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Tuesday, 06 June 2006 00:00 |
The past couple of weeks the market dropped severely. We move to the sidelines early on to avoid any major losses. Now it appears that the market is retesting that bottom from a technical standpoint. If that bottom holds we are optimistic. Time will tell.
This week I wanted to talk about the silent tax, inflation. About twenty years ago it cost less than $7,000.00 a year to attend Harvard, gasoline was 91¢ a gallon, and a night at the movie was only $2.50. People are living longer and therefore there is a fear for many that they could run out of money. Our job is to help our clients preserve their portfolio against the future financial storms and preserve their purchasing power.
One of the biggest challenges to accomplish that is the actions of the Federal Reserve. The press often talks about their changing of interest rates. To me that is minor. What is more important is how much money they are putting into the system. The more they put in the more inflation will occur in the future. Read the attached article.
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Tuesday, 16 May 2006 00:00 |
Do you ever get those thoughts in the middle of the night as a result of something that that you read the day before? Last night was one of those nights. After writing the market comments yesterday something struck me as extremely important. The last article kept ringing in my years, especially the following:
Twenty years later, we find ourselves in a similar situation. The U.S.
current account deficit is at almost 7 percent of GDP, and to counteract this global imbalance, central banks worldwide are participating in what is seen as a "regime change." The U.K.'s Telegraph reports:
"Central banks around the world - led by the Fed - are tacitly co-operating to bring about a managed dollar decline. The first signs of this came at last month's Group of Seven finance ministers' meeting in Washington.
"That was followed by an unusually stark statement to Congress by Ben Bernanke, who said America's 'international debtor' status 'cannot continue forever'. The IMF chipped in too, warning that the 'resolution of global imbalances' may require a 'substantial' dollar decline."
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Monday, 15 May 2006 00:00 |
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Last week we moved out of the stock market and onto the sidelines. Both Thursday and Friday registered big losses in the markets. My belief is that there is ongoing discussion about China allowing their currency to float against the U.S. dollar. All this discussion is backed up today by parts of publications which I read. If all these comments are true and you are planning a trip outside of the United States it’s going to get more expensive as time goes on. It also means that it will take more dollars to buy goods from foreign countries. Can anyone say inflation? With more inflation the Federal Reserve will increase rates even further which are sure to slow the economy and harm the stock market which up until last week had been doing well this year. You read and you decide but I believe that right now a safe place to be is in cash. |
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Wednesday, 03 May 2006 00:00 |
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Good news versus bad news
Good news
The United States released a report that showed the U.S. economy grew at an annual pace of 4.8 percent in the first quarter, the fastest in more than two years.
Bad news
The U.S. Treasury Department announced its new budget showing a budget deficit of $760 billion. It took 204 years for the U.S.Government to accumulate its first $1 trillion in debt. Now, it adds that much every 18 months. Scary! |
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