Monthly Archives: October, 2017

Here’s Why Startups Are Dying In The US

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Reading Time: 4 minutes While recent small business surveys show small business confidence is high and many small businesses don’t list large competitors as a major threat, there has been a long-term trend of startups losing market share to mature firms, with large businesses improving their profit margins. This is an explanation for how…CONTINUE READING

Perils of Index Investing

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Reading Time: 4 minutes In a previous article, we discussed the problems with investing in index funds. One of the most important points made in that article was that indexes ignore firms with negative earnings when calculating price to earnings (P/E) multiples. When you buy an index fund, you buy all the stocks. Ignoring…CONTINUE READING

Consequences For Europe During ECB QE Reduction

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Reading Time: 4 minutes In this article we’ll look at the ECB’s monetary policy and the macroeconomic metrics in Europe. The biggest decision in the queue is what the ECB does with its bond buying program. The decision on the size and duration of Quantitative Easing in 2018 will be announced on October 26th.…CONTINUE READING

Central Banks Prevented 2016 Recession

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Reading Time: 4 minutes The economy was on the brink of recession in early 2016 and global coordinated central bank action helped prevent a crisis. Every time the Fed ‘kicks the can down the road’ it makes the inevitable situation worse. The further asset prices get from their intrinsic value, the worse the correction…CONTINUE READING

What Role Does Gold Have in Today’s Markets?

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Reading Time: 3 minutes In modern financial markets, the list of securities you can place bets on is long indeed. In addition to traditional investments such as stocks and mutual funds, newer financial instruments such as derivatives and ETFs (electronically-traded funds) have become popular. There has even been an attempt recently to allow investors…CONTINUE READING

John Taylor Disagrees With His “Taylor Rule”?

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Reading Time: 5 minutes Trump’s decision for Fed chair will be made sometime this fall. We’ve already discussed Powell and Warsh who are the front runners. In this article, we will take a look at John Taylor because he was interviewed by the President. John Taylor is a reformer much like Kevin Warsh. Powell is…CONTINUE READING

Why Are Stocks Going Up?

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Reading Time: 4 minutes Investors who are bearish on the stock market often claim that they don’t know why stocks are moving higher. It makes them look silly because stocks move higher most of the time. The real question should be why stocks aren’t moving higher when they go down. It makes sense to…CONTINUE READING

Physical Retail Stores Are Not Becoming Extinct

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Reading Time: 4 minutes Most of the articles that discuss the latest changes in retail talk about an apocalypse for physical stores at the hands of online shopping. This is ‘drive by’ analysis that misses the whole point. There are big changes in the way consumers are shopping; simply using the increase in online…CONTINUE READING

Seasonal Adjustment & Cost of Living Conspiracy Explained

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Reading Time: 5 minutes Many libertarian leaning people who follow Austrian economics consider themselves skeptics. That viewpoint stems from the idea that neither the left nor the right are advocating for their interests as well as the concept that the general media is deceptive. While it can be argued that misinformation is put out…CONTINUE READING

How The Federal Reserve Decides Policy

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Reading Time: 4 minutes The Federal Reserve has a dual mandate to form an economic environment which keeps prices stable and has maximum stable employment. The Dual Mandate Bullseye chart does a great job of showing the policy objective the Fed has. As you can see, the x axis has an unemployment gauge and the…CONTINUE READING

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