Is Iran Seeking A Tactical Gain With UN Nuclear Watchdog?

May 18, 2012 / jennifer / No comments

Negotiations continue between Iran and the IAEA Regarding Iran’s Nuclear Agenda

Iran and the International Atomic Energy Agency (IAEA) met earlier this week to discuss Iran’s nuclear agenda.  Meetings will resume on the 21st as UN nuclear watchdog hopes to make some headway in getting inspections of Parchin Military site where it is believed that explosive nuclear testing has occurred. IAEA’s goal is to gain headway on the 4-years of stall tactics by Iran against UN inspectors.

Iran Denies Having An Illegal Nuclear Agenda, Claims Uranium Refinement is For Civilian Nuclear Reactors

Iran denies having an illicit nuclear agenda, but has been refining uranium, which is a key component to a nuclear bomb.  Iran claims that their uranium refinement is for the sole purpose of a future network of civilian nuclear power stations and a medical isotope reactor.  While it is true that Uranium refined to low levels can power a nuclear power plant, the UN nuclear watchdog fears that Iran has a greater agenda of refining its uranium to 90% which would make it capable to power a nuclear weapon.  Iran has also been accused of building a large containment vessel over a decade go, which is a strong indicator that they have been conducting high explosive tests, making it likely that their intention is weapon development.  Many of the nuclear powers believe that Iran is stalling trying to clean up Parchin Military site before they were to allow inspections.

Israeli President Claims Iran Is Stalling Trying To Gain Headway On Nuclear Agenda

President Benjamin Netanyahu claims:  “It looks as though they see the talks as another opportunity to delay and deceive,” he told reporters in Prague. “Iran is very good in playing this kind of chess game.”  Currently Israel is the only Middle East Country thought to have possession of nuclear weapons. Their fear is that if Iran gets their hands on a nuclear weapon it could pose a mortal threat to Israel and its allies.

How Will The Middle East Powder Keg Affect The Global Economy? 

With tensions between Iran and Israel mounting, Middle East political affairs are looking rather uncertain.  Israeli leader Netanyahu feels a preemptive strike against Iranian nuclear facilities could help “unclothe the emperor”.  He feels that this may actually embolden the Iranian people to overthrow the regime and doesn’t think it will instigate an all out war. If Israel makes good on their threat of a preemptive strike, what’s to stand in the way of all out war, pulling in Iran, Israel, the US and other UN forces?

In the face of potential military involvement in Iran and Israel how will this effect the economic situation here in the US?  To ensure the safety of your assets and to make sure you are properly invested given today’s political and economical environment it would be an excellent time to examine your portfolio to make sure you are properly positioned.

For more information on how to protect and multiply your assets visit redhawkwa.com

http://latestnews.thefiscaltimes.com/2012/05/18/iran-may-seek-tactical-gain-with-u-n-nuclear-deal/

http://www.bloomberg.com/news/2012-03-19/israelis-grow-confident-strike-on-iran-s-nukes-can-work.html

Category: Economic News, Financial Planning/Retirement Planning, Investments / Tags: , , , , , ,

Despite Obama’s Claims Of Unemployment Rates, All Things Considered Unemployment Is Much Worse Than Many Suspect

May 18, 2012 / jennifer / No comments

Unemployment Rates Of Today Haven’t Been Seen In America Since The Great Depression

In spite of all the talk about America’s slow recovery and a return to the economic bliss prior to the Obama presidency unemployment is still at the longest 8% streak since the Great Depression.  During the Bush administration Americans enjoyed an unemployment rate of only 4.4 percent.  Since then, the Obama administration is claiming a U-3 unemployment rate of 8.3%.  However, when all things are calculated in and considered the unemployment rate is actually much higher than the alleged 8.3%.

Unemployment Statistics Are Severely Underreported; All Things Considered Unemployment Is More Like 22.5%

The Government calculates unemployment using figures from the Labor Department’s U-3.  However, when the fact that there is 2 million fewer jobs today is calculated into the equation the projected 8.3% unemployment becomes an actual 10.3% unemployment.  Additionally, the U-3 unemployment rate does not calculate in discouraged workers who have been unemployed longer than a year, or those who are underemployed working less than 365 days in the year and only part-time.  If these U-6 statistics are figured into the unemployment rate, those who have been employed less than 365 days and those who are under-employed is 15.1%.  If you add in the additional statistics of those who have been unemployed for over a year it raises unemployment to an astounding 22.5%.

