Archive - June 20, 2014

1
Fed’s Zero Rate Policies Are Deflationary
2
Sniff, Sniff …. Is that inflation I smell ??
3
The Designation Everybody Should Be Aware Of

Fed’s Zero Rate Policies Are Deflationary

 

Federal Reserve Chair Yellen feels stocks are fairly priced and is thus not worried about a bubble. This makes her feel free to stimulate the economy in an attempt to create jobs for the hidden long term discouraged unemployed. This is increasing stock market risks by making the bubble bigger and more volatile which can lead to a deflationary crash.

Low Fed Funds rates can act to stimulate the economy however the most likely outcome of low rates is that speculators will use borrowed money to speculate in stocks and real estate rather than to invest in a directly

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Sniff, Sniff …. Is that inflation I smell ??

On Tuesday of this week an economic report caught many by surprise. The Consumer Price Index.

CPI gets Hot !

CPI Econoday M over M CPI  6-17-14

If this continues, this is a VERY strong sign the economy is gaining traction.

The bars tell a better story than the line in the chart !

Inflation at reasonable levels is good, especially given the alternative (deflation) ….. Now “Goldilocks/Three Little Bears” ….. not too hot, not too cold….hopefully just right !!

We will review the winners and losers of inflation, but for now let’s watch and see if it continues!

Have a Great Friday!

John A. Kvale …

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The Designation Everybody Should Be Aware Of

We will stick together..smile together..be tog...

At some point in your life you have probably started a new job, applied for life insurance, started an IRA or retirement account, or opened a bank account. You may remember when filling out the paperwork that the form asked for a beneficiary – both primary and contingent. This is simply telling the account’s custodian to whom you want your account to go to should you pass away.

Your primary beneficiary is the first (hence the name primary) that receives account balance or death benefit. The contingent is who receives the account balance in the event your primary beneficiary predeceases …

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