The Fed is in the inflation business. Look at the value of your dollars in gold today. In 1942, a dollar was worth 1/35th of an ounce of gold. Today, a dollar is worth 1/2465th of an ounce of gold. Since gold-dollar convertibility was ended in 1971, the value of the dollar has fallen by 87%. Americans born in 1971 still have years of work ahead of them before retirement. They have worked their entire lives while watching the value of the dollars they saved eroded by bad fiscal and monetary policy. Action Line: If Americans want stable money, peg the dollar to gold. When you want … [Read more...]

The new 715-mile-long Trans Mountain Pipeline in Canada will add 590,000 barrels a day of capacity to Canadian oil producers for export. Fidelity portfolio manager Peter Belisle calls the pipeline a "game changer for Canadian oil producers." Fidelity reports: “This new pipeline gives Canada significantly greater access to world markets,” says Belisle. “And I believe the broader market is underestimating the impact here.” He adds that the Canadian energy sector has the potential to “meaningfully improve its environmental profile” via Pathways, a carbon capture and sequestration program, or … [Read more...]

Look at the outperformance of stocks that were cast away by the index funds. Turns out the indexes made mistakes, as research by Robert Arnott of Research Affiliates points out. Spencer Jakab reports in The Wall Street Journal: Rebound relationships are best avoided, but maybe not in the stock market. In a paper that starts out by stating that “no one enjoys getting dumped,” two investing quants reveal some surprising, and potentially lucrative, traits of companies that have really let themselves go. With about half of the money invested in American stocks now sitting in index funds, and … [Read more...]