Infinite Money Printing: Fed Now Buying ETFs
Infinite Money Printing: Fed Now Buying ETFs
Notes From The Field By Simon Black May 12, 2020 Bahia Beach, Puerto Rico
May 12, 2020 Bahia Beach, Puerto Rico
Just when you thought they couldn’t come up with any more crazy ideas, the Federal Reserve announced last night that they will start buying Exchange Traded Funds, effective immediately.
Just to be clear, this means that the Fed is going to conjure money out of thin air, and then use that new money to buy ETFs.
But not just any ETF. The Fed is specifically targeting ETFs that own corporate bonds.
The key idea here is that the Fed is trying to bail out bankrupt companies across the Land of the Free.
Dealing With and Getting Through Financial Emergencies
Dealing With and Getting Through Financial Emergencies
Ask the Advisor – Dealing With and Getting Through Financial Emergencies
Posted on May 6, 2020 by Mark Seed
To quote Mr. Mike Tyson once again on my site:
“Everybody has a plan until they get punched in the mouth.”
-Mike Tyson, former heavyweight boxing champion.
How true.
I’ve been doing a lot of reflecting and thinking during this financial crisis – given we all got punched in the mouth to some degree. In working towards our personal goals we’ll have deal with and get through some financial emergencies from time to time.
Recently, I’ve written about the following as I ponder what insane market and economic calamity has occurred over the last couple of months:
How Might I Prepare For An Upcoming Global Recession?
The Psychology of Money
.The Psychology of Money
Jun 1, 2018 by Morgan Housel
Let me tell you the story of two investors, neither of whom knew each other, but whose paths crossed in an interesting way.
Grace Groner was orphaned at age 12. She never married. She never had kids. She never drove a car. She lived most of her life alone in a one-bedroom house and worked her whole career as a secretary. She was, by all accounts, a lovely lady. But she lived a humble and quiet life. That made the $7 million she left to charity after her death in 2010 at age 100 all the more confusing. People who knew her asked: Where did Grace get all that money?
But there was no secret. There was no inheritance. Grace took humble savings from a meager salary and enjoyed eighty years of hands-off compounding in the stock market. That was it.
Weeks after Grace died, an unrelated investing story hit the news.
Richard Fuscone, former vice chairman of Merrill Lynch’s Latin America division, declared personal bankruptcy, fighting off foreclosure on two homes, one of which was nearly 20,000 square feet and had a $66,000 a month mortgage.
Fuscone was the opposite of Grace Groner; educated at Harvard and University of Chicago, he became so successful in the investment industry that he retired in his 40s to “pursue personal and charitable interests.” But heavy borrowing and illiquid investments did him in.
“Sweep the Leg”
.“Sweep the Leg”
Notes From The Field By Simon Black May 7, 2020 Bahia Beach, Puerto Rico
It was barely a week ago that the federal government estimated it would borrow $3.7 trillion this fiscal year due to all the Covid bailouts.
Then, only a few days later, the Treasury Department updated the estimate and announced they would in fact be borrowing $4.5 trillion this fiscal year.
That’s an increase of $800 billion in less than a week!
Not to be outdone, the Federal Reserve has printed more than $2.5 trillion in less than 50 days, expanding its own balance sheet by 62% since the start of the pandemic.
Monetary Madness for Virus Hoax
.Monetary Madness for Virus Hoax
The Final Wake Up Call By Peter B Meyer
Corona Quarantine Is Our First Step Into the New World Prison
Fake money and central control will destroy the economy, but they can still boost stock prices, and keep people unnecessary Corona Virus quarantined. It’s a virus with a Facebook page, a Twitter account, and a PR firm. It has gotten more press coverage and more views, than any ailment ever visited the human race on planet Earth. If this virus were a stock, it would be overexposed, overpriced, and overhyped.
Different countries use different strategies to fight the ‘fake’ invasion. Brazil, Nicaragua and Sweden haven’t implied any quarantine rules and don’t have more, even less infected people or none at all. And, there are 34 countries on the planet that have not registered a single Covid-19 case.
What Is A Money Story And How Can It Affect Your Finances?
.What Is A Money Story And How Can It Affect Your Finances?
If I had more money, ____ wouldn’t be a problem. I work hard. I deserve that new _____.
I’ll never be able to pay off this debt. I can’t earn enough to get ahead.
