Money Update September 6, 2016 Summer ends, Fall begins. READ! Important Market News

 

Reality starts with a dream

 

Marc’s notes:

Hi folks and Jambo! (Swahili for hello).

Well summer is finally drawing to a close and what a busy one it was as you all know from reading these updates. I got a lot of stuff done and made a few trips with the family as our time with all three kids at home is growing shorter by the day.

We went to a super party at a client’s house with a lake a few weeks back and about 150-200 people attended. I met a whole bunch of influential folks and just regular folks and swam in their private lake most of the day. Thank you to my friends Vicki and Larry for the invite. A camping trip with the family followed. Then it was off to San Diego where I went to school to bodysurf, work on my tan and see captured man-eating killer whales perform for the last time. (SeaWorld is phasing out the shows thank goodness). Saw the show but was glad I turned down whale sushi during my June Japan trip!

I ran and did yoga every morning starting at about 6.00 am on the beach across the street. A sand smoother was hard at work. I could not resist waiting until the tractor turned around and headed straight for me. I then tiptoed out on the smooth sand, defiantly turned towards him and stomped the crap out of pristine sand. LOL. Yes, yes, it was a defining and hilarious moment, even though I was the only one laughing and only one of two people to see it.

Classic moment, simple yet I will not forget it for a long time. I had a wonderful morning and smiled for hours! 

Here also is my proverbial “stupid seagull on beach” mandatory shot that I hate to post, it’s so COMMON! Anywhere here are all the photos: 

 

     Amazing grounds as friends party!

 

 

               Camping by the water

 

 

  

 

 Pristine sand before the "dance" 

 

    All too common stupid shot of beach and lone seagull 

 

Here is Belmont amusement park, a sick bowl of ice cream and a surf shop that still stirs my soul and reminds me of years of body surfing with my old pal Kent. I can still pound waves with the best of them and spent about 6 hours in surf getting beat to hell but getting some way cool rides!

 

   Belmont Park  

 

    

Too huge of a bowl of ice cream at Belmont

 

 

The chaff of bathing suit and salt water on my skin, the smell of hamburgers and the buzz of a coastal boardwalk all add to the wonder........

 

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The fall is shaping up to be one busy season. First off markets may rock and roll if history is any indication. We will cover it all in our upcoming shows starting the third Thursday of this month, September 15, 2016 at noon PST. Some news on the show and Money Matters in general. I have given up the South of the Border show on Mondays for a while. A great sub by the name of Karl will be standing in for me. I have so much on the plate I need the extra time.

Pacifica Radio picked up the show and is spreading it through their network. As they told me a few weeks back: “Alternative money news with humor and easy to understand explanations.  What’s not to like”?

Greta of PR was very helpful in revamping the news pieces to better fit their formats. Thank you to PR and Greta, a delightful and very helpful lady. Never be hestitant to take advice from people who have been there and know something about their particular field.

"Arrogance leads to ignorance and visa versa" 

 

For years I have been diligently sending in my articles to Gold Country Media who handles seven newspapers. After about 4 years of doing this, they finally called me last week. They selected yours truly as their new financial columnist to write bi-monthly to start the third week of this month. Readership in the first paper I run in is 12,000, about doubling my current readership. The other six of their papers include Roseville, Rocklin and others in the lower valley area with readership close to a quarter of a million! If you live off the hill prepare to see my mug in your local paper. 

I have to thank all of you for your support over the years! We are making great inroads and the last two months things have really popped.

I also went to the State Capitol for a hook up with Senator Ted Gaines with my son Kyle. A private tour and talk, one on one with great networking took place. I also met the head of the California Dem/ Rep parties at a function a few weeks back along with many elected officials of Nevada County and the State. Many knew of the show and some more networking took place. All these folks were do'ers and their job titles, wealth and status reflected this. They were also very nice people. Funny about do'ers. They usually are happy and belittle no one. They don't discrminate (from my experience) and are not mean or spiteful as many others I know. They don't waste time talking about pie in the sky pipe dreams nor spend their day whittling away the hours on social networks or in front of computers visiting garbage websites. They simply aim at a target and go get it. 

 

What are we to make from all of this?

 

“Where you go in life depends a lot on who you hook your cart to”

 

Hook up to successful people and weed out the talkers. Talkers make good friends but lousy business associates. Don't dream it, do it. Above all, learn from those who have been there.

Who has been there?

How do you know?

Look at what they have, who they associate with and if they have actually accomplished something. Get out of your meetings and stop talking about what you are going to do and instead, get in your car and go do it! It is as simple as that. 

 

One more time with feeling: AVOID THE TALKERS. 

 

A new class and license is in the making for yours truly. More on that later as well but I will be expanding the financial side of the business to better serve our clients which means you!

Want to meet to discuss your portfolio or plans? Email me.

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My son Kyle is still doing great deck work for low cost. Here are some more before and after photos. Email me for a bid. He is saving for a car and college and has some great references and past shots of decks he has done.

