Money Management

Peter Schiff thinks speculation is driving Bitcoin’s recent price jump. 

After a woeful 2022, Bitcoin (BTC) has rallied a little this year. According to CoinMarketCap data, the granddaddy of crypto started 2023 at around $16,500 before rising to over $23,000. It has now fallen slightly and is nowhere close to its all time high of over $68,000, but it’s still an almost 40% increase in five weeks.

Some see the rally as a reason for optimism and hope the crypto winter might finally be thawing. But Peter Schiff, a popular economist and financial commentator, isn’t convinced. On Jan. 18, Schiff tweeted: “The #Bitcoin rally is providing cover for the #gold rally to continue unnoticed. As the financial media is distracted by the sucker’s rally taking place in fool’s gold, its (sic) paying no attention to the real rally going on in actual gold.”

Why Schiff thinks this is a sucker’s rally

Schiff, who’s known for predicting the 2008 economic crash, is also famous for his love of his gold and his criticism of Bitcoin. The founding member of Euro Pacific Asset Management, Schiff’s main objection to Bitcoin is that it doesn’t have any use. Unlike gold, which he believes is a hedge against inflation and could always be used in jewelry if nothing else, he argues Bitcoin is just a string of numbers. Schiff thinks gold is better than money, particularly as he isn’t convinced the Fed will be able to curb inflation.

In a 2021 interview with RealVision, he labeled Bitcoin a “fad” and said, “Bitcoin is not a currency — it’s not used as a medium of exchange really or a unit of account.” He continued, “It’s just used for speculation, but it’s not an investment asset like real estate, doesn’t pay rent, it’s not a stock, it doesn’t pay dividends, it’s not a bond, it doesn’t pay interest.”

He thinks that there are different forces behind the two price rallies. For him, Bitcoin has risen on speculation that various speculative assets that dropped significantly last year will now recover as the Federal Reserve relaxes its tightening measures and eases interest rate hikes. In contrast, he says people are buying gold because it’s a hedge against both inflation and a potentially weakening dollar.

Is Peter Schiff right about Bitcoin?

Investment decisions don’t have to be either/or questions. Depending on the type of investor you are, it’s about building a diversified portfolio of quality assets that you believe will perform well in the long term. As such, if you believe gold and Bitcoin could have value, you might own both of them.

That said, Schiff is almost certainly right to question whether Bitcoin can hold its recent gains. The crypto rally mirrors a rally in equities, which one Bloomberg article says is partly down to “wishful thinking swirling that the inflation beast has been conquered.” It is hard to believe that the Fed’s economic tightening measures will end until it is confident inflation is under control. Some analysts think our inflation problems are far from over.

In addition, many economists warn that a recession could be in the cards. There’s a lot of uncertainty, both about what is going to happen economically and what impact this would have on risky assets like crypto. On top of which, we don’t know what impact increased crypto regulation will have, nor whether any other platforms will collapse in the ongoing fallout from FTX. The fact that Bitcoin is still nowhere close to erasing last year’s losses is another reason for caution.

Rally aside, Schiff is not alone in arguing that Bitcoin has no intrinsic value. Warren Buffett thinks so, too. But there are plenty of Bitcoin fans who disagree, including Ark Invest’s Cathie Wood, who point to its potential as a currency in emerging markets and the role it could play in the international remittance market, among other things.

Bottom line

Deciding whether to buy Bitcoin, gold, or any other investments means looking at the fundamentals and deciding how it might perform in the future and how it might fit into your portfolio. In a way, it doesn’t matter whether this rally will be short lived or not. What matters is whether Bitcoin can overcome the hurdles it faces and outperform other investments in the coming decade or more.

