Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

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