Published July 15th, 2007
in Economics.
I get more hits on my site for the term “Ron Paul” than any other by 5X. Strange for a financial website - maybe not since money and politics are so interrelated. If you don’t believe me just look at the amount of wealth that was destroyed by the “bone-headed” move the Canadian government made in November. By imposing a new tax on income trusts billions of dollars vanished in thin air.
Ron Paul is definitely the Rodney Dangerfield of this upcoming election. He gets absolutely no respect. I was cracking up after I think the second Republican debate. The FOX commentators couldn’t believe that he was winning their Internet polls. They attributed it to the Internet savvy crowd stuffing the ballots. Well how do they explain this? In the second quarter, Ron Paul is reporting that he has 2.4 million cash on hand. That is more money than former “front-runner” John McCain.
Continue reading ‘Ron Paul Gets No Respect’
Published April 28th, 2007
in Investing - General and Economics.
In spite of all of the big hoopla, the DOW simply isn’t what it used to be.
Source: Peter Schiff
Despite its recent eclipse of 13,000 the Dow now buys 30% fewer euros than it did then back in 2000 when it was priced at approximately 11,500. It also buys 35% fewer gallons of milk, 40% fewer bushels of corn or wheat, 65% fewer ounces of silver, 70% fewer barrels of oil, 80% fewer pounds of copper, and 90% fewer pounds of uranium. Try figuring what the Dow will buy in terms of other necessities, such as housing, insurance, college tuition or hospitalization. Any way you measure it, the Dow is worth far less today then it was in January of 2000.
The point to remember is that when it comes to records, it is real purchasing power, not nominal value, that counts. Measured by its purchasing power, the Dow has clearly lost value over the past seven years. Those who have remained invested in Dow stocks during that time period are clearly poorer as a result. Those who continue doing so will likely loss even more wealth in the years ahead, regardless of how many more nominal record highs the Dow sets.
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Published April 24th, 2007
in Economics and Investing - Energy.
I paid 55 bucks to fill up my car this weekend. That’s only going to cover 3/4 of a tank soon. Looks like it is time to bulk up on Oil Company stocks. That will more than cover the increased gas expenses.
April 23 (Bloomberg) — Whether it’s $50 to fill up your Prius or $130 for the Ford Expedition, $4-a-gallon gasoline is coming to a pump near you.
Fuel prices are rising at a pace not seen since Hurricanes Katrina and Rita knocked out a third of the U.S. oil refining industry in 2005. Gasoline consumption is climbing twice as fast as last year and will accelerate when summer travel begins late next month.
“What we’re surprised by is the increased demand,” said James Mulva, chief executive officer at ConocoPhillips, whose refineries from California to New Jersey produce 56 million gallons of gas a day, enough to meet 14 percent of the country’s needs. “Even though the price of gasoline is up, the demand is up,” he said in an April 12 interview in Houston.
Continue reading ‘Gasoline at $4 Coming to a Pump Near You, Unfazed by Rising Tab’
Published April 12th, 2007
in Economics.
Source: Ron Paul’s Texas Straight Talk
April 9, 2007
Recently I had the opportunity to question Federal Reserve Chairman Ben Bernanke when he appeared before the congressional Joint Economic committee. The topic that morning was the state of the American economy, and many of my colleagues raised questions about how the Fed might better “regulate” things to ease fears of an economic downturn. The tenor of my colleagues’ questions suggested that Mr. Bernanke’s job is nothing less than to run the U.S. economy, like some kind of Soviet central planner. Continue reading ‘The Federal Reserve Monopoly over Money’
I think that some heads are going to roll when Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson are forced to admit that the subprime mortgage problem is not contained. In my previous professional life, I worked as a sales person for a software company. We as sales people were often referred to as “feet on the street.” In addition to our sales responsibilities, we were responsible for gathering competitive information, surveying the landscape, detecting trends and most importantly feeding this data back to headquarters. Through formal as well as informal channels, the “feet on the street” ensured that the executives always had the most current field data. Since the executives were constantly speaking to Wall Street or in Industry forums inaccurate data could be very costly in many ways. Continue reading ‘Subprime Mortgage Problem Contained? Give Me a Break!’