How Will Long-Term Unemployment Problems Affect Economic Recovery And Investments?

In spite of the 800 billion dollar stimulus package by the Obama Administration, which were projected to  have dropped unemployment to 6% by now, the unemployment status in the US is rather bleak.  In order to return to the 4.4% unemployment rate enjoyed under the Bush Administration an astounding 225,000 jobs would need to be created every month for the next 60 months.  Given the current rate of economic growth that type of growth recovery seems nearly impossible.

Our economic recovery has a long way to go; much further than our government cares to admit.  Especially as we are approaching the year end tax hikes and spending cuts that threaten to throw the economy further into recession at the end of 2012.  For an investor these economic times can seem very uncertain. That is why it is absolutely imperative to make sure your assets are properly positioned in investments that provide the best return during such a unique investment time.

To learn more about how to protect your assets and multiply your profit potential click here 

 

Category: Economic News, Financial Planning/Retirement Planning, Investments / Tags: , , , ,

Central Bankers Are Hedging Against Global Inflation By Heavily Investing In Physical Gold

May 17, 2012 / jennifer / No comments

Central Bankers Purchase 57.9 Tons of Physical Gold in March Alone

Central Bankers have been grabbing up as much physical gold as they can in an attempt to back up their currency.  Throughout 2011 their physical gold purchases totaled 440 tons of gold bullion, which equaled about 37 tons per month.  In March 2012, however, central banks took advantage of the lower gold prices and purchased 57.9 tons.  If the rate of purchasing 57.9 tons per month continues it will make the 2012 gold purchases over 700 tons of physical gold!  Concurrently The Central Bank in China is the largest consumer of gold, purchasing exorbitant amounts of physical gold to back up their currency the yuang, however the actual amount is not being reported to the International Monetary Fund (IMF).

Physical Gold

Central Bankers Will Tie Up Half The World’s Gold Supply In 2012

The actual supply and demand of gold is going to be in question as the gold mining has remained constant at 2500 tons per year for the last decade.  However, until 2010 the central bank demand of gold was relatively low.  If purchasing goes as predicted, over half of the world’s gold supply will be tied up by central banks in 2012.  With supply remaining constant and demand for gold increasing the gold prices will be forced upwards in proportion to demand.  It’s only a matter of time before gold begins to skyrocket.

Central Bankers Are Turning To Gold As Most Major World Currencies Are Firing Up The Printing Press

The primary reason behind why central bankers are investing heavily in gold revolves around the weakening economies around the world.  The EU is in crisis coping with austerity measures and possibly more bailouts or default with Greece, Spain and Italy and may forced resort to money printing.  Japan’s weakening economy may force their hand at the printing press; the UK is already in a recession and may have to resort to printing money and with the year end Fiscal cliff expected in the US QE3 may be just around the corner.  The fact of the matter is, the currencies aren’t thriving and currency based investments may not be the safest place to house your assets at this current time.

If the central bankers are taking refuge in gold to protect their assets it may be time to evaluate your personal portfolio to make sure you have a hedge of protection against the economic times to come.  To learn more about precious metals and other smart investment options given the current economic climate worldwide visit redhawkwa.com 

http://www.profitconfidential.com/gold-investments/half-of-world-gold-production-being-bought-by-central-banks/?subid=OUTBRAIN

Category: Economic News, Financial Planning/Retirement Planning, Gold And Silver, Investments / Tags: , , , , ,

Are We Heading For a Taxmageddon At the End of 2012?

May 17, 2012 / jennifer / No comments

Year End Taxmageddon or “Fiscal Cliff” Could Stifle Economic Growth and Cause Major Economic Problems

At the end of 2012 many significant tax breaks and benefits are ending that could cause a considerable drop in consumer spending, seriously hampering the economy.  Fed Chairman Ben Bernanke is urging congress to address these issues before citizens face major increases in taxes.  He is convinced that if congress doesn’t address this and the fed doesn’t intervene, that the fiscal cliff may be so great the fed will be unable to offset its effect on the economy.

