World Reserves
All the markets moved sideways, so there’s really nothing to report there.
Some folks are worried about stocks being in a BEAR market right now, and the possibility of a BEAR market rally – that’s when stocks go up for a short time before continuing their downward trend. For those of you who are traders, i.e. thinking about getting in and out in less than 6 months (I bet you thought I was going to say “daily”) – then this could absolutely happen. I would recommend that you look at a long term graph of whatever market you’re in. That way, you will see the volatility in your market, and how long it takes to make significant moves.
In the news today…..
Credit card companies are reducing the credit limit on some of their cards. They are trying to reduce their risk to people defaulting. However, this has one very bad side effect, and I want all EconomyGuy readers to be aware of this side effect, especially if you got an announcement from your credit card company. When your FICO score is calculated, the amount of your credit card limit is used in the calculation. If you normally carry a balance on your credit card from month to month, you will be hit with a LOWER FICO score. If you pay off your cards, it shouldn’t make a big difference in your score.
A recently passed Congressional Farm Bill had a provision in it that acts as a great example of how stupid Congress really is, and how it works to YOUR detriment. This Farm Bill included a provision to settle a discrimination lawsuit between the US Government and black farmers. A small amount was included in the wording ($100M) so that voting Congress(stupid)people wouldn’t worry about this provision. However, the $100M was a place holder, and the actual amount of settlement is likely to be closer to $3B. So, what’s wrong with that you ask???? Well Congress didn’t say how this was going to get paid. It’s just another example of spending your (your children’s and your grandchildren’s) future income without even THINKING about it. Where’s someone who will take responsibility???
Tonight’s Dinner Conversation….
Let’s talk about reserve currencies. Do you know what they are? Well, you probably know the US Dollar is the world’s reserve currency. But, what does this mean in reality? Well, if you look at ALL the reserves held by ALL the central banks in the world, then you see that:
- the US Dollar is 63% of the world’s reserves
- the EURO is 27% of the world’s reserves
- the Yen is 3% of the world’s reserves
- and the also ran’s
The US Dollar at 63% is at its lowest percentage EVER, and the trend is downward. It was 73% about 10 years ago. The winner in this beauty contest is the EURO.
So, the question for you tonight is “What happens if the US Dollar loses its place as the world’s reserve currency?”
PS – Here’s a hint. It’s not a pretty picture for anyone living in the USA.
Here are today’s numbers:
Dow Jones 30 Industrial - 11,350 (up 4 points)
10 Year Treasury Bond - 3.98% (down 0.01%)
Euro - $1.5745
Gold - $928 (down $3)
Oil - $140.00 (down $0.21)
Gasoline - $3.50 (down $0.02)
