Debt
Five Ways to Make 2012 Your Best Year Ever
I hear it everywhere I go. I'll start investing again…
…when the debt problem is fixed.
…when the markets pull back a little.
…when the EU crisis is over.
…when the elections are over.
Chances are you've said some of these same things to yourself.
Yet, waiting is exactly the wrong thing to do. Time is something you never get back.
And when it comes to consistent investment returns, time is the one thing you always have to capitalize on – without fail.
Besides, waiting makes it harder to get back in the game. Ask anybody who missed the S&P 500's 99.53% run up off March 2009 lows that carried things until April 2011.
Or the 87.26% run up through July 2007 following the low set in 2003. Or the 569.25% move from November 1987 (shortly after Black Monday) through January 2000.
No. The way I see it, the thing to do is to begin investing the moment you decide you want to. That way you pique your imagination, your motivation and your returns.
Five Ways to Get Better Results in 2012
Here are five tips to help you get started:
To continue reading, please click here…
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Robo-Signing is the Tip of the Iceberg for the Banks
What may be good news for delinquent credit card holders may also be really bad news for banks.
It turns out the "robo-signing" of foreclosure affidavits is just the tip of the iceberg.
In what one judge called "robo-testimony," falsely attested-to statements by bank document custodians have been submitted in courts around the country by banks trying to win judgments against delinquent credit card debtors.
Apparently, tens of millions of credit cards issued by banks have not been accompanied by good recordkeeping, either.
Chasing down delinquent borrowers in court requires original credit agreements and accurate payment histories to verify outstanding balances and claims.
As it turns out, banks aren't providing them – either to the courts or to third-party debt collection companies that buy uncollected debts for pennies on the dollar.
As a result of these shoddy practices, judgments already granted to banks could be overturned and they could be sued by state attorney generals or pursued by the Consumer Financial Protection Bureau.
The same banks could even be potentially charged by the Justice Department under the Racketeer Influenced and Corrupt Organizations (RICO) Statutes for selling dubiously documented accounts to debt collection companies.
While some debtors will take comfort in what they read here, investors in banks may want to question how legal issues and regulatory investigations will impact their stocks.
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Not Much of a Debate: Inflation is Part of the Plan
Forget about lost decades. Forecasts that we'll be turning Japanese couldn't be further from the truth.
Here's why.
It's simple, really. Deflation is not in the interest of anybody in power, so it's very unlikely to happen.
The U.S. Federal Reserve's policy move to target inflation last week just re-emphasizes this point.
That's not to say deflation is a bad thing for everybody.
For savers and those living on fixed incomes, deflation would be a very good thing indeed.
Their income would gradually increase in real terms, and their savings would become steadily more valuable. Holders of Treasury bonds would also gain mightily from deflation.
However, the very people who would gain from deflation are not in power.
The People's Bank of China can't vote in the U.S. (yet!), Ron Paul is not president, and there is not an organized and powerful savers' political movement. After all, this is not Germany or Japan!
Meanwhile, in the real world, the U.S. government is spending far more than it takes in, and its debt is rising to dangerous levels. This has been happening on a bipartisan basis since at least 2001.
The Tea Party may have elected a Congress committed to reducing spending, but none of the battles of 2011 actually reduced spending – they just slowed the rate of growth somewhat.
Since much of the debt is borrowed long-term at low interest rates, the best way to reduce its burden on future generations is to encourage inflation.
Savers may lose out on the deal, but to those in Washington, the idea of inflating our way out of debt is irresistible.
Of course, sometimes we can depend on an independent central bank to resist this temptation. But at present, Fed Chairman Ben Bernanke is committed to near-zero interest rates in his fight against deflation.
Now you don't have to be a conspiracy theorist to realize that, if the power structure is committed to at least moderate inflation, inflation is what you are going to get.
In fact, it is already brewing.
2011 Budget Showdown: Don't Raise the U.S. Debt Ceiling… Sell the White House!
I have to tell you that – as a former international merchant banker – I want to laugh out loud when I hear the dire predictions of how the United States will have to default if Congress doesn't raise the nation's debt ceiling. With a little Wall Street-style creative financing – even when the government's [...]
2011 U.S. Debt Forecast: Five Simple Ways to End America's Spiraling National Debt
By 2020, U.S. debt could reach 90% of the United States' annual economic output. That's more than $20 trillion in national debt, which would mean Americans are on the hook for more than $65,000 per person. Just by paying the interest on that much debt, the United States could become incapable of repairing its own [...]
Three Ways to Profit as China Dumps Japanese Debt
[Editor's Note: Money Morning's Keith Fitz-Gerald - a noted commentator and best-selling author - is a frequent guest analyst on Fox Business. In his latest interview, Fitz-Gerald detailed an investment strategy that will help U.S. investors profit - no matter which way the U.S. dollar moves.]
As a veteran trader, I have a tendency to look past the day's top headlines. That's why a recent Bloomberg News story – which stated that China sold a net total of 769.2 billion yen ($9.24 billion) worth of Japanese debt in September – really caught my eye.
By itself, this story probably wouldn't be a big deal. But this development is the start of an important new trend in the global currency markets. And the following three factors tell me that we should be taking a close look at why China has decided to dump Japanese debt. For instance:
- Given that the same thing happened in August, September marked the second straight month Beijing has sold more Japanese securities than it purchased.
- This marks the reversal of a seventh-month stretch of China being a net purchaser of Japanese debt.
- The two months of sales nearly wiped out the net surplus of 2.32 trillion yen ($27.86 billion) that China had amassed as a result of seven months of buying Japanese debt.
- Finally, the 2.02 trillion yen ($24.26 billion) worth of Japanese debt that China sold in August was China's single-largest monthly sale of Japan government bonds since 1995, when these statistics first started being recorded.
While there are other conceivable explanations, my take is that China is definitely unloading its yen-denominated holdings, and shifting its investments elsewhere as part of a much bigger reallocation strategy. As investors, this is a trend that we need to track – and to react to.
Let me explain….
To understand how to profit from this currency-market development, please read on…
The Defeat of the "Shadow Shogun" Means it's Time to Buy Japanese Stocks
[Editor's Note: Global investing expert Martin Hutchinson has already this year predicted upturns in four key global markets well before Wall Street was able to see the same profit potential. Now he explains how this week's Japanese election - coupled with the Bank of Japan's push to devalue the yen - tells us it's time to buy Japanese stocks.]
Japanese Prime Minister Naoto Kan's narrow Tuesday victory over Ichiro Ozawa for the leadership of the Democratic Party of Japan wouldn't normally get investor pulses racing – after all Japan has had five prime ministers in four years.
However, the Bank of Japan's heavy intervention in the currency markets this week confirmed my view that this political twitch was really very different.
The upshot: As investors, we should pay attention … and should look to increase our allocation to Japanese stocks.
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