Haven't been able to see the mail icons since the mail was upgraded... arggghhhh Sure frustrating. Cannot find any help for this problem either.
Americans should be very unhappy with the Federal Reserve. First, they increase the monetary base by nearly five-fold and then tell savers they cannot earn interest on their deposits because the Fed QE put too much money into the banks. END THE FED.
Devalued currency happens whether you money is inside or outside a 401K. Perhaps the more insidious revelation is rising interest rates. You deferred the taxable event from current low taxation environment to future high taxation environment. Didn't Wall Street tell you that tax deferral would be one of the great advantages of 401s/IRAs?!? Gotcha!
But, the Feds inflation target is 2.00% plus 200 basis points means that 30-year Treasury Bond should have a 4% handle minimum. Believe the long term average yield on 30-year was more like 6%.
At 3.3% yield you get your after-tax money back as taxable income interest payments over 30 years. So take 3.3% plus 2% inflation target plus 35% premium for taxes that gives a base rate of 7.15% for which an investor might be willing to leave money on the table for the next 30 years.
Dealers are in the business for the Bid-Ask spread and little extra profit on shipping, handling and insurance.
Haven't had any Y! Mail Icons for formatting text since the new mail was foisted upon us. Any idea what the problem is and how to solve it?
Maybe... I think its still about access to information, who has it and who can profit from it. Most big wigs don't gamble the way the little fish do. They prefer a sure thing with no risk. Even Soros had insider information on what the central banks of the day were doing and knew that British pound was being forced into the dumper; made him a billionaire.
Wasn't until I looked at some of the old documentaries on the history of money and markets, that I came to a new understanding of the phrase "BUY LOW AND SELL HIGH". The Rothchilds were not doing this on a longitudinal basis, over time, as most people think about this phrase. Rather, they were arbitraging price differences between geographically diverse markets. The Rothchilds could do this because they had business operations in multiple markets and thus knowledge of price differences between markets. They sold gold in high price markets and bought their gold in low price market, then shipped to the high priced market and sold for a profit; rise and repeat. This allowed them to build great wealth in real-time, in the now, not in the future. In other words, they were not speculating on future direction or market prices, rather they were capitalizing on real known price differences in the current market. BIG DIFFERENCE!!! In one instance the future outcome is an uncertain unknown and in the other instance the positive result is definitively known.
More accurately: people chase what is going up and flee what is falling down. So, if you chase early and flee early, you do alright. But if you hesitate and only chase late and flee late, then you are indeed going broke.
Janet Yellen, the new Chair of the Federal Reserve, says that "excess savings" is suppressing interest rates. She is most likely referring to the trillions upon trillions of excess bank reserves on deposit at the Federal Reserve, which is mostly funny-money that the Fed itself has digitally conjured on their computer.
TARGET Dollar Bin - Inflation Indicator
Has anyone noticed that their dollar bin is filled with three dollar items? That's 3x fold increase. Big inflation for bargain bin product area to jump 3.0 times in price.
"Forces are gathering to end the US dollar hegemony, and are well documented." Yes, this is true. Plain as the nose on anyone's face. Only a matter of when it ends, how that ending will manifest itself, and what will replace it. How big a chuck in how many different alternative vehicles is the question? Normalcy bias is so strong!!! Maybe this will be as invisible and painless as the last monetary change.
Think back to 1971 and Nixon's actions. Most of us did nothing and just went about our business and we weren't really hurt as long as we were working. Staying out of the gold mania didn't really matter at all. Only thing most people did was buy an overpriced piece of jewelry, because it seemed so important to display some ownership of gold however miniscule. Bet those pieces were sold at a loss the minute gold got above $850 per ounce -- ha! Jewelry has a 400% mark-up. They would have needed $3,400 per ounce gold to break-even some 30 years later.
The market turned on dime when mark-to-market was suspended in 2009, but even unicorns have a limited lifespan. Once the bank's toxic assets are either handed-off to the Fed or papered over with Fed funny-money creation, the need for banker QE should end. I mean how much toxic sewage can these banker bozos have on their books?!?
Interest rates didn't rise until TAPER was mentioned. That's bond speculators awakening to the end of their free ride. Awakening to a change in policy direction is somewhat different than an open revolt to ongoing policy. If fed thought that tapering would not change interest rates, they were and are extremely naïve about markets.
Relax... If the conditions that required QE are abated then QE would be pulled back. If QE is ended, then the conditions that sustain 0% interest rates would need to abate before they could rise. Yellen put forward a basis upon which interest rates would not rise at the end of QE and that was the so called "excess savings". No hope for senior savers!!!
To be more specific, I was interest in the bit about the difference between the trade deficit and budget deficit being the GAP that needs to be filled by QE. Of course, this presumes that the trade deficit is all recycled back into treasuries, which it is not.
Looked up the numbers. And, that GAP has fallen from $47 billion per month in 2012 to $17 billion per month in 2013. This decline was trending for both components, more exports and smaller budget deficit. Which would support tapering of QE, specifically the amount assigned to treasuries.
However, this perspective does not account for the QE3 assigned to mortgage-backed securities. Presumably, those purchases keep the money flowing through the home financing system and prevent the assets from piling up on the GSE books. It also likely contributed to GSE's repaying the government loans with the Fed's newly printed money. It's a circular game. With the pressure off to repay the government loans, this likely reduces the Feds need to print funny-money for the GSEs.
I think my take-away is that the reason for QE is not what is stated in public by the Federal Reserve; its not due to this mumbo-jumbo about dual mandate of maximizing employment and creating price stability.
Yellen said it more than once, "Excess savings is depressing interest rates. Savings exceeds demand for loans and this causes a condition known as excess savings". Several congressional reps and I are confused by this statement. What does she mean? Where is the excess? Is she referring to depositor accounts at the banks or the gigantic excess reserves on deposit at the federal reserve (those excesses were created by the Feds quantitative easing)? Does this mean that Yellen wants us to move our money into brokerage accounts in order to drain the banks of their excess savings?
NIRP... Yellen in her testimony debunked the "Taylor Rule" because it would call for negative interest rates. She said that negative interest rates were not practical and that 0% is the lower bound. Reaching the zero bound is what Yellen says requires the Federal Reserve to use other tools, such as quantitative easing and forward guidance. NO WORRIES ON NIRP.
Sure is interesting. Just read that the emerging/frontier markets that are experiencing currency "adjustments", due to taper induced change in the direction of international money flows, are starting to sell US Treasuries to raise capital to buy-back their own currency as a counter-move. If the foreign government selling begins to overwhelm retail buying, then this rising bond price tide could start to ebb.
Keep in mind that retail has been listening to Federal Reserve Chairman bragging that his QE made stock market rise, so its natural for them to think tapering will crash stock market. Retail spooked out of stocks often try to hide in bonds.