Archives for September 2012

September 2012 - Page 18 of 19 - Money Morning - Only the News You Can Profit From

Election 2012: Why the GOP Is Really Talking About the Gold Standard

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One of the most surprising proposals from the Republican National Convention was that the GOP platform for Election 2012 includes a commission analyzing a return to the gold standard.

Ever since the United States went off the gold standard in 1971 the U.S. monetary base has grown to its current level of roughly $2.56 trillion. With this increase has come an even more alarming rise in the federal deficit. Currently the U.S. has around $222 trillion in unfunded liabilities.

That's why many, most notably Rep. Ron Paul, R-TX, have called for a return to the gold standard and a compete audit of the Federal Reserve.

But as opponents are quick to point out, it is impractical, impossible, and highly unlikely that America's enormous monetary supply would be backed by gold.

Some on the left, such as Paul Krugman of The New York Times, called the return to the gold standard "an almost comically (and cosmically) bad idea."

So why would the GOP bring it up?

Experts have theorized that the inclusion of a gold standard commission on the GOP party's platform is just a way to encourage Ron Paul supporters to join the Romney camp.

Within the GOP there are worries that these devoted "Paulites" will not vote for Romney unless more of Paul's agenda is taken seriously. The move to "audit the Fed" and a return to the gold standard are two ideas Paul supporters care most about.

But there's more to the gold standard proposal than pleasing Paulites.

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How To Profit From A Paul Ryan Economy

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By Money Morning Reports If you haven't prepared your investments for a possible Romney/Ryan victory… you should do so immediately. Here's why… First, we're only two months away from the election and current polls show Romney and Obama are in a virtual dead heat. That means, a Romney/Ryan victory is very much a real possibility. […]

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Expert: U.S. Will Be On Gold Standard Within 2 Years

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By Terry Weiss, Money Morning In a stunning interview on King World News, noted expert Peter Schiff said the Fed's failed stimulus plans have debased the dollar so much, the U.S. will have no choice but to go back to the gold standard in "a year or two." Schiff, the CEO of Euro Pacific Capital, […]

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Invest in Silver Before Prices Climb Higher

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Silver prices are up this week on hopes of a third round of quantitative easing, or QE3, reaching their highest level in four months.

U.S. Federal Reserve Chairman Ben Bernanke on Friday hinted at further central bank action and silver prices jumped more than 3%. They've continued climbing this week to over $32 an ounce.

Speaking at the annual Jackson Hole, WY economic symposium, Bernanke expressed concern about the U.S. labor market stagnation and said yes, he is open to more quantitative easing to assist the economic recovery.

Details weren't included but it didn't matter: Bernanke said the magic words.

Silver has jumped on the bull train thanks to inflation concerns and talks of quantitative easing by central banks. Buyers increased in volume after the Aug. 22 release of Federal Reserve minutes, extending a rally that had been kicked off by signs of European solidarity.

It's not just U.S. news that's keeping the run going. German officials, including Chancellor Angela Merkel, are starting to sing a different tune for the European Central Bank's (ECB) stimulus activities. This may help reduce borrowing costs for debt-ridden Eurozone nations.

All these signs are reasons to load up on metals before prices take off higher.

"From now on, this is a dip-buying market," David Govett, head of precious metals at the brokerage Marex Spectron, told The Financial Times. "Yes, there will be setbacks along the way, but fundamentally the market is now in bull mode."

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Will Fiscal Cliff Trigger Muni Bond Defaults?

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Turns out our nation's counties and cities are in much worse financial shape than previously believed – and the impact of the fiscal cliff could drag these municipalities down even lower.

A recent report by the New York Federal Reserve determined that while Moody's Investment Service reported only 71 defaults from 1970 to 2011, there were actually 2,521.

That's because Moody's only reports on the defaults of rated bonds, which are safer for investors. Taking all U.S. muni bond defaults into account, the default rate is actually 4%, not 1%, according to The New York Times.

It's not just Moody's that missed on municipal bond default statistics. The Fed's combined database indicated 2,366 defaults from 1986 to 2011, compared with Standard & Poor's 47 defaults during this same period.

