Beating Inflation

Every piece of inflation news has the power to terrify and send investors searching for ways to protect wealth.  Bonds look like a poor prospect.  As the Federal Reserve (Fed) raises interest rates, bonds will lose value simply as a matter or arithmetic.  (For an explanation see this post.)  Even if the Fed were to cease its counter-inflationary effort, …

Market Prospects Darken

Stocks have lost a lot of ground of late.  In the last month, the most used stock index, the S&P 500, has dropped over 10 percent.  Volatility from one day to the next is sufficient to unnerve even the most cold-blooded investor.  What may be still more upsetting, the Federal Reserve (Fed) has promised to constrain credit and …

The Federal Reserve Raises Interest Rates

After pursuing an easy money policy for years, the Federal Reserve (Fed) has finally made a change.  A recent statement announced four essential moves: The Fed would end its program of adding liquidity to markets in which it directly bought securities –– what policy makers call “quantitative easing.”It has raised the rate on the benchmark federal …

China’s Baby Shortage and What It Means for You

China’s huge population  — 1.4 billion-plus –– often adds to American fears of Beijing’s military and economic potential.  Yes, China has a lot of people, but they’re aging fast and there is already a clear shortage of younger workers.  The country’s working-age population is set to fall in coming years, and, critically, it will face the economic burden …

The Last Great Inflation and What It Says About the Present One

With inflation now firmly in the headlines (and in our lives), a look back at the last experience with this menace may offer needed perspective.  Of course, history never repeats exactly, and there is no claim here that it will.  Nonetheless, a look back will provide ammunition to counter much of the nonsense appearing in the media …

Who Gains from Inflations?

The Federal Reserve (Fed) has at last acknowledged inflation, and it is taking steps – albeit very preliminary ones – to deal with it.  Governments in other countries have admitted possible inflation problems, but most have taken no action.  Unless the inflation in the U.S. goes away on its own (highly unlikely at this  point), Washington will have …

Crypto: Too Cool for School

Crypto currencies, along with digital applications, are now all the rage.  The last man who bragged that he bought his Lamborghini with Bitcoin clearly thought the method of payment “way cooler,” than the vehicle he bought. Journalists boost crypto less from understanding what it is than because it discomforts the banking establishment that they love to …

What Drives This Market Rally?

People are worried.  Society seems to have degenerated into partisan bickering and, too frequently, violence.  Democrats and Republicans seem more set on thwarting each other than serving the nation.  Inflation seems to have gotten away from the Federal Reserve (Fed).  Supply chains are failing.  And yet, despite this dispiriting picture, stocks continue to rise.  Is it that market participants are unaware …

Why Evergrande is Dangerous to all of Us

With the impending failure of Evergrande, China’s real estate giant, it is useful to review what is at stake for China and for any financial system facing this problem. The issue has only partly to do with the size of the firm that is in trouble, and even less to do with its financial misdeeds.  Rather, …

The Trouble with China’s Evergrande

Beijing has taken preliminary steps to deal with the failure of Evergrande, China’s second largest property developer.  This is not the end of the story, however, not by a long shot.  The picture too closely resembles the beginnings of America’s 2008-09 financial crisis to ignore, though thankfully it is occurring on a smaller scale.  Before it is resolved, …