If you don't believe Reggie, try this from Chris Whalen.
The Fed's Zero Rate Policy Is Destroying AmericaChristopher Whalen, Institutional Risk Analytics | Oct. 12, 2010, 9:55 AM | 9,401 | 33
"Crown of Thorns"?
Pearl Jam
Ament/Fairweather/Gilmore/Gossard/Wood
In this issue of The Institutional Risk Analyst, we turn the camera eye on two different perspectives on the continuing crisis affecting the U.S. economy, the Fed's deflationary monetary policy and the surging price of gold. We look at how the rapid changes now underway in how consumers and investors alike view the dollar will affect the risk picture facing banks, companies and individuals. BTW, tomorrow IRA cofounder Christopher Whalen will be travelling back to the heartland to visit our friends at Indiana State University. We will give a talk entitled: "Do Americans Need a New Deal?" More on this theme next week.
Last week The IRA traveled to Washington D.C. to participate in the latest event sponsored by our friend Alex Pollock at American Enterprise Institute, "Living in the Post-Bubble World: What's Next?" We received a great deal of media buzz before and after the event, but the most poignant comment came in this unexpected and very disturbing letter from Dianna in Rockford, IL:
"I have no way of knowing if this message will ever actually reach you. Nevertheless, I want to extend a most sincere message of appreciation for one of the comments you made during recent participation in an American Enterprise Institute symposium. You are the only financial guru /analyst whom I have heard make any reference to the devastating impact of extraordinary quantitative easing on "grandma" and her carefully laid financial plans. Many middle class retirees have no generous government or corporate pension. We have had to plan and save prudently for retirement. Now, as we watch returns on CD's plunge from an average 5% to an anemic 1.5%, we also experience a plunge from a comfortable retirement into a state of severe "penny-pinching". You were correct...not only do we have to cut back on gifts for the grandchildren, we are also drastically curtailing many discretionary purchases, travel to spend time with family and so forth. I have heard NO other analyst speak to this impact on responsible retirees who thought they had done all the right things to prepare for the "golden years". It just felt good to realize that there is at least one individual who has given any consideration to this fallout from "Fed" policies."
Now you know why we at IRA take time away from our business to engage in public debate about how the world of finance affects real people. And you also see the horrible damage that the Bernanke Fed is inflicting upon real American in order to bail out the large Wall Street banks. And the irony is that all of this damage and sacrifice by Dianna and tens of millions of American individuals and businesses who depend upon interest income to survive will be for naught. The Big Banks will have to be restrructured in any event using the resolution authority in the Dodd-Frank legislation.
We also heard from our friend Henry Smyth, proprietor of Granville Cooper Asset Management Ltd., which features a unique gold fund that is comprised solely of rolling forward positions in the noble metal. The fund is domiciled entirely out of reach of America's spendthrift government and settles via Julius Baer in Zurich. (Disclosure: IRA co-founder Chris Whalen is a neighbor of Smyth and an introducing party of GCAM.)
Smyth, who we know from our Mexico days, has been pestering us since the summer about a chart created by his colleague Zeke Brustkern that illustrates the growth of the demand for gold over the past decade and how the increased estimates each year understate the actual market performance. Click here to see the gold chart which Smyth explains below:
"What this graphic aims to elucidate is the evolution of parabolic estimates of the future of gold price over the last five years. Starting with five years of data, from Sept. 2000 through Sept. 2005, a growth projection is forecasted through Sept. 2012. Each subsequent year another projection is crafted adding the additional data points into the curve's slope estimate. Five curves are portrayed in all, representing data from Sept. 2000-Sept. 2010, all projecting through 2012. What becomes clear is that despite using estimation methods intended to represent rapid parabolic growth, the estimated values continue to fall short of the real asset value appreciation. With the exception of 2008/2009, each passing year has brought substantial upward revision of growth projections, and has continued to do so throughout 2010."
Consider these two data points: First, an American retiree named Dianna who has seen her retirement savings rendered worthless by the ill-considered policy actions of the Federal Open Market Committee. Second, the action of the gold market, which is likewise suggesting that fiat paper dollars have no value. If you take the two observations together, it suggests to us that the Fed's actions are feeding global deflation and that the next leg down in the U.S. financial markets could be particularly severe -- especially if the Fed resumes printing more funny money.
