Finance

This site is devoted to enlightening oneself regarding the economy, the markets and investment options to strengthen one's financial wellbeing. That being said, occasionally I think a meaningful site should share other ways to improve one's life to make it the absolute best it can possibly be - and this is one such article.

Increasing stock market prices are largely driven by an increasing rate of monetary inflation BUT monetary inflation growth has now been either flat or declining for the last three years, depending on what time frame one looks at. Conclusion: Earnings, and ultimately valuations, must fall as an ever-expanding rate of monetary inflation is unsustainable and as interest rates cannot forever be kept artificially low.

The Federal Reserve has decided to leave its target interest rate unchanged at a range of 0.25% - 0.5% while suggesting that a hike later in the year was very likely. This article presents the differing points of view of two former Fed officials as to whether it was the right call or not.

What is the value of education for household income? The Census Bureau's annual survey data for 2015 published last week gives us some interesting insights into this question.

A bubble is the state of a market before the crash. It is a situation in which assets trade at a price that is considerably higher than their intrinsic value and, in my view we're currently in a bubble. The current S&P 500 P/E is at 25.09 (when the historical average is 15.61). The question is, "When will the market crash?" and I see worrying signs that this could happen soon.

Calpers, the nation's largest pension fund, recently reported a $139 billion shortfall - but is the actual shortfall more likely to be $500 billion to $1 trillion when we adjust their investment assumptions - that ignore how the Federal Reserve has changed the markets - for our current reality. If so, then there is an explosive increase in pension obligations - and taxpayer obligations - that greatly exceed what is being reported by the governments or in the media.

According to a research paper from the latest issue of the Journal of Finance, there is "no evidence that the recommendations of financial consultants to institutions add value, suggesting that the search for winners, encouraged and guided by investment consultants, is fruitless". This article identifies the reasons behind why that shocking revelation is the case.

What you are about to read could give you serious heartburn, especially if you are an economist or a central banker or a retiree or just someone who has lived life playing by the rules, and now you find yourself getting no return on your savings, forcing you to save even more and work even longer.

We are better off than ever before according to the Fed Q2/16 estimate of the balance sheets of U.S. households which shows that, collectively, our net worth reached a new high in nominal, real, and per capita terms. The bottom line is that, in fact, life in the U.S. continues to get better and better.

Although low to negative interest rates could persist for years, odds are the current low-yield craze won’t last a full 30 years. Therefore, at some point down the road, today’s buyers of 30-year bonds will likely wish they had parked some of their savings in physical precious metals instead.