Category: Commodities

Now that the Federal Reserve has hiked interest rates by 4.5% since early 2022, taking them to its highest level in 13 years… Everyone I talk to these days asks: “Should I just buy bonds now?” Short answer … not really. Longer answer … not really, because buying bonds still won’t make you money. Look, I get why everyone’s considering bonds right now, especially the “risk-free” Treasury bonds and bills. Prices are down and yields are up. But Treasury yields are still below the rate of inflation. Buying Treasurys may be better than keeping your money at the bank, but[…]

Sitting in my firm’s investment committee meeting in April 2009, it was clear we had a problem. A good problem to have. But still a problem. Since I started at the firm the year before, we’d been decidedly bearish. That served our clients well in 2008. We gained about 10% for the year while the S&P 500 lost almost 40%. That performance earned us a lot of new clients. We started 2008 with about $80 million under management. By the end of the year, we had over $150 million. We wanted to keep the clients. Our management fee was 2%[…]

It’s classic Washington accounting. They show off big numbers and projections, and promise us that spending a fortune today will somehow save us money in the future. But the problem is… Washington always underestimates the actual cost to the American taxpayer. And it’s happening again with 2022’s “Inflation Reduction Act.” In August 2022, President Biden signed the 725-page act into law. It was the most significant action Congress had taken on clean energy and climate change. Using what The Wall Street Journal refers to as “accounting gimmicks,” the Congressional Budget Office estimated this bill would only cost Americans $391 billion.[…]

I called it! I told my readers six months ago that the U.S. government was getting ready to make a fully traceable digital dollar, otherwise known as a central bank digital currency (CBDC). The Federal Reserve just announced the first step toward our new digital currency. In July, the Fed will officially launch its FedNow Service. According to the press release, this service will “facilitate nationwide reach of instant payment services by financial institutions — regardless of size or geographic location — around the clock, everyday of the year.” That’s a fancy way of saying that the government will be[…]

This crisis in the banking sector is not going away anytime soon. And as Mike Carr will tell you, it’s much bigger than Silicon Valley Bank, or even the tech sector at large. Last week, he pointed out that this isn’t a “banking problem.” It’s actually a problem with how venture capitalism works, especially in tech companies. On today’s podcast, Mike breaks down this idea further, explaining the bigger picture of how this shake-up with big banks is affecting U.S. businesses — and how this could bring us even closer to a recession. He also identifies the best way to[…]

I’m a short-term trader. The reason for that is because I understand long-term risks. Long-term investors are often too comfortable in their belief that the market of today will be there when they wake up decades from now. The fact is, economies change drastically in that time. And passively investing through it all can severely hurt your returns. Any student of history understands this, and that’s why I’ve been an active market trader for almost 40 years. Looking back to when I started … The world was very different as I was preparing to leave college in 1983. Inflation —[…]

Everybody knows that trading is risky and buying 30-year Treasury bonds is safe. Right? There’s actually an argument for precisely the opposite. Hear me out… Exhibit A is the recent collapse of Silicon Valley Bank (SVB). What was once the 16th largest bank in the U.S. is now the largest bank failure since Washington Mutual’s in 2008. But it wasn’t reckless lending to “risky,” subprime borrowers that brought down SVB. It was the bank executives’ decision to buy supposedly “safe” 30-year T-bonds — and a similar class of income assets, federal agency mortgage-backed securities (MBS) — at paltry yields just[…]

Successful startups follow a typical pattern. An entrepreneur has an idea. They start a business. After a short time, the business makes money. Starting the business is challenging. Entrepreneurs generally need capital. Starting a small business on Main Street might require $100,000, for example. To get the money, the founder goes to the bank. Bankers review the business plan. They also review the owner’s assets. Bankers want to ensure they get repaid with interest. This is hard work. But all around the world, small businesses secure capital and many find success. The process is a little different in the tech[…]

Today’s financial media is overrun with stories about failing banks and financial risk. Yet five years from now, the only thing investors will remember about 2023 is the outrageous bargain prices on oil and gas companies. We touched on this opportunity in last Wednesday’s issue. In short, investors are worried that recent bank failures might lead to a recession. And a recession would in turn lead to lower demand for oil and gas. So prices fell. That’s why oil prices hit a 15-month low on Monday, with Goldman Sachs reducing its price target to $75 per barrel. But the simple[…]

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” This quote by Henry Ford might seem crazy — after all, don’t we all have a simple understanding of how banking works? But when you truly look at our current banking system from start to finish, the more I’m convinced Ford was right. There’s a revolution on the way. Ultimately, we’re going to move away from banks as we know them today to something entirely new — a digital[…]