Money Matters Update November 2, 2015

 

 

Can you help me feed the poor this Thanksgiving?

My "match your funds' Turkey Matters program is officially underway. Mail in your check to any food bank you choose. I will drop a digit and match your funds (up to $5,000) and mail my check to that food bank. Make your donation go farther! 

Let's buy Turkeys for the poor! Your Thanksgiving will never be better knowing you helped me feed thousands of hungry people! Just mail me a receipt of your donation to the below address. (New regulations on me require you make the donation yourself- do NOT mail the check to me)

 Mail me the receipt then I will mail a check to that particular food bank.

 

                  Mail your receipt to address exactly as listed below:

Money Matters/Turkey Matters

PMB 101

578 Sutton Way

Grass Valley, Ca 95945

 

 

Money Matters airs this Thursday, November 5, 2015 NOON PACIFIC TIME on KVMR Fm and worldwide at KVMR.ORG

 

 

Dear fans,

For years people have listened to my show and read my columns. Because many thought I made sense and agreed with my economic views, they requested I manage their funds and for years I have refused. I simply had too much work in the radio/ media business. But after so many requests and having given it serious consideration, I have joined a very dear friend at his firm MKB Financial Services in Auburn. Matt Baltz and I think alike. We are like family. We strive to provide the best service, with integrity, straight forward analysis with detailed and concise communication. We offer a full range of money management, retirement planning, income planning, family planning, investment recommendations and more. We have developed 3 portfolios to help meet the needs of our clients. The cost will be a simple fee commensurate with the industry on the amount invested.

I will talk with you quarterly to review your investments and more often if you require it.

Annually we meet and you and I will update your financial information to keep us on track and make sure you and I are up to date on your situation and your expectations.

We will handle the transfer paperwork for you. I will sit down with you and gather your individual situation and your needs, basically getting to know your financial picture so together we can decide what is best for you and your family.

I am excited to be able to offer you this opportunity to go "Money Matters"!

Call me today at my personal number (530) 559-1214 (private cell- do not give out ) to talk with me about meeting with you or just to get more information. I expect to be busy with this announcement so give me a call to beat the expected rush! Or send me an email at  mcuniberti@cambridgesecure.com

Thank you again and I look forward to meeting of all of you!

Website news:

The website moneymanagementradio.com is being overhauled to reflect this new opportunity.

You will start receiving newsletters again shortly! Thanks again for your patience and I look forward to speaking with you on and off air! 

All the best and I am so excited to hear from all of you on my new role in managing your finances if you would like me to fill that role!

Marc

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What and how do stock sectors react to what particular macro-economic events?

Although common sense might lead one to think one way or another, the truth lies between both common sense and market sense.

For example, when interest rates rise, you might think financial companies might perform worse, common sense pointing you to the increasing cost of their money they have to lend out.

But banks can charge more interest on the back side, and since they make a percentage on the amount they loan, higher interest rates can increase the total amount they lend out, so their percentage goes up, making them more profits, or so the story goes.

Higher interest rates can put pressure on highly leverage companies, those that borrowed a lot to finance their activities, but it might take out some of their competitors as well, increasing market dominance for the surviving companies.

A stronger US dollar can make US exports more expensive but companies that sell mostly to US consumers might sell even more, making their financials even better.

Higher rates could hurt companies selling or mining gold as gold pays no interest and if rates rise the cost of holding gold becomes more expensive to investors, but higher rates could signal inflation is materializing and many investors buy gold to guard against inflation.

No matter what an investor’s belief on what does what to company sales, many underlying currents and cross currents of what happens down the line could have an opposite effect of what common sense might tell you might happen.

Although no one can say for sure what exactly will happen to prices of company stocks when certain things happen, we can never say never and also never say for certain what will happen because something else does. There is always two sides of a story and in the world of investing, for every investor betting a cause will cause an effect, there is always another investor willing to take the other side of that bet at the right price, simply because he believes in something else.

 

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International Monetary Fund (IMF) representatives have given China strong signals that the yuan is likely to soon join the fund’s basket of reserve currencies, known as Special Drawing Rights (SDR) , Chinese officials with knowledge of the matter told Bloomberg News this week. 

A SDR is sort of like the currency of currency. Naysayers of SDR’s think of them as just a higher step on the paper money ladder while central banks think SDR’s are the last bastion of monetary elixir.

The IMF created the SDR system in 1969 to boost global liquidity as the Bretton Woods system of fixed exchange rates unraveled. While the SDR is not technically in actuality a currency, it gives IMF member countries who hold it the right to obtain any of the currencies in the basket -- currently the dollar, euro, yen and pound.

When national currencies consistently fall in value because of over abundant use of the printing press, the IMF uses the SDR to provide a backstop to nations when individual national currencies suffer, as they did during several crisis of the last decade or so.

Although the world average Joe will never get his hands on an SDR, they are used by world banks to purchase other currencies when times get tough and things get critical.

Sounds like bit of a shell game and it is. A game involving the last stop (we hope) in a world of currencies going bad. Think of climbing higher on the super structure of a sinking ship. The SDR is the highest piece (so far).

 

The equivalent of about $280 billion in SDRs have so far been created and allocated to IMF members as of September 2015, compared with about $11.3 trillion in global reserve assets. Small potatoes by comparison, but the path is clear. When your currency goes bad, you simply go to the IMF and get some more of theirs.

China is pushing for inclusion in the basket of currencies that make up the SDR and the IMF is said to be seriously considering it.

Global use of the yuan has surged since the IMF rejected SDR inclusion in the last review in 2010. By one measure, the currency became the fourth most-used in global payments with a 2.79 percent share in August, surpassing the yen, according to the Society for Worldwide Interbank Financial Telecommunication, known as Swift, the system that keeps track of and facilitates such monetary conduits.

