Inflation: What it Means For Different Investments

While everyone in the US are worrying about the unemployment rate, whether they will have a job next week, and if their 401k's will bounce back, there is another worry behind the scenes which will not really be a problem until the economic recovery takes place. That is Inflation! Why is inflation such a big worry in the long run? Because the US and other nations have pumped trillions of dollars into the economy. When the supply of money increases, there is more of it to bid up prices of every day items. This is inflation. In the 70's and 80's we saw inflation at a rate over 10% for several years. The problem with that is the money people are holding continues to be worth less and less in relation to what it can buy. So, with the possibility of some major inflation in the future, you should know how it will effect various investments:

Inflation's Effects on Stocks
The stock market doesn't have all that much correlation to the inflation rate. If inflation goes up, companies can just raise their prices usually and make things even out. Inflation can however cause mroe volatility in the stock markets

Inflation's Effects on Money In the Bank
You don't want to have lots of money in a savings account paying low inetrest when inflation strikes. As the inflation rate rises, that money is actually losing value if your interest rate you are getting from the bank isn't at least as high as the inflation rate. The good thing though with cash is that you can usually find a bank paying a rate that is over the current inflation rate. The one tip here is to not lock any money in a CD for the long term during periods of inflation unless you feel inflation rates have peaked.

Inflation's Effects on Gold and Oil
As inflation rises commodities, especially gold and oil should rise as well. If we have high rates of inflation then Gold and Oil are where you should have at least a portion of your portfolio.

Inflations Effects on Bonds
Inflation is terrible for bonds if you already own them. As internet rates and inflation rise, the older bonds values decline since they have less a yield. On the other hand, if you can get some long term bonds while inflation is high, they will likely go uop in value when it subsides.

VineFire Scam? For Sure

I don't usually weigh in on these types of programs, but since Vinefire is so popular so fast, I thought I'd give my view on the program. On the cover Vinefire seems like just another Digg.com type site. You post links, and other rate them. That is until you see what this site, which likely has less then a few hundred dollars a day in revenue, offers:

VineFire's Payout Offers

• $50.00 Just to sign up
• $0.45 for each Link your click
• $0.50 for each Sponsored link clicked (Sponsored links are Affiliate links for the owner)
• $0.12 cents to post a link

Now, You woudl think that at least the person posting the link would have to pay, to provide revenue to the company so they can pay the 45 cents for each click members make on your link, but no, they pay you for advertising too!

So, how is VineFire a scam?

1. They waste your time
2. They charge peopel for featured links
3. They charge people for accoutn upgrades. $5 to raise your daily earnign limit from $50 to $100

All this and they cliam you wil have to wait until January of 2010 before getting your payments. Now, looking at the Alexa rank, lets consider that they have close to 10,000 members. Lets say they all make half of the limit of $50 per day. Thats $25 X 10,000 which equals $250,000 per day they need to pay out eventually. Since they are probably brining in maybe $1000 a day if they are lucky, this is a surefire scam.

A Sign of a Market Recovery - Acquisitions

A few weeks ago, before the Dow decided to run up close to 20% making it the biggest short term rally since the Great Depression, I stated that one of the signs of a recovery is when larger corporations begin buying up the smaller ones.

Well, it looks like the buying has begun. Google is supposedly in talks with the Social networking site Twitter.com to either buy, or make a search deal with them. If Google was to acquire Twitter it would give them an instant inroad into the live search areas. Twitter is used for people to write a short 140 character or less message describing what is on their mind, or what they are doing. Because so many people use them, it is very easy to search Twitter for a word, and see just how that word relates to current events in real time. Google could really take advantage of that kind of information.

There are also many other deals in the works. IBM was, and maybe still is trying to acquire Sun Microsystems, and the pharmaceutical industry is starting to gain buzz about all sorts of possible acquisitions and mergers. This is a sure sign that larger corporations believe that the smaller ones are currently undervalued, likely because the whole stock market as a whole is undervalued. Look for the coming months to even heat up more with deals being made in just about every industry there is. Earnings season is here, and next week Google as well as Apple and many other tech firms will be announcing earnings. It should be interesting to see what they are and what it may say about the economy in general.

