According to popular tradition, one particularly harmful affect of a depreciating dollar is the prospect of an uptick in consumer price inflation.  Denial of this self-evident truth is usually met with a vitriolic tirade of ad hominem attacks, straw men arguments, and comments about the sobriety of your mother during pregnancy.  Yet, just how much [...]

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You’ve no doubt heard about the proposed gas tax holiday supported by presidential candidates Hillary Clinton and John McCain but opposed by Barack Obama.  I’m going to have to side with Obama on this one.  A gas tax holiday is by far the dumbest idea to ever come out of a presidential candidate, and that’s [...]

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I got quite a bit of negative feedback to my post Calculate Your Personal Inflation Rate because in it I stated that inflation numbers are not, in fact, manipulated by the government.  Well, that statement really upset the tin-foil-hat conspiracy theorists.  I got a few emails telling me how wrong I am without any supporting evidence.  I got some [...]

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We’ve already seen how recessions can be good for consumers, but recessions actually serve a much larger purpose.  Capitalism, at its root, is all about the efficient allocation of scarce resources.  In a free-market capitalist society, capital naturally flows wherever promises to give the highest return.  If manufacturing companies are having trouble competing  in the [...]

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Recessions get a bum rap. People lose their jobs, their homes lose value, their savings account pays peanuts, and the media predicts the end of the world on the hour. But there are several reasons you should welcome a recession,  some selfish and some selfless. Let’s start with the selfish reasons you might welcome a [...]

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The term long tail, coined by Wired editor Chris Anderson in the October 2004 issue, refers to a socio-economic trend away from a hit-based economy to a niche-based one.  In essence, the theory of the long tail states that the revenue potential of all the less popular, long tail markets taken together far exceeds the [...]

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Over the long term, corporate earnings tend to comprise about 10% of GDP.  This number fluctuates, of course, but the long-term trend is relatively consistent.  Since corporate earnings are eventually reflected in stock prices and their share of GDP is relatively stable, we can use economic growth forcasts to predict future stock returns.  The long-term [...]

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All investments have risk, even supposedly “risk-free” assets like US Treasury Bills.  For practical purposes, however, the yield on the 90-day US Treasury Bill is often referred to as the risk-free rate because the risk of these securities, while not quite zero, are extremely close.  According to Investopedia, the risk-free rate is
“…the minimum return an investor [...]

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Nobody knows the future and there are no crystal balls, but that doesn’t stop people from trying to divine the future of stock prices.  There have been many methods put forth over the years, most of them bunk.  That said, there are several workable frameworks that have shown themselves to be reasonably accurate over the [...]

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Let’s face it:  the dollar is weak and seemingly getting weaker by the day, with currency experts forecasting it will get worse before it gets better.  While I don’t buy into the “end of the dollar” hysteria, I do think it’s prudent to hedge your bets.  There are a few simple ways you can benefit from [...]

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