Monthly Archives: August, 2017

Central Bank Monetary Cliff Awaits

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Reading Time: 4 minutes Ever since the financial crisis in 2008 an experimental monetary policy has been in place, known as quantitative easing. The Federal Reserve expanded its balance sheet from about $800 billion to $4.5 trillion. It bought mortgage bonds and treasury bonds. This had a big effect on almost every asset. Lowering…CONTINUE READING

The Federal Reserve: Everything You Need To Know

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Reading Time: 9 minutes What Is The Federal Reserve? The Federal Reserve System was established on December 23, 1913 with the enactment of the Owen-Glass Act also known as the Federal Reserve Act, making the Federal Reserve System (The Fed) the central bank of the United States. The Federal Reserve System consists of twelve regional…CONTINUE READING

Rating Agencies & The 2008 Financial Crisis

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Reading Time: 4 minutes In the 2008 financial crisis there were several acronyms that popped into the common vernacular simply because they were at the root of the problem. Most of these arcane instruments were difficult to understand, confusing nearly anyone who was not at the heart of dealing with them on a day…CONTINUE READING

Student Loans Crisis: Is College Worth It?

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Reading Time: 5 minutes Imagine every grain of sand on a beach was actually a grain of gold.  That is a lot of gold.  Imagine what would appear to be infinite amounts of gold.  Miles and miles of gold.  How much is it worth?  Probably not that much to anyone because if you actually…CONTINUE READING

Is Social Security Bankrupt?

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Reading Time: 5 minutes Social Security is the social welfare program provided by the United States federal government. The program is designed to be a safety net for retirees and disabled individuals around the country. Individuals pay into the program throughout their working lives and then receive benefits once they retire. That sounds pretty…CONTINUE READING

Why Is China Dumping US Treasuries?

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Reading Time: 4 minutes China is a major manufacturer of merchandise. They are the world’s second largest economy, following the United States. China is the world’s biggest exporter of goods and have the largest trade surplus. That trade surplus results in vast currency reserves. This positive balance of trade for China has continued to…CONTINUE READING

Quantitative Easing (QE): Are We Making A Mistake?

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Reading Time: 7 minutes The current path of monetary policy in the form of quantitative easing (QE) world wide and particularly in the United States is following a dangerous trajectory, one that has a historical precedent without looking back several centuries. This disastrously flawed monetary experiment has plagued Japans economy and its people since the…CONTINUE READING

Interest Rates Vs. Bond Prices: How Do Bonds Work?

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Reading Time: 4 minutes There is an inverse relationship between bond prices and interest rates. This is all a matter of supply and demand. And, if you understand the inverse relationship then you will better understand the way interest rates move. What Is A Bond? Bonds are debt instruments. There are two basic types…CONTINUE READING

Rate Of Change: Is The US Economy Slowing Down?

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Reading Time: 3 minutes Firstly, what is the rate of change? The rate of change (ROC) is the percentage change in value that a variable changes over a defined period of time. ROC is often used when attempting to understand the trajectory or trend in which a certain variable is moving in. Take a look at this…CONTINUE READING

What Happened To Your Savings?

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Reading Time: 5 minutes The United States and its citizens are generally not known to be the world’s biggest savers, not for the last few decades at least. The current rate of savings is 5.5% in the United States. Other countries grab the distinction with savings in low double digits. While some may immediately get…CONTINUE READING

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