Cryptocurrency is a high-risk investment. This does mean there’s the potential for big returns, but you could also lose everything. Bitcoin may achieve some of the things its fans believe it can, but there are no guarantees. If you’re considering investing, make sure you understand the risks involved, use a reputable crypto exchange, and only spend money you can afford to lose.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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What happenedAmericans plan to spend an average of $115 on the Super Bowl this year, according to a LendingTree survey. But that’s not the cost of attending the big game — it’s the cost of game-related expenses, such as food for a Super Bowl party. So whatThe $115 Americans are planning to spend on the Super Bowl this year is a 31% jump from the $88 they planned to spend in 2022.”The cost of practically everything has gone up, so it makes sense that if you’re going to spend on the game this year, you’re probably going to spend more than you did last year,” said LendingTree chief credit analyst Matt Schulz. “Still, 31% is a pretty big leap. That more people are planning to spend on Super Bowl-related expenses this year speaks to the game’s power. The data clearly shows that while many are making sacrifices because of higher prices, many aren’t willing to do so with the Super Bowl.”As of December 2022, total food costs were up 10.4% annually in the U.S., according to the Bureau of Labor Statistics. The cost of food at home was up 11.8% compared to late 2021, while the cost of food away from home was up 8.3%. Now whatTwenty percent of Americans plan to invite guests over for the big game, and if you’re going to host, do your best to keep your costs down.Preparing food at home is likely your best bet in that regard. While the cost of food at home has risen at a faster pace than the cost of food away from home (such as restaurant meals and takeout orders), the latter is still apt to be your more expensive option. Find easy recipes you can make in your kitchen, or make your party a potluck affair where everyone chips in.Along these lines, don’t upgrade your equipment if doing so will mean having to carry a credit card balance forward. A good 14% of Gen Zers plan to buy new electronics ahead of the big game. But that’s an expense you should skip if you don’t have the cash in your savings account to cover that sort of purchase outright.Chances are, your fellow football fans will be excited to get out of the house and watch the big game in good company. So there’s no need to mess up your finances when a low-key gathering featuring a regular old TV will more than suffice.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If you’re using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes. Read our free reviewWe’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy. 

What happened

Americans plan to spend an average of $115 on the Super Bowl this year, according to a LendingTree survey. But that’s not the cost of attending the big game — it’s the cost of game-related expenses, such as food for a Super Bowl party.

So what

The $115 Americans are planning to spend on the Super Bowl this year is a 31% jump from the $88 they planned to spend in 2022.

“The cost of practically everything has gone up, so it makes sense that if you’re going to spend on the game this year, you’re probably going to spend more than you did last year,” said LendingTree chief credit analyst Matt Schulz. “Still, 31% is a pretty big leap. That more people are planning to spend on Super Bowl-related expenses this year speaks to the game’s power. The data clearly shows that while many are making sacrifices because of higher prices, many aren’t willing to do so with the Super Bowl.”

As of December 2022, total food costs were up 10.4% annually in the U.S., according to the Bureau of Labor Statistics. The cost of food at home was up 11.8% compared to late 2021, while the cost of food away from home was up 8.3%.

Now what

Twenty percent of Americans plan to invite guests over for the big game, and if you’re going to host, do your best to keep your costs down.

Preparing food at home is likely your best bet in that regard. While the cost of food at home has risen at a faster pace than the cost of food away from home (such as restaurant meals and takeout orders), the latter is still apt to be your more expensive option. Find easy recipes you can make in your kitchen, or make your party a potluck affair where everyone chips in.

Along these lines, don’t upgrade your equipment if doing so will mean having to carry a credit card balance forward. A good 14% of Gen Zers plan to buy new electronics ahead of the big game. But that’s an expense you should skip if you don’t have the cash in your savings account to cover that sort of purchase outright.

Chances are, your fellow football fans will be excited to get out of the house and watch the big game in good company. So there’s no need to mess up your finances when a low-key gathering featuring a regular old TV will more than suffice.

