This Article Originally was Published here: http://www.wealthdaily.com/articles/eurozone-government/4304

Overturning centuries of popular parody, it seems the French may after all assume the role of savior – at least as far as Europe is concerned.

Recently, French President Francois Hollande urged the creation of a Eurozone government, comprised of the 17 nations that presently use the euro, within the next two years.

The government would convene every month and would be lead by a full-time president, reports CNNMoney, which quotes from the President’s recent news conference:

"This economic government will debate the main political and economic decisions to be taken by the member states, harmonize tax policy, start the convergence of social policies from the top and launch a battle against tax fraud.”

Let’s recall that Hollande was elected at a time of intense internal strife within France, as the austerity and stimulus camps waged war against each other. Hollande led on promises of economic growth, but as France’s fortunes have declined in the months since, so has his popularity.

Just recently, France officially joined the “countries in recession” club, with a GDP drop of 0.2 percent over the first three months of 2013.

Eurozone Strife

Meanwhile, the pervasive European financial malaise continues. Various European nations and states have pledged coordination when it comes to making budgetary policies and try to claw back lost economic ground. The European Central Bank is to supervise nearly the entire Eurozone banking industry come 2014.

However, various nations have also not been able to uphold their commitments to cutting down on borrowing – France is guilty here, as well. The major question now appears to be the creation of some authority that can operate across the EU with regard to shutting down failing banks while also creating a shared fund that can serve as a buffer for costs.

With Germany’s elections due this September, it’s unclear how enthusiastic the nation may be for such wide-ranging reforms. And without Germany – which has, for some time now, been the EU’s growth engine – it’s safe to say nothing much is going to get done. If anything, Germany might even be against it; after all, they’ve done the most to bail out, one after the other, Greece, Ireland, Portugal, and Cyprus.

According to Reuters, Hollande’s proposal would pave the way for a pan-European economic government endowed with its own budget, rights to borrow, and a clearly coded tax system. Evidently, Hollande is fighting back against a growing tide of criticism both at home and across the EU at large, reasserting his leadership role.

However, Germany will likely prove a formidable opponent, as the nation’s government remains opposed to any sort of mutualized debt across the EU nations. 17 nations currently use the euro; 10 others do not. Were the Eurozone to form its own economic government, there are legitimate concerns that it could worsen divisions between nations.

Franco-German Divides

Hollande remains optimistic about the future of his proposed Eurozone government, however, indicating that major EU-wide economic and political decisions could be weighed by this government, which would consequently ease frictions across states. Hollande has also issued a call for a major decade-long EU-wide investment plan for the digital sector as well as green energy reforms and public transport options.

It all sounds very promising, but as of now it’s really just some impressive talk. The EU is in no position whatsoever to even consider these big plans – the real economic data is simply too dismal.

Moreover, as Deutsche Welle reports, the recent numbers indicate that the Eurozone’s January-March contraction was the sixth consecutive shrinkage, with 9 out of 17 member nations currently in a state of recession. And Hollande’s desire for a more closely-integrated Eurozone is almost certainly going to be opposed by the more individualist Angela Merkel.

Merkel is not a fan of the idea of socializing debt, given her firmly austerity-driven movements. However, her most recent statements suggest that there is, at least, a working relationship between the two.

At the same time, as this choice quote indicates, Merkel is well aware of how much Europe (at least at the moment) needs Germany:

"When I'm accused of selfishness, then I can answer very well that of course I am not selfish, but I know that in the long term Germany will only do well when the whole of Europe does well. And Europe also doesn't do well when Germany is doing really badly."

The quote was in response to a memo that leaked, apparently from Hollande’s party; the memo indicts Merkel for “selfish intransigence.”

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This Article Originally was Published here: http://www.wealthdaily.com/articles/eurozone-government/4304

I remember watching an episode of The Jetsons as a kid and being floored by the idea that the family's food magically appeared in front of them... no muss, no fuss — a cloud of mist that produced a piping hot meal in seconds!

