At the beginning of this month, Janet Yellen announced there would be a rate hike sometime during the month of March. During inter-day trading, Gold went up over $12 while the Dow went from green to red as Yellen made her announcement. Previously it was only a one in five chance that rates would go up in March, then it moved immediately to 75% and now 82% according to the CME’s tracking tool of Fed funds futures. The rate hike will happen more than likely on March 14-15th of the Fed Market Open Meeting, less than 48 hours before our country will have reached the looming Debt Ceiling. The Fed confirmed last December that there would be three hikes in 2017, and that was also confirmed in her speech at the beginning of this month. [Read more…]
January 2017 Newsletter Setting The Record Straight
On Tuesday, November 8th, 2016 our country believed enough in the ideals of Donald Trump that he won the electoral vote and became President Elect Donald Trump. The markets reacted in the short term, similar to the Alan Greenspan coined the phrase, “irrational exuberance”. Pushing the dollar aggressively higher and raising the 10-year note rate, resulting in stocks moving beyond the economic and fundamental levels. Gold adjusted down as a result of this. All because of the ideology that soon to be President Trump will make America Great and fix all. I said this environment will not last.
There is the old adage that says “The Trend Is Your Friend”. Historically people that move against trends, for the most part, are the ones that incur financial loss. So it is imperative to understand and to be on the right side of a trend to benefit financially. I believe the world is moving into a new era, a shift on a large historical level towards De-Globalization. To understand De-Globalization, one must first understand that some of the stepping stones the world has established in creating a Global society, and the results showing that is what the world has evolved too. [Read more…]
An Update From David Fischer
There seems to be an underlying theme of two comments that are somewhat ongoing when talking about a Bail Out and a Bail in. As many of you know our government did a Bail Out for Fannie Mae, Freddie Mac, AIG, and GM in 2008 and 2009. This became so disturbing amongst Americans that many have said it will never happen again.
In talking about a Bail In that has already happened in 14 countries, in the last 5 years, people passionately say that if that was done in America there would be a revolt and rioting in the streets. In hearing these two comments from many walks of life, 100% of the time they haven’t done their homework on this subject. Therefore a belief or an opinion has been developed without knowing historical and factual events. [Read more…]
As I have said before and I will say once again, “when the Fed starts raising interest rates, markets in paper will start to go into turmoil, and gold will turn bullish on either the first or second rate hike.”
The Federal Reserve is Making Moves
The Federal Reserve has backed itself into a corner, they are darned if they do and darned if they don’t. In September 2015 Janet Yellen, Fed Chairman, talked about negative interest rates as an option to sustain and stimulate the economy. Can you imagine for a moment your bank charging you to hold your money? Would you do that? That is what a negative interest rate would do. In December 2015 the Fed raised interest rate was .25 percent to .5 percent of a percent. This sent stocks down and gold prices up. Since then, stocks are off about 9 percent and gold rose over 16 percent. Last week Japan announced negative interest rates, being the fifth entity to join the ranks with Switzerland, Sweden, Denmark, and the Euro. This caused a one day rally since there was a large injection of capital from the Japanese sector and trickled over into our markets. The next day they wore off and we were back to the fundamentals, which the lack thereof caused the paper indexes to fall more and gold moved up. [Read more…]
As we close out 2015 many thoughts come to mind, “I can’t believe it is December already.” The coming holidays, and get-togethers with family and friends, is one of many rituals this month brings. It is also the time of year when people reflect on their investments to make appropriate changes.