A conservative estimate of the tax shift by the Heritage Foundation indicates that 3% of the nation’s total output or 494 billion will be absorbed in additional taxation.  Some of the taxes include an expiration of the bush-era tax cuts on income, capital gains, dividends, pay-roll tax deductions, and some deductions for businesses.  Additionally, the taxes imposed by Obama’s medical plan are set to take effect in 2013, drawing even more revenue from tax payers.

Congress Needs to Act to Avoid Bernanke’s Projected “Fiscal Cliff” And Protect Against Taxmageddon

According to Bernanke, congress needs to set a 2-fold fiscal policy that can accomplish long-term financial sustainability, and short-term measures to prevent economic damage while trying to attain the long-term financial sustainability.

It is rather unlikely that congress will deal with these issues before the elections in November.  Therefore we are relying on lawmakers to act quickly before the year end so America doesn’t wake up to brand new excessive tax laws on January 1st 2013.  The government has very few options.  They can ease things in the economy by further quantitative easing or by printing money, but at some point they will have to come head to head with the inflation and ever increasing debt ceiling.

In the meantime, investors need to make sure their portfolio is secure in the event the economy takes a downturn in the wake of newly imposed taxation and spending cuts.  One man’s nightmare can be another man’s opportunity if you are properly positioned in the market.

Take the time to examine your portfolio to make the most of today’s economy.  To learn more about the best investment options during these uncertain economic times click here

http://www.csmonitor.com/USA/Politics/2012/0426/Fiscal-cliff-threatens-economy-on-Dec.-31-Bernanke-warns-Congress

 

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Fear Of Greece Pulling Out Of The Euro Has Prompted Bank Runs In Greece

May 16, 2012 / jennifer / No comments

Fear of a “Grexit” Causes Run On Greek’s Banks

On Tuesday Greek officials announced that their attempts to form a coalition government had failed, new elections are set for June 17th, which should determine a government for Greece and also Greece’s fate in the euro.  Fear of Greece pulling out of the Euro has prompted Greeks to withdraw 900 million in assets from local banks.  For the first time ever there are lines to ATMS as Greeks are trying to gain control over their assets.  Since January 2010 over 72 billion euros have been withdrawn from Greek banks leaving only 165 billion euros in March.  Rumor has it that Greek banks have placed a withdrawal limit of 50 euros on accounts.

Greeks Worry About The Fate Of  The Euro In Greece

Fear Of Bank Runs In GreecePapoulis, Greek president warned the political leaders that panic could ensue as  Greeks are beginning to worry about the fate of the Euro in their country.  As much as austerity measures are wildly unpopular among the Grecian people 70% still maintain a desire to keep the Euro in their country.   June 17th elections are predicted to decide the fate of the Euro in Greece.  Many speculate that the Euro will be discarded in favor of the Drachma.

Central Bankers Desire Is For Greek To Stay In The Eurozone

Mario Graghi, president of the European Central Bank commented that the bank’s strong preference is for “Greek ot continue to stay in the euro area.”  Central bankers and many European countries have much to lose as billions of euros have been pumped into the Greek economy to keep it afloat.  The aftershock of a Greek default could cause economic ripples in the entire global economy.

How does a Greek Default Affect Your Investment Portfolio?

As uncertainty abounds in Greece and the rest of the Eurozone many investors are getting major risk aversions.  The Euro has taken a hit and is at a 4 month low trading at 1.28 on the dollar.   Money is flooding other currencies as investors are reacting to the volatility in the political/economic realm of Europe.  Volatility brings opportunity, the question is, what market segment in these economic times represents the best opportunity.

To learn more about some of the best strategies and options during these economic times click here

http://www.latimes.com/business/money/la-fi-mo-greece-banks-20120516,0,2374245.story

Category: Economic News, Financial Planning/Retirement Planning, Investments / Tags: , , , , , ,

The Flight To Safety From The Euro Causes The Dollar To Appreciate

May 16, 2012 / jennifer / No comments

Euro Fell Against the Dollar After Greece Announced a Failure To Reach An Agreement On A Coalition Government

The Euro fell to a four month low against the dollar when a Greek spokesperson announced the need for another round of elections because of their failure to come to a consensus on a coalition government.   German bonds rose sharply and the Italian 10-year yields hit 6% as a sharp response of risk aversion to Greece’s announcement. The British pound lost .44% The Euro is down .3% or 1.28 on the dollar as investors scaled back on investment risk.