For years I waited anxiously for the Food-a-Rac-a-Cycle that would conjure up a hot meal before my very eyes.

Turns out my wait might finally be over...

Welcome to the future, my friends.

If you're a regular reader of these pages, you know we've been beating the drum on 3D printing for years now. This technology has the power to revolutionize the way we live. We've seen 3D printers spit out guns, human tissue, even an entire house. And now we can add a new one to the list of printable goods: meat.

New breakthroughs have taken growing meat from the realm of schlocky horror films to real-life problem solving.

Gabor Forgacs, a biological physicist and co-founder of a “in-vitro meat” start-up, actually broke out the salt and pepper during a recent demonstration and chowed down on a hunk of “biomeat” in front of a delighted audience:

“Not too bad,” he remarked, as he chewed and swallowed the one-inch strip.

Forgacs is the head of Modern Meadow, a company developing bioprinted meat as a way to both help satisfy the world's growing hunger problems and curb the damage that large-scale factory farming does to the environment.

The impetus for printing meat is rooted in a very real problem with very limited solutions. Making meat is one of the most resource-intensive processes know to man: It takes up one-third of all available land and wreaks havoc on greenhouse gas levels. Producing a quarter pounder, for example, takes almost seven pounds of feed, 50 gallons of water, and 75 square feet of land, according to the Journal of Animal Science.

In-vitro or 'cultured' meat could almost eliminate those issues. Forgacs predicts that Modern Meadow's meat would require 99% less land, 96% less water, and emit 96% fewer greenhouse gases than current methods of cultivating livestock.

How do they create this mystery meat?

Let's say you want to start on a batch of beef... Put simply, you'd take a biopsy of healthy cow cells and use it as a base for a sort of cell culture stew, combining the cells with amino acids, sugars, minerals, and other building blocks. This primordial soup would ferment into a printable form, which you'd print at home into the appropriate shapes and textures.

It might not sound like a mouth-watering process, but as they say, it's best not to see how the sausage gets made.

The million-dollar question is: How does it taste?

“Not bad. The taste is good, but not yet fully like meat. We have yet to get the fat content right and other elements that influence taste. This process will be iterative and involve us working closely with our consulting chefs,” Modern Meadow’s CEO Andras Forgacs (Gabor Forgacs' son) told Reddit.

Modern Meadows will most likely start with ground meats and sausages before tackling the intricacies of a T-bone steak, a wild tuna, or a fine cut of Kobe beef.

While this is assuredly weird, wild stuff, this isn't some group of wiry mad scientists bringing this technology to the fore...

Billionaire investor and pay-pal founder Peter Thiel is throwing his weight behind Modern Meadows. He's invested $350,000 from the Thiel Foundation to help get the ball rolling. And this isn't the first outsider idea that Thiel, an avowed libertarian, has bankrolled: He's also funded Atlas Shrugged-inspired paradise islands and a fellowship that pays young people to skip college and create their own capital ventures. This guy is all about big ideas. His backing of the project bodes well for this industry in particular, as the Thiel Foundation's Breakout Labs division has successfully funded brain reconstruction and human cell re-engineering.

"Modern Meadow is combining regenerative medicine with 3D printing to imagine an economic and compassionate solution to a global problem,” a Breakout Labs spokeswomen said. "We hope our support will help propel them through the early stage of their development, so they can turn their inspired vision into reality."

Forgacs originally developed the technology to create tissues and organs for biomedical company Organova. Turns out creating edible meat will be a far easier process...

So far, bio-printing has been applied to build three-dimensional tissues and organ structures of specific architecture and functionality for purposes of regenerative medicine. Here we propose to adapt this technology to building meat products for consumption. The technology has several advantages in comparison to earlier attempts to engineer meat in vitro. The bio-ink particles can be reproducibly prepared with mixtures of cells of different type. This allows for control in composition that enables the engineering of healthy products of great variety.

