With stocks hitting new highs today, even as the pace of economic growth seems to be slowing, much of the market’s strength appears to be coming from the continued low interest rates provided by the Federal Reserve. Although we don’t know when rates will rise, the general consensus seems to be that it will happen sometime this year.

With that in mind, it’s time to take another look at what happens when rates start to rise, a topic I originally addressed last year.

Here's a post that originally appeared in 2013 but is worth revisiting. 

In my recent post on the relative strength and weakness of various currencies, I didn't address one big question: what determines a currency's value? Is there, in fact, a “right answer” as to the value of each currency?

As with many economic questions, there are several right answers, depending on how you look at it.

We talked the other day about the power of compounding and how it can be used to help determine whether trends are sustainable. The idea is that the compounded returns will at some point run into a limit that can’t be surpassed.

It sounds simple, but the idea of limits actually isn’t so clear. In many cases, the real issue isn’t a physical limit, but an economic and technological one.

I wrote last week about trends that can’t continue and noted that I would be looking at more of them through December. First, though, it makes sense to consider exactly what it is that makes a trend unsustainable.

Why can’t something go on forever?

One of the advantages of a slow summer season is that we can spend some time on topics that are important but not urgent. Demography is a great example. It determines most of the context in which the economy operates, but its trends play out over years and decades. Like the weather, demographic trends are just there, and we have to adjust to them.

Simply looking at the U.S. population distribution can give us some insight into what will happen over the next 20 years or so, as well as what’s happening right now.

Yesterday, I wrote that banks starting to lend again is a plus for the economy. Today, I want to take a closer look at a key assumption underlying that statement.

Much of modern society revolves around consumption, and there's nothing wrong with that—if it’s affordable. If not, we find ourselves in 2009 again.

The real question here is what affordable means. In fact, this is the question at the core of saving, investing, retiring, and pretty much everything else I write about here. 

Also known as the “fear index,” the VIX tends to stay low when investors are feeling confident and to spike when investors get scared. Technically, it reflects the volatility of the stock market—how much things bounce around—but on a practical level, it tends to mirror recent market performance.

The thing that interests me about the World Cup—besides the chance to watch elite players going all out—is how the results totally upend the usual global stories.

Looking at the Goldman Sachs projections for the tournament, the major powers (with the exception of Germany) are nowhere to be found. Combined, the U.S. and Russia have a 1.1-percent chance of winning it all. China isn’t even on the list. Japan is, but might as well not be. Ditto the UK.

Whenever you look at statistics, there are two things to keep in mind:

1. Correlation is not causation.
2. There are three types of lies: lies, damn lies, and statistics.

I’ve written before that there’s generally more downside risk in the stock market than investors expect. One way to account for that is to look at the VIX.