The Day of American Austerity: What Will It Look Like? In the United States, the belt-tightening has just begun Since the start of the European sovereign debt debacle, the word "austerity" has been bandied about a lot. It wasn't an everyday word, and may send some people to the dictionary. Merriam-Webster defines "austerity" this way: enforced or extreme economy. But even knowing this definition might leave one wondering how "austerity measures" relate to Europe's debt crisis. The Associated Press (5/13) provided this overview: Austerity has been the main prescription across Europe for dealing with the continent's nearly 3-year-old debt crisis, brought on by too much government … [Read more...]
4 Practical Ways to Keep Your Small Business Profitable during a Recession
Small Business Big Profits Recession is a word that strikes fear into the heart of many small business owners and investors, and for good reason. Reports indicate that the number of failing small businesses drastically increased during the recent recession, and many are still in the process of recovering from insolvency due to the economic backlash. Although a recession certainly decreases the overall demand for products because consumers have less money to spend, there are certain companies in almost every industry that find a way to not only survive but thrive during these harsh financial times. Creatively Outdo Competitors to Increase Profits When people have less money to spend they … [Read more...]
Why is the US Federal Government Afraid of Deflation?
Deflation: Harry Dent "Understanding Demographics Is Vital to Success" In this segment from one of his talks at the Casey Research Recovery Reality Check Summit, economics expert and author Harry Dent explains how shifting demographic trends lead to economic cycles and why the current US federal government is so afraid of deflation. https://youtu.be/d3EZlY-29Ss Harry's complete presentation – as well as the speeches of 30 other economic and investment luminaries from this Summit – is available to you in MP3 or CD format. Listen to experts like David Stockman, Harry Dent, Lacy Hunt, James Rickards, John Hathaway, Chuck Butler – their assessment of what investors should expect and … [Read more...]
Prepare for your financial future
Position Yourself for the Rest of "Conquer the Crash" The earlier you prepare, the better To this day, I wonder why Robert Prechter's book Conquer the Crash has not been more widely recognized. It described in advance much of what happened in the 2008 financial crisis. Published in 2002, the book provided detailed descriptions of then-future economic scenarios. They were detailed vs. general. Prechter was specific in a way that would prove right or wrong; there was no gray. This is from the book: There are five major conditions in place at many banks that pose a danger: (1) low liquidity levels, (2) dangerous exposure to leveraged derivatives, (3) the optimistic safety ratings of … [Read more...]
What is Quantitative Easing?
Is Quantitative Easing Money Printing? Quantitative Easing is often referred to as "money printing" or a way for the government to increase the money supply. According to Wikipedia, quantitative easing is different from the typical method whereby governments buy treasury debt to increase the money supply. In QE1 when the market was panicked, and banks didn't want to buy government bonds, the central bank implemented "quantitative easing" by purchasing relatively worthless financial assets (like mortgage backed securities) from banks and giving them new electronically created money. So this is straight forward money printing compared to the more round about traditional method. Thus … [Read more...]
Global Debt Market: Biggest Bubble of All Time?
The Global Debt Market -- The Biggest Bubble of All: This One Has Yet to Deflate (Are You Ready?) History shows that once a financial bubble bursts, it can take a long time to bounce back. Recent history offers an example: Real estate prices topped in 2006-2007 -- then came the worst part of the sub-prime mortgage crisis in 2008. Yet instead of recovering with the passage of time, real estate prices just keep getting worse: Home prices dropped for the fifth consecutive month in January, reaching their lowest point since the end of 2002. -- CNNMoney, March 27 As values sink and desperation grows, the number of owners giving their timeshares away for $1 -- or less -- has doubled in … [Read more...]
Why Deficits Are Politically Convenient
Terry Coxon of Casey Research discusses the effects of deficits on the economy and politics. ~editor Deficits: How Far to the Wall? By Terry Coxon, Casey Research Decades of manipulation by the Federal Reserve (through its creation of paper money) and by Congress (through its taxing and spending) have pushed the US economy into a circumstance that can't be sustained but from which there is no graceful exit. With few exceptions, all of the noble souls who chose a career in "public service" and who've advanced to be voting members of Congress are committed to chronic deficits, though they deny it. For political purposes, deficits work. The people whose wishes come true through the … [Read more...]
How to Handle an Economic Implosion
I came across some research on the subject of worry. Here's how it was presented: Things People Worry About: things that never happen - 40% things which did happen that worrying can't undo - 30% needless health worries - 12% petty, miscellaneous worries - 10% real, legitimate worries - 8% Of the legitimate worries, half are problems beyond our personal ability to solve. That leaves 4% in the realm of worries people can do something about. I thought about our gigantic national debt and weak economy. These seem to fit into both subcategories of "real" worries. You can't do much as an individual to solve the nation's debt and economic problems, yet you can prepare for a … [Read more...]
What Happens to Gold if We Enter a Recession or Depression?
By Jeff Clark, Casey Research Mayan prophecies aside, many of the senior Casey Research staff believe that economic, monetary, and fiscal pressures could come to a head this year. The massive buildup of global debt, continued reckless deficit spending, and the lack of sound political leadership to reverse either trend point to a potentially ugly tipping point. What happens to our investments if we enter another recession or – gulp – a depression? Here's an updated snapshot of the gold price during each recession since 1955. … [Read more...]
If the Economy’s “Recovering,” Why is the Largest-Ever U.S. City Bankruptcy on the Horizon?
What's really going on? As pundits chatter about an economic recovery, 80 miles east of San Francisco you'll find a city (pop. 292,000) facing bankruptcy: Stockton is on the verge of becoming the largest city in the United States to declare bankruptcy... San Francisco Chronicle (3/4) Bloomberg reports (2/25) that it costs the city $175,000 just to get a consulting firm's fiscal evaluation. Management Partners issued a report which said: ...the city took on a large amount of debt in anticipation of ongoing growth that now exceeds the city's ability to pay. Compensation packages exceeded sustainable levels and the city assumed a significant liability for improved retiree health … [Read more...]
