Investing in Gold (Part 1) by Jason Galanis

By Jason Galanis

Recently, the investment trend towards commodity diversification has more and more people thinking about investing in gold. However, I, Jason Galanis, believe gold can be an extremely volatile, yet effective tool in one’s investment portfolio.

Most investors select gold as a way of diversifying their risks, especially if market conditions make it so risks are more common. Gold’s even been used to prevent losses or incur profits in market conditions like the aforementioned.

Though, it doesn’t stop many new investors from choosing gold as an investment vehicle. Most of them, however, should understand one thing about gold investing: there’s always a catch.

According to industry experts, there are reasons behind why gold investment has a catch:

  • Gold prices are more volatile than what most beginners expect.
  • Gold prices are often affected by day trading, as performed by central banks and speculators.

Gold prices may rise, but those particular reasons point to gold being a lot more volatile than most people think.

Let’s look at an example. Gold prices are known to get as high as thousands of dollars. At the same time, gold prices can drop down to just hundreds of dollars in just a few months. If you were an investor who had a lot of stake in gold, losing hundreds at a time isn’t really something you want out of an investment like that.

Jason Galanis

Jason Galanis: “Gold can be a critical part of one’s investment portfolio.”

Gold investments are said to ‘shine’ when used as a hedge against losses for assets like real estate and bonds. That’s something you should think about if you’re planning to invest in gold. Most beginner investors, however, probably want to invest in gold for getting a return on their investment. And, that’s fine, too.

Just don’t forget to talk to a financial adviser for advice on what movement to make.

Russia Looks to Renminbi as Dollar Hedge by Jason Galanis

By Jason Galanis

America’s financial sanctions on Russia are driving the country away from the West and into the waiting arms of China. I, Jason Galanis, believe we are playing a dangerous game of geopolitical tug-of-war.

The sanctions began in response to Russia’s annexation of Crimea in April and its ongoing support for separatist rebels in eastern Ukraine. Although the US sanctions are targeted to a narrow group of companies in the oil and gas sector (the state-owned Rosneft and the independent Novatek) and those linked personally to Vladimir Putin, the ripple effects are now being felt throughout the Russian economy. Russian stocks have tumbled and the ruble is now the worst performer against the dollar of all the major currencies. Russian companies are gearing up to switch their contracts to the renminbi and other Asian currencies to hedge against getting pushed out of the dollar market by US sanctions and a falling exchange rate.

Jason Galanis

Jason Galanis: “The US and Russia are playing a dangerous game of geopolitical tug-of-war.”

Russia is trying to ease Western investors’ fears and looking to the east for growth in foreign investment. Russia’s sovereign wealth fund, the Russian Direct Investment Fund, recently launched a Chinese version of its website, part of an effort to diversify Russia’s sources of foreign direct investment. Russian billionaires and corporate CEOs are looking into Chinese accounts and investments settled in renminbi, according to the head of Deutsche Bank in Russia. Russia is also working on a national payments system to reduce its reliance on American companies like Visa and Mastercard, which Moscow recently threatened with billions in fines if they refused to process payments for US-sanctioned companies and individuals. The tit-for-tat exchange of sanctions and threats between America and Russia has caused some leading Russian politicians to call for a complete “de-dollarization” of the Russian economy, and many Russian companies are re-negotiating their contracts to include provisions allowing payments in China’s renminbi. In the long-term, the fracas will no doubt add fuel to Russian calls for a basket currency—which began at the first BRICS summit in 2009—to replace the dollar as the world’s dominant medium of exchange.

Fed Rate Increase Imminent? By Jason Galanis

The Federal Reserve is signaling a potential rate increase within the next few months with Fed Chairwoman Janet Yellen pulling out all the metrics to convince the markets and the country that it’s getting time to increase the cost of money. I, Jason Galanis, am curious to see what effect this has on the market.

Yellen is pointing to improvement in the jobs market (US unemployment fell 1.4% over the last year, from 7.5 to 6.1%), which came “more quickly than expected,” but is also warning of asset bubbles in biotech and social media stocks. Yellen seems to be suffering from a case of analytic myopia: instead of focusing on stock prices, unemployment and inflation at home, she should be looking at the enormous dollar bubble in emerging markets.

Jason Galanis

Jason Galanis: “Is a rate hike imminent?”

The Fed is using stock prices to gauge whether to increase rates because traditional inflation indicators are giving nothing but “noise,” i.e., numbers the Fed doesn’t like to think about. The Fed is a business like any other. It’s job is to ensure high levels of employment and stable inflation rates.