Volatility In The European Market Quells Investors Appetite For Risk

As volatility in the eurozone has been in full swing many investors have pulled back feeling that the risk of staying heavily vested in the Euro may out way the potential yields.  The money pulled out of Euro based investments has to go some where, and much of it has flooded other currencies, causing dollar based investments to be on the rise.  The upward trend of the US dollar paired with the rise in the relative strength index, reinforces a bullish outlook for the reserve currency.

Dollar Expected To Appreciate Further As Flight To Safety Continues, How Will This Affect Your Investments? 

The Dow Jones-FXCM U.S. Dollar Index was up another .30 percent on Tuesday as the upward appreciation of the dollar continues.  Further appreciation is expected as the European pullback continues.  The US is outperforming both Europe and China.  The housing market is starting to stabilize, with sentiment being the highest it has been in five years. And the dollar is also up against the Yen trading at 80.07 yen.

One has to wonder when looking at the dollar if the dollar is simply “less bad” than other currencies, the money has to go somewhere and the dollar is the current beneficiary.  Volatility brings opportunity, the question is, what market segment in these economic times represents the best opportunity.

To learn more about some of the best strategies and options during these economic times go to redhawkwa.com 

http://www.reuters.com/article/2012/05/15/markets-forex-idUSL5E8GFBZW20120515

http://www.thestreet.com/story/11536177/1/usd-rally-to-accelerate-on-less-dovish-fed-gbp-to-reverse-course.html


Category: Economic News, Financial Planning/Retirement Planning, Investments / Tags: , , , ,

Wien’s10 Surprises That Shape Investments Strategies for 2012

May 15, 2012 / jennifer / No comments

Every Year Wien Shares Market Strategies That Have Major Market Moving Potential

Byron Wien’s the longtime head investment strategist at Morgan Stanley has made his name  by giving his views on market strategies known as his “10 surprises”  He has been publishing them since 1986 and they are greatly anticipated because his predictions seem to carry weight due to their market moving potential.

Warren’s 10 surprises always deviate from the consensus.  They are events that most investors assign a 33% chance of happening, but Wien has determined they are more than 50% likely to occur.  In 2011 His surprises were:

Correctly Wien predicted:

  • The unemployment rate will drop below 9%
  • Gold Prices will surge above $1600/oz –they closed at $1,923.70/oz
  • crude oil reached $114

Conversely, Wien incorrectly predicted:

  • US growth would reach 5% in 2011, it grew at the much slower rate of 1.8%]
  • The S&P would rise to 1500. –it rose to 1363.61

In 2012 Wien Shared Several Interesting Predictions that Shape Investment Strategy

  • Crude oil falls to $85 a barrel.
  • S&P 500 exceeds 1,400.
  • U.S. real GDP growth exceeds 3%, unemployment rate drops below 8%.
  • Obama runs against Romney for president, Democrats win House, lose Senate.
  • Europe develops broad plan to solve debt crisis.  Greece and Italy restructure their debt.  Spain and Ireland strengthen their finances.  A bank meltdown is avoided.  European economy contracts.
  • Computer hackers attack major financial institutions.
  • Investors buy currencies of countries “that seem to be managing their economies sensibly,” such as the Scandinavian nations, Australia, Singapore, and South Korea.
  • Congress reduces U.S. debt by $1.2 trillion over 10 years, with cuts to defense, Medicare and agricultural subsidies, as well as some tax deductions.
  • Syrian President Bashar al-Assad is ousted.
  • Stock indexes in China, India, and Brazil surge 15% – 20%.

If Wien’s Surprises Prove True How Will His Predictions Affect Your Investment Portfolio? 

