The U.S. monetary system, as with most others, was built on the principle of hard currency. However, the definition of ‘hard currency’ has changed over the years. So much so, that today’s hard currency is not what your parents or grandparents understood in decades past.
Las Vegas was not always the investor-owned entertainment venue it is today. Prior to the 1970s, most of the valuable property in the city was built and maintained by organized crime. It was not until the 1970s, and creative investors such as Steve Wynn, that Sin City began saying goodbye to mobsters in favor of Wall Street investors.
Governments around the world measure economic strength based on the combination of a number of factors. One of the factors we use in this country is known as the Gross Domestic Product (GDP). Some say that GDP is a very reliable measure because it gauges the market value of U.S. productivity. Others say it is marginally useful due to its inherent weaknesses.
Are you familiar with how the U.S. income tax system works? Do you understand that it is a progressive system that does not tax everyone at the same rate? If not, allow us to explain. Needless to say, it is a system rife with inequities, at least in the eyes of those in the highest tax brackets.
The reasons why China has flatter business cycles than the US:
1. A major part of China economy is comprised of state-owned businesses / national enterprises with very large capacities and economic powers. Anything bad that happens to the economy can be immediately and silently negated without going public. Fluctuations are there, just not known to people.
Government and independent economists use a minimum of 12 economic indicators to help them determine how the U.S. economy is doing. Among these indicators is something known as ‘housing starts’. Housing starts are a verifiable statistic that measures the difference between the number of building permits issued and the actual number of houses being built during a given period. Housing start statistics are always released with a comparison of the previous month in order to track up-and-down trends.
Whenever an individual buys securities, he or she must consider what is known as face value. Unlike the face value of consumer goods, face values on securities are not always static. Depending on the type of security one purchases, face value could change from time to time, negatively or positively impacting one’s investments.
The European Central Bank (ECB) is now in the process of implementing its own quantitative easing program modeled after what was done in the U.S. and Great Britain. The powers that be believe that the ultra-slow recovery in Euro Zone countries is largely due to not enough lending going on. They also believe that printing more money and flushing the system (a.k.a. quantitative easing) is the solution to the problem.