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What happenedDell became the latest tech company to announce widespread layoffs today (Feb. 6). Per Bloomberg, the computer giant notified the Securities and Exchange Commission (SEC) that it will slash 6,650 jobs — about 5% of its workforce. Dell CEO Jeff Clarke shared the news in a message to staff, writing, “There is no tougher decision, but one we had to make for our long-term health and success.”So whatDell’s cuts come against a backdrop of significant layoffs in the banking and tech sectors. Amazon, Microsoft, Meta, and Google are among the companies that have cut head counts recently. But so far, the job losses haven’t spread to many other industries. Quite the opposite, in fact. Last week, data from the Bureau of Labor Statistics showed that unemployment had hit a 54-year low.Nobody has a crystal ball, so it’s almost impossible to say whether tech job losses are an anomaly or an indication of what might happen in other sectors. That said, many economists still warn a recession is likely, in spite of positive jobs data. For example, Insider reports that Bank of America analysts think the positive job news could trigger more aggressive moves from the Federal Reserve, which in turn could lead to more economic difficulties.Now whatIt isn’t easy to make decisions about your personal finances when there’s so much uncertainty and conflicting information. Particularly if you’re considering changing jobs or making other big life moves such as buying a house. But there’s no harm in being prepared for economic difficulties, even if they end up not happening.Here are some steps you can take:Stock up your emergency fund: Whether it’s a job loss or a medical issue, you never know when life will throw you a curveball. Having three to six months’ worth of living expenses in a savings account gives you a cushion against the unexpected. Indeed, some financial experts suggest the uncertain economic conditions mean you should put even more into your emergency fund.Pay down debt: If a chunk of your paycheck is tied up in debt payments, it can make it even harder to cope if you suddenly lose some or all of your income. On top of which, rising interest rates make it more expensive to carry debt, particularly the credit card variety. Learn more about ways to pay down debt.Dust off your resume: It’s much easier to make a plan and update your resume when you have a job and things are going well. Think about the measurable ways you add value in your current job, and what specific data you can include that supports your achievements.Connect with your professional network: In addition to updating your resume, reach out to old colleagues and look for other ways to reconnect with your network. Those connections can often be invaluable when looking for a job.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If you’re using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes. Read our free reviewWe’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy. 

What happened

Dell became the latest tech company to announce widespread layoffs today (Feb. 6). Per Bloomberg, the computer giant notified the Securities and Exchange Commission (SEC) that it will slash 6,650 jobs — about 5% of its workforce. Dell CEO Jeff Clarke shared the news in a message to staff, writing, “There is no tougher decision, but one we had to make for our long-term health and success.”

So what

Dell’s cuts come against a backdrop of significant layoffs in the banking and tech sectors. Amazon, Microsoft, Meta, and Google are among the companies that have cut head counts recently. But so far, the job losses haven’t spread to many other industries. Quite the opposite, in fact. Last week, data from the Bureau of Labor Statistics showed that unemployment had hit a 54-year low.

Nobody has a crystal ball, so it’s almost impossible to say whether tech job losses are an anomaly or an indication of what might happen in other sectors. That said, many economists still warn a recession is likely, in spite of positive jobs data. For example, Insider reports that Bank of America analysts think the positive job news could trigger more aggressive moves from the Federal Reserve, which in turn could lead to more economic difficulties.

Now what

It isn’t easy to make decisions about your personal finances when there’s so much uncertainty and conflicting information. Particularly if you’re considering changing jobs or making other big life moves such as buying a house. But there’s no harm in being prepared for economic difficulties, even if they end up not happening.

Here are some steps you can take:

Stock up your emergency fund: Whether it’s a job loss or a medical issue, you never know when life will throw you a curveball. Having three to six months’ worth of living expenses in a savings account gives you a cushion against the unexpected. Indeed, some financial experts suggest the uncertain economic conditions mean you should put even more into your emergency fund.Pay down debt: If a chunk of your paycheck is tied up in debt payments, it can make it even harder to cope if you suddenly lose some or all of your income. On top of which, rising interest rates make it more expensive to carry debt, particularly the credit card variety. Learn more about ways to pay down debt.Dust off your resume: It’s much easier to make a plan and update your resume when you have a job and things are going well. Think about the measurable ways you add value in your current job, and what specific data you can include that supports your achievements.Connect with your professional network: In addition to updating your resume, reach out to old colleagues and look for other ways to reconnect with your network. Those connections can often be invaluable when looking for a job.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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It’s funny how quickly we forget predictions that get it wrong. 

