The Investor’s Dilemma

The performance in the stock market year-to-date has been unusually strong, especially so given the weak economic conditions of the country and the world. Financial assets have risen while economic conditions have been stagnant. How long can this divergence continue? Financial Markets There is no way to provide a reasonable answer to that question. Stocks are supported and elevated by [...]

Federal Reserve Policy Ensures Inflation

The Federal Reserve is the enabler of Federal government’s profligacy. It plays this role by monetizing the debt, i.e., purchasing Treasury bonds that otherwise could not be sold, or at least not sold for the artificially low interest rates that currently prevail. Since the financial crisis, the Fed’s balance sheet has risen from $800 Billion to over $3 Trillion! Government [...]

Full Fund

The Full Fund is available only to Premium Members. It selects from the largest universe of ETFs (111) and selects the most ETFs. Two portfolios are generated — Large (L) and Small (S). The Large portfolio holds up to 14 ETFs. The Small portfolio holds up to seven ETFs. When markets are performing poorly, fewer ETFs will be selected and a [...]

What Inflation?

Economists have frequently used the Big Mac Index to compare prices in different countries as a marker regarding exchange rates. It is nearly the perfect product as it is available nearly everywhere and quality and portion-controlled tightly by McDonalds Corporation. It can also be used domestically as this quote from munKNEE demonstrates: The Big Mac Index vs. the Consumer Price Index [...]

Full Portfolio

Changes to the Full Portfolio have occurred since this write-up. All portfolio pools and selection processes undergo periodic review. The addition of new ETFs is one reason. Refinement of screening techniques is another. There is an on-going search to improve results. These results no longer reflect the current composition of the Full Portfolio or the algorithm which makes selections. The [...]

An Inevitable, Unhappy Ending

Tim Price offers some important observations in this article: Credit expansion, wrote the great Austrian economist Ludwig von Mises, is not a nostrum to make people happy. “The boom it engenders must inevitably lead to a debacle and unhappiness.” That seems a pretty accurate summary of the current situation for the western economies: a debacle, and unhappiness. Von Mises also wrote that [...]

Inflation Is Political Cowardice and Chicanery

It is no secret that politicians prefer inflation over tax increases. Zerohedge explains why: If the authorities raise taxes explicitly and openly, voters know exactly why they have less spending power. They also know how much less spending power they have. But if the authorities instead raise money by simply printing it, they raise the revenue by stealth. No one knows [...]

Inflation Is Theft and Fraud

Inflation, in a fiat currency world, is inevitable. It is not an economic inevitability but a political one. Politicians like to spend money and buy votes. They don’t like to raise taxes. A central bank makes it possible for them to have the best of all worlds, at least for a time. The US Fed, with its new QEternity policy, [...]

Our Fate Is Sealed

These four links from yesterday’s Drudge Report say it all: JOBLESS…  INFLATION… POVERTY… RECESSION… Five years into this mess and we are no closer to climbing out. Collapse of financial institutions was averted (temporarily?) by massive infusions of government and taxpayer funds but the economy has not budged. More and more people are beginning to think that we should have [...]

Understanding Our New Investment Climate

This video gives a wonderful overview of what is going on in the economy and in markets. Ty Andros and Gordon T. Long discuss our economic problem. A Must Watch! It is one of the best explanations of what lies ahead that I have heard. Regardless of who wins the election, this problem is insurmountable even if Romney wants to change [...]

The Government Is Helpless, Bankrupt and Immoral.

Finally, some people are coming out and questioning the actions of the Federal Reserve. Here is a comment from David Einhorn (my emboldening): Sometimes you have to look at what is the base assumption. because sometimes you have a groupthink around the base assumption and everybody agrees to the same thing and acts reflexively and doesn’t really challenge what is [...]

The Top 18 Economic Documentaries

Any collection of the top anything is open to question. So it is with this post from There are items that I would have excluded and others that I would have included. I might also quibble with the order, if it reflects order of importance. However, after these usual qualifications, the list below is a good one and worthwhile [...]