With meat consumption slated to practically double by 2050, the world is aching for solutions on how to provide an extra 465 million tons of meat. And in-vitro meat appears to be the front runner to satisfy that need.

Dr. Mark Post has already assembled the world's first in-vitro hamburger, created from 20,000 strips of cultured muscle tissue. Dubbed the $325,000 burger due to its extreme cost, he takes it as the first step in an unstoppable process. 

“We already have sufficient technology to make a product that we could call meat or cultured beef, and we can eat it and we survive.”

The process could also open up to a brand-new market: vegetarians. A large bulk of vegetarians don't eat meat for ethical reasons, but may be chomping at the bit to indulge in nutritious, ethically-produced meat products... not to mention the millions of Indians who currently eschew cow for religious reasons who are hankering for a hamburger.

New markets mean bigger business.

Alas, it'll still be few years before you can print your dinner Jetsons-style. And though Modern Meadow is operating as a nonprofit organization, the for-profit investment opportunities are already ripe for the picking...

It's not a matter of if 3D printing could change the world. It's a matter of when. And once it does, early-bird investors like us are going to not only eat our 3D-printed steaks, but we'll be feasting on profits as well.

We've put together a report on the most promising of the bunch. You can read it right here.

Godspeed,

Jimmy Mengel for Outsider Club

This Article Originally was Published here: http://www.wealthdaily.com/articles/retirement-after-the-baby-boomers/4302

As if Gen Xers don’t have enough to worry about already, it’s becoming more and more apparent that individuals who call this generation their own may be up against a fair amount of odds when it comes to retirement – especially when compared to the baby boomer generation. 

Financial analysts are finding more and more data indicating that early baby boomers may be the last group of individuals to stay on track with the amount they’re able to save post-retirement for quite a while.

Younger boomers and those in earlier generations will continue to find issue in saving, and this may quite possibly hold true for many years in the future, depending upon how things shape up with the economy.

These findings come right at the heels of a time when baby boomers are set to reach retirement age, with many already there. As more information comes to light, it is becoming abundantly clear that retirement for Generation X and perhaps Generation Y will not be nearly as streamlined as it has been for past generations, due primarily to the Great Recession that occurred during the 2000s.

Pointing Fingers at the Recession 

It’s not very difficult to view the recent recession as the reason why many members of Gen X are up against odds in terms of their retirement outlook. Many people in this generation had put a great deal of focus on owning a home during the years from 2007 to 2010, and those who made the step found themselves losing quite a bit of money on their investments.

According to CNNMoney, the net worth of Gen Xers during this period of time dropped a whopping 45%, falling to $41,600 from $75,077. For baby boomers, however, numbers only fell by 25%; still, this was problematic for many people.

One of the main issues that has made it exceptionally difficult for Gen Xers to retire comfortably in the future is the fact that many were already having a difficult time saving for retirement before the recession finally hit in 2007. For those who were already scraping by trying to make ends meet, the recession was nothing short of a disaster.

Now, it’s becoming more and more clear each day to those who have yet to save a fair amount of money for retirement that the future is going to be about sticking to an austerity program – especially for those who find themselves making a lower than average income.

Other issues are at hand as well. In general, those who find themselves part of Generation X are also dealing with higher levels of debt than generations from the past. Student loans, mortgages, and credit cards are piling up for these individuals, many of whom find it next to impossible to make a dent in their debt while still staying afloat in daily life.

Just two years ago, the median debt level for Gen Xers was $80,000, and there’s no telling what this could be in the future.

Planning for the Days to Come

No one has ever said retirement is easy, but Gen Xers may need to put a bit more effort into the planning process than generations from the past.

One of the issues at hand here is that younger generations tend to be less savvy and persistent when it comes to saving than older generations, which makes it all the more difficult to find the right balance when trying to build retirement savings.

Gen Xers should do whatever they can to hire a financial advisor experienced in retirement planning as soon as they feel ready to tackle the issue. A financial advisor that has been in the business for years can help confused individuals get on the right path, making retirement planning far less stressful than it might be otherwise.

