Are we back to blowing asset bubbles already?

Last week saw Alan Greenspan interviewed as part of the Financial Crisis Inquiry Commission. The Times reported that during this interview “Mr Greenspan denied his policies encouraged the type of risky lending that spurred the financial crisis. The long-time Fed Chairman - whose reputation has been deeply undermined by the crisis - denied low interest rates and loose regulation had encouraged lenders and borrowers to take ever greater risks."

Where is the economic recovery?

I keep hearing in the news about how fragile the economic recovery is that we are currently seeing. I don’t know about you but I don’t see any economic recovery. What I am currently seeing is nothing more than a mirage that has been caused by massive fiscal stimulus by governments borrowing money (or as I like to think of it, stealing money from the future generations) that they didn’t have or worse by printing money (quantitative easing etc). I am yet to see any evidence that would make me think we are seeing a genuine recovery.

An appropriate quote for how the economy should be managed

MoneyWeek every week publishes a series of quotes. In this week’s issue one of these particularly leapt out at me. In my opinion it really sums up how the UK government (or for that manner any government) should manage the economy and highlights how far away from this philosophy we are today.

The Bank of England shows their hand – UK Bank Rate held at 0.5%

The Bank of England this week held interest rates at 0.5% for the fourteenth month in a row. I’ve been speculating over the past few months at what the Bank of England are up to but I’m now convinced I know the strategy of the Bank of England and unfortunately it’s not their officially published Monetary Policy Framework of keeping to the Government’s inflation target of 2%. It’s clear that’s not the strategy when the Retail Prices Index (RPI) is running at 3.7% (annualised 3 month RPI is 4.8%) and the government set Consumer Price Index (CPI) is running at 3.0%.

Investing mistakes I’ve made – contango and exchange traded commodities (ETC’s)

Since I took full responsibility for my retirement investing strategy I’ve made some mistakes that have cost me money. I’m also sure that going forward I’ll probably make some more. What however is key for me is that if I make a mistake I never make that same mistake again. Over the coming months, if I get time, I will try and share some of these mistakes with you so that you can do your own research which hopefully might even save you some money. The first of these was not understanding how exchange traded commodities (ETC’s) work plus also not understanding the concept of contango that is associated with many ETC’s.