On August 5, after markets had closed, Standard and Poor’s stripped the U.S. of its triple-A rating. Many had predicted that a downgrade would result in a broad sell off of Treasuries and a corresponding increase in yields. These predictions proved to be wrong. The next trading day, August 7, the yield on the 10-year […]

As November drew to a close the European financial crisis grew more severe when the most prudent European government, Germany, could not sell more than about 65 percent of its public debt on offer at an auction. If investors refuse German bonds, then what hope is there for the traditionally more profligate European sovereigns, such

While the broader media has largely ignored until only recently the flaws inherent in Social Security, our parent organization, AIER, has consistently pointed to these deficiencies. In 1935, when Social Security first became law, AIER warned against the depressive effects of Social Security’s taxes. In 1939, the first of many expansions was enacted, prompting AIER

The first quarter of the New Year has brought an astonishing sequence of global events. The horrific earthquake in Japan, the world’s fourth largest economy, has claimed at least 10,000 lives. Political uprisings throughout the oil-rich Middle East offer both promise and peril, but instability is the watchword. Domestically, states are struggling to address unprecedented

Politicians have met the bond market. Legislators in Washington have spent lavishly for decades, and the bill is now due. Standard and Poor’s change in outlook for U.S. Treasury securities from “stable” to “negative” serves as a stark reminder that profligate spending has consequences. While fiat currencies can mask the ill effects of unchecked fiscal

U.S. Treasury securities have long been regarded as the best proxy for a theoretical risk-free asset. Their payments are backed by Congress’s unique power to tax an economy that accounts for a quarter of the world’s entire economic output. But this risk-free reputation is now in question; as U.S. gross debt approaches 98 percent of

AIER recently published research regarding silver as a potential component of an investment portfolio. Silver was found to have several desirable attributes, but the evidence does not support its inclusion among our recommended asset classes at this time. The emergence of exchange traded funds could have a profound impact on the silver market. We will

Those of us who attended economics classes dutifully recorded in our notebooks that the returns on obligations of the U.S. Treasury were the “proxy for the risk-free rate of return.” They provide a foundation to which “risk premiums” could be added in order to approximate higher expected rates of return for the universe of inherently

Capital markets are reflecting bad news throughout the global economy. In the U.S. aggressive monetary and fiscal policy has served to stimulate fears of inflation and growth of the national debt, but little else. European policymakers face a debt crisis that threatens the viability of the European Union, and now growth in China appears to

The area shaded light green in the chart below traces the hypothetical fate of a dollar invested in the S&P 500 between January 2008 and June 2011. This period spans the stock market’s historic collapse, precipitated by the subprime mortgage crisis, and its subsequent rebound. A disciplined “all equity” investor would not have lost any