Bringing the Solutions Right to You

With turmoil erupting in the Ukraine, the world appears to becoming economically unstable throughout this crisis. One thing is certain, with crisis the masses will flock to safe havens. Two of which are gold and the greenbacks. Historically Gold has done extremely well during these periods, and recently we have seen gold rise close to $100 during this crisis. Remarkably, we have seen in the past few years gold has declined in value. But if gold is a safety net, reason could be because gold is valued in US$. So if the relative safety value of the US$ is greater then gold, we can gather US$ will gain in value and the price of gold may decrease. But during this crisis, we have seen both increase in value. So, has the US$ finally caught up with the economy, or are there just more people getting married this year causing the demand for gold to increase?

Congratulations to our Canadian Olympians and the success we have seen at these Olympics. Everywhere we see a proud country uniting in Olympic Glory. However during the Semi Final Mens hockey game, while visiting some associates, it was apparent that all computers were tuned in watching our Canadian Athletes compete against the USA for a spot in the finals with a chance of winning Gold. If everyone is watching these Olympics instead of working, how will this effect our economy. Our economic health is measured by Gross Domestic Product (GDP) output and Inflation. If the GDP increases at a faster rate then inflation, the countries standard of living will increase. But if everyone stops producing during the Olympic Games, then our GDP will decline, thus causing a reduction in Canadian standard of living.

The solution is simple, cheer on our athletes, be proud to be Canadian, but after the Olympics, we all have to increase our productivity to make up for any lost GDP during these games in Sochi.

With the winter Olympics off and running, our Canadian athletes all have one thing in mind, how to accumulate Gold. The Olympics have been running since the Greeks started the games in 775 BC on mount Olympia as a tribute to the Olympian Gods, Olive branches were the original trophies given to the victors and were later replaced with Gold, Silver and Bronze medals in the modern Olympics.

So why the obsession with precious metals as a reward for athletic excellence? There are many reasons why we accumulate, mine and extract precious metals. They can be used as a currency, jewelry, hedge against inflation and protection from world turmoil. It's difficult to speculate on the origins of Gold and why as early as 4000 BC gold was being mined in Africa and widespread usage in Egypt in 2600 BC. It was originally believed that something so rare and precious had to have health benefits.

Regardless of the history and current uses of Gold, it still makes beautiful metals that our athletes are willing to spend years of dedication for the ultimate metal that can withstand the true test of time.

Over the past few months their has been a lot of hype about bitcoins, a computerized currency poised to dominate world industry, a replacement for the greenback, euro and pound. They originally started in 2009 and were created as a 100% fiat currency, after a few short years, 10,000 bitcoins could buy 1 pizza. Now bitcoins trade for $1000 US$ making the original pizza purchase of 2010 valued at $10,000,000.

With incredible growth and acceptance becoming prominent throughout North America you can now find bitcoin ATM'S and use them at casinos in Las Vegas, it appears to be the basis of a world changing event, similar to the Internet itself.

But wait, lets go back in History to see if these bubbles ever existed before. We would not have to go back that far to find a similar event such as the Dot Com Bubble where company stock values exploded from pennies to hundred of dollars, then declined from March 2000 to October 2002 losing over 5 Trillion Dollars.

Before this another famous bubble would be the Tulip Mania of 1637 where one tulip bulb cost the equivalent of 10 times a persons yearly salary. We can search through history and find that bubble mania recreates itself and sometimes follows by a bust.

So the big question is, are bitcoins going to become a valid currency to replace major currencies? If so, then $1000 would appear to be cheap, or will it die a quick death similar to Tulips and Dot coms. One thing for certain is wealth can be created in the most unusual ways, and pizza never goes out of favor.

The hot topic for 2014 is interest rates, will they go up or will they go down? If we all possessed a crystal ball, these questions would easily be answered and investing would be easy. Unfortunately, my crystal ball is broken, so any investment decisions must be based on facts. Let's look at some facts associated with interest rates before making any harsh decisions on their direction.

Fact #1: Interest rates have risen from approx 2.5% to 3% over the past few months
Fact #2: The US is still issuing 75 billion per month in QE
Fact #3: The Dow just had its best monetary gain since 1995
Fact #4: US GDP has risen from 0.1 to 4.1 in 2013

Based on these facts, we should leave any interest rate estimates to anyone who still owns a crystal ball, but all the facts accounted for 2014 will be full of surprises.