While some analysts are calling for a mild devaluation of the dollar, what we see forming ahead could be something far more dramatic and potentially disruptive to the world economy, namely a protracted period of deflation driven by the subserviant position of the Fed vis-a-vis the largest banks. This new shrinkage will not only see gold moving higher but will also see the dollar collapse a la the FDR dollar devaluation of the early 1930s. This crisis is being caused by Fed zero interest rate and quantitative easing ("QE") policies.
As we have said before and we'll say again, the FOMC's zero rate policies imply that the dollar and all assets denominated in dollars have no value. Stocks, bonds and other financial assets depend upon income to make these obligations money good. Without a positive return, there is no reason to hold dollar assets. When President Abraham Lincoln introduced fiat paper dollars backed by nothing to finance the Civil War, these pieces of debt originally were convertible into Treasury notes that paid interest. But the need of a growing nation for a means of exchange rendered such devices irrelevant.
Today the situation is reversed. Non-commercial demand for dollars is collapsing in much of the global economy, in part because the Fed is transferring something like three quarters of a trillion dollars annually from individual and corporate savers to the Wall Street banks. And even this vast subsidy will be insufficient to prevent the ultimate restructuring of the top three U.S. banks. What will Fed Chairman Ben Bernanke and the other members of the FOMC say to Dianna and the millions of other Americans impoverished by their policy errors when we have to break up the top-three U.S. banks anyway?
Forget more QE. If the FOMC does not soon allow interest rates to rise and thereby rebalance the policy equation between American savers and borrowers, then we fully expect to see gold prices climb further. Fed Chairman Ben Bernanke and the FOMC will hand the detractors of the central bank led by Rep Ron Paul (I-TX) the political issue they need to eliminate the Fed once and for all. And President Barack Obama will be wearing the concrete booties that once belonged to President Herbert Hoover. Unlike your worthless greenbacks, you can take that to the bank.
Read more: http://www.businessinsider.com/fed-zero-rate-policy-destroying-america-2010-10#ixzz12uaKHMFk
http://www.businessinsider.com/fed-zero-rate-policy-destroying-america-2010-10
The latest jobs report came out on Friday. Overall, another 95,000 jobs were lost in September. Maybe they should start calling it the no-jobs report. Ezra Klein crunches the numbers to explain why the addition of 64,000 private sector jobs is pitifully inadequate:
That's about 35,000 less than the 100,000 or so jobs needed to keep up with population growth. It's about 180,000 less than the number of jobs needed to get back to 5 percent unemployment in the next 10 years. It's about 257,000 less than the 320,000 jobs needed to get back to 5 percent unemployment in five years.
In other words, the economy is not bouncing back any time soon. Even worse, it's clear that Washington is not up to the task of creating the conditions for the job growth the country so desperately needs. And as we find ourselves in the silliest stretch of the electoral silly season, it doesn't inspire confidence that the government that emerges on November 2nd will do any better.
A deep-seated cynicism is not an unreasonable response. But I'm pleased to report that hundreds of thousands of Americans across the country are choosing to react by taking action. As a result, a parallel economy is being created by people who, finding there are no jobs, have decided to create their own.
Of course, this burgeoning parallel economy doesn't mean the government is off the hook. But while millions of Americans are waiting for the government to do the right thing in terms of bold infrastructure spending, a payroll tax holiday, etc, etc, many have decided to stop waiting.
Through the creative use of technology, social media, and a focus on community, this new wave of small businesses is making its mark in a true convergence of left and right. At the moment, our government may be can't-do, but more and more of our citizens are solidly can-do -- and irrepressibly American.
To turn a spotlight on this nascent movement and encourage its continued growth, HuffPost is launching Small Business America, a new blog sponsored by FedEx where entrepreneurs can exchange ideas, get advice, and keep up with the latest small business news. Small Business America's contributors will run the gamut from CEOs to mom-and-pop business owners to policy-makers, business writers, professors, and social media experts.
Some of those we'll be featuring in our first week include:
- Aaron Patzer, founder of the online personal finance site Mint.
