Economic Insights: Gold, Stocks, Inflation & FOMC – Economic Prism Part 169

I Didn’t Believe the IRS Anyway
By Dennis Miller, Miller’s Money Forever

The emails of Lois Lerner have resurfaced, but her BlackBerry remains lost forever. The IRS deliberately destroyed that device in June 2012, following congressional staff interviews regarding their targeting of conservative groups, as confirmed by a recent sworn declaration from the Deputy Assistant Chief Counsel.

We all encounter individuals whom we instinctively distrust without a clear reason. Often, there is a significant basis for that feeling.

Consider a situation where someone feigns flattery. Their words may seem nice, but their body language and tone reveal the insincerity, leaving you to wonder, “Does this person truly think I’m gullible?”

This prompts us to raise our trust barriers. If someone is deceptive in one area, who is to say they aren’t deceitful in others?

The IRS situation exemplifies the reasons behind our skepticism. Vital emails requested by Congress were allegedly deleted, coinciding with the failure of several hard drives.Continue reading →

Markets were closed for Labor Day yesterday. However, at the Economic Prism, the contemplation continued tirelessly. Where should we focus our thoughts?

One obvious focal point is the extraordinary stock market. It keeps climbing—day after day and month after month. Remarkably, August marked the S&P 500’s best month since February.

“The S&P 500 gained 3.8 percent for the month,” reported MarketWatch, “making it the best August performance since 2000. Additionally, the S&P also experienced its largest monthly percentage gain since February, when it rose 4.3 percent.”

Something remarkable is indeed unfolding. Since hitting a low of 666 on March 6, 2009, the S&P 500 has surged over 300 percent. Simply investing in an index of the country’s 500 largest companies has allowed investors to triple their initial investments.

But how long can this trend persist? The future remains uncertain. The fact that it has lasted this long is astonishing. Unfortunately, the next five years may not be as lucrative for stock market investors as the past five have been.Continue reading →

Here, close to the summit of Tahquitz Peak, summer twilight stretches into the evening. The sunlight filters through tall pine trees and fragrant cedars, casting a warm glow over Idyllwild, a charming mountain village nestled in Southern California. We take deep breaths, savoring the moment, as time slows to the soothing cadence of Strawberry Creek flowing through the town.

School resumes next week, bringing the return of crowded classrooms and common-core curriculum. What could be more daunting? Yet, we are not quite ready to close the door on summer.

Childhood is fleeting, so why not extend the summer break for as long as possible? Plus, the outdoor classroom along Ernie Maxwell Scenic Trail offers invaluable lessons that a typical classroom cannot provide. Concepts like time, gravity, hydrology, and ecology come alive in nature.

While there are fundamental learning skills—like reading, writing, and arithmetic—that require traditional classroom instruction, the lessons learned outside are equally vital. Mastery in these areas demands committed practice and repetition.Continue reading →

Naturally, we found ourselves disappointed. We had hoped that Federal Reserve Chair Janet Yellen would share some significant insights during her address in scenic Jackson Hole, Wyoming. Specifically, we were eager for a hint about when the federal funds rate, which has been held near zero for almost six years, might be increased.

Unfortunately, we were left with more hot air than substance. Here’s a selection of notable excerpts from Yellen’s speech.

“At the FOMC’s most recent meeting, the Committee determined, based on various labor market indicators, that ‘labor market conditions improved.’ However, they believed that there was still significant underutilization of labor resources.”

“Considering this assessment and the Committee’s expectation that inflation will gradually move toward its long-term objective, they reaffirmed their view that it will likely be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to remain below the Committee’s 2 percent long-term goal, and as long as long-term inflation expectations remain stable.”Continue reading →