Three Stories With More Questions than Answers…

Today, I’ve got three stories that make me ask more questions than I have answers:

Electronically Traded Funds, called ETFs, are modern day mutual funds that you can purchase for a tiny commission and fee. Right now, there is more money invested in Gold ETFs than there is in the entire S&P 500. And that consists of the 500 largest companies. Just think about that. The fever is at an all-time high when there is more invested in something shiny and speculative than there is in the assets of the largest companies in the world. Although invested isn’t the word I’d use. I’d call it gambling. True or false? It may go up for another long stretch, but mark my words, when it corrects, it’ll drop by half in a hurry.

The State of California just approved an insurance company test which charges your insurance premiums based on the miles you drive. What do you think? Is that something that’ll benefit people or hurt them? I guess if you’re a Senior, it could be a good deal, but if you drive a fair bit….not so much….

Bank of America has just announced they’ll now charge $5 a month for their clients to use a debit card.

With the recently implemented financial reforms, banks have had their massive debit card fees capped. The Federal Reserve, and this would be the same in Canada, says it costs the banks 4 cents to process a debit card transactions. But until recently, their fees were averaging 44 cents. That’s a 1,000% return – a pretty good profit! It’s now 25 cents, and that helps merchants, and eventually you and me in lower prices, but cost the banks a ton of money.

Would you pay a fee just to have and use your debit card? I bet 99% of people will when it does come to Canada. Besides, if you go back to a credit card, the banks make even more money. So heads you lose, tails they win. Sick – but true.

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