Federal Reserve Confusion… Last week offered much in the way of understanding how things may be beginning to unfold at the Federal Reserve. After the August 10 Fed Board meeting where tensions reportedly flared among members over when to begin a new round of quantitative easing, came the Fed’s annual retreat to Jackson Hole where Bernanke undoubtedly revealed the Fed’s stance as a deflation fighter. You can read his entire speech here.
Five Facts That Every Investor in China Should Know… Money manager Puru Saxena joined me on my radio show last weekend from his office in Hong Kong to talk about why he is more bullish than ever on investing in China. He talks about the specific areas and sectors in China where he and his clients are investing. Listen to the two-part interview below.
Tail-spinning USD… In other news, China’s drive to provide its currency with international reserve status got a boost last week. Many of the world’s biggest banks – including JP Morgan and Citibank – have launched international roadshows promoting the use of the renminbi (the Chinese currency) instead of the U.S. Dollar to their corporate customers engaging in trade deals with China.
Citibank also made news last week when a foreign exchange report was released warning that another round of quantitative easing from the Federal Reserve was be the “endgame” for the U.S. Dollar. Here’s a brief excerpt from the Citibank report:
A second round of QE will likely put sharp downward pressure on the USD, to some degree versus the euro
and other G10 currencies, with potential for a broader USD sell-off. Foreign investors are likely to view the renewed direct intervention as indicating that the Fed’s balance sheet expansion and implicit monetization of fiscal expenditures are first line approaches to dealing with disappointing recovery prospects, rather than the exceptional measures they were meant to be initially. This could have severe implications for foreign perceptions of the quality of the US assets that they are accumulating in private and official portfolios, and may lead them to draw the conclusion that USD weakness is less a by-product than a desired outcome of these measures.
Inside Job… A new film about the 2008 financial crisis that looks excellent. Watch the trailer below.
Housing Crisis Deepens… The residential real estate market took it in the chin in July. According to a report conducted the National Association of Realtors:
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.
For a good article about the July home sales report with some startling charts, click here.
How Hyperinflation Will Happen… Gonzalo Lira wrote an interesting blog post called “How Hyperinflation Will Happen.” It is an enlightening article. You can read it here.
China Will Force the World Off Oil… The Council on Foreign Relations warned last week of China’s growing demand. You can read the report here.
401(k) and IRA Confiscation? I have been warning you for some time that government-controlled assets like 401(k)’s and IRA’s are ripe for seizure by the Federal government. This seizure will likely take the form of higher distribution taxes on the income received from these qualified plans. Here’s a new article about the topic from the European press.
Still Bullish on Silver… Silver continues its price rise. And when you consider the fundamentals driving the metal, the future looks even more bright. Here’s five trends that will drive silver even higher in the coming years.
About Jerry Robinson
Jerry Robinson is an economist, published author, columnist, international conference speaker, and the editor of the financial website, FTMDaily.com. In addition, Robinson hosts a weekly radio program entitled Follow the Money Weekly, an hour long radio show dedicated to deciphering the week’s economic news.