 

    Before        After   Total cost this deck $200

 

 

All for now. Read on for what I think will be a hot topic in the months to come.

 

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This is the first in our three part series on inflation

 

Inflation causes downward class mobility in almost every income strata except the super-rich. Inflation actually enhances their position very nicely.

The majority of people do not comprehend this fact nor do they understand just how inflation does this. In fact, inflation is called the “stealth tax” as its symptoms lull to sleep the very people it damages the most.

Inflation has different official descriptions but for simplicity sakes let’s just says it is rising prices, a definition most people would give if asked what it is.

Inflation is a general price increase over time in most all things such as food, energy, service and just about everything people spend their money on. Inflation also causes your income to rise. One could safely say the U.S. and indeed most of the planet has seen steadily increasing prices of most everything only interrupted by an occasional fall in certain items (such as gas prices recently) caused by temporary supply gluts or for other reasons, but the general direction over many years is up.

Most have accepted inflation as a fact of life but there have been prolonged periods of time where inflation was nonexistent for decades in just about every country one might look at. Many argue during these times a country is the most prosperous.

Just how inflation does its dirty work yet masks this deed in a feel good sort of way to the people it affects is truly an economic marvel. Inflation feels good as it increases your wages, your house and stock values, and even brings more people into your place of business. It all sounds wonderful doesn’t it? After all, if you make more, sell more and your assets go up in value, what’s not to like?

Keep reading.

The economic truth is inflation slowly erodes your net worth, your paycheck (by decreasing what you can buy with it) and most importantly, persistently drops consumers into lower and lower income classes.

It accomplishes this task by adhering to one economic truth. Although everything does go up in price including your income, that one truth is wages always lag behind the general increase of prices in everything else. That is the one fact that causes this otherwise feel good phenomenon to stealthily destroy all who live within its grasp. It appears you are getting ahead but in actuality the exact opposite is happening.

An example would be to imagine a two percent inflation rate where everything you buy goes up two percent a year. Your house also goes up by that amount as does everything you own and even your business sells two percent more. But because wages (income) lag behind everything else, you are slowly falling behind. True, you do make more, and sell more, (hence the feel good part) but the wage increase does not match the increase in the things you buy. It’s like running a race where you run five mph (your wages) but your opponent runs ten (general price levels).

Although you think you’re getting somewhere, the longer you run the race, the further behind you get.

That the Federal Reserve (hence the government) supports such a policy and has stated such in their minutes begs the question: why would they support such a class destroying policy?

 

We will discuss that and how inflation actually helps the super-rich in our next Money Matters. Stay tuned for our three part series on Inflation in our newsletter, newscasts and shows.

 

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The Federal Reserve could potentially raise interest rates as soon as the next two weeks, New York Fed President William Dudley said, warning investors that they are underestimating the likelihood of increases in borrowing costs.

“We’re edging closer towards the point in time where it will be appropriate, I think, to raise interest rates further,” Dudley, who serves as vice chairman of the rate-setting Federal Open Market Committee, said Tuesday on Fox Business Network. Asked whether the FOMC could vote to raise the benchmark rate at its next meeting Sept. 20-21, Dudley said, “I think it’s possible.”

So here we go again. The markets seem tethered by an invisible thread to what the Feds say and do, but mostly since what they say happens far more frequently then when they actually act, the “Fed Speak” has had tremendous sway on what markets do in its day to day movements.

Investors must be scratching their proverbial heads. One day the markets shoot higher on a particular news piece then the bottom falls out on some other news item.

It could be argued the markets react on both fundamental news and non-fundamental news which means it may not be so tied to what the economy is actually doing but tied to what the Federal Reserve is actually saying.

In my father’s day, stock markets generally reflected what was expected to happen in the economy and the businesses in it. More specifically it was said the stock market told us what would happen in advance, like six or nine months in advance. Good business news and growth in earnings bolster investor confidence and subsequently they bought stocks.

Fast forward to today, and the markets seem not only concerned about what businesses will do but what the monetary authorities will say and do as well.

If businesses have positive growth, investors may perceive the Federal Reserve will raise interest rates, which is what they do to cool off an overheating economy. This fear of rising rates may spur a selloff in stocks, the exact opposite of what traditional stock market reaction would be in the face of good news in the business sector. Conversely if businesses start to suffer, and the economy shows signs of weakening, investors my think the Feds will drop rates, which is generally good for stocks, and the markets may rise despite a poor business environment.

Case in point: New York Fed President Dudley’s remarks that rates could rise sooner than expected caused a significant sell off in stocks the day he made his speech. It is indeed a strange world we live in when the markets now react positively to negative business news and react negatively when businesses say they’re doing better.

This “opposite reaction” compared to what markets had done in years past may be caused by the Federal Reserve’s hyper activity in the markets of the world as they attempt to steer the economy where they think it should go. As the Feds have increased their activity and involvement in the economy over the decades in their belief they can control such a beast, it could be argued the cure may be worse than the disease.

 

All for now, email me with your questions,

Marc