When Yellen called the 1.8% CPI increase “noise,” she was doing what any good chairperson would have done: downplay the bad numbers and focus on something else, like favorable price-equity ratios. Indicators the CPI and even Yellen’s personal favorite, the NAIRU (“non-accelerating inflation rate of unemployment,” which strikes a balance between full employment and price stability), are no longer of any real use to determine Fed policy. Even if they weren’t subject to all kinds of fudging, they simply ignore a huge part of the monetary picture.

According to the International Monetary Fund, the Fed’s low rates have enabled about $500 billion in loans to emerging markets, and even a small rate increase could trigger disastrous capital flight from India, Indonesia, South Africa, Brazil and Turkey. Easy money is a potent drug, and over the last five years the Fed has gotten a good part of the developing world thoroughly addicted.



Record Losses for BofA, Share Price Holds Steady by Jason Galanis

Bank of America posted record losses for the second quarter of 2014 amid ongoing legal battles with regulators and falling mortgage revenues. I, Jason Galanis, hope this does not cause the who banking sector to slide.

Profits were down 43% for the iconic institution, America’s second-largest bank by market capitalization. Although its share price took a minor hit in response to the news, investors aren’t dumping the stock, which is hovering right in the middle of its 52-week average.

Jason Galanis

Jason Galanis: “I hope this does not lead to a banking sector selloff.”

Just this April Bank of America agreed to pay over $10 billion to settle accusations that it misled lenders Fannie Mae and Freddie Mac about the quality of the mortgage-based derivatives it sold them during the run-up to the financial crisis in 2008. That’s on top of the nearly $10 billion Bank of America paid directly to Fannie and Freddie last year to buy back its bad mortgages, money which came straight out of the bank’s reserves. Chief financial officer Bruce Thompson decided to look on the bright side of his company’s woes, saying it had done well to “manage expenses.” Fair enough, but lowballing your attorneys isn’t a growth strategy.

Despite the optimism Bank of America remains saddled with billions’ worth of bad mortgages which it is quietly writing off, and new mortgages aren’t coming onto the books fast enough to replace the old rotten stock. New mortgage production in the first quarter of 2014 was less than half compared to the previous year: down from $25 billion to $10.8 billion. In other words, Bank of America pulled in just enough revenue from new mortgages in the first quarter to settle up with the Department of Justice over its predatory lending practices. So the question is: when will Bank of America get its head above the rising tide of legal fees, settlement costs and bad debt?

How to Jumpstart Your Retirement EARLY by Jason Galanis

Much has been written about how to successfully save for retirement. However, I, Jason Galanis, believe the most important piece of advice is to get your financial world in order EARLY!.

Adult children, specifically those in their 20s, need to learn how to be financially responsible now, instead of waiting for the opportunity in the future. Even if it’s too late, there’s still time for adult children to learn how to become more financially responsible in their 30s.

Becoming financially responsible in your 30s

They say around age 30 is when people approach many life milestones, including marriage, purchasing a new home and possibly having children. In fact, many financial experts assume people in their 30s have a more ‘mature’ outlook on finances, since they should have already learned from their past mistakes.

Jason Galanis

Jason Galanis: “The best decision one can make to ensure future financial success in this rapidly developing financial world is to get started EARLY!”

The truth is that young people aren’t prepared for financial responsibility in their 30s. Thankfully, there are things they can do when they reach that age to become financially responsible:

Finance and marriage in your 30s

More millennial couples talk about finances than older couples, according to a recent study. That means many young couples do care about responsibility and civilly managing their finances in a recovering economy. So, younger couples should talk with each other about their finances to remain ‘on the same page.’

Finance and children in your 30s

Child care expenses can get expensive, almost $10,000 a year on average, for the first few years of their lives. That’s why it’s important for young couples to save and manage their money to ensure their children’s financial priorities are cared for alongside their own.

Finance and real estate in your 30s

Buying a home is probably the largest purchase most people make in their lives. That said, many people don’t realize how much they need to save before taking the plunge. It’s recommended to save as much as 20 percent on a home’s purchase price for its down payment, when the time comes. And, if you can’t buy a home for any circumstance, it’s better to rent.

Facebook’s “Social Research” Raises Eyebrows by Jason Galanis

We all know that social media sites are watching us, but did you know that Facebook has actually been changing the way their site works in order to study what was going on with your mood and everything else in your life for a study? I, Jason Galanis, was shocked when I found this out.