William Aulet, Managing Director of the MIT Entrepreneurship Center.
Karen Mills, Administrator of the Small Business Administration.
Tim Westergren, Founder of the online radio site Pandora.
Christopher Hytry Derrington, whose company helps firms outsource their work to rural America instead of overseas.
Small Business America will also feature the first-person accounts of people who have already jumped in and started their own business -- as well as those thinking of taking the leap.
One of those forced by circumstances into creating her own business is Brenda Carter, whose story is featured in Third World America. A grandmother living in Marietta, Georgia, Carter had worked as a manager of information systems at the same company for thirteen years. Then, in 2007, she was suddenly laid off. "Imagine getting up every day for 13 years and suddenly that part of your life just ceased," she wrote. "I cried and cried and cried. I just could not believe it."
She didn't know what she was going to do, but then had an idea. Her mother, to help pay the bills as a single mother in New Orleans, had sold pralines door-to-door. "People would knock on our doors at all times of night asking to purchase these pralines," she said. "So as I was sitting at home I thought 'Hey I can do this too! This is something I can do and am comfortable doing.'"
And now she's the proud operator of a growing praline operation -- except instead of selling door-to-door, she's doing it computer-to-computer. Her online store can be found here. "Times are changing and so must we," Carter says. "We need to be supporters of ourselves, otherwise we will not survive."
Americans have a lot of passion and ingenuity, and there is a clear market in helping bring them to market. Enter Etsy.com and Cafe Press, which have now grown large enough to have a multiplier effect rippling across the country.
Etsy was founded in 2005 by Robert Kalin. Then 25, he was an aspiring furniture designer feeling frustrated by his attempts to sell his work online. So he created a streamlined platform for handmade goods of all kinds, and launched it from his apartment.
The site's mission? "To enable people to make a living making things, and to reconnect makers with buyers. Our vision is to build a new economy and present a better choice." Which is exactly what Etsy.com is doing. And along with creating jobs, this new economy is creating connections, and caring, and community. As Kalin said in a 2009 interview:
One of the most important things anyone can do right now is create jobs. What's important is to empower people to make a living, and I support renting and running a 9,000-square-foot workspace in Red Hook, Brooklyn, that provides other small businesses with affordable studio space. And we have big community dinners there once a week for networking and sharing our ideas.
Etsy's effect is being felt far beyond Brooklyn. Colleen Fields, 54, lives in a remote town in the mountains of North Carolina. Two years ago, she was laid off from her job as a newspaper subscriptions manager. "I must have sent out a thousand or more resumés and applications," she told The Huffington Post. "I applied for a job at a convenience store, and they said they had over 200 applicants. It's just crazy. There are no jobs around this area."
A friend suggested she look into Etsy. Not exactly computer literate, she nevertheless gave it a try. In December 2009 she opened her online store, Gemstones and Wire, selling necklaces, earrings and handmade clay vases. She wrote about how some women pay all their family bills with small businesses started through Etsy. "I'm just not one of them yet. I would love to be one of them," she added.
Several other successful sites have followed in Etsy's footsteps. Among them is Bonanza, which, with its "friendliest social community online," aims to put the human element back into e-commerce, "making people relevant again."
Then there is ArtFire, which started two years ago in Tucson, Arizona. It provides a platform for "handmade goods, fine art, vintage, designed items, supplies and media," and aims to "celebrate the unique individuality of artists and crafters around the globe."
Cafe Press was started in 1999. Based in San Mateo, California, the company provides on-demand printing for mugs, t-shirts and products designed by users, "uniting and rewarding self-expression." It now gets 11 million unique visits a month and, with its 6.5 million users, adds around 2,000 new, independent shops and 45,000 new products every day.
Another great example of making a business out of helping people make a business is Recession Wire. Begun in February 2009 by Sara Clemence and Laura Rich, who were laid off when Portfolio magazine folded, and partner Lynn Parramore, the site aims to "chronicle the 'upside of the downturn' through personal stories, helpful advice and reportage on the changes underway in these hard times."
In its small business section, the site features articles like: "How to Bootstrap Your New Business Wisely," "Don't Close Your Business, Change It," and "A Cool, Free Way to Figure Out a Business Idea's Potential."
