December 18, 2009 The Recovery is Picking Up Speed, Setting the Stage for Big Gains in the Next Year By Jon D. Markman, Contributing Writer, Money Morning Do you hear a rumbling, a honking, the smell of new carpet in the air? If so, it's all a result of the biggest surprise of the past month: the rise of U.S. vehicle sales, which was supposed to have ended with the "Cash for Clunkers" deal over the summer. And it's a very positive surprise. The U.S. auto industry may be beleaguered, beaten, bruised and battered, but it is still extremely important to this country. If it can get rolling again, shocking the skeptics, then a lot of good things will happen. When car sales rise, auto factory production rates rise, causing more car parts to be ordered, more steel and rubber and glass ordered and more advertising purchased. This leads to more people being hired in manufacturing, product planning and marketing, and all ancillary industries. A stronger auto industry will make the U.S. economy start to spin faster on its axis in ways no one is expecting. You cannot overestimate the importance of the improvement of this key industry, and yet I really don't think that investors are really onto it yet. Let me explain... URGENT RETIRE-EASY ALERT: Introducing the single best way to make sure you'll never run out of money... It's called the Endless "Paycheck Portfolio"! In just 3 simple steps, you could unleash a steady flow of work-free income...starting with up to 75 automatic "paychecks" deposited directly into your account. But you must act now, or risk missing the next scheduled "payday" on October 15, 2008. Get the full report here. Sponsored content Stagflation in 2010 May Look Like Reruns of the 1970s By Don Miller, Associate Editor, Money Morning The rare combination of surging inflation, artificially low interest rates, and a jobless recovery may be setting the stage for stagflation, an unpleasant economic malaise not seen in 40 years. Although uncommon, it's quite possible for the economy to slow and for inflation to rise. It happened in the 1970s, and it could be happening now. In this case, the definition of stagflation means a stagnant economy that grows well below its potential while both inflation and unemployment are rising. And just like the global stagflation of the 70s, it begins with a huge rise in oil prices. It then continues as central banks use excessively loose monetary policy to counteract the resulting recession, causing a runaway price spiral. Continue... Buy Sell or Hold: The SPDR Gold Trust ETF Will Rally in 2010, as Recent Dollar Strengthening Loses Steam
By Horacio R. Marquez, Contributing Editor, Money Morning Gold prices surged to a record high $1226.10 an ounce on Dec. 3, but have since retreated. Meanwhile, the U.S. dollar has been weak for many months, but shown signs of strength in the past week. So what's next for the dollar and the price of commodities like gold? In order to answer that question we must look at the factors that brought us here: loose monetary policy and government stimulus. When the global banking system seized up last year, governments met in global forums and loosely coordinated a mammoth response to the economic chaos. On the fiscal side, governments turned to counter-cyclical spending. And on the monetary side, central banks, including the U.S. Federal Reserve, dramatically reduced interest rates and actively engaged in money printing. Continue... | |
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