Archives for July 2013

July 2013 - Page 15 of 18 - Money Morning - Only the News You Can Profit From

Why "Deleveraging Markets" Will Drive Up Oil Prices

I’m set to appear on Fox Business Network this afternoon (at about 2:50 Eastern) to deliver this revelation, but you heard it here first.

Recently, I have been suggesting a narrow trading band for both West Texas Intermediate (WTI) and Brent crude in London. They’re trading today at about $96.00 and $103.00, respectively.

But two developments are threatening to heat things up yet again – and fast.

Read More…

Abuses at McDonald’s and JPMorgan Chase Help Keep America Poor

Natalie Gunshannon, a McDonald's worker from Pennsylvania, has just won the right to… draw a paycheck. Work-for-pay is a fairly straightforward system that the Western World has been using for the past six or seven centuries, give or take.

Ms. Gunshannon was an hourly employee at a McDonald's franchise in Shavertown, Pennsylvania. Her degree is in massage therapy, but jobs in that field are scarce. A single mother, she took whatever work was available, which brought her to McDonalds, where she worked the line for $7.44 an hour, 30 to 70 hours per week.

After her first pay period, she was given not a paycheck, but a "debit" card loaded with her wages. This card, backed by JPMorgan Chase & Co. (NYSE:JPM), could be used anywhere Visa was accepted – including ATMs. It all seemed very convenient.

It wasn't.

Will the Price of Silver Go Up in 2013?

After this week's performance, we're getting more questions along these lines from Money Morning members: Will the price of silver go up in 2013?

Silver prices closed out a volatile week down $0.91, or 4.61% at $18.81. This week's loss continued silver's painful slump in 2013.

The white metal, down roughly 35% year-to-date, has even fared worse than gold, which is down about 20% in 2013. The serious slump in gold prices, tame inflation and record stock market rallies has taken some of the shine out of silver this year.

Since silver is more volatile than gold, it has underperformed – typical of a bear market.

Money Morning's Resource Specialist Peter Krauth explains, "Because the global silver market is relatively small, silver prices tend to be more volatile. But volatility works both ways, so when silver rises, its price can explode higher. That's exactly what happened in April 2011, when silver prices rose by 170% in the space of just seven months. That's why silver investors say investing in silver is like buying 'gold on steroids'."

So will silver go up this year, or is it destined to disappoint?

Obama’s War on Coal Attacks All of Us

This is not a green jobs story. There are no soirees, no socialites running across the veranda drinking mojitos to hear about the latest Obama electric car boondoggle.

This is not a story of families sharing their latest trip to Martha'sVinyard. This story is a story about Morgantown, West Virginia and cities like Morgantown all across the United States.

This is a story about coal miners, hard-working people who mostly inherited their way of life from their fathers and grandfathers. Every day they go to work and every day the dangers they face could make it their last.

Their workplace has no windows. There are no Alfred Jacob Miller prints hanging on the walls. What there is, is hard work, darkness and dust and at the end of the week an income to support their families. The same as it has been for generations.

There are an estimated 174,000 blue-collar, full-time, permanent jobs related to coal in the U.S., including mining (83,000), transportation (31,000), and power plant employment (60,000).

Coal is used extensively for electricity around the country. Without coal electricity prices will rise and even now they already started to.

Data from the U.S. Bureau of Labor Statistics show a steady climb in the kilowatt hour rate since Obama took office: Price per KWH in May 2009:12.6 cents, May 2010:12.7 May 2011: 12.9, May 2012:12.9, May 2013:13.01.

June Jobs Report: Beware Underemployment and Underground Economy

According to the June jobs report, the economy added 195,000 jobs last month, on par with the revised pace in May. Economists were looking for 165,000, and a dip in unemployment to 7.5%.

Despite the gains, the unemployment rate remained at 7.6% because more people hit the pavement looking for jobs–making it all the more difficult for job seekers.

