According to Bloomberg, Jim Rogers is in the process of getting all his assets out of the dollar.
“I’m in the process of, I hope in the next few months, getting all of my assets out of the dollar. I’m that pessimistic about what’s happening in the U.S.” Rogers said.
“The yuan is the best currency to buy right now, I don’t see how one can really lose on the renminbi in the next decade or so. It’s gotta go. It’s gotta triple. It’s gotta quadruple.”
In Part I, I discussed the various options available to stash my savings to get the maximum rate of return, while preserving liquidity.
I decided to split my savings into 3. The first half while be kept with Bank of America in their flexible 5 month CD currently paying 5.1%. After 7 days, I can withdraw the money without penalty. Not a bad option, since it balances liquidity with return.
However, one of my main concerns is the devaluing of the US Dollar. Its currently lower than its ever been in history. No one knows where the bottom is, and because Ben Bernanke has hinted that he’s going to continue to lower the interest rates, I feel the bottom is still far away.
Everyone should have an emergency fund set up with atleast 6 months of living expenses. As I explained the previous post, the most efficient way is to create a CD Ladder.
However, with rates being as low as they are, there may not be any difference in the interest rates whether you keep your money in a CD or a regular savings or money market account.
I keep all my emergency funds in a regular savings at INGDirect. But after the rate cut, I’m only getting an annualized yield of 4.3%. I know there are better options so I looked around to see whats available.
Even though the markets were down today, my stock portfolio was up 3%. This was mainly because I’m heavily weighted in Oil and Gas Canroys and they were all buoyed today on news of a major takeover. Abu Dhabi’s state-owned utility company, National Energy agreed to buy out PrimeWest Energy(PWI) in a deal worth $5 Billion. PWI was up 30% on the news and all other canroys were up around 5% as well.
On Tuesday, Ben Bernanke cut the Federal Funds rate by 50 basis points (or 0.5%) to 4.75%. While most people may not have expected a cut of this magnitude, they definitely were expecting some sort of rate cut. There’s been too much bad news regarding the economy to think otherwise.
Comedian George Carlin talks about consumerism, education, politics, slave/wage labour, wall-street, critical thinking and the american dream, all in under 5 minutes. His assessment of these topics is pretty accurate too.
[Profanity Alert: The language in this video is NOT PG-13].
During the July 4th weekend I went to Las Vegas along with some cousins. Rather than book 3 rooms in a hotel at over $200/night each, we decided to stay in a vacation rental. It worked out to be less than half the price and it was a lot more fun.
NPR had an interesting section on increasing economic anxiety in the middle class. Even though the economy is thriving, 7 out of 10 Americans report living paycheck to paycheck, meaning there never seems to be enough left over for savings.
I definitely don’t agree that the economy is thriving. I think the economy is actually in recession but it won’t be announced for another 6 months, meaning it’ll be March before the Fed actually admits to it. (Thats one reason why I think Ben Bernanke will reduce the Fed Funds rate 50 basis points this week, but I digress).
The following hilarious spoof is courtesy of David Fuller’s Fullermoney newsletter (with thanks to Investment Postcards too):
Dear investor, we’d like to take this opportunity to update you on the recent performance of our hedge fund, Short-Term Capital Mismanagement LLP.
As you know, market selection for the entire fund is guided by a proprietary investing tool we like to call “a dartboard”. Once the asset classes are decided, individual security selections are generated by digitizing our unique hexagonal cuboid models. Unfortunately, it transpires that our hexagonal cuboids are not as unique as we thought. Hundreds of other hedge funds possess identical dice. The technical term for this is a “crowded trade”. You may also see it referred to as “climbing on a bandwagon already headed for the wall”.
I dislike paying taxes as much as the next guy. But instead of complaining I’ve put my money in investments that give me tax breaks like real estate and oil drilling programs.
However, some people hate paying so much that they’re willing to live below the poverty level just to avoid “qualifying” for taxes. Here’s a war protester that refuses to pay for the Iraq war and has decided to live on less than $12,000 a year.
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