Financial Sense Newshour: Experts

Jim welcomes back Barry Ritholtz, CEO and Director of Equity Research at Fusion IQ, an online quantitative research firm. Barry discusses how the many economic “crises” today are overblown and essentially driven by the media and Washington. Barry sees the vast majority of “news” today as simply gossip. As to stocks, Barry believes they are not as cheap as 3 years ago, but still reasonably priced. He much prefers the dividend theme to stock buy-backs by corporations. Barry also discussed a long term secular trend in demographic changes that will be a negative for employment longer term, as increasingly more productive companies need fewer workers to stay profitable.

Jim welcomes Professor Steve Hanke, Professor of Applied Economics at The Johns Hopkins University in Baltimore. Professor Hanke is also a Senior Fellow at the Cato Institute in Washington, D.C. Jim and Professor Hanke discuss his recent article “Hyperinflation? No. Inflation? Yes.” He sees better growth ahead in the second half, perhaps as high as 3%, but also growing inflation as well. Professor Hanke notes that the US has had periods of high inflation in its history, including the Civil War, but never hyperinflation. He does not believe we will see it in the US in the foreseeable future.

Jim welcomes back Axel Merk, founder and portfolio manager at Merk Investments LLC. This week Axel discusses some of the downside of currency wars, including a loss of competitiveness in domestic economies, growing social unrest, and in extreme cases, war. Axel also sees the Eurozone as less capable of debasing its currency than other countries, which will ultimately strengthen the Euro. He sees gold in a transition phase, but believes that the US, Japan and the UK will drive gold prices higher eventually.

Jim welcomes Doug Short, VP of Research at Advisor Perspectives. Doug sees the US markets as having room to grow and are above trend. He also discusses the Alternate CPI statistics, which Doug believes do not add up, and are out of sync with reality. Given the alternate CPI inflation levels, Doug notes that the current S&P 500 would be considerably more undervalued than in 1982. However, he notes that it still feels like a recession, since comsumer income has not kept up with inflation. Median household income is down 8.4% since 2000. This is among the reasons that many investors are scared, and remaining on the sidelines.