Younger workers who find themselves scraping by will undoubtedly find issue in planning for retirement, but this doesn’t mean that it’s okay to avoid saving altogether. It’s more important now than ever before for individuals to pay close attention to the retirement plans offered by their employers, as one may be far more suitable to a certain person’s life plan than another.

The more thought one puts into the planning process, the better the chances of coming out ahead – at least ahead of others in Generation X!

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This Article Originally was Published here: http://www.wealthdaily.com/articles/retirement-after-the-baby-boomers/4302

This Article Originally was Published here: http://www.wealthdaily.com/articles/easing-stimulus-and-gold-prices/4301

Like a tugboat pushing a little here and pulling a little there, the Federal Reserve’s job is to guide the juggernaut that is the U.S. economy through shallow waters, doing its best to keep the American economy moving forward without running aground.

Though the tugboat captain Ben Bernanke is very vocal on his radio, always making the tug’s intentions and moves known, waiting six long weeks between FOMC meetings for Captain Ben’s updates is excruciating for news-starved traders and investors.

While we wait for their next meeting of June 18-19, then, let’s satiate our thirst for insight into the Fed’s possible next moves by checking in with an officer of the crew, San Francisco Federal Reserve Bank President John Williams.

Although Williams is not a voting FOMC member this year, he is an active participant in the committee’s discussions and can have valuable insights for us.

Williams Anticipates Tightening Soon

Speaking at a luncheon sponsored by the Portland Business Journal last week, Williams made clear that an outright end to the Federal Reserve’s easy money policy of near-zero interest rates and monthly bond purchases is not a done deal.

“It will take further [economic] gains to convince me that the 'substantial improvement' test for ending our asset purchases has been met,” Reuters quotes him.

However, he does believe that should economic reports continue to be as positive as they have been for the most part over the past 2 or 3 months, slight reductions in Fed stimulus could be forthcoming – and soon.

Williams anticipates quicker-than-expected U.S. GDP growth of 2.5% for this year and 3.25% for the next.  Though he does anticipate a slight rise in inflation, he expects it to remain easily manageable at about 1%, half of the Fed’s 2% target.

After noting what he called the “considerably” better employment picture, Williams concluded that the Federal Reserve “could reduce somewhat the pace of our securities purchases, perhaps as early as this summer.”  “Then, if all goes as hoped, we could end the purchase program sometime late this year.” – Reuters.

Two Separate Stimuli

Hurting Williams’ anticipation of a beginning of the end of Fed stimulus is his own expectation of unemployment finishing this year at slightly below 7.5% and ending 2014 at just under 7%.  This is pretty much where the U.S. unemployment number is now, implying no substantial improvement in jobs growth for the next 1.5 years.

Yet the latest FOMC statement released at the end of its last meeting on May 1^st indicated that the committee “currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent.”  And its stressing “at least” leaves room for low interest rates to continue for a time even when the unemployment falls below 6.5%.

So how could Williams expect stimulus easing to begin this summer and end this year when unemployment requirements are nowhere near being met?

Well, Williams was not referring to an end of all Fed measures but to an end of bond purchases only.  While interest rate changes are dependent upon unemployment falling below 6.5%, changes to bond purchases have no such requisite target.  The two stimuli run independently of each other, so that one can be scaled back without triggering a change in the other.

Williams also noted that ending new bond purchases would not end the positive benefits of all bond purchases to date.  The Fed would simply stop buying bonds and would thus stop pumping new money into the economy.  It wouldn’t start selling bonds or taking money back out.

As the Fed holds on to the trillions of dollars worth of bonds and mortgage securities purchased so far and does not sell them back right away, all that extra liquidity pumped into the system through the bond purchasing program would remain swirling about the economy, forcing long-term borrowing rates to remain low and reducing the cost of getting your hands on that money.

