Equity
From the start of the Case-Shiller national price index in 1987 until the bottom of the financial crisis in 2009, Americans owned less and less of their homes. Homeowners were rapidly cashing out their home equity—they have owned less and less of their homes every year. It appears that trend may have ended with what looks like a bottom in 2009. The chart below shows the percentage of equity Americans own in their homes (in black) and the prices of their homes. Even as prices increased, Americans drew down the equity in their homes. The declining trend of the equity line from 1987 to 2009 is … [Read more...]
Stimulus Wave Receding: American Economy Swimming Naked from the Waist Down
At the same time more economic data are signaling slowing American productivity, the number of unemployed has begun rising once again. In today’s employment situation report, the number of unemployed persons ticked up by 164,000. Hardest hit were blacks whose unemployment rate increased to 14% from 13.2%, and adult women whose unemployment rate increased to 7.3% from 7.0%. Job creation slowed as well. Only 155,000 jobs were created in December, compared to 161,000 in November. In December, government payrolls shrank by 13 thousand, the third consecutive month of declines driven … [Read more...]
What We’re Reading 1-4-13
1950s Tax Fantasy Is a Republican Nightmare, Amity Shlaes, Bloomberg More Asians Going for Gold in the Vault, Clementine Wallop, Wall Street Journal Focus on Health-Care Costs Causes More Spending, David Goldhill, Bloomberg Gauging the Guidance That Models Give the Fed, Jon Hilsenrath, Wall Street Journal … [Read more...]
Best of 2012: 6% Income in Retirement
Originally posted: June 19, 2012 I came across a special report on retirement income last week during my daily reading regimen. I was surprised by one particular article on ways to boost your retirement income. The recommendation was for preferred stocks—an area I know well and a choice that makes sense in the right environment. But now is not that time. The hook for preferred stocks is the current yield of 6%. But one catch, as the article correctly points out, is that preferreds are lower on the food chain than bonds. There’s more risk of not getting paid if the company can’t make … [Read more...]