At the point when news spread through the weekend that Facebook had controlled its news feed to study how social networking posts influence individuals’ feelings, the genuine issue was that anybody was that shocked. The study, which was distributed in the Proceedings of the National Academy of Sciences and directed by Jeffrey Hancock of Cornell University, Facebook analyst Adam Kramer, and Jamie Guillory of the University of California (San Francisco), found that individuals had a tendency to reflect the enthusiastic state of their companions’ posts.

Jason Galanis

Jason Galanis: “Is Facebook stalking us?”

So if your companions composed cheerful posts, your posts were usually a lot happier as well. Companions posting around an awful day at work would have a tendency to cut you down. The revelation made a lot of people really angry, but then they would look at the fine print. Anybody giving careful consideration to the standard disclaimers that tech organizations consistently distribute may have seized upon a few apparently guiltless sounding expressions tucked away in the organization’s information use arrangement that said a lot.

In addition to everything else, Facebook says obviously in the distributed record that it may utilize the data it accumulates from individuals on its informal organization for interior operations, including troubleshooting, information investigation, testing, research and administration change. The pair of phrases referring to research and investigation have all the earmarks of being one of a kind to Facebook, because you can’t find them in any other online company’s terms of service.

British Pound Back in the AAA Again by Jason Galanis

Standard & Poor’s has upgraded its outlook on Britain’s credit rating from negative to stable added a caveat to its prognosis for the pound sterling: Britain’s AAA credit will see a major downgrade unless the UK stays in the EU. I, Jason Galanis, think this is a good move.

The move expresses some measure of investor confidence that, despite the victory of UKIP in the European parliamentary elections in May, Great Britain is not likely to exit the EU anytime soon. The appreciation of the pound is putting pressure on the monetary and trading ties between the UK and eurozone countries; the Conservative administration of David Cameron and his man at the Bank of England seem more interested in scoring political points at home than strengthening economic ties with the EU.

Jason Galanis

Jason Galanis: “Pound back to AAA.”

Chancellor of the Exchequer George Osborne has been pounding the pavement to boost British sterling, and his efforts seems to have paid off. He’s made trips to the Royal Mint, holding up handfuls of sovereigns for the cameras, as well as construction sites. Wait a moment? What’s a central banker doing getting his picture taken—and looking very obviously out-of-place and trying-to-hide-it—with a bunch of roughneck tradesmen? Osborne donned a hardhat and looked ridiculous for a very good reason: to calm fears about England’s runaway real estate market, which saw an 8.4 percent increase in 2013 and shows no signs of slowing down on its own this year. The Bank of England has maintained record-low interest rates since the global economic crisis of 2007/8 in a bid to increase liquidity, and the program has largely succeeded. Eurozone ministers are worrying about deflation in the world’s second largest reserve currency, but Brits are rejoicing over the continued appreciation of the pound sterling continues: homeowners and developers like rising real estate prices and holidaymakers like the extra distance the pound will go aboard. The growing disparity between the pound and the euro is making trade between the two currency zones more hazardous, which ultimately increases the chance of England evacuating the EU.

Former Soviet Republics Send a “Dear Putin” Letter by Jason Galanis

Trying to fend off the Russian bear on their doorsteps, the leaders of Ukraine, Georgia and Moldova have signed free-trade and political cooperation agreements with the EU in Brussels on Friday. I, Jason Galanis, believe this is an important harbinger of things to come.

The signing comes in the middle of an undeclared war between Ukraine and Russia; Kiev accuses Moscow of supporting rebels in its east who have captured many major cities in the ethnically-Russian region since April. The rebels, indignant at the popular overthrow of president Viktor Yanukovych in February and Ukraine’s increasingly cozy relations with the West, would like to see the east secede to Russia, a la Crimea.

Jason Galanis

Jason Galanis: “Former Soviet Republics send open letter to Putin.”


NATO released satellite photos in mid-June showing three Russian tanks crossing the border into Ukraine, in an apparent shipment of materiel to the rebels. Putin at first denied that his country was arming the separatists, but changed his line when NATO released the satellite photos. He now claims the shipments are not to arm the rebels, but to help “protect ethnic Russians” endangered by the fighting.

Neither side seems willing to acknowledge what is really going on: an undeclared proxy war of aggression by Russia. Moscow is afraid of losing influence as more and more former Soviet republics sign “memorandums of understanding,” defense agreements and trade pacts with the EU.