YouTube fans know Graham Stephan as a financial influencer. The real estate investor is particularly popular with young adults diving into the investment pool for the first time. Like every other financial influencer on the planet today, Stephan has weighed in on what he expects the housing market to look like in 2023.

Reading the tea leaves

Here are Stephan’s predictions for the 2023 housing market:

“We’re finally going to see the delayed effects from a slowing economy.”A combination of higher mortgage interest rates, weaker consumer spending, and continued layoffs will put pressure on landlords to hang on to their current tenants. This will delay rent increases as inventory piles up.Landlords will compete for a fixed pool of tenants, possibly driving rents down further.Home values will take longer to adjust than rent prices.There will most likely be a mild drop in prices in some areas, while homes in other, hard-hit areas may drop by 25%.

A historical perspective

According to Stephan: “The housing market in 2023 won’t be what you expect — whether you’re a buyer, seller, renter, or landlord. Home sales are down 35% — the biggest decline on record!

To understand this shift and what it means for you, we need to take a step back Way back to World War II.”

Returning servicemen and women

When World War II ended, the U.S. economy was lifted by a wave of veterans returning home. There was a problem, though. To help with the war effort, most economic activities had been put on pause. Now, there were millions looking for jobs that did not exist.

In response, the government kept interest rates low to promote both manufacturing and spending. The GI Bill was put in place to give these returning soldiers access to low-interest, zero-down-payment mortgage loans as well as a free college education.

Additional detail: It’s important to note here, the GI Bill was intended to help white soldiers acclimate to home and make their way into the middle class. Although more than 1 million Black men and women served in every branch of the armed forces during World War II, few were allowed access to GI Bill benefits. Segregation was still the law in 18 states, making it next to impossible for those returning service personnel to secure a mortgage or attend college.

Americans got married in record numbers, anxious to start families of their own. To ensure that there were enough homes, 7 million were built between 1945 and 1950. There were another 8 million added by 1955.

Today represents the flip side of the coin

Like peering into a mirror, we can flip what was happening in the years following World War II with what’s happening today. Stephan made these points, contrasting the differences:

After months of falling home sales, they dropped by another 35% in November 2022.In an effort to slow consumer spending, the Federal Reserve has steadily increased the interest rate. Not only did it slow the amount Americans were willing to spend on a car or vacation, but higher interest rates also slowed the number of people willing to buy a home.Median home values are 143% higher than they were in the 2000s, yet median incomes have not kept up.The number of recent layoffs in the tech sector has led to job insecurity, with people afraid they will lose their jobs.More people now live with their parents or share a home with roommates rather than buying a house of their own. This is the opposite of what happened after World War II.While returning veterans wanted homes to raise growing families, the size of today’s family is shrinking, which also shrinks the need for a new house.Despite a drop in housing sales, rents are slowly dropping. Nationally, rents fell by 0.59% in November 2022.Apartment construction recently hit a 40-year high, with more than 917,000 being built. These new apartments are expected to be ready for tenants by the second half of 2023, meaning there may be more units on the market than demand for those units.

Final thoughts from Stephan

“So what does 2023 look like? There are a lot of predictions, not all in agreement,” Stephan said.