Crazy Facts about Forex Plus Forex Megadroid

Just wanted to go over a few things about Forex trading since it is the weekend and there isn't much economic news out. I'm just going to go over some fact that may surprise you about Forex:

1. The Forex market is the largest market on the planet by far. On an every day there are over $3.5 trillion in transactions. Yes that is $3,500,000,000,000!
2. Banks are estimated to have 20-30% of all their cash trading in the forex markets. It is estimated that 40% of their profits come from trading forex.
3. The Forex Market has grown over 700% in the last 20 years.
4. Some experts think that some banks will switch over entirely to forex trading since it has been shown to be more lucrative then that of lending. I doubt this will ever happen though.
5. An individual can trade $100,000 in currency with only $1000 in cash. This is called 100:1 leverage which is allowed because of the rather tight movement of currencies.
6. Unlike the stock market the forex markets are opened 24 hours a day, 7 days a week.
7. There are 2 markets for demand, the traders, and the actual buyers of the currencies such as travelers and business entities.
   

Now, There are tons of strategies and systems people create, prove to work and then sell. Systems like Fap Turbo, Forex MegaDroid, and others have all been shown to make profits to some extent. Having said this, if you are a good trader you can come up with your own strategy that works best for you. So next time you see one of those ads on TV about Forex trading, you have some incite about what it is.

Amazing Week on Wallstreet - Whats Next?

The Dow has been flirting and even surpassed the 8000 mark this week. Unemployment numbers were not great, but there were a lot of signs that economic conditions may be improving. At this pace the recession should probably be over by the 4th quarter, and unemployment should go down by the start of 2010. So whats on tap for Next week? Below is a quick list of the dates and times of key economic data. It really isn't that big a week in terms of data, however the following week should be packed with interesting pieces of information.

- Apr 7 2:00 PM Consumer Credit
- Apr 8 10:00 AM Wholesale Inventories
- Apr 8 10:30 AM Crude Inventories
- Apr 9 8:30 AM Export Prices ex-ag.
- Apr 9 8:30 AM Import Prices ex-oil
- Apr 9 8:30 AM Initial Claims 04/04
- Apr 9 8:30 AM Trade Balance Feb

Wholesale Inventory number should be interesting. In February it fell at a 0.7% rate, and experts expect a decrease of about 0.6% when the March number are released on Wednesday. The Initial claims of unemployment insurance should also give us an idea where Unemployment numbers are headed. A surprise to the downside, meaning more Job Opportunities for America, could keep the market rally alive and well.

Terrible Job Numbers Continue but Stocks Up

Yesterday and today we were presenting with more terrible unemployment numbers. Worse then expected by most experts in fact. US Initial Jobless Claims Rose by 12000 to 669000 last month, while people continue to get laid off while companies cut back their expenses on lessening demand for their products and services.

Why Is the Stock Market Up Then?
Despite these terrible numbers, the stock market has been up close to 5% in the last 2 days alone. Kind of ironic huh? The reason the jobs data is not affecting the stock market in a negative sense is because traders and investors have already likely priced in the expect loss of jobs. They know that the unemployment rate is a lagging indicator in the economy. This means that the Stock market, as well as economic demand will rise before the unemployment rate begins to lower and new job opportunities present themselves.

Some Good News:
The market is also being propelled by some rather optimistic news. Pending home sales were up, and the manufacturing index was not as bad as most experts thought it would be. This along with the expectations that mark-to-market accounting rules were going to be changed today has propelled especially the Banking and financial stocks.

Overall, I have a good feeling about the market. Stocks should probably settle in the 7,900-8,400 range for a while, creating a new base for a run up to higher territory in May and June.

Google to Buy Apple - Goople

This morning Google announced in a statement that they will acquire Apple, formerly Apple Computer, in a cash and stock purchase. The deal will Give Google an instant Hardware and software business to go along with their search and cloud computer software business. As long as regulators allow the deal, Google, or Goople as it will now be called, will have a market cap of over $200 Billion.

What does this mean for Company?
The two companies mash up well. Google now has its own Cell Phone, the iPhone which is by far the leader in the smartphone industry. Along with this it will be inetresting to see what gogole does as for a smartphone operating system. They of course have their own in Android, but Apple also has their own operating system. Will they merge the two? Google now has an instant operating system to take on Microsoft. Will Goople now expand Apple OS to other computers besides the Mac? Will Goople somehow integrate iTunes into their internet search results? We will all fidn out soon I assume.

What does this Mean for Competition?
Let's just say that Microsoft has no chance. Google will lead in Internet search, smart phone sales, and have their very own computer lineup and Operating system. Windows better watch out.

What does this Mean for Consumers?
Consumers should benefit greatly from this. Innovation will be rampant. The 2 brightest tech companies are now one. I wouldn't be surprised if Goople were to subside all Iphone sales, making them extremely cheap by place ads within the phone. You shoudl see vast improvement in Googles search, when searchign for music, and a possibly faster product innovations for Apples old lineup of products.