At this point in May, crude oil has already begun its descent and is roughly $96.50/barrel, and the S&P 500 is closing out at roughly 1,358.  Many things are still up in the air regarding Wien’s predictions including the Republican candidate for the 2012 Presidential elections and foreign financial predictions.  Elections in France and Greece are shaking things up in Europe and there are some current speculations that Spain’s banks may be close to a default and in need of the EU bailout money.  Many things still hang in the balance to determine if Wien’s predictions will hold true or not, and the remainder of 2012 will see how many things shake out regarding political and economical arenas world wide.  Volatility brings opportunity, the question is, what market segment in these economic times represents the best opportunity. It may be time to ask yourself and evaluate whether or not you are properly diversified as we enter the latter half of 2012

To learn more about some of the best strategies and options during these economic times go to redhawkwa.com 

http://www.efinancialnews.com/story/2012-01-04/byron-wien-surprises-2012

Category: Economic News, Gold And Silver, Investments / Tags: , , , , ,

JP Morgan Loses Big In Their Attempt To Hedge Against Inflation

May 15, 2012 / jennifer / No comments

JP Morgan Cutting Their Losses As 2 Million In Assets Allocated To Hedge Against Inflation Back Fire

As most every bank does, there is an investment office that will take the surplus assets and invest them in order to serve as a hedge against inflation and interest rates, however in the case of JP Morgan banks, the Chief Investment Office, made some questionable investment choices and wagered large amounts of money on credit default swaps.  This was the same method of investment that took down AIG.  Credit default swaps are risky, but they offer a much higher return than the typical government bond, or low-yield dividend.  However, its never a great decision to have all your eggs in one basket.  One JP Morgan investor out of London had such a big position in the credit default swaps that it was actually distorting the market!  In May 2012 JP Morgan announced a 2 billion dollar loss of assets due to their risky trading procedures.

inflation

Jamie Dimon, CEO Of JP Morgan Admits Their Gamble Against Inflation Was: “Flawed, Complex And Poorly Conceived”.

According to Dimon, CEO of JP Morgan, the risky trades were “flawed, complex, and poorly conceived.”  The chief Investment office, that was headed up by Ina Drew was given the sole task of investing the surplus assets to hedge against inflation and interest rates.  Every single bank has to have a


hedge in place to safe guard against those things. However, most banks concentrate their holdings into low-risk, low return assets such as Government bonds, government mortgages, corporate and municipal bonds.  Dimon admits that: “This should never have happened…I can’t justify it. Unfortunately, these mistakes were self-inflicted.”

What’s An Investor To Do To Secure a Hedge Against Inflammatory Inflation Rates?

Admittedly, JP Morgan took great risks with tax payer money when they placed all their bets on a gamble on credit default swaps.  Risky?  Yes.  But the alternative of low risk, low return investments could be just as risky in the long-run.  As inflation is projected to hit all new highs of 9-10% or higher by the years end, low return investments that offer yields well below the inflation rate can be equally as destructive to tax-payers hard earned money.

Do You Have An Effective Hedge Against Inflation?

One thing that JP Morgan’s losses show is that standard ways of investing aren’t cutting it in today’s volatile and uncertain economy.  What worked 5 years ago, is no longer producing results today.  Where does the balance exist between risk and return?  As an investor you need to evaluate whether your’re gambling and putting up too much risk, or whether you’re too conservative, which again puts your wealth at risk from inflation.  Time to get out the balances and figure out where you are on the risk return spectrum and makes sure you have an effective hedge for the economic situation of today.

To learn more about protecting your assets against inflation visit redhawkwa.com 

Category: Economic News, Investments / Tags: , , , , ,

Sell In May And Walk Away?

May 12, 2012 / Slong / No comments

Does May 2012 Call for Staying in Stocks?  Or does the stereotypical adage “Sell in May and Walk Away” Apply to You?

 

“Sell in May and Walk Away” is a strategy that many investors and traders contemplate at the end of April as we are heading into stereotypically slow months ahead from May through October.  Jeff Hirsch with the Stock Trader’s Almanac calculates that the Dow has a typical return of .3% during the slow months of May-October, and averages as high as 7.5% in the “good” months of November-April.    Similarly, Sam Stovall at S&P Capital IQ affirms that the S&P 500 is up an average of 1.2% during slow months and 6.9% during the 6 good trading months.