EU President Herman Van Rompuy was quick to defuse potential Russian misgivings about this latest round of deals between Eastern European countries and the EU, saying “There is nothing in these agreement or in the European Union’s approach that might harm Russia in any way.” Putin, quite clearly, has a different interpretation of Russia’s national interest, and it doesn’t include standing idly by while its former allies cozy up with the West. Moscow responded to the signing with threats of economic embargoes on Ukraine, Georgia and Moldova. Like any spurned lover, Putin is lashing out.

Hard Times in Londontown by Jason Galanis

Alert the press: London’s falling. An estimated 50,000 people marched from the headquarters of the BBC to the House of Parliament at Westminster. I, Jason Galanis, think this may be a sign that more unrest is yet to come.

The so-called People’s Assembly gathered outside the seat of British government to protest the austerity cuts David Cameron’s coalition government has put before Parliament. The cuts are supposed to get Britain’s spiraling national debt under control. John Bull is now in hock to his creditors to the tune of £1.2 trillion, that’s over 70% of Britain’s GDP. Cameron says if Britain doesn’t get its debts down, another crisis could put Britain “over the brink.”

Jason Galanis: “These protests are unsettling.”

The People’s Assembly listened to comedian and accused rapist Russell Brand promise a “peaceful, effortless, joyful revolution” to overturn Tory austerity. Guardian columnist Owen Jones accused the Conservatives of creating a country of working poor. There are two choices facing Britain now: cancel the debt, destroying England’s gilded credit; or to buckle down and accept a bleak future of lowered spending on health and education that will just as surely destroy England’s civil society.

The real story of the protest is the near-total absence of any kind of coverage by the much-vaunted BBC. Apparently the folks at the Beeb can tell you exactly what’s happening in Iraq, but they failed to notice 50,000 irate Londoners marching outside their doorstep. The BBC’s failure to report on one of the largest protests in the history of London is stunning, and it’s exactly the kind of failure of a public service to serve the public that Londoners were protesting. Britain’s National Health Service (NHS) is falling apart, providing shoddy care after lengthy waiting periods. What was once a sacred cow, the third rail of British politics, has been slaughtered over the last decade by Tory austerity imposed by neoliberal Tony Blair. David Cameron’s coalition government is gearing up to cram another round of austerity cuts down the collective British gullet. Meanwhile, the People’s Assembly and it moiety of liberal cohorts are preparing for another round of demonstrations over the summer, and perhaps even a general strike just to keep things interesting.

Cameron’s Gambling on the EU by Jason Galanis

Conservative British Prime Minister David Cameron has said he intends to resume his push for a nation-wide referendum to “renegotiate” Britain’s membership in the European Union. I, Jason Galanis, believe this is a big gamble for England’s embattled PM.

Cameron’s effort to solidify his country’s flagging support for the EU stalled last year, but the success of the UK Independence Party in the May 22nd elections for European Parliament has given a new urgency to the issue. The UKIP, led by Nigel Farage, advocates total withdrawal from the EU, a position which is steadily gaining favor with the British public. The social and political costs of membership—increased immigration, higher taxes to pad the EU’s budget, and more laws written in Brussels, not London—have begun to dawn on Britons.

Jason Galanis: “Cameron betting big on the EU.”

Cameron’s very public campaign for a referendum is actually a bit of cleverly disguised political theater, and has the very real potential to backfire. The referendum is tentatively set for 2017, giving Cameron plenty of time to perform a farcical David-versus-Goliath struggle with Brussels, to be ended with Cameron winning “concessions” for Britain. Cameron’s case of mild Euroskepticism is a misdiagnosis: he is putting on the symptoms to satisfy his people, nothing more. Cameron referendum bill might not make it through Parliament, split between his Conservatives (mostly in favor) and Labour and the Liberal Democrats (firmly opposed); although even if it fails Cameron will still score political points for trying to “let Britain decide” whether to continue being part of the EU. Cameron is banking on predicted economic growth between now and 2017 will help change Britons’ opinion of its union with the Continent. Regardless of whether the British economy improves or takes yet another nose-dive in the next three years, Scotland will remain the deciding factor. Scots go to the polls on September 18th to decide whether to declare independence from Britain. If Scotland elects to be independent Cameron will lose a large bloc of pro-EU voters. The worst case scenario for Cameron and the British political establishment would be a “yes” vote on both referendums: an independent Scotland and British withdrawal from the EU.