Is This Week all About the Fed?

There is certainly no shortage of things happening right now that could potentially affect financial asset prices. One of the major potential catalysts for price action this week is likely to be Wednesday’s Fed meeting. It is widely expected that the central bank will take another step towards normalizing monetary policy. The central bank will likely raise the Fed Funds Rate by another 25 basis points. Markets seem prepared for such a move from the Fed, and will probably be far more interested in what... Continue Reading

The Time to Prepare for the Next Recession is Now

The current economic expansion in the U.S. is the third longest recorded. And while the idea of a never-ending expansion is certainly appealing, it is also straight out of fantasyland. The economy will see another recession, and the next one could be closer than many have been anticipating. And it could be brutal… Whether its next year, two years from now or even early in the next decade, the next recession could have a significant impact on the economy. Only this time, the Fed may... Continue Reading

Three Reasons Physical Gold is the Ultimate Investment

Unlike paper assets such as stocks or bonds, physical gold brings a lot more to the table than the potential for higher prices or dividends.  If you do not already own physical gold, here are three major reasons you need to consider an allocation right now. Gold is the only real form of money: The problems associated with fiat, or paper currencies, are nothing new. Paper money has shown a strong tendency to lose value over time. As paper money declines in value, so does... Continue Reading

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Is a 40 Percent Correction in the Cards for Stocks?

Risks for stocks seem to be increasing by the day. That being said, it could still me time before stocks finally make a long-term top. After all, numerous analysts have been calling for a top for some time now, yet the market has remained stubbornly bullish. Whether the top is finally reached tomorrow, next week, next month or sometime next year, the end of the bull market is likely on the horizon. While a “correction” is defined as a pullback of 10 percent or more,... Continue Reading

Did the U.S. Just Get One Step Closer to an All-Out Trade War?

Recently, we discussed some of the potential implications of a global trade war following the Trump administration’s decision to impose tariffs on steel and aluminum. Regardless of what side of the aisle you may be on, investors are still trying to decide just how significant an impact such tariffs may have on companies and financial markets. Following the decision, economic advisor Gary Cohn submitted his resignation yesterday. Cohn was considered to be a strong supporter of free trade, and apparently did not feel he could... Continue Reading

Could a Trade War Send Gold Higher?

Markets have a lot on their plate right now, including the notion of higher interest rates, overstretched valuations and accelerating inflation. If that is not enough for stock market bulls to contend with, how about adding the potential for a global trade war. Stocks are set to open lower again on Monday, as the threat of a trade war begins to sink into investor psyche. Last week, President Donald Trump made waves as he discussed heavy tariffs on steel and aluminum products. The 25 percent... Continue Reading

Is Further Downside in the Dollar on the Way?

It’s no secret that the dollar has been under pressure in recent months. The idea of rising deficits, ongoing relatively low interest rates and more aggressive monetary policies in other parts of the world have all played a role in the greenback’s slide. The dollar recently tried to rally as Fed Chairman Jerome Powell has not eased fears of three rate hikes this year and possibly a fourth. Higher rates could boost the dollar, as it could mean potentially higher returns for those holding dollars.... Continue Reading

No Easy Way Out

Now that new Fed Chairman Jerome Powell has taken the reigns, investors seem to be getting a sense that the central bank is not likely to deviate from its previous course under Janet Yellen. The central bank is still sticking with three possible rate hikes for this year, and the possibility of a fourth or perhaps larger hike are also on the table. The central bank now finds itself in a very difficult, if not impossible, situation. It has to attempt to control accelerating inflation... Continue Reading

Why Paper Money Fails

There’s nothing like the feel of cold, hard cash in your hands. Holding a wad of bills may provide a sense of empowerment, as you feel the texture and weight of the money in your hands. For a moment now, however, try to take a different view. Imagine that in your hands is not money, or cash, but rather a stack of IOUs or promises. Doesn’t have quite the same ring to it now does it? The fact is, paper money is exactly that: IOUs... Continue Reading

More Fed Minutes – Same Story

Wednesday’s release of the highly anticipated Fed meeting minutes were essentially a non-event. Although no action is expected from the central bank until, next month, some investors did seem to be a bit nervous as the new Fed Chairman, Jerome Powell, takes the reigns. The central bank did stick with some similar language, as it suggested that it would on a path of gradual rate hikes. Of particular note, the Fed did raise its inflation expectations and stated that core personal consumption expenditures would rise... Continue Reading