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ADVISOR THE MONTHLY NEWSLETTER Greetings: Capital Financial Management NC, Inc. Stocks have been crazy the first half of 2016. No one really knows what the economy and the market have in store for the second half, however we feel the market will not remain calm. Markets usually do well in a presidential election cycle and may be up 6% or 7% by years end. Remember, the strongest safeguard against the ups and downs is diversified investing focused on the long term. In addition, hedge against loss by allocating a portion of funds that index the market with no risk. Please call my office and ask about our new Wealthguard software that limits the downside to your portfolio at no cost to you. Don strives to be an advocate for retirees, those still working and people just like you. He is committed to helping them address the issues that are important to their financial well-being. Don has completed studies in investment and finance at NCSU. He is a licensed investment advisor and is held to a fiduciary standard. History of the Gold Standard In paradise, it's said the streets are paved with it and Fort Knox is filled with it. Pioneers travels westward to find it and Johannesburg, South Africa owes its existence to it. The glean of gold has long tantalized, transfixed and mesmerized people everywhere. Gold has been the standard for good jewelry and even the premium material in electronics connections. Even the term, the gold standard, has a connotation of the very best. Gold has also been a standard, adopted by many countries, to affix the value of their currencies with a value tied to a certain amount of gold. The U.S. began using the gold standard de facto in 1834 and it became law in 1900 after the Congress passed the Gold Standard Act. The prices of an ounce of gold was valued at $20.67 in the United States stating in 1834 and it remained at that price until 1933. The standard offered long-term price stability. That it offered price stability, past tense, is because the gold standard ended in 1971. From Copyright 2016 Capital Financial Management NC, Inc. 1946 to 1971, there existed a system called the Bretton Woods system, under which most countries used U.S. dollars to settle balances. The U.S. government then promised to redeem those central bank balances for $35 an ounce. The U.S. gold reserves dropped steadily as a result, provoking a global unease that the U.S. would be able to continue to make redemption for dollars. It was President Nixon, in 1971, who declared that the U.S. would stop the practice and the gold standard, once and for all, ended. A Return to the Gold Standard Some politicians have suggested that we return to the gold standard in recent years. Congressman Ron Paul suggested it during his 2012 presidential campaign, and more recently, Ted Cruz suggested it, during the Republican primaries. They point out the price stability that was a byproduct during the years it was in force. Also, they feel that it takes monetary policy away from the group of decision makers at the Federal Reserve. Detractors point out that a discover of a new gold supply would add to the worlds gold supply and a concurrent expansion of the money supply. This may not be a desirable byproduct at the time. Also, if one country began to hoard gold, it would require other countries to raise interest rates to keep their money. If that country happened to also be in recession, the end result would not be good. Don and Patti have been married for 34 years, with two great sons. Past presidents, of very different ideologies, supported the standard and even made the point that it benefited the middle class, not just the rich. Republican President William McKinley and progressive Democrat President Grover Cleveland, were both early supporters. While famous economists, like John Maynard Keynes, were against the gold standard, others today believe that it might be a good thing. It may become more than an academic argument in the near future. CAPITAL FINANCIAL MANAGEMENT NC, INC. - MONTHLY NEWSLETTER The G20 Meeting of Financial Officials Recently, when the Greek economy suffered economic woes, it affected the U.S. stock exchanges more than once. Recent geopolitical unrest in France has had a marked impact on world stock markets. Currency speculators impact the values of currencies around the world. A down day overnight in the markets of China or Japan, is often a precursor to a down day on Wall Street. The true essence, of a global economy, is seen every day in hundreds of ways, from Asia to North America, Europe to South America. On the other hand, economic growth benefits all countries, through trade agreements, and beneficial negotiations. With this reality in mind, The Group of Twenty (G20) was formed to bring together the finance ministers and central bank governors from 19 countries and the European Union. The group has been meeting annually since the first meeting in 1999. In 2008, there was a G20 "Leaders Summit," which help pave the way for an economic recovery after the recession. That summit was held in Washington D.C. The Way it Works The group uses policy tools that can include monetary, fiscal and structural; acting both together as a body and individually. 66 public companies in the UK issued profit warnings. These concerns can impact the world economy and had the attention of the economic experts at the meeting. Membership in the G20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, and European Union. Also, the group said that global growth was "weaker than desirable." This opinion was shared by all of the G20 participants and, the lack of debate, made concentrating on a remedy easier. The members focus on change that they can enact that benefits the global economy through open trade and job creation. Many other organizations, such as the United Nations and the International Monetary Fund, attend meetings and participate in the solutions. The dropping value of the Chinese currency was also on the agenda. The president of Germany's central bank, a member of the G20 group, assured reporters that the global economy would still improve this year and next. With this meeting of minds, and the world's leading experts, economic uncertainty can be addressed in a global forum. That's the G20. During the group's most recent meeting, in Chengdu, China, Britain's exit from the European Union was a major topic. A reworking of Britain's relationship with the EU was laid out to calm some of the anxiety. Despite this, some members believe that there will be additional volatility in the financial markets as these negotiations go forward. Regarding Brexit, the G20 ministers said that their group "had the tools to cope with the potential economic and financial consequences from the referendum result." Even before the Brexit vote, Closing: Please enjoy this months newsletter and feel free to contact our office with any questions or concerns. Our workshops in September will be the 13th and 15th at McCormick and Schmidt in Raleigh and the 20th and 22th at Peak City Grill in Apex. We invite our current clients to come and enjoy a nice meal with us, and we encourage you to bring a friend. Referrals are the highest form of compliment you can give us. Thanks Don Delaria Disclaimer: Donald Delaria is a Investment Advisor Representative (IAR) with Capital Financial Management NC, Inc.(CFM) Investment Advisory Services offered through Capital Financial Thanks Management NC, Inc. A Registered Investment Advisor (RIA). Investing involves risk including the potential loss of principle. No investment strategy can guarantee a profit or protect against loss in periods in periods of declining values. Past performance does not guarantee future results. Don Delaria Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products They do not in any way refer to securities or investment advisory services or products. Fixed Insurance and Annuity product guarantees are subject to the claims-paying ability of the issuing company are not offered by Capital Financial Management NC, Inc. Copyright 2016 Capital Financial Management NC, Inc.