2011 Made Good on the Saying “Sell in May and Walk Away”

 

In 2011 investors who made the decision to sell in May of 2011 avoided the Dow losing 6.7% In October’s lows of last year, the Dow dropped even further to 19.1%.  Now some investors were wise and got in when the Dow was low last October and November, while others remained fearful of the volatile market and missed the opportunity.

European Elections Make Selling in May an Even More Complicated Issue

 

The debt crisis in Europe that caused last  years lows is still very much a current issue, especially as the elections in France and Greece showed an overall aversion for austerity measures in Europe.  A lot of speculation has ensued wondering what the German reaction will be to the opposition of austerity.  Will Germany continue to bail out countries like Greece if they continue to live well beyond their means?  Will Greece and others be forced out of the Eurozone due to financial collapse?  Many things are up in the air and speculators are having a hay day trying to determine what the economic volatility will due to the market and to investments in general.

Even with all of the turmoil, things could still go right for the stock market.  Gasoline prices may have peaked for now, Europe may continue to muddle along, and the US may continue a slow economic recovery.

Calculated Risk can be a Gold-Mine in a Volatile Market

 

Whether or not you choose to sell stock or remain in the market, the European upheaval combined with the average lows projected ahead, it is a good time to evaluate your portfolio and determine whether or not you are positioned properly for the months ahead.  Maybe it is at time to diversify.  If over 60% of your assets are in stocks, maybe the “Sell in May” strategy would appropriate for any amount that exceeds 60%.  Those assets could then be reallocated to other investment opportunities.

Volatility may seem scary, and the knee-jerk is to pull out and get into something “safer”.  However, if you play this hand right, you could use the stock market roller-coaster to your advantage and find opportunities to multiply your wealth.

Category: ETF Research, Financial Planning/Retirement Planning, Investments / Tags: , , , ,

The People Speak Out Against Austerity in Europe

May 11, 2012 / Slong / No comments

European Debt AusterityThe People Speak Out Against Austerity in Europe:  Recent Elections in France and Greece Could Change the Financial Outlook in Europe and Around the World

 

The results of the elections in France and Greece demonstrated that the European people aren’t all about austerity and are looking for change in the near future in regards to growth and economy.  Germany may be standing alone as Merkel refuses to be moved in regards to austerity measures, but the face of Europe is rapidly changing as new officials are being voted in, replacing former leadership.  Sarkozy is the 11th leader to be replaced in elections since the economic downturn of 2008.  The people are demanding change and sending a clear message that austerity is not popular approach.

Can Germany Be Expected to Continually Bail Out European Countries Who Refuse to Comply to Austerity Measures? 

 

The question that must be asked is, if the new officials oppose austerity measures, where does this leave Germany?  Is Germany to be expected to bail out the European countries that default as a result of continuing to live beyond their means?  However, if Germany were to say “forget it!” and pull out of the Euro, the Euro would plummet and Eurozone bonds would shoot sky high.  Hollande the newly elected leader of France has made it clear that he plans to try to renegotiate the austerity measures.  Merkel responded stating:  “We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. It has been negotiated and has been signed by 25 countries,”

What Happens to the World’s Financial Paradigm if Elections Shake up the Financial Security in Europe?

 

As we look at the impact of the elections on investments we saw an immediate reaction among speculators causing a drop in the Euro and the European stocks and bonds due to the instability of the political atmosphere in Europe.  The Euro came in at 1.32 on the dollar, which is the lowest it has dropped since January.  As a result of the reactionary exit out of Euro investments, the dollar based investments should go up as the money flowed from the euro into the dollar.  Commodities should take a temporary dip as dollar based investments climb as a result of the European turnover.  As most of us realize, its not that the dollar is a “good” investment per se but right now it is the “better” investment. 

Volatility in the Europe Can Be Opportunity for Investors

 

Anytime the financial security gets shaken up around the world it can present major opportunities for the investor.  Volatility isn’t necessarily the time to play it cautious and sit on your money, it’s the time to search for new opportunities and follow the money trail into investments that have proven success in the past during economic upheaval. 

Category: Economic News, Investments / Tags: , , ,
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