Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Fiscal Y2Cliff Sham Held Investors Hostage 2012

Stock-Markets / Financial Markets 2012 Jan 04, 2013 - 10:57 AM GMT

By: InvestmentContrarian

Stock-Markets

John Paul Whitefoot writes: On January 1, 2000, the world breathed a collective sigh of relief that the over-hyped Y2K fiasco dissipated without even a whimper after years of ballyhoo.

Some things never change.

As expected, at the last moment, Democrats and Republicans came together in joyous union and resolved the so-called fiscal cliff. Nervous investors around the world joined together with rapturous optimism and jumped back into the markets.


On January 1, 2013, the House approved the new deal by a 257 to 167 margin. The bill increases the income tax rate from 35.0% to 39.6% for individuals earning more than $400,000 a year and couples taking home more than $450,000 combined. Everyone else will continue to see income tax cuts.

None of this should be a surprise to anyone, since Obama, in his bid for re-election, said he would increase the tax rates on the wealthy, though his definition of “wealthy” has changed, climbing from earnings of $200,000 for individuals and $250,000 for families.

While both sides are unhappy about what they didn’t get, they should be unhappy about how they treated the global population.

For almost a year, inept politicians in Washington sat around, worrying about their chances for re-election; ignoring the impact the unresolved fiscal cliff was having on the international investing community and global economy.

But why put your hard-earned time and effort into resolving the fiscal cliff when you might not be re-elected? Maybe because it’s part of your job? You’d be forgiven for thinking it was otherwise. After all, during the eternal run up to the Presidential elections, the fiscal cliff wasn’t even a major talking point. President Obama said he wanted to raise taxes on the rich, but other than that…it received scant attention.

That doesn’t mean the campaign trail silence wasn’t heard around the world. If a quasi-new age Mayan doomsday scenario can send rational people into a tizzy, imagine what a real-life economic doomsday scenario could do to unpredictable investors and world leaders. Sadly, we didn’t have to imagine.

It’s tragic that politicians in Washington didn’t care what kind of impact the unresolved fiscal cliff had on the international economy. Throughout 2012, the global economy continued to struggle. Parts of Europe are in recession, so too is Japan; the U.S anticipates anemic growth in 2013, and China is expecting expansion to be tepid.

Granted, responsibly resolving the fiscal cliff in a reasonable timeframe would not repair the global economy. But knowing the world’s largest economy was doing something constructive would have sent a positive message.

Better late than never I suppose. Even with the fiscal cliff averted, nothing has really changed in the U.S. The national debt is still rising, and as a result, the buying power of the U.S. dollar continues to decline.

What areas of the stock markets hold promise for investors? Precious metals like gold, silver, and platinum should continue to be an attractive avenue for those looking for hard assets.

If you don’t want to hedge against the U.S. dollar with gold, silver, or other precious metals, you could consider inverse exchange-traded funds (ETFs) that short the U.S. dollar. Because the U.S. dollar is weakening against many foreign currencies, other stronger nations will see their currencies increase in value.

The PowerShares DB US Dollar Index Bearish (NYSEArca/UDN) tracks the performance of the Deutsche Bank Short US Dollar Index and gives investors a cost-effective way to capitalize on the fall of the U.S. dollar.

The index that the PowerShares fund follows is based on six currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. It currently trades near $27.20 and has an average three-month volume of more than 62,000 units. The fund’s net asset value is approximately $97.5 million.

While the markets have responded positively to the fiscal cliff deal, the question is: how long will rally last? When the fiscal cliff steps out of the spotlight, we’ll see that the real underlying issues affecting the stock market are the global economy and its impact on corporate earnings.

Source: http://www.investmentcontrarians.com/debt-crisis/...

By John Whitefoot, BA
www.investmentcontrarians.com

Investment Contrarians is our daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”

John Whitefoot, BA, is an Editor at Lombardi Financial specializing in penny stocks. Prior to joining Lombardi, John worked for eight years as the Senior Financial Editor of a leading online financial newsletter. Through his career, John has profiled over 1,000 penny stocks researching and covering numerous sectors including healthcare, media, manufacturing, IT, education, hospitality, natural resources, and retail. He's primarily a fundamental analyst who focuses on "off radar" penny stock situations with big upside potential for the individual investor.
Sign Up for our A Chilling Indicator of What’s Ahead for the Economy..

Copyright © 2012 Investment Contrarians - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Investment Contrarians Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules