Reggie Middleton
Reggie Middleton is the founder of Boom Bust Blog, one of the most popular financial blogs in the world. Millions of people visit Boom Bust Blog daily for hard-hitting analytical reports and blog posts that give them insight, foreknowledge, and financial truth about what is really happening in the fast-changing world of economics and business. Boom Bust Blog is so spot-on that it has the captive attention of UBS, Citibank, Morgan Stanley, Deloitte, Citadel, central banks (including the European Central Bank and the Central Bank of Canada), the International Monetary Fund (IMF), Hartford, and General Growth Properties.
The inner workings of international finance, banking, and business are becoming more and more complex. Reggie Middleton explains them in a way that makes them accessible to anyone who wants to be in front of what’s happening before it happens. His understanding of markets, experience of financial analysis, and focus on the fundamentals allows him to see the writing on the wall when others don’t. Reggie Middleton called the fall of Bear Stearns, gave advanced warning about Lehman Brothers before anyone saw it coming, the fall of the real estate market, and the collapse of General Growth Properties.
In this conversation, we get into Reggie Middleton’s rarefied field of understanding and ask him hard-hitting questions about the state of Europe, China, the US economy, global markets, and mobile computing wars between Apple and Google, and ask him to explain many distinctions in finance that even seasoned professionals often miss.
Reggie Middleton hits it out of the park. If you want to stay out of harm’s way and make money, tune in.
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Very interesting speaker. I agree with the majority of what he said, but there are a few things I would like to comment about.
First he said Banks are federally insured hedge funds who dont make money lending money, interest rates are too low so they speculate. I believe Banks DO make money lending. They get the funds for nothing and even though interest rates are low, the cost of money to banks is even lower.
Second he talked about a run on the banks but didn’t really mention the FDIC which insures deposits. This has the effect of having banks take on more risk becuase they don’t have to worry about depositers losing their money (they have the FDIC).
I agee that you can’t be a good investor by following your emotions. Its hard for humans to do so but they have to take the emotion out of investing if they are going to make money.
Microsoft didn’t sell computers, they sold only software. Apple sold hardware and got burned. Now you don’t make money selling software becuase Google gives it away. But I’m unclear about how Google makes its money.
Fiat currencys. I disagree that tying the dollar to gold is just substituting one fiat currency for another. Worldwide people believe gold has value. Our currency is based on the faith and credit of the US. Gold’s value is independent of the faith and credit of our government. I am not sure though that US dollar should be tied to gold.
Look forward to more interesting interviews like this one.
Elena
My understanding is that banks make more money speculating, in credit default swaps, derivatives and other products. We’re very bullish on real gold, not gold ETFs, and even more importantly, gold holds purchasing power and appreciates while paper dollars lose their value over time, every time. There are a few currencies to watch though and trust me, we are watching them very carefully and everything that has to do with them. Go to Reggie Middleton’s website for how Google makes money at http://www.boombustblog.com Thanks for listening and the input.
Banks make money because they lend you something they don’t have (digits on a computer screen) and you have to pay them back in multiples. In the US of 2008 onwards, some banks cannot lose because their losses are passed on to tax-payers. This will ultimately destroy America because those who do well with what they have now have to compete with those too big to fail institutions who even to this day continue to suck people’s blood (with the help of government officials and a community organiser (Yes you Mr obama)).
The government guarantees deposits up to a certain amount (I think 100K in the US). Banks, due to fractional reserve banking can put the use X times the amount of money they have. For example, if a bank has 1 million as capital, it can deploy 20 times as much in loans. If those loans are not paid back, the bank goes bust or should unless it comes under ‘too big to fail’ umbrella in which case it gets tax payers to fund it again.
Google makes almost all its money from advertising (Adwords/Adsense). It’s a business model it stole from Yahoo (who bought a company called Overture-Yahoo sued google and won around a billion Dollars for that)
Paper money (US currency is printed on cotton rather than paper) is just a representation of its value. The more the Fed prints (or add 000 digits on computers), the more money loses its value. The Dollar has been losing value for a while now. While there may be spikes due to currency trading & other events, eventually the Dollar will be worth a lot less in the years to come.
Gold or any other precious metal has the value that it has. a 1Kg of gold stays 1Kg of gold even in 200 years. Paper money on the other hand loses value with time.
Super-smart speaker and if you listen to his analysis on YouTube…he is very clued up and knowledgeable about what is going on and he’s absolutely right that to get out of this economy mess, there has to be debt destruction and not shifting the can down the road. The helicopter Bernanke can print money till the cows come home and give it to his friends, it’ll only make matters worse for the US.
Interesting interview.
I have a question about short-selling. To me there is a problem with the practice of short-selling and here is why: it boils down to property ownership. When you borrow something and sell it, you have essentially committed fraud. Because you do not have the ownership rights to be able to transfer from the true owner to someone else. If you had bought the stock instead of merely borrowing it, then you own it and you can sell it. Borrowing a stock and selling it is a contravention of property rights as far as I’m concerned. Even if you have the permission of the true owner to sell it, you are mislabelling the transaction, which is – legally speaking – fraud, because the buyer believes he ownes that stock outright.
Anyway, that’s the way I see it. Perhaps I’m missing something but if we can’t keep terminology unambiguous in the financial markets, we will never be able to properly classify theft and fraud.
Thoughts Kim?
I agree with you about short selling Jim. People in finance are entrenched in these types of transactions and believe that it is “good for the free market” when in fact, it really isn’t. That would require an entire other show like the one we did with Ellen Brown and others.