Tag Archives: Currency

January 2015 Financial Planning Tax Tip, Capital Market and Economic Review (Video)

Welcome to our monthly Economic, Capital Market, and Financial Planning tip of the month.

For those new to our writings, we touch on the most pertinent Financial “stuff” along with a video that has even more specialized details of the latest month as well as this post.

Ok…let’s go!


You Tube Direct Link   or   Vimeo Direct Link


Another special Tax saving Financial Planning Tip:

Be sure to Catch that Catch up provision !

Getting slightly older has some great benefits such as the catch up provision, be sure to take advantage of it :Retirement Plan

  • 401k Catch up $6000 in 2015 for age 50+
  • HSA Family and individual $1000 catch up for age 55+ (note 55 not 50)
  • IRA, SIMPLE, 403b, 457b (IRS website)

Those turning 50/55 years young this year should contact your employer (if applicable) to make sure you are enrolled and receiving maximum benefits.

With taxes being more prevalent (being PC here) since the tax payers relief act sunset, every savings counts!

Swiss Unpegs the Peg

The pressure of the worlds lower rates were too much for the Swiss to take. After promising they would hold the peg to the Euro, in sudden turn around fashion they let the peg go.

Swiss Franc to Euro 1-2015

A quick view of this chart shows the pain that occurred for many on the wrong side of this exchange.

  1. Other countries following suit
  2. Swiss residents/natives now are much less competitive, in the short-term
  3. Push back against the artificially lowering of rates AGAINST world governments (a slight loss of confidence towards them)

These concerns arising from the Swiss moves may have larger implications, not to worry, we are watching carefully.

US Rates continue their Dive

The underestimate of worlds lower rates on our US rate continues but not only ourselves, but almost all other. Rates have continued to fall even as our economy picks up steam. Another side effect, in addition to our Swiss comments above.

10 Year 1-30-15

Lower rates, a negative predictor of future economic growth in the past may not be giving the correct signal at this time. Time will tell, but we think these are artificially low and will normalize in the coming quarters. Read “Higher Rates” coming soon!

Hope you are having a great start to the year!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225

Draghi throws cold Ice on Euro … New Videos … New Mug Shot (yikes!)

While only a partial week with the holiday shortened Monday, there were a lot of events that occurred.

Mario Draghi In the House

ECB (European Central Bank) Chief Mario Draghi announced more cowbell stimulus

  • EU Marginal Lending rate cut from .4 to .3%
  • EU Refinancing Rate from .15 to .05%
  • EU Bank Deposit rate from …. -.1 to -.2% … yes you read that correct, Negative

Care to guess when the announcement was made?

Euro USD

Recall, most countries like their currency being WEAKER as it makes exporting more competitive, although a headwind for imports.

Euro < 130 .. More to come ? Sure looks like it !

All New Helpful Videos

Given client continued usage of our web pages, this blog site, and new technology improvements … over the labor day weekend (yaya … boring for many, but fun for me) I recorded three videos that are our most common requests or confusion.

This will not be the last for sure, as they were fun to do, helpful, and useful to show future technology improvements.

Click Here for the New Pro Video Page

New Mug Shot in the Making

Mid week marks the first official new mug shot in over four years …. Wow, where did that grey come from … Oh well, after much prodding by Cathy (office manager) the coming D Magazine “Best Financial Planner” award will have an updated (or old dated ?? haha) new mug shot !

Have a Great Friday and a Super Weekend!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225

Q 2 2013 J.K. Financial, Inc. Newsletter Topics with Video Summary…….The Masters

It is finally here…..Our newsletter has been posted on our company website here and paper copies should be in your mailbox soon if not already. This Quarterly newsletter was light on heavy technical topics and heavy on longer term planning issues. We hope you enjoy.

Q 2 2013 J.K. Financial, Inc. Newsletter Key Topics

  • Currency as an Asset Class
  • Paper Certificates go the way of the Buggy Whip
  • Why you should be on the email list for this site (http://www.street-cents.com)
  • CFA Forecast Dinner Review (17 points for our electronic Diary)
  • If you have a Pension you have a decision and it’s irrevocable

A few personal points by John Kvale

Lastly, those who follow us, know we love The Masters…it starts the spring season and is great viewing (might even take over the normal tennis that is on every night at my house)….Hope you enjoy as much as us…it starts tom0rrow !!

Have a great day!

John Kvale

8222 Douglas Ave # 590
Dallas, TX 75225

U.S. Dollar, Down and Out, or Not to Worry? (Part Two of A Series)

As a continuation of our first part series, U.S. Dollar, Down and Out, or Not to Worry? (Part One of A Series) we will expand on interest rates and their direct effect.

Given the fact that, using our Bank of England example, certain governments have different objectives that others, (U.S.) Let’s take a look at the possible direct effects, again in our opinion.

The U.S. Government is attempting to stimulate our economy by holding rates low. without much consideration to the level of the U.S. dollar against other foreign currencies.  This helps the ailing housing market and also helps the financial centers, banks, become more profitable. Low interest rates help home owners refinance and purchase homes at a much more affordable monthly payment. Low interest rates are very profitable for financial centers as they loan at much higher rates than they borrow or lend at, thereby putting the wind at their back for profits.

The unintended consequence of lower rates, again in our opinion,  is a lower U.S. dollar.  Currency investors rush to borrow from lower rate countries, extracting cash, and lend or invest funds in the higher interest rate currency, also known as the “carry trade.”

Our belief is there is an approximate finite pool of currency investors, and as disparity between country rates exist, the lower interest rate country currency will be pushed down, and the higher currency interest rate moved up, all other factors being equal.

Next up, in our last part, longer term patterns.