At Inc.com, the website of Inc. Magazine, the editors aim to provide "advice, tools, and services, to help business owners and CEOs start, run, and grow their businesses more successfully." Its start-up section includes advice on writing a business plan, running a home-based business, naming a business, how to incorporate, and financing.
StartupNation bills itself as a "free service founded by entrepreneurs for entrepreneurs." Headed by Jeff and Rich Sloan, two experienced entrepreneurs, who started the site to share their "years of in-the-trenches experience," the site features blogs, forums, advice, and networking tools.
Micro-financing, another entrepreneurship model greatly enhanced by the web, has been around for awhile. But the founders of InVenture Fund wanted to take the model to the next step. It was launched in October 2009 because, as the site says, "traditional microfinance models weren't doing enough to lift communities out of poverty." The problem was that the 75 million or so borrowers around the world were locked into loans they had to repay, sometimes at interest rates of 30 percent. InVenture finds microloan recipients who have good track records and gives them the financing to expand, with no fixed repayment schedule. "Give entrepreneurs an opportunity for real financial and social growth," the site says, "and they'll lift not just themselves but their communities out of poverty." A portion of the site's profits is then invested in responsible community programs, like clean water and education.
Indeed, one of the hallmarks of this entrepreneurial movement is community -- including an emphasis on local food, local agriculture, and sustainable business practices. One of the ironies of this new wave of small businesses is how the global reach of the web has been so pivotal in connecting people to their own communities.
Judy Wicks, the owner of the famed White Dog Cafe in Philadelphia, founded the Business Alliance for Local Living Economies (BALLE), which now has 80 local chapters in the U.S. and Canada. To spread the local food gospel of the White Dog, Wicks also founded Fair Food, which connects local family farms with city dwellers.
In Lexington, Kentucky, Fresh Stop is an attempt to bring the benefits of community-supported agriculture to those who couldn't normally afford it. Forming partnerships with churches, Fresh Stop asks those who can afford it to pay a bit more for what they buy, which subsidizes those for whom the fresh -- and healthy -- food would otherwise be out of reach.
Whether you're directly involved in a small business or not, I hope you'll check out Small Business America. After all, we're all affected by the well-being of the communities we live in. At least for the time being, real solutions are less likely to come from politicians than from the thousands of people in thousands of communities taking the initiative to connect, share, and create.
I love how human this movement is. It's fueled by technology, but at its core is a real person connecting to another real person. As Twitter founder Biz Stone said of his company: "Twitter is not a triumph of tech. It's a triumph of humanity."
Technology is what will allow this very American movement to scale up and begin to have a real impact. But it's in our backyards and basements that it begins. "To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections," wrote Edmund Burke. "It is the first link in the series by which we proceed towards a love to our country, and to mankind."
Click here to check out Small Business America... and let us know what you think.
eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
Meanwhile, also in the <b>news</b>…
This entry was posted in News and tagged alex carlile, david anderson, harrogate council, mike gardner. Bookmark the permalink or use the short url http://ldv.org.uk/22006 for twitter and emails. Follow any comments here with the RSS ...
eric seiger
If you don't believe Reggie, try this from Chris Whalen.
The Fed's Zero Rate Policy Is Destroying AmericaChristopher Whalen, Institutional Risk Analytics | Oct. 12, 2010, 9:55 AM | 9,401 | 33
"Crown of Thorns"?
Pearl Jam
Ament/Fairweather/Gilmore/Gossard/Wood
In this issue of The Institutional Risk Analyst, we turn the camera eye on two different perspectives on the continuing crisis affecting the U.S. economy, the Fed's deflationary monetary policy and the surging price of gold. We look at how the rapid changes now underway in how consumers and investors alike view the dollar will affect the risk picture facing banks, companies and individuals. BTW, tomorrow IRA cofounder Christopher Whalen will be travelling back to the heartland to visit our friends at Indiana State University. We will give a talk entitled: "Do Americans Need a New Deal?" More on this theme next week.
