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Showing posts from June, 2021

Inflation Can Ruin Your Bank and Investment Accounts

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I often have a conversation with someone about safety vs. the return on bank accounts and investments. Regardless of your returns, inflation will eat away at these, either reducing your return, or reducing the balance of your investments.  Currently, as I write this, inflation is about 5% or 6%, depending on what source you read. Some say this is a transitory type inflation, and as soon as supply-demand imbalances work themselves out, inflation will go down to "normal," or 2% or less. Others say this inflation will last longer.  Regardless of what the outcome will be -- and no one can accurately predict that -- you need to be aware of what inflation can do to cash or investments. Consider that most quality bond funds pay about 2-3%, high yield bond funds are around 5-6%, and other investments, such as AT%T, will pay a 7% dividend (as least for now). And add in that most banks offer less than 1% -- as low as .05% -- interest, you need to pay attention.  This chart will show yo

Weekly Events: The Big Double-Cross; Capitalism Myths; How Many Genders Are There?

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The Big Double-Cross President Joe Biden Supposedly, a bi-partisan group of Democrat and Republican Senators reached an agreement with President Biden on a $1.2 trillion "infrastructure" package. But an hour later, Biden changed the conditions of the agreement, saying he would not sign the bill, if passed, unless he also received a bill that would include everything else he wanted, some $3 trillion in other "infrastructure" programs.  Republican senators are now threatening to sink a the compromise after President Joe Biden said that its adoption was conditioned on the passage of a complementary bill containing top Democratic priorities. Multiple senators who took part in bipartisan negotiations during the bill’s creation have already said that they may now withhold their support, jeopardizing its passage given the 60 votes necessary for it to overcome a potential filibuster. “No deal by extortion!” South Carolina Republican Sen. Lindsey Graham said Friday. “It was

Treasury Inflation Protected Securities (TIPS): What You Should Know

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From Charles Schwab, Inc. Inflation continues to be a concern these days, and many investors are looking for investments that can keep pace with, or hopefully beat, the rate of inflation. As a result, Treasury Inflation-Protected Securities, or TIPS, have become a popular investment option. But investing in TIPS isn't always straightforward. They have many unique characteristics that can make the investing experience a bit confusing. Here are answers to some of the most frequently asked questions about the TIPS market: 1. What are Treasury Inflation-Protected Securities? Treasury Inflation-Protected Securities, or TIPS, are a type of U.S. Treasury security whose principal value is indexed to the rate of inflation. When inflation rises, the TIPS’ principal value is adjusted up. If there’s deflation, then the principal value is adjusted lower. Like traditional Treasuries, TIPS are backed by the full faith and credit of the U.S. government. Although there are many measures of inflatio

U.S. Coportate Tax Rate About Average Among OECD

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Fed stands pat, but raises inflation expectations

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From Schwab Market Insight The Federal Open Market Committee (FOMC) concluded its two-day monetary policy meeting today, opting to leave its stance and interest rates unchanged, as was widely anticipated, and there was also no change to its asset purchases. However, the Committee sharply raised its expectations for inflation this year and pulled forward the timeframe of when it could begin to raise interest rates, surprising the markets. In its statement, the Committee said, "Progress on vaccinations has reduced the spread of COVID-19 in the United States. Amid this progress and strong policy support, indicators of economic activity and employment have strengthened." On inflation, it noted that prices have risen, but it still deems it as "transitory," while it also continued to reiterate its intentions to aim for an average of two percent over time, and that longer‑term inflation expectations remain well anchored at two percent. However, in the updated economic proj

Job Openings Hit New Records in April

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Market Snapshot from Schwab Investing

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Liz Ann Sonders shares her perspective on the U.S. stock market and economy in this monthly Market Snapshot video. https://youtu.be/pA7r1efrtJE Subscribe to the Charles Schwab channel: https://www.youtube.com/charlesschwab

JOLTS, a Sleepy Economic Indicator, Jolts Awake

By Kelly Evans, The Exchange, CNBC Well, JOLTS certainly lived up to its name yesterday. This is typically one of the sleepiest economic indicators, despite its acronym (for the Job Openings and Labor Turnover Survey). It comes out way after the fact--yesterday's release was data for the ancient month of April--and it's not usually a headline-grabber. Until now. My eyes certainly bulged when I saw the number. Nine-point-two million job openings?! I've never seen it that high before. It jumped by a million openings in just a month. This is truly bizarre. Not in the sense that I don't believe it--but in that the data are confirming something really, really different is going on out there. Why so many job openings? It's peculiar to reflect upon. In the 2001-2007 expansion, there were never more than about five million in any given month. By 2010, after the great recession, openings had collapsed to fewer than three million and it took more than five years for them to r

New Leak of Taxpayer Info Is (More) Evidence of IRS Corruption

by Dan Mitchell International Liberty I sometimes try to go easy on the IRS. After all, our wretched tax system is largely the fault of politicians , who have spent the past 108 years creating a punitive and corrupt set of tax laws. There is plenty of IRS behavior to criticize. Most notably, the tax agency allowed itself to be weaponized by the Obama White House , using its power to persecute and harass organizations associated with the "Tea Party." That grotesque abuse of power largely was designed to weaken opposition to Obama's statist agenda and make it easier for him to win re-election. Now there's a new IRS scandal. In hopes of advancing President Biden's class-warfare agenda, the bureaucrats have leaked confidential taxpayer information to ProPublica, a left-wing website. ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. ...ProPublica un

Don't Panic! The World is a Better Place than You Thought

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A very well-done and interesting video. For more on this topic, visit Gapminder Foundation