And now the looming fiscal cliff, scheduled to be reached on Jan. 2, 2013, could drive up many more city debt levels to dangerous highs.

If Congress doesn't agree on a solution, $530 billion in tax increases and reductions in federal spending will take place at the start of next year. According to a recent study by the Congressional Budget Office (CBO), going over the fiscal cliff could take the United States -and its cities and counties – back down into the valley of another recession.

That's when muni bond defaults could tick up.

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Stock Market Today: Markets Slide as Manufacturing Shrinks

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Here are the major headlines in the stock market today.

  • Manufacturing declines for third straight month – The Institute for Supply Management's factory index contracted to 49.6 last month from 49.8 in July, its lowest level since July 2009. Economists are worried that the looming fiscal cliff could deter businesses from spending in the upcoming months. "As I look at this and try to find some rays of sunshine, it's quite difficult," Bradley Holcomb, chairman of the ISM survey, told Bloomberg News on a conference call. "I would characterize this as a sobering picture of U.S. manufacturing right now without any clear signs of immediate improvement."
  • Construction spending falls – Construction spending fell 0.9% in July to a seasonally adjusted annual rate of $834 billion, the Commerce Department said Tuesday. Economists had expected a 0.5% gain. Private residential construction fell 1.6%, private non-residential construction fell 0.9% and public construction spending fell 0.4%. Compared with July 2011 spending is up 9.3%.

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Gordmans In Line; Guides Rev Lower - Analyst Blog

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Gordmans Stores Inc. (GMAN) posted earnings per share of 18 cents in the second quarter of fiscal 2012, in line with the Zacks Consensus Estimate. The result surpassed the year-ago quarter’s earnings of 15 cents per share. Behind the Headline Numbers Net sales for Gordmans Stores grew 9.6% year over year in the first quarter […]

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SunTech Ships Higher in Q2 - Analyst Blog

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Suntech Power Holdings Company Ltd. (STP) announced preliminary financial results for the second quarter ended June 30, 2012. In the reported quarter, greater demand from European markets, China, Japan and Australia drove sequential shipment growth. As a result, Suntech's shipments of photovoltaic (PV) products for the quarter increased by approximately 33% from the first quarter […]

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The "Mobile Wave" is So Huge America Will Be Reborn

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Thanks to mobile computing, America is about to be reborn.

This growing technological wave will make the dollar stronger, spread American values throughout the globe, and establish English as the single most important language on Earth.

In fact, our leading position in the rise of smartphones and tablet computers makes it certain that the United States will undergo a major revival and rebranding.

Along the way America will re-emerge as the dominate force in technology and economics in the world – by far – as soon as the end of this decade.

This new breed of American-made tech will also improve the lives of billions of people around the world by providing them with better health care and education.

Now, admittedly you've heard this bullish story from me before. But here's the thing: these aren't my insights.

They belong to a hard-hitting high-tech executive who is a renowned expert on the subject. His name is Michael Saylor, and he is the CEO of MicroStrategy Inc. (NASDAQ:MSTR), a leader in business intelligence.

More to the point, Saylor is the author of the hot new nonfiction book called "The Mobile Wave: How Mobile Intelligence Will Change Everything."

In the book, he makes the case that we've passed the tipping point in bringing cutting-edge software to the world. From healthcare apps to text books, it's all on your smartphone or tablet.

The book is a fast and compelling read. If you want to take a look for yourself, you can find "The Mobile Wave" on Amazon.com.

As befits the topic, I read Saylor's book on my iPad…

Michael Saylor on the Promise of America

Intrigued by what he had to say, I got in touch with Saylor by phone, and we chatted for nearly an hour.

Some of you may find his comments controversial. After all, it's the "in" thing these days to bash America as a once-great nation losing its technical lead to China and India.

But Saylor disagrees. He believes mobile software and the wireless Web are major trends that will give the U.S. its high-tech rebirth and bring billions out of poverty in the Third World at the same time.

Here's how he sees it…

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