2011 September

Precious Metals’ Place in the Liquidity Crisis

The prospect of unlimited quantitative easing (QE) has always been a driving force behind the demand for precious metals. Conventional trading wisdom has always held that gold is one of the best hedges against inflation, with silver acting as both money and a commodity. Since QE is nothing more than money printing disguised through the .. read more

On September 30th, 2011, posted in: Markets by

Looking Back To the Late ’80s For ‘Contagion’ Guidance

The clock has been turned back to 1989 and the stock market briefly cheered the temporal transformation, although credit markets have remained far less sanguine. With Europe on everyone’s collective mind, rumors of an expanded European Financial Stability Fund (EFSF) acting akin to the early version of U.S. TARP had many hoping that a true .. read more

On September 30th, 2011, posted in: Markets by

Rational Expectations

While catching up on some reading, this Op-ed in the WSJ rang so true with me that I wanted to share.  In the article Holman W. Jenkins, Jr relates a recent sit down he had with Nobel-winning economist Robert Lucas of the University of Chicago. Some insights from the article: When modelling an economy you .. read more

On September 28th, 2011, posted in: Markets by Tags: , ,

Unintended Consequences

The WSJ has an article about a provision in Dodd-Frank that allows banks to now pay interest on business checking accounts: A little-noticed provision of last year’s financial-overhaul law gave companies something they had long wanted: a way to earn interest on large balances held in bank checking accounts. But now, with the economy weak .. read more

The World Needs a “Cross of Gold” Once Again

By John L. Chapman, Ph.D.                                                                                                                                                  Washington, D.C. On July 9, 1896 at the Democratic National Convention at Chicago, Democrat nominee William Jennings Bryan ended his acceptance speech with lines that have become famous in American political history: If they [William McKinley and the Republicans] dare to come out in the open field and defend the .. read more

Productivity not Aggregate Demand

“The policy changes in the late 1930s benefited the economy by increasing competition, by bringing wages more in line with productivity, and by improving the incentives for investing.” University of Pennsylvania professor Harold L. Cole and UCLA’s Prof. Lee E. Ohanian suggest temporary stimulus in an effort to increase aggregate demand is no prescription for .. read more

Regulation: Enough is Enough

Senator Susan Collins of Maine is proposing legislation for a 1 year moratorium on new regulation. http://online.wsj.com/article/SB10001424053111904194604576583082888335542.html?grcc=88888&mod=WSJ_hpp_sections_opinion First, I agree with Ms. Collins, enough is enough.  Do we really need congress regulating to the point of ordering walnut companies not to market the health benefits of their product?  If harm were inflicted because of this .. read more

On September 26th, 2011, posted in: Markets by

Contrarian Alert

Relative value for S&P earnings and Baa Corporate bonds are in uncharted territory. For the first time in the last 22 years the trailing earnings yield on stocks is higher than Baa corporate bond yields.  The implication is expected negative growth for the US economy. Trailing earnings yields are typically lower than bond yields because, .. read more

On September 24th, 2011, posted in: Markets by Tags: , ,