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Stock Investments, Treasuries, Wireless Communication Companies and Mutual Funds

Listeners’ Questions, Peter’s Answers- August 18, 2011

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Luke from Elmwood Park, IL
I wanted to purchase some stocks to diversify from my precious metal holdings. Do you have a suggested website? ScottTrade?

Cesar from Salinas, CA
You’ve said socialism does not work under any circumstances. What about Brazil? Its government has made a priority of lifting the poor through social programs. And unlike America, Brazil is currently doing great and their programs seem to be working. Can you share your opinion?

Ralph from Rocky Hill, CT
I would like to know why you think interest rates will rise when the Fed is willing to buy all the Treasuries as necessary? If we can keep printing and the Fed can keep buying, why can’t they keep interest rates low at least until the great economic crash comes?

Alex from Pittsburgh, PA
There are four national cell phone companies and two types of cell phone technologies, GSM and CDMA. GSM is considered the most open form of technology because it allows a customer to put their SIM card in any phone they choose. AT&T and T-Mobile are the only nationwide GSM based carriers and AT&T plans to buy out T-Mobile, effectively creating a monopoly in GSM carriers and reducing the number of national cell carriers to 3. Isn’t this bad because the cell phone industry has high barriers of entry and thus, low competitive forces?

Albert from Antwerpen, Belgium
Marc Faber said speculative gold exploration companies could plunge if money dries up in a depression scenario, like we saw in 2008. I can see that when bank lending drops and exploration companies can’t secure a loan, they also can’t proceed with their project. Even if gold prices surge, these companies could fall together with the stock market. What is your view?

Tony from Madison, IL
My parents have both passed away in the past 5 months and they left my sisters and me around $20,000 in mutual funds. My father told us to sell them when he died, but we’ve hung onto them. Would your suggestion be to sell the mutual funds or keep them?

Kyle from Collinsville, IL
You’ve stated that, “Once China figures out that we can’t pay them back, they won’t lend us anymore.” I think we’ve made it pretty evident that we aren’t going to be able to pay them back, but they still want us to keep borrowing by raising the debt limit. If China recognizes this but still wants to lend to America, what do you think their long term outlook is?