Category

U.S. Economy

Precious Metals

The QE Helps, But Expect Higher Gold Prices Regardless

The U.S. Federal Reserve pixie dust resulted in higher gold prices this week, much as it lifted silver prices and stocks.

Gold buyers reacted enthusiastically to the Fed's announcement on Wednesday that it would not reduce its $85 billion a month bond purchases, known as quantitative easing, or QE for short.

Gold prices leaped the most in 15 months, after the Fed's "no taper" move, to about $1,365 an ounce.

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Chart of the Day

Here's What $1.2 Quadrillion Looks Like

The global derivatives market is big. Really big. So big – and so unregulated – in fact that no one really knows exactly how big it is, but the very best estimates put the notional value at $1.2 quadrillion dollars. That handily beats the entire world's "GDP" of $71.8 trillion. The number is so big that it really defies anything on a human scale. Humans don't do quadrillions of anything – at least not usually.

Or think of it this way: There are about 2 quadrillion stars in the "El Gordo" cluster, the largest cluster of galaxies we've observed so far. The derivatives market is galactic in scope.

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Investing Tips

The Best Investments to Hold When Interest Rates Rise

Inflation can be tough to contend with, yet investors should guard against inflation lest it eat away at their portfolios – which isn't hard to do if they know the best investments to hold when inflation rates rise.

Official interest rates are notoriously unreliable – outright false at times – which can downplay or underestimate the situation. Don't trust the numbers. Make that mistake, and your investments' value can evaporate before your eyes.

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Investing Tips

Stock Market Crash 2013: Four Factors Investors Need to Watch

Some call it a "perfect storm" and others a "financial apocalypse," but it doesn't matter what you call the fiscal headwinds facing the U.S. economy – just that you watch them, and the stock market "crash talk" they're stirring up.

With talk of the Hindenburg Omen, credit crunches, and struggling emerging markets, it's important to prepare for the potential impact of bumps ahead.

Precious Metals

What You Need to Know About Silver Prices and the Fed QE Taper

Silver prices have rebounded about 28% since the lows of late June, and are currently trading at around $23 an ounce.

This move was key for silver prices – it means the metal broke out above its 50-day moving average.

Barclays' technical analysts pointed out that last week was silver's best week since 2011, with a gain of 14.3%.

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Investing Tips

The Most Important Number to Watch This Week

The esoteric – yet highly accurate – Hindenburg Omen we looked at Friday may suggest the probability of a market crash. But the number I'm watching this week could cause one.

As a standalone figure, of course, the yield on 10-year Treasuries is small. But the amount of money it impacts worldwide is flat-out staggering.

Out of the estimated $1.5 quadrillion dollars' worth of derivatives on the planet right now, roughly $500 trillion is specifically related to interest rates.

So you can see why the 10-year gets so much attention. But right now, I'm watching it even more carefully… for one important reason.

When the Hindenburg was sounding the alarm last week, 10-year Treasury yields spiked at the same time, up to 2.8210% before relaxing a bit in early trading last Friday as of press time. That suggests to me the Fed is losing control over interest rates.

No doubt this is a frightening scenario, which is why it's important to remember…

Washington

The Best Way to Ignite the Economy

The problem with the U.S. government's stimulus efforts to create jobs, and the Federal Reserve's quantitative easing to foster full employment, is that banks are the only direct beneficiaries.

There's just no good pool of jobs being formed from the trickle-down effect that first bathes bankers in bonuses, and then showers shareholders with buybacks and dividends.

There is a better way.

And, in spite of the details which additionally involve two necessary but minor structural changes that can be accomplished with the stroke of a pen, there are only two primary steps we need to take to create good-paying, long-term jobs and crank up economic growth.

Step 1 to Growth and Better Jobs

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