It looks like 2023 is going to be one of those years we only understand when studying it through the rearview mirror.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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What HappenedAccording to the NHTSA (National Highway Traffic Safety Administration), Honda has issued a “Do Not Drive” warning for approximately 8,200 older Acura and Honda vehicles due to a potentially deadly Takata Alpha driver side airbag that has been recalled. Models with the recalled airbags include:2001-2002 Honda Accord 2001-2002 Honda Civic 2002 Honda CR-V 2002 Honda Odyssey 2003 Honda Pilot 2002-2003 Acura 3.2 TL 2003 Acura 3.2CLSo WhatThe recalled airbags have a 50% failure rate and can rupture on even minor impact, ejecting metal fragments into the driver’s face. This can lead to death or serious injury. The recall means you can have your airbag repaired or replaced free of cost at a qualifying dealership or repair facility.“If you have a vehicle with a recalled Takata Alpha air bag, you must get it repaired now — for free. These inflators are two decades old now, and they pose a 50% chance of rupturing in even a minor crash,” said NHTSA Acting Administrator Ann Carlson. “Don’t gamble with your life or the life of someone you love — schedule your free repair today before it’s too late.”Now WhatYou can check to see if your vehicle is included in the open recall through the NHTSA website here. If your vehicle is one of the affected models, you can schedule a free repair at your local dealership or through Honda/Acura customer service. You may also be eligible for free towing and/or mobile repair since the vehicles are now deemed unsafe to drive.Because the recall-related repairs are handled through the vehicle manufacturer, you don’t need to involve your auto insurance at all. This means recalls tend to have little to no impact on your insurance rates.
More: Check out our picks for best car insurance companies
That said, if a serious fault impacts the overall safety rating of your vehicle, it could lead to a potential rate increase if you fail to have it repaired. In rare instances, ignoring a “Do Not Drive” warning may even give your insurance company grounds to deny a future claim on the basis of negligence. This is also a good time to ensure you have adequate personal injury protection (PIP) through your auto insurance. PIP provides coverage if you are injured in a car accident, and it applies no matter who is at fault. It can cover medical bills, lost wages, and funeral expenses. While not required in all states, PIP can be useful to have regardless of whether it’s mandated where you live.Our best car insurance companies for 2022Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Brittney Myers has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 

What Happened

According to the NHTSA (National Highway Traffic Safety Administration), Honda has issued a “Do Not Drive” warning for approximately 8,200 older Acura and Honda vehicles due to a potentially deadly Takata Alpha driver side airbag that has been recalled. Models with the recalled airbags include:

2001-2002 Honda Accord 2001-2002 Honda Civic 2002 Honda CR-V 2002 Honda Odyssey 2003 Honda Pilot 2002-2003 Acura 3.2 TL 2003 Acura 3.2CL

So What

The recalled airbags have a 50% failure rate and can rupture on even minor impact, ejecting metal fragments into the driver’s face. This can lead to death or serious injury. The recall means you can have your airbag repaired or replaced free of cost at a qualifying dealership or repair facility.

“If you have a vehicle with a recalled Takata Alpha air bag, you must get it repaired now — for free. These inflators are two decades old now, and they pose a 50% chance of rupturing in even a minor crash,” said NHTSA Acting Administrator Ann Carlson. “Don’t gamble with your life or the life of someone you love — schedule your free repair today before it’s too late.”

Now What

You can check to see if your vehicle is included in the open recall through the NHTSA website here. If your vehicle is one of the affected models, you can schedule a free repair at your local dealership or through Honda/Acura customer service. You may also be eligible for free towing and/or mobile repair since the vehicles are now deemed unsafe to drive.

Because the recall-related repairs are handled through the vehicle manufacturer, you don’t need to involve your auto insurance at all. This means recalls tend to have little to no impact on your insurance rates.

That said, if a serious fault impacts the overall safety rating of your vehicle, it could lead to a potential rate increase if you fail to have it repaired. In rare instances, ignoring a “Do Not Drive” warning may even give your insurance company grounds to deny a future claim on the basis of negligence.

This is also a good time to ensure you have adequate personal injury protection (PIP) through your auto insurance. PIP provides coverage if you are injured in a car accident, and it applies no matter who is at fault. It can cover medical bills, lost wages, and funeral expenses. While not required in all states, PIP can be useful to have regardless of whether it’s mandated where you live.

Our best car insurance companies for 2022

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Brittney Myers has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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