Monthly Archives: December 2012

What Happens When the Bond Markets Turn Against the US?

The following is an excerpt from the latest issue of Private Wealth Advisory. In it I outline the relationship between the Fed’s commitment to low interest rates, the scramble for high grade collateral driving the sovereign bond markets, and how the whole mess will eventually come crashing down. Private Wealth

Why Bernanke’s Terrified of 2013

On December 12, the US Federal Reserve surprised yet again by announcing QE 4: a program through which it would purchase $45 billion of US Treasuries every month. Between this program and the Fed’s QE 3 Program announced in September, the Fed will be monetizing $85 billion worth of assets

How to Play the Fiscal Cliff Failure

Tonight between 7:30-9:30PM, the House will vote on Boehner’s “Plan B” for the fiscal cliff. At this point the entire exercise is one of looking busy for appearance’s sake: it wouldn’t bode well if the US were to go over the fiscal cliff because members of Congress were already on

Even US-Based Investors Need to Know About This

The markets in Europe continue to rally hard despite the fact that Europe’s financial system is totally insolvent. At the center of this mess is Spain, which now barely functions as a country. Spanish pharmacies, owed $500 million by the government, are running out of medicine in Valencia. Strikes have

Three Reasons the Fed Announced QE 4

Do you find the Fed’s announcement of QE 4 confusing? After all, why would the Fed engage in more QE when it just announced QE 3 three months ago? In this excerpt from my latest issue of Private Wealth Advisory I outline the real reasons the Fed announced more QE

What 2013 Means For You, Your Portfolio and the Economy at Large

Now that Obama has been re-elected, the BLS and other Government entities have begun to revise all of the positive data from before the November election downward. New jobless claims are back over 400,000. The amazing new home sales of 389,00 from October has been revised back down to 369,000.

And That’s Checkmate, Ben Bernanke

Today the US Federal Reserve announced that it would be implementing QE 4: a policy of spending $45 billion per month buying Treasuries on the long-end of the yield curve until employment falls to 6.5%. So between this and QE 3 which was announced just two and a half months

The US’s “EU Style” Negotiations Will Without a Doubt Take Us Over the Cliff

Ever since the EU Crisis began in earnest in January 2010, EU leaders have maintained the following strategy: 1)   Engage in endless meetings/ discussions, none of which resolve anything. 2)   Announce that the situation is resolved. 3)   Wait for the world to realize nothing has been fixed. 4)   Repeat. The

Two Economic Developments Every Investor Needs to Be Aware Of

Last week I outlined the reason why we are very likely going over the fiscal cliff: there are little if any political incentives for the GOP or Dems to fix the problem; the best option politically is to let us go over the cliff and then offer targeted tax breaks

Three Charts Every Investor Needs to See

The market continues to track the same pattern it performed going into the failed debt ceiling talks of July 2011. As you’ll recall, then as is the case now, US politicians failed to reach a credible solution to the US’s debt problems. What followed was a credit rating downgrade and

QE 3 Didn’t Work… Why Would QE 4?

The primary market forces remain in play. The markets are holding up on hopes of additional stimulus from the Central Banks. Some bulls are even calling for QE 4 at the upcoming Fed meeting, despite the fact that QE 3 was launched a mere three months ago and was open-ended

The Only Thing You Need to Know About the Fiscal Cliff

I’m going to lay out everything you need to know about the fiscal cliff negotiations. After reading this, you can ignore all of the media’s coverage of this topic as well as various politicians’ announcements pertaining to this subject. All you need to know consists of just one sentence. Politicians

The Investment Classes That Will Most Benefit From Obama’s Second Term

During the its first term, the Obama Administration thus far has proven itself in favor of increased Government control and Central Planning. That is, the general trend throughout the last four years has been towards greater nationalization of industries (first finance, then automakers and now healthcare and insurance), as well