Implications

We know how the markets have adjusted to both measures being applied at full steam – both bond purchasing and low interest rates together.  As it is, bond yields have been squeezed to insignificant scraps, investors have flocked to a hot stock market that just keeps rising, and precious metals like gold and silver have fallen out of favor since they offer no real benefit in an inflation-less climate.

But how will the markets respond to the reduction of bond purchases by the Fed, let alone the end of the purchasing program altogether?  Definitely the first market to move will be the bond market.  When Mr. Government Trillionaire is no longer sitting in the front row at bond auctions, we would expect bond prices to fall and interest yields to improve.

In turn, improving bond yields will cause some of the excess stock buying to reverse, as investors lock in stock profits and redirect some funds back into bonds.  Remember, not everyone invested in stocks really wants to be there to such an extent as this.  Much of the equity investment is there only because bond yields are so putrid.  Improve the bond yield a little, and we can expect some equity money to return to fixed income.

So if Williams is correct that bond purchasing could be tapered as soon as this summer, perhaps this white-hot equities run will finally correct at that time.

Yet it is still unclear how this should affect gold and other precious metals.  Although less bond buying by the Fed means less stimulus – which hurts gold – the ensuing sell-off in equities could see some of that money redirected back into gold and other metals as a safety play together with bonds.

Moreover, a reduction in bond purchases may be viewed as a sign that the Fed is worried about inflation taking hold.  Introduce even the smell of inflation risk, and the precious metals will react.

If gold can hold that low $1300 level, the current correction since the 2011 high will have been contained within that critical 30% retracement area, a depth from which it recovered once before in 2008.  If it can hold above this level throughout the summer, H2 could see a nice upward kick, it being the stronger half of the year traditionally.

The lull between FOMC announcements may be difficult to sit through, as investors debate whether to start getting defensive now or wait a little longer.  One cue, that could provide some more insight into the Fed’s next move, which is coming up in three weeks with the release of the latest employment data on Friday, June 7^th.  A week and a half after that, Captain Ben will show us the course he and his tugboat officers have plotted as they nudge and steer the good ship U.S. Economy along its merry way.

Rotation or Displacement?

As one last thought… the situation described above where both stocks and bonds might fall together for a time may seem counter-intuitive.  Equity and bond markets are supposed to move opposite each other as investments rotate out of one market into the other.

However, looking back at these last four years of Fed stimulus since early 2009 we notice a striking abnormality: both equities and bonds have moved up together.  Not a rotation, this has been more of a displacement, where the government jumping into bonds displaced investors out of bonds into equities.

In a way, we might say that the “great rotation” out of bonds into equities that everyone has been looking for has been happening right under our noses.  We just hadn’t noticed it because we were expecting one market to fall while the other one rose.

As it was, both markets rose together because we didn’t have the ordinary recycling of old money.  There was a new participant in the marketplace – the Fed – bringing in new money, lifting both markets together.

We might expect the reversal of this displacement, then, to create a vacuum as the Fed stops buying bonds.  As bonds fall, we would expect to see some investors rebalance their portfolios, selling some equities to buy more attractive yielding bonds.  As equity money moves into bonds to fill the Fed’s vacuum, we could see both markets moving down together for a time.  This reverse rotation would be just as counter-intuitive as the first because of both equities and bonds falling together.

It is kind of like an elephant jumping in and out of a swimming pool, which would cause the water level to rise and fall.  If both equities and bonds rose together when the Fed jumped in, we might expect them to fall together as the Fed jumps out.  At least for a short time.

And if indeed both equities and bonds do fall together, we might then have a showdown between which safe-haven is turned to for protection… the USD or gold.  It is too early to tell which would win out.

Joseph Cafariello

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This Article Originally was Published here: http://www.wealthdaily.com/articles/easing-stimulus-and-gold-prices/4301

I've seen all of the movies -- from the first ones with Captain Kirk and his crew to the ones with Captain Picard and the Next Generation cast all the way through the latest, younger, hipper version that currently dominates the box office. Some are campy fun. Some are thrill rides. Some, frankly, aren't that great. And sometimes, I even learned something while watching.

