Mike Maloney on Why the Ben Bernank is Inflating the Money Supply

Why the Ben Bernank is Inflating the Money Supply

Mike Maloney of gold & silver inc goes over charts and shows how the fed stopped all deflation since 2007. Deflation would have meant that prices and wages would have gone down. The democrats fear this because they never want to hear wages going down, and the republicans don’t want to hear that prices are falling, due to lower margins.

for you the public deflation would be a godsend, because that would mean, while you might make less, milk, cheese, eggs and lettuce would cost less and less each month.

the ben bern hates deflation and loves inflation. inflation means everything goes up and up. however, if you’re poor, it virtually kills you.

The bottom line is, that the US is the world market. Other than the closed and lower class economies of China and India, the US is the largest consumer market. These manipulations of the currency and monetary supply fights against the very market forces he’s trying to curtail. It is a losing battle at best, if you believe he is actually to do anything other than to make he and his european and zionist investors money.

Course Correction: DOW Falls, Crude Oil Falls, Copper Falls

DOW Falls, Crude Oil Falls, Copper Falls

Financial Education: the Cash Flow Statement

The Cash Flow Statement

A cash flow statement shows a company’s cash inflows and outflows and the overall change in its cash balance during an accounting period.

One of the quarterly financial reports any publicly traded company is required to disclose to the SEC and the public. The document provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter. – Investopedia

Because public companies tend to use accrual accounting, the income statements they release each quarter may not necessarily reflect changes in their cash positions. For example, if a company lands a major contract, this contract would be recognized as revenue (and therefore income), but the company may not yet actually receive the cash from the contract until a later date. While the company may be earning a profit in the eyes of accountants (and paying income taxes on it), the company may, during the quarter, actually end up with less cash than when it started the quarter. Even profitable companies can fail to adequately manage their cash flow, which is why the cash flow statement is important: it helps investors see if a company is having trouble with cash. – Investopedia

The cash flow statement is separated into three sections: operating activities, investment activities and financing activities. The statement shows cash outflows in parentheses to designate a negative number. Each section’s net cash flow, or total cash flow, is shown at the bottom of the section. Positive net cash flow from a section means a business generated more cash than it spent on that section’s activities. Negative net cash flow means the business spent more than it generated on those specific activities. – Bryan Keythman

As you can see, if a company has a negative ending cash flow the company might be in trouble. The true beauty of knowing how to read a cash flow statement, is that a company CANNOT flub the numbers or “interpret” the data. It’s straight numbers and arithmetic. The other quarterly statements can be “interpreted” and manipulated to put a good light on the company’s quarterly endeavors.

Homework

If you work for a publicly traded company, go online, if you can, and try to find their quarterly cash flow statement. It might shed light on whether the company is actually healthy or not.

Go Away I’m Studying for the CFA

Word of the Day: Margin Expansion and Amazon (AMZN)

Margin Expansion

Margin Expansion

The technical, narrow definition of this term is: an increase in the rate of profit a company makes on a product.

However in broader terms it can defined as: In long-term reference, a measure of a company’s net profit margin in the latest reported quarter divided by profit margin in the fiscal year previous. In short-term reference, a measure of a company’s net profit margin in the latest reported quarter divided by profit margin in the quarter immediately preceding.

So we can be talking about a specific product, or the net profit margins overall. We simply apply the term as narrowly or broadly as we like.

The news today applies to Amazon’s quarterly report.

The Amazon (AMZN) bull case has pivoted to a story of margin expansion from revenue growth after the company surprised analysts with better-than-expected profit margins during Q4. A number of firms are out with price target increases, citing margin expansion as a major factor. PT hikes: Barclays to $260 from $245; JPMorgan to $333 from $245; Baird to $325 from $300; BofA to $315 from $300; Credit Suisse to $334 from $301. AMZN +8.3% premarket to $281.62. – Seeking Alpha

In my opinion, I think overall Amazon is not doing as well as it appears, regardless of the news. I have a bearish outlook on the company, from observing their day to day operations. It is one of the few companies that I actually pay attention to. I do not consider their fundamentals good. On a technical standpoint if this trends up, you can still make money, since this news came out. But as a swing trader or long term investor, I think the fundamentals are just not there.