United States latest Debt Crisis

14-Jul-2011 | Reggie | Currency FX USA

The United States has run in to a slight problem.  There is an limit on how high their debt can go and unfortunately they have hit that limit.  Since the government is still running a deficit, it is absolutely necessary that this debt ceiling be raised in order for the United States government to continue to function and not default on it’s financial obligations.

 

In order to raise the debt ceiling, its up to President Obama to get the go ahead from Congress.  Congress isn’t making it easy and is wanting some serious spending concessions to be made.  In the midst of this, the United State’s AAA credit rating is being questioned by various rating agencies such as Moody’s and seriously raising investor concerns.  Since some of these concerns have come to light, the US dollar has dropped significantly in value.

 

The deadline is set for August 2nd.  It seems quite unlikely that some sort of deal won’t be reached by then, but investors are on their toes none the less.  The US dollar is and has been the go-to currency for much of the world so the outcome will have very serious consequences.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Oil Touches 2 year high!

28-Apr-2011 | kate | Asia Europe FX Oil & Gas US Markets

Oil climbed to a 31 month high today while the US dollar touched the lowest level against several major currencies, while gasoline futures jumped on news that supply levels are at the lowest levels since 2009.

 

June Crude delivery reached112.86 a barrel, oil’s highest trading price since September of 2008.

 

According to some analyst, this week’s movement in oil will be further pushed up next week when European traders return from two weeks that contained nationals holidays, resulting in relatively thin markets. Some Asian markets and Germany will also be closed on May 2nd for holiday purposes. For example, Oil volume on the Nymex totaled just over 609 thousand contracts, which was 20% below the three month average.

 

Putting it on a local perspective, Edmonton’s Global News reported that gasoline prices climbed form 1.15 a litre this morning to over a 1.20 a litre by the noon report.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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$1.05 and Climbing

21-Apr-2011 | kate | Bonds Canadian Investing Commodities Economics FX The Wise Investor US Markets USA

The US dollar is facing strong selling pressure among loss of consumer confidence sending investor fleeing into stocks, commodities and emerging markets.

The U.S. economy has been taking some heating this week after a series of events include the rating agency Standard & Poor indicated that they were in discussions regarding the potential downgrade of U.S. government debt from stable to negative. Such an event hasn’t happened to the U.S. government 1941.

As the world is waiting for the outcome of a vote in congress, which is deciding whether or not to increase the debt ceiling, currently set at 14.3 trillion dollars. The decision should be met no later than May 16th, 2011. After that date, the government will have a two month buffer before the U.S. Treasury will be unable to issue any more funds, if the ceiling change is not approved.

Meanwhile, Canadian dollar has been benefiting from high commodity prices which have driven the loonie to its high level since November 2007.  WTB Oil is trading around 111-112 dollars per barrel

 

 

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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A Nickel for your thoughts?

15-Dec-2010 | kate | Banks Canadian Investing Currency Economics Economy FX Government The Wise Investor

The Canadian senate has been conducting a study since 2008 on the utility of the penny in the Canadian economy, which was presented last night. The penny is being targeted for removal after citing it’s significant as legal tender has diminished over the last sixty years.

For example, the cost to manufacture one penny actually cost around 1.5 cents and balloons to 4 cents when the government factors in shipping and handling to get it from production to costumer hands. So for the government to keep the supply of 30 billion Canadian pennies in circulation, it cost tax payers an estimated 130 million dollars, PER YEAR!

Seigniorage, is referred to difference between the sum of the cost and the face value of the coin and is getting larger with each passing year courtesy to inflation and higher labour and metal prices, while the value of the penny is stuck at 1 cent. The results are a piece of legal tender that cost more than it is worth. Adjusted for inflation, using the earliest records on the penny available, one penny in 1870 (it was introduced in 1858) was worth about 27 cents in 2005.

Another interesting argument against the penny is that only 37% of Canadians (yes I am one of them) actually use the penny. The rest of Canadians place their in saving dishes, fountains or miss place them because they do not find them valuable. Over half of one survey respondents reported that they view the penny as an inconvenience and view it as useless.

Another supporter to abolish the penny heard on CBC this morning, calculated the costs of the penny, time spent waiting for change to be counted and employee productivity levels from handling the penny at several million dollars a year.

Well all these people out there hate the penny, I am one who likes it and was interested by the extra money that it would cost me over my life time if the penny was abolished on cash transactions. Luckily for me, someone else had already wondered the same question and completed some analysis for me to share. Here are the Desjardin Groups findings

Desjardin findings suggest that 816 million pennies are produced annually, just to replace the amount of penny that consumers take out of circulation, some of which are literally thrown in the garbage. If we removed the penny from circulation, like some countries have already done, we would be saving millions of dollars in taxes per year.

Since all decimal points will exist on debit and credit card payments, a method called Swedish rounding will apply to cash transactions. Swedish round is symmetrical meaning that neither sellers nor buyers would profit over time from rounding. Over time, the method would balance out the gains and losses from rounding to the nearest decimal point.

Swedish rounding

A Price of Is Rounded Too
9.98

$10.00
9.99
10.00
10.01
10.02
10.03

$10.05
10.04
10.05
10.06
10.07

If the senate does determine the penny isn’t worth keeping, there will be 12 months notice until the penny is not longer accepted as legal tender.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Commodities Surge while Stocks Flounder

09-Nov-2010 | Reggie | Commodities FX Market Outlook

In breaking from the trend of the previous few weeks, commodities continued on their upwards trend while the stocks took a break in the strong rally that has been occurring for the past few weeks.  Soybeans, Oil, Gas, Copper, Silver, and Gold were all up as concerns over weakness in the currencies of the world continue.  In very related news the Canadian dollar managed once again to rally above that parity marker.

Surprisingly the strength across the commodities did not carry through into the stocks themselves.  Many of the Canadian commodity producers saw fairly substantial drop.

Quadra FNX was down 4.56% to $15.91, Ithaca Energy dropped 5.76% to $2.29, Aura Minerals dropped 8.84% to $4.33, and Sino-Forest dropped 5.14% to $21.24.  Analysts are attributing the drop in the stocks to rising concerns over the Federal Reserve’s plan to stimulate growth.  This is a very sharp reversal from weeks prior where the markets were elated by the the announcement and viewing the plan as a sort of back stop to the market.  The argument was that the huge amounts of money flowing into the system would be directed towards the safety of bonds and treasuries, thereby driving up their prices and leaving stocks as the only option open to investors looking for any sort of return.  Those against the plan now see the benefit of being in US dollars and treasuries.  Whether the fed will back off their proposed plan has yet to be seen but seems unlikely at this point.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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