If the Chinese yuan becomes part of the SDR, central-bank reserve managers and institutional investors will automatically want to accumulate yuan-denominated assets, which will help the Chinese economy by having a more desirable and internationally accepted currency.

In the grand scheme of things and likely in the eye of the average citizen, such things are beyond everyday comprehension and the world’s central banks are just fine with that.

After all, if you’re going to monkey with global assets and control everything money from the top down, keeping your customers (which is all of us) in the dark serves the purpose well.

What better way to get away with something than have a system so convoluted and confusing to the common observer that nobody really understands it anyway.

The best anyone can do is hope it is all done for the common good and that no one is getting ripped off by the whole thing.

Now how many of you believe that?

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A number of car companies are making or in the process of making driverless vehicles and although we are not there yet, the progress is astonishing.

I test drove a Tesla in the spring and was told a “fetch” function would soon be available.

If you park the Tesla and signaled it, it would start itself, back out of its parking space and come get you. No word on how far it would “fetch” but you get the picture.

The argument for driverless cars is of course enhanced safety by reducing accidents and more free time to nap, work or just sightsee as the car delivered you to your destination.

Other opportunities include driverless taxis and delivery vehicles.

Many are skeptical about just being along for the ride with a computer chip as your chauffeur but we already have computers controlling flying vehicles, medical operating systems, entire subway systems and a host of other critical infrastructure and services, many of which have life threatening implications should they malfunction.

Computer are faster, some say flawless and can be made with fail safes to prevent a catastrophic mishap should the computer in control experience some sort of meltdown.

Although many drivers enjoy the thrill of acceleration and piloting their own vehicle, think of the work we could get done or other activities we could perform while our carbot took the wheel.

Traffic jams could be minimized by efficient traffic control interfacing and fuels costs would certainly drop as the computer strived to obtain the optimum consumption on every straightaway and turn.

Car companies might enhance the interiors to be more like a comfortable airplane ride with comfy seating, work tables, larger viewing portals and who knows what else. Maybe you will even catch up on some zzz’s during those early morning trips to the office or the local airport to catch that early morning flight.

Who knows what will transpire in the years ahead as driverless cars become more and more sophisticated.

With technology moving at literally the speed of light and a host of brilliant engineers from car companies everywhere working on solving the issues surrounding putting an computer at the wheel, it may be sooner than you think when you call your car to come get you, tell it where to go, and then sit back and enjoy the ride.

 

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The left side of the aisle cries to increase corporate taxes and the right side of the aisle claims corporations employ people and heaping higher taxes on them will only either get people fired or those higher costs will be passed on to consumers..

No matter which side of the aisle you side with, few would argue that the government should not be paying public money, which is all they have by the way, to private for profit companies. In plain English, if somebodies in business to make a buck, that buck should be made, not bequeathed upon it from some governmental agency. For profit it just that, for profit. So make your own damn profits and keep your hands of our tax dollars.

Sounds reasonable and any reasonable man or woman would likely agree.

However that is not what happens in today’s ivory halls of Congress, and in many cases egregious acts of what we call crony capitalism runs amok, where our government hands out willy-nilly our tax dollars to some private companies and then some of that money finds its way in huge bonuses, salaries and perks for the VPS and shareholders.

The latest of these immoral use of tax dollars is the payment of tax money to private shipping magnates and their companies. The Wall Street Journal reports retiring speaker John Boehner authorizing not only making payments to these companies, which by the way is already happening, but boosting payments to boot.

A 1996 Maritime Security Program (they always give them feel good names so you will think it’s a national priority) has basically handed out free tax payer money to shipping companies, and the amount is now about 5 million dollars per every ship owned. Keep in mind that equates to about 1/3 of their leasing revenue they get for their ships at current rates. According to the journal. Most of this money goes into the pocket of the shipping unions and VPS of these companies.  The money is paid under and by the Defense department and payments to go those owning foreign ships as well.

Stansberry Research’s October 9^th musing blames the Democrats to authorizing this program to get union votes yet also notes the Republicans also are not complaining nor trying to stop the program.

This is just one in a long line of what Stansberry Research calls an ongoing march of the Zombie companies who limp on barely alive or thriving by drinking of the milk teat of the Federal Government.  Stanberry author Doug Casey suggests the following to halt the practice of crony capitalism and allow for a deep cleansing of those companies that should be allowed to die or at least earn their money the old fashion way, by earning it.

 

Those steps include:
 

No more bailouts. Allow those companies instead to pay the price of their mistakes and damn the consequences.

 

Abolish most if not all regulatory agencies.  According to Casey, they do nothing but garner funds from private businesses to feed their ranks all the while “throwing sand in the gears of the economy”.

 

Abolish the Federal Reserve.

 

Cut the military.

 

Sell governments assets like huge land holdings and government run companies among the many. Privatize these companies like the US Postal Service and Amtrak.

 

Eliminate income tax.

 

Default on the national debt and contingent liabilities. Clean the slate and start over.

 

Although radical in his ideas, Casey might be onto something this analyst has said for years. Most of government hinders progress. It survives to grow larger, taking larger and larger chunks out of the producers while providing little in return.

Although many scoff at such ideas claiming who would run the subways and who would maintain the roads, the aim here is to reduce the size of government and by a lot. They would exist to do just that and that only: build the roads, fight the wars, protect the borders, and help the truly needed (not the millions it doles out money to today), protect the environment and protect the people from those that would have monopolies over the us.

Outside of that, most of government today is wasteful, bloated, crony and whose only interest is growing larger and getting votes and all propelled by taking more and more of your money all the while removing more and more of our freedoms.

Most of government today is a bad deal for the rest of us almost any way you look at it.