I need X amount of money to have peace of mind. I’m a cheapskate.
Spending money on things for yourself is selfish.
Money can elicit a whole slew of feelings: shame, pride, guilt, stress, and more. And, more often than not, these feelings about money stem from your childhood.
Even if the adults in your life didn’t openly discuss money as you were growing up, you still picked up on how it was handled in your family.
What Worked (And Didn’t Work) During 1970s Stagflation
.What Worked (And Didn’t Work) During 1970s Stagflation
Notes From The Field By Simon Black May 5, 2020 Bahia Beach, Puerto Rico
When the New York Stock Exchange opened for trading on January 2, 1970, the Dow Jones Industrial Average was at 809 points. It was the start of a new decade, and expectations were high.
Consumer confidence was high, the economy was strong, and NASA had just put a man on the moon only a few months prior.
America was ready to move on from the tumultuous 1960s and was looking forward to a boom in the 1970s.
But that didn’t happen.
Over the next 10 years, the US economy would suffer its most painful episode since the Great Depression.
The 1970s were hit by a nasty bout of stagflation-- a period of high unemployment, high inflation, higher taxes, higher debt levels, and pitiful economic growth.
It’s one of the worst fates an economy can suffer. But it lingered in the US for years.
Good News And Bad News From Warren Buffett
.Good News And Bad News From Warren Buffett
Posted by TEBI on May 4, 2020
The world’s most famous investor Warren Buffett spoke at length at the weekend. Now aged 89, Buffett was addressing an online version of the annual meeting of his firm, Berkshire Hathaway. He talked about stocks, the economy and of course the coronavirus crisis.
Some commentators have suggested that Buffett was more downbeat than he has been in the past. He certainly had bad news as well as good. But, as Andrew Ross Sorkin commented in the New York Times, it’s more accurate to say he was neither pessimistic nor optimistic but realistic.
Particularly noticeable was how often Buffett repeated the words, “I don’t know”. That’s right, Warren Buffett, the most successful investor of the modern era, doesn’t know how this crisis will unfold. Yet there are plenty of experts in the media offering their opinions.
The Ones Most Responsive to Change
.The Ones Most Responsive to Change
By Muhammad Ali
IF YOU FAIL TO PLAN, YOU PLAN TO FAIL
Benjamin Franklin supposedly once said, “If you fail to plan, you are planning to fail.” Sir Winston Churchill is credited with another, oft repeated, saying: “Those who fail to learn from the past are doomed to repeat it.” And along that same vein there’s the phrase we hear often in the workplace, “learn from your mistakes.”
The questions that I have for you today are more about the odds. Alright let me elaborate on this. If you fail to plan, does that mean you will definitely fail? What are the odds of this happening?
And the other side, if you plan, does that mean you will not fail? What are the odds of this happening?
How Inflation Affects Growth Versus Value
.How Inflation Affects Growth Versus Value
By Ben Carlson Posted by TEBI on May 3, 2020
It seems bizarre to worry about inflation during the sharpest, more severe economic contraction of our lifetime.
But the sheer amount of government spending and monetary policy being instituted by the Federal Reserve means it’s something that’s on people’s mind as a potential risk in the not-too-distant future. The “worry” is once the virus is contained the economy could potentially overheat through a combination of pent up demand and government spending.
My initial read on this is if we do get inflation from all of this spending that’s a good thing — it means we beat the virus and things are back to normal (if there is such a thing).
The Fed would have a much easier time fighting inflation than the current predicament.
The Relationship Between Time, Money, And Happiness
.The Relationship Between Time, Money, And Happiness
Written by J.D. ROTH| Published: 15 May 2018 – Updated: 23 February 2020
The older I get, the more I'm convinced that time is money (and money is time). We're commonly taught that money is a “store of value”. But what does “store of value” actually mean? It's a repository of past effort that can be applied to future purchases. Really, money is a store of time. (Well, a store of productive time, anyhow.)
Now, having made this argument, I'll admit that time and money aren't exactly the same thing. Money is a store of time, sure, but the two concepts have some differences too.
For instance, time is linear. After one minute or one day has passed, it's irretrievable. You cannot reclaim it. If you waste an hour, it's gone forever. If you waste (or lose) a dollar, however, it's always possible to earn another dollar. Time marches forward but money has no “direction”.