Last week The IRA traveled to Washington D.C. to participate in the latest event sponsored by our friend Alex Pollock at American Enterprise Institute, "Living in the Post-Bubble World: What's Next?" We received a great deal of media buzz before and after the event, but the most poignant comment came in this unexpected and very disturbing letter from Dianna in Rockford, IL:
"I have no way of knowing if this message will ever actually reach you. Nevertheless, I want to extend a most sincere message of appreciation for one of the comments you made during recent participation in an American Enterprise Institute symposium. You are the only financial guru /analyst whom I have heard make any reference to the devastating impact of extraordinary quantitative easing on "grandma" and her carefully laid financial plans. Many middle class retirees have no generous government or corporate pension. We have had to plan and save prudently for retirement. Now, as we watch returns on CD's plunge from an average 5% to an anemic 1.5%, we also experience a plunge from a comfortable retirement into a state of severe "penny-pinching". You were correct...not only do we have to cut back on gifts for the grandchildren, we are also drastically curtailing many discretionary purchases, travel to spend time with family and so forth. I have heard NO other analyst speak to this impact on responsible retirees who thought they had done all the right things to prepare for the "golden years". It just felt good to realize that there is at least one individual who has given any consideration to this fallout from "Fed" policies."
Now you know why we at IRA take time away from our business to engage in public debate about how the world of finance affects real people. And you also see the horrible damage that the Bernanke Fed is inflicting upon real American in order to bail out the large Wall Street banks. And the irony is that all of this damage and sacrifice by Dianna and tens of millions of American individuals and businesses who depend upon interest income to survive will be for naught. The Big Banks will have to be restrructured in any event using the resolution authority in the Dodd-Frank legislation.
We also heard from our friend Henry Smyth, proprietor of Granville Cooper Asset Management Ltd., which features a unique gold fund that is comprised solely of rolling forward positions in the noble metal. The fund is domiciled entirely out of reach of America's spendthrift government and settles via Julius Baer in Zurich. (Disclosure: IRA co-founder Chris Whalen is a neighbor of Smyth and an introducing party of GCAM.)
Smyth, who we know from our Mexico days, has been pestering us since the summer about a chart created by his colleague Zeke Brustkern that illustrates the growth of the demand for gold over the past decade and how the increased estimates each year understate the actual market performance. Click here to see the gold chart which Smyth explains below:
"What this graphic aims to elucidate is the evolution of parabolic estimates of the future of gold price over the last five years. Starting with five years of data, from Sept. 2000 through Sept. 2005, a growth projection is forecasted through Sept. 2012. Each subsequent year another projection is crafted adding the additional data points into the curve's slope estimate. Five curves are portrayed in all, representing data from Sept. 2000-Sept. 2010, all projecting through 2012. What becomes clear is that despite using estimation methods intended to represent rapid parabolic growth, the estimated values continue to fall short of the real asset value appreciation. With the exception of 2008/2009, each passing year has brought substantial upward revision of growth projections, and has continued to do so throughout 2010."
Consider these two data points: First, an American retiree named Dianna who has seen her retirement savings rendered worthless by the ill-considered policy actions of the Federal Open Market Committee. Second, the action of the gold market, which is likewise suggesting that fiat paper dollars have no value. If you take the two observations together, it suggests to us that the Fed's actions are feeding global deflation and that the next leg down in the U.S. financial markets could be particularly severe -- especially if the Fed resumes printing more funny money.
While some analysts are calling for a mild devaluation of the dollar, what we see forming ahead could be something far more dramatic and potentially disruptive to the world economy, namely a protracted period of deflation driven by the subserviant position of the Fed vis-a-vis the largest banks. This new shrinkage will not only see gold moving higher but will also see the dollar collapse a la the FDR dollar devaluation of the early 1930s. This crisis is being caused by Fed zero interest rate and quantitative easing ("QE") policies.
As we have said before and we'll say again, the FOMC's zero rate policies imply that the dollar and all assets denominated in dollars have no value. Stocks, bonds and other financial assets depend upon income to make these obligations money good. Without a positive return, there is no reason to hold dollar assets. When President Abraham Lincoln introduced fiat paper dollars backed by nothing to finance the Civil War, these pieces of debt originally were convertible into Treasury notes that paid interest. But the need