Paychecks grew at a modest pace and have managed to beat (government-reported) inflation in the past year. Average hourly pay increased $0.10 to $24.01, up 2.2% from a year ago. Meanwhile, over the 12 months ending in May, consumer prices ticked higher by just 1.4%.

G8 Plan to Invest in Africa Agriculture Smacks of Colonial Land Grab

A G8 initiative intended to get corporations to invest in Africa with the goal of alleviating hunger on that continent is – surprise, surprise – not working out as planned.

President Barack Obama launched the "New Alliance for Food Security and Nutrition" in 2012 when the United States held the presidency of the G8 (the Group of Eight, a forum of eight of the world's major economies).

By encouraging partnerships between governments and corporations to invest in Africa, the G8 said it hoped to "lift 50 million people out of poverty in sub-Saharan Africa by 2022."

Morsi Conspiracy: Obama's Strange Support of the Ousted Egyptian Tyrant

After days of heated demonstrations washed over the streets of Egypt, the Egyptian military removed Muslim Brotherhood-backed President Mohamed Morsi on Wednesday.

Since Morsi's election in June, 2012, the Obama administration has been strangely supportive of Islamist leader, forking over $1.3 billion in military funding to Egypt annually. It's the Morsi conspiracy.

I say "strangely supportive," because conspicuous red flags dot Morsi's political career.

A few years prior to his presidency, Morsi delivered a speech urging Egyptians to "nurse our children and our grandchildren on hatred" of Jewish people. A few months later, he described Zionists as "descendants of apes and pigs" in a television interview.

The US is, of course, the closest ally of Israel.

But ostensibly, the Obama administration has been throwing so much monetary and PR support Morsi in order to show our backing of a democratically elected government in Egypt.

Morsi was democratically elected in a tight presidential race last year, and maintains that he is the country's legitimate leader.

But Egypt's highest-ranking military officer, General Abdel-Fattah El-Sisi, said that Morsi "did not achieve the goals of the people" as he became increasingly authoritarian and non-democratic.

Although Morsi hasn't been in power long, he already has quite the history of "removing" his opposition.

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"Ultra" ETF Investing: The Newest Portfolio Killer

Exchange traded funds (ETFs) have changed the face of investing for individuals as well as institutions.

These relatively new investment tools have made it easier to play sector rotations, go short the market or even leverage positions.

Yet at this point in the market cycle, this leverage becomes a double-edged sword for a particular set of ETFs: the Ultra set.

You see, investors like me who adopt a macro, top-down approach often want to use ETFs to take a position on an enticing sector.

Having made that decision, we're then tempted by Ultra ETFs, which offer us the possibility of 2x or 3x our gains.

Resist the temptation.

A History of the Gold Standard

This history of the gold standard explains why there's a growing group of advocates calling for its return…

President Herbert Hoover made a statement in 1933 that rang true for centuries and still rings true today for many: "We have gold because we cannot trust governments."

Hoover was talking about how governments have never been able to resist the temptation to inflate the amount of paper money issued until that paper money becomes nearly worthless. Gold, meanwhile, has been a reliable preserver of wealth for literally centuries.

Some nations have tried to meld the two together – gold and paper money – through the use of what is called the gold standard.

A gold standard is a monetary system where paper money is directly convertible into a fixed amount of gold. In other words, the value of paper money is backed by gold.

England was the first country to adopt such a monetary system in 1822 and its use soon spread around the world, including in the United States.

Don't Let the Global Economy Wreck Your Investment Strategy

There's trouble all over the global economy, from fresh tremors in the Eurozone debt crisis to unrest in the Middle East and uncertainty over the fate of Obamacare here at home.

With so many threats to the markets coming from so many directions, what's an investor supposed to think?

Fortunately it's the job of Money Morning's Chief Investment Strategist Keith Fitz-Gerald to figure out which issues investors need to watch and which ones they don't.

On Fox Business Keith spells out what he thinks are the biggest threats to the global economy now and what investors need to be doing about them.

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Want to know more? Here's what Keith thinks would be The Worst Investing Mistake You Could Make Right Now.

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