Published March 22nd, 2007
in Economics.
It’s all over the news subprime lenders are imploding left and right. The net result is tighter lending standards that eliminates many new buyers and affects the trade-up market. What happened to the good old days when a person with a $60K job could afford a $600K McMansion? Obviously there is plenty of blame to spread around.
Here are three excellent articles that discuss who took the punch bowl away. Make sure to read the comments to the articles as well.
Nouriel Roubini’s Global Economics Blog
Mish’s Global Economic Trend Analysis
Ron Paul’s Texas Straight Talk
Published February 23rd, 2007
in Economics.
Ron Paul is one of the few in Congress that really “gets it.” He has filed to run for the Presidency in 2008, but has been really quiet since filing. I wish that he would pick up the pace, because he is one who could make a difference.
Source: Texas Straight Talk
February 19, 2007
Federal Reserve Chairman Ben Bernanke testifies twice every year before the congressional Financial Services committee, and I look forward to these opportunities to raise questions about monetary policy. I believe monetary policy is critically important yet overlooked in Washington. Money is the lifeblood of any economy, and control over a nation’s currency means control over its economic well being. Fed bankers quite literally determine the value of our money, by controlling the supply of dollars and establishing interest rates. Their actions can make you richer or poorer overnight, in terms of the value of your savings and the buying power of your paycheck. So I urge all Americans to educate themselves about monetary policy, and better understand how a small group of unelected individuals at the Federal Reserve and Treasury department wield tremendous power over our lives.
The following are some excerpted comments from my opening remarks at the hearing with Mr. Bernanke:
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Published February 8th, 2007
in Real Estate and Economics.
During the housing boom, many banks devised “creative” loans allowing people to borrow money with no down payment and pay low interest rates for the first few years on adjustable mortgages. Now, as interest rates reset higher, more borrowers are missing payments stressing the lender’s books. Remember this article from a month ago - Subprime Lenders Gone Too Far: A Time Bomb Waiting to Explode. Today the stock price of one subprime lender exploded. The others were wounded. Here is the damage:
- New Century Financial -36.21%
- Accredited Home Lenders -6.03%
- Country Wide Financial -2.57%
- HSBC Holdings -1.50%
HSBC, one of the world’s largest banks, started today’s party by announcing its bad debt charge would be about $1.8 billion higher than expected. In total, its 2006 charge for bad debts would be about $10.6 billion — or 20 percent above analyst consensus forecasts. It attributed the losses to problems in its mortgage lending to lower quality U.S. borrowers.
Continue reading ‘Subprime Lenders Starting to Explode’
Published January 24th, 2007
in Economics.
The following two articles highlight the poor fundamentals of the U.S. Dollar. What are you doing to protect your wealth?
Countries and Industries with Tailwinds
by Monty Guild, Tony Danaheur
The authors use a scoring system to measure the fundamentals of the U.S. Dollar and break it into its short-term, intermediate-term and long-term components.
Short-term currency valuation indicator: Real interest rates (current short term interest rates less the current inflation rate).
U.S. interest rates are flat, British Pound rates are rising, Japanese Yen rates are close to rising, and Euro rates are steady.
Impact: neutral to bearish for the U.S. currency. Score: -1 for the U.S. Dollar.
Continue reading ‘The U.S. Dollar Fundamentals Stink’
Published January 5th, 2007
in Economics.
No one says it quite like Peter Schiff.
“December’s larger than expected jump in non-farm payrolls is predictably being touted as evidence of a more vibrant U.S. economy. Unfortunately, the data does not support this conclusion. The bloated service sector added 178,000 jobs, while manufacturing shed another 12,000 jobs. What this means is that 178,000 more workers will be consuming goods while 12,000 fewer will be making them. The result will be larger trade deficits that merely compound already stretched global imbalances and exacerbate America’s inevitable day of reckoning.”
Even Ben Bernanke should understand this…
“As an example, suppose that ten castaways were marooned on an island. What if on the day they washed up on shore they all decided to assume the following jobs; lawyer, accountant, banker, economist, actor, philosopher, astrologer, beautician, teacher, and nurse. How long do you suppose they would all remain alive without food, water, or shelter? Someone has to provide those things or everyone will perish.”
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