The Hidden Costs of Precious-Metals Miners’ Optimism By Andrey Dashkov, Research Analyst The junior resource sector is struggling financially, something most investors seem to agree on – and rightly be wary of. Here at Casey Research, we've analyzed both producers and explorers to see how profitable (or value-adding) they may be under current market conditions. The rather obvious conclusion, shared by many company executives, is that now is the time to be frugal.> Producers have started to focus on cutting costs and pulling back from development projects that have diminished prospective returns or otherwise unacceptable risk profiles. Developers have sinned in their own way, … [Read more...]
Why Inflation is Theft
By Dr. Ron Paul When I talk to many teenagers and grade schoolers, they seem to have no problem comprehending the fact that if you just create a lot of money, it'll be like Monopoly money and it won't have value. Governments do that for all kinds of reasons, especially to enhance political power to fight wars we shouldn't be fighting or to pass welfare programs that aren't deserved. When you print that money, the value of that dollar has to go down, and then one of the consequences of inflating the money will be higher prices. But there are a lot of other problems, too, with inflating. It causes a business cycle, it causes financial bubbles and it causes a lot of … [Read more...]
The Effects of Tapering Off the FED’s Stimulus Program
Here's an economic irony for you. Less inflation means lower prices for you and I. However, to some who work for the Federal Reserve, that means things are off target and the economy still needs more work. Huh? What? It seems slightly fuzzy, but when you look at the larger macro-economic picture, things slowly start to come into focus. To a certain extent, inflation is actually good for the economy. The slow growth of inflation is one of many variables that is prompting speculation about whether or not the Federal Reserve should start tapering back its quantitative easing (stimulus) of the economy. Recent Inflation Drop Prompts Speculation In the May 2013 release of the April data, the … [Read more...]
Should You Buy an Annuity?
For many cash strapped seniors an annuity sounds like the perfect solution. And it can be if you think you’ll outlive your mortality date. The only trouble is that the insurance companies offering annuities have perfected estimating your mortality date based on factors like gender, birth year, where you live, where you were born, the age your parents died, and your health (or unhealthy) habits. One disadvantage of an annuity is that when you die there is nothing left for your heirs. On the other hand, with an insurance policy you (or your heirs actually) come out ahead if you live less than your mortality date. So in addition to Dennis Miller's advice in the following article you might … [Read more...]
Lessons from TARP Boss Neil Barofsky
By Bill Bonner Yesterday evening we drove down to Zombietown. A friend in Washington had promised to introduce us to Neil Barofsky, inspector general of the TARP program. You remember TARP? It was the feds' $700 billion program to rescue the US economy from a correction. Neil Barofsky was in charge of it. So we decided to go down and ask him how it turned out... Rewarding Mistakes Bill: So... where did the $700 billion go? Barofsky: "I wondered the same thing," he said (from memory). "It was amazing to me that no one knew. We gave it to the banks. But no one knew what they did with it. I proposed to Tim Geithner that we find out. He was outraged. He cursed me out, using the … [Read more...]
Highest Grossing Movies Adjusted for Inflation
Traditionally, war films, musicals and historical dramas have been the most popular genres and Gone With the Wind held the record of highest-grossing film for 25 years but doesn't even make it into the top fifty in the modern market. But purchasing power varies widely over the time period since Gone With the Wind was first released in 1939. But the true key to determining how revenues really compare is when you adjust them for inflation. Highest-grossing films (Nominal) First we will look at nominal gross box office revenues. That is the actual number of dollars (not adjusted for inflation) earned strictly in the box office. Modern films have an advantage because in addition to box office … [Read more...]
Buying or Selling Gold and Silver?
Many investors consider the recent drop in gold, silver and platinum prices to be the perfect opportunity to build (or add to) their precious metals position. With the price down, the basic law of supply and demand has kicked in and demand for silver bullion and silver coins has risen sharply. Short-term, supply has gotten tight, as some dealers scramble to keep up with demand. We also saw a major disconnect between Physical Gold vs. Paper Gold as a massive sell order hit the futures market to sell 400 tons of gold! But at the same time small buyers rushed to their local dealer to take advantage of the price drop and stock up on the physical metal. And of course since gold and silver … [Read more...]
Experimental (Reckless) Monetary Policy
In the following article Bill Bonner makes some excellent points about the problem with the current monetary policy. The first is that it is totally ludicrous to try to buy real goods with fake money. It has to cause distortions in the overall economy. "People make different decisions when they can borrow for practically nothing... " Secondly, once it gets started, without some form of real recovery it will be impossible to stop. Kind of like a drug addict. The withdrawal will be painful and won't happen until something forces the FED's hand. And thirdly also just like drug addicts and unsuccessful people the world over the FED is taking a short term view. It is a proven fact that the most … [Read more...]
Is Ben Bernanke “Shooting Blanks”?
Summary: Lacy Hunt and Van Hoisington launch into their first-quarter "Review and Outlook," this week with a statement that some may find eye-opening: "The Federal Reserve (Fed) is not, and has not been, 'printing money'…" But given the facts of life about how money is really created (and destroyed), they are of course right: it's all about the acceleration – or deceleration – in the M2 money supply. Van and Lacy say, "A review of post-war economic history would lead to a logical assumption that the money supply (M2) would respond upward to [the Fed's] massive infusion of reserves into the banking system. Mystery Math- Monetary Base up 350%, M2 Up 35%? And yet, the Fed's 3.5x … [Read more...]
Long Term U.S. Inflation
We have updated the charts on long Term Inflation, including Average Annual Inflation by decade, Cumulative Inflation by Decade and Cumulative Inflation since 1913. The Chart below shows the Annual Inflation Rates for each decade. Each bar represents the average Annual Inflation for that decade (not the total cumulative inflation for that 10 year period but how much it increased each year on average during that decade). Do you know: 1) Average Annual Inflation since 1913: 2) That deflation in the "Roaring 20's" was almost as bad as in the "Great Depression" of the 1930's? 3) How Crop Subsidies affected farm prices in the 1920's and 30's? 4) How the proliferation of … [Read more...]