Need a Weakened Dollar Hedge?

                    

Apropos my previous blog: Need a weakening dollar hedge? (Right now the dollar has been relatively in a stronger-phase stage.)

                       

Gold is not truly a panacea. It offers no earnings. And has storage and insurance costs if bought outright.

                       

This alone isn’t too bad when interest rates are low, but proves costly when interest rates are high or are rising. And you can be sure interest rates will go far higher as inflation becomes more of an economic factor.

                       

Moreover, higher interest rates generally spell a stronger dollar, and more pressure on gold.

And remember when seeking an inflation hedge: For 25 years, from 1985 to 2010, consumer prices went up a bit more than 200%. Yet, during this time, gold prices were off by about 20%,(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Form of Gold You Can Buy?

                    

What kind of gold do you buy, if that is your investment decision? The answer is not what you probably expect.

                       

You can trade gold as a commodity, as many do. But even government trades impact short-term supply/demand and prices.

                       

You can buy it in the form of bullion, in bars or coins. The latter can be rare or in circulation. Or you can buy ETFs that hold gold. Gold mining shares are yet another alternative.

                       

Note: Want to head for the hills in an emergency? Gold bars are too heavy; rare gold coins could do it. But try this only in a dire emergency. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Unavoidable Investment Risks

The financial media keeps harping on investment risk and how to

avoid it. Every investor wants to eliminate risk, even when foolish enough to buy a lottery ticket where the odds of winning can be as slim as being hit by lightning.

                       

But the truth is, every investment and every savings plan has some measure of risk exposure. Placing all your funds in a mattress is also perilous because of certain future inflation. There is thus always some measure of uncertainty in every investment.

                       

You do have to consider speculative hazards in the context of family finances, commitments and responsibilities. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

The Democrats and the Actual John Maynard Keynes

                                     

U.S. Democrat party followers have had a long association with John Maynard Keynes. Since Franklin Roosevelt and the New Deal in the 1930s, this economist’ s teachings have been their guide. It has been to this day. But they do not always read Keynes correctly.

Today’s Democrats refer to him to suit their political purposes. They feel that you fight recessions by government spending money, to create jobs, and thus encouraging demand.

                       

Experience shows otherwise, Mass spending does not produce jobs. But it does produce deficits.

                       

At the same time it produces no incentives for business to expand job formation. Business expansion requires lower tax rates, not higher rates that over-spending eventually causes. That stifles business, especially affecting smaller firms that account for the bulk of U.S. jobs.

                       

The media never fully get into detail and depth when it touches on the thinking of John Maynard Keynes. To disclose what Keynes really suggested as an emergency, and for only  a short term.

All we now get is cherry-picking from his theory. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Investing in China?

                      

Investing in Chinese corporations can be risky when that government can run things pretty much its own one-party way.

                       

Moreover, Chinese economic statistics are sometimes not accurate. For example, new housing is an important statistic in China. But the official housing index, the National Bureau of Statistics, has in the past been much different and lower, than the China Real Estate Index System. 

                     

And the difference far surpasses rises in Chinese wages, This poses the likelihood of problems. Moreover, this example is an important difference.It affects the steel, cement and other basic aspects of housing construction information that analysts require.

                       

Therefore, investing in China poses information as well as political dangers of a controlled economic system. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

                   

Income Taxes on Prizes

                   

Prize money won in any contest by a contestant is taxable as income. Thus,  that free vacation trip or new car gift is probably going to be taxed at the retail value, not at the discount you could have gotten, had you bought it directly.

                                                   

So, the contestants may be getting non-cash items for cash tax payouts, amounts they may not even possess.

                       

Also be aware: That foreclosed mortgages and any reductions in credit card loans or loan forgiveness, result in an income tax bite.

Amounts saved are considered income. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Independence of Independent Research

                     

The need for independent, rather than broker or investment banker securities research, arose because of both real and imagined problems about the work of in-house securities analysts.

                       

A 2003 settlement imposed by then New York State Attorney General, Eliot Spitzer, provided for so-called independent securities evaluation. It was supposed to be a buffer to what was being offered by analysts also underwriting securities. It thus forced them to spend $460 million to finance “independent” research, on behalf of non- institutional clients.

                       

Such securities research was little used. Some independence was achieved, but few investors have since used that source of information. However, it was a political success at the time the settlement was made. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)