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August 2015

For Clients & Friends

Dear clients and friends, The long overdue market correction has finally arrived. And due to automated trading, volatility is extreme. Furthermore, it is likely that the volatility will last for a while. Here are the economic issues the market is fretting over: Weakness in China – their currency devaluation is a clear sign that Chinese officials are worried about economic growth. That growth, by the way, is likely substantially lower …Read More

The U.S. is Losing the Currency War

Over the past year, the U.S. dollar has appreciated more than 18%, and in the week of August 10th, China surprised the markets by allowing its currency to depreciate nearly 3% against the dollar, thoroughly roiling the equity markets. The Peoples Bank of China (PBOC) had typically pegged the value of the Chinese currency (RMB) to the dollar. In August, 2014, it took 6.15 RMB to purchase $1; and on …Read More

With GDP at 2.3 percent and gold prices low, should you buy?

The data on the economy has been mixed of late, and the price of gold has tanked again. In what follows, I try to analyze these trends. The U.S. Economy U.S. GDP growth of 2.3 percent in the second quarter appears, at first glance, disappointing. But given the very significant headwinds in the manufacturing sector (recession in the oil and gas industries), the strong dollar, and falling worldwide demand which …Read More