One of the things I learned while watching Star Trek VI: The Undiscovered Country -- the last one with the original Enterprise crew -- is that the word "sabotage" comes from "sabot," a French word for shoes or clogs.

During the Industrial Revolution, protesting workers threw their wooden sabot into machines designed to replace them, intending to destroy the machines. A Vulcan crew member -- played by a pointy-eared Kim Cattrall, long before "Sex and the City" made her a major star -- shared this piece of wisdom.

While there are various theories surrounding the origins of the word sabotage -- including questions about whether or not the word is truly related to shoes -- there is no question that today sabotage refers to destruction.

In fact, sabotage is often associated with subtle methods of destruction, although throwing shoes into a machine isn't particularly subtle.

Sabotage can even take place in your finances. You might even be perpetrating financial sabotage on your own retirement portfolio.

Here's how...

1. Borrowing From Your Account

Your retirement account can seem like an ideal source of needed funds in a pinch. However, borrowing from your retirement account can have a big impact on you in the long run. Many investors think that, since they are paying themselves back, a loan isn't that detrimental.

Unfortunately, while you can replace the capital -- and even replace it with interest -- you can never replace the time lost. That capital is no longer earning returns, and there is no way to get back the compound interest you would have earned.

2. Paying Excessive Fees

What kinds of fees are you paying on the investments in your retirement account? For years, I stuck with the managed fund with a 2% expense ratio. That ate into my real returns, especially when I consider that I pay 0.35% now with ETFs, and I could even pay less with other funds.

High brokerage fees, expense ratios and sales loads all eat into your returns. When you compound what you are spending on higher fees over time, we're talking about tens of thousands of dollars.

3. Trading Too Frequently

You might be surprised to find out how frequent trading within your retirement account can sabotage your long-term gains. Those who trade frequently are more likely to buy high and sell low. Additionally, more trading usually means more fees, which eat into your returns over time. If you have a good retirement plan that is fundamentally sound, there's no reason to muck it up with frequent trading every time you panic.

4. Failing To Diversify

Look at your retirement portfolio. Is it heavy on your company's stock? If so, it's time to diversify. Your asset allocation can make a big difference in how your retirement turns out. Consider whether or not you have the right mix in your portfolio. This means that you should include stocks, bonds, cash, and (if you have the risk tolerance) other investments.

Don't forget to diversify geographically as well, including foreign investments in the mix. While having some company stock isn't the end of the world, don't rely too much on it. Make sure you change up your asset allocation so that your retirement portfolio isn't destroyed by the tanking of one stock/sector/asset class/region.

5. Failing To Contribute Enough

Your retirement portfolio needs something in it to grow. Chances are that you haven't saved enough. You might be basing your monthly retirement account contribution on unrealistic returns, or you just might not be putting in what you need for long-term retirement success. It really doesn't matter why you are underfunding your account. What really matters is that you boost your contributions.

Just adding $200 a month more can make a big difference a couple of decades down the road through the magic of compounding returns.

6. Withdrawing Funds Too Early

Yes, it's possible to withdraw money early from your retirement account. Some investors withdraw money early because they think they are in an emergency or they want to help their kids pay for college.

Sadly, not only do you have the cost that comes with the removal of capital from your account, but you also have to pay a 10% penalty on the money if you are under 59 1/2. Additionally, you will need to pay taxes on the money if it is coming from a tax-deferred account. Early withdrawal sabotages you now and later.

And, if you are doing a rollover, make sure you do it properly. You don't want your legitimate rollover to be termed as an early withdrawal and result in costs.

The Investing Answer: Examine the ways you could be sabotaging your retirement portfolio and then make changes to your behaviors. The best defense against portfolio sabotage is a good plan that you stick to over time.

Post courtesy of Miranda Marquit at Investing Answers.