News — finance

Lessons and Reactions From The Federal Reserve’s June Policy Statement

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By John McDonald  On June 19, 2019, the United States Federal Reserve Board of Governors released a policy statement based on the recent meeting of the Federal Open Market Committee. Market reaction was swift and substantial. Nearly immediately, the yield on the 10-year Treasury Note fell below 2% since November of 2016. CNBC describes 2% as “a key psychological level”, though such language is, at best, nebulous. Regardless of the “psychological significance” of the fact that the 10-year note dropped below 2%, substantial downside moves in that key interest rate can absolutely have a serious impact on everyday financial issues...

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Buried Under A Lifetime of Debt

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By John McDonald Excessive debt is among the biggest entrapments in which to be caught. Day after day and sleepless night after a sleepless night, Americans facing a disproportionately – and dangerously – high debt burden live in a financial cage of their own making, sometimes motivated by the highest of ideals (like starting a new business or getting an education) and sometimes motivated by the high-consumption lifestyle that has become the norm in the land of the free and the home of the brave. Consider the pervasive issue of student debt, for example. The case for pursuing higher education...

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“Strong Undercurrent” for Gold Could Mean $2,000 an Ounce in the Near Future

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By John McDonald Thanks to a vast array of long- and short-term geopolitical factors and economic trends, many precious-metals analysts believe gold could hit $2,000 an ounce in the near future. While most are unwilling to predict exactly when that might happen, the most bullish believe even a relatively short-term extension of trade tensions between China and the United States could send gold through the $2,000 ceiling as U.S. fears over a national recession continue to mount. Some cite momentum that has been building since 2003 for this expectation. “In the last eight to 10 years, we’ve seen a bull...

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MarketWatch Claims Investors Are More Bearish Than Anytime Since 2008… But Are They?

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By John McDonald Both the S&P 500 and the Dow Jones Industrial Average have been booming upwards with hardly a pause since the day after Donald Trump won the Presidency of the United States in November of 2016. Having bolted upwards by over 40% from then to today’s close at 3,003.67, the S&P 500 appears strong and headed higher still. Yet the “experts” at MarketWatch tell us that investors have not been this bearish since 2008. Something seems a bit “off”. One wonders: Who are the “investors” to whom MarketWatch refers? Are these “investors” actually representative of the collective psyche...

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Presidential Criticism of European Central Bank President Raises Fear of Currency Wars

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By John McDonald Despite suggesting earlier this summer that European Central Bank President Mario Draghi would be better in charge of the Federal Reserve than sitting chairman, Jerome Powell, President Trump has recently criticized Draghi for aggressive monetary tightening in Europe.  Draghi had signaled that the ECB could lower interest rates as early as July while speaking at a central-banking forum in Portugal. The euro responded by plummeting in value while global equity markets reacted positively to the news that the ECB might restart its bond-buying program to support the Eurozone economy. President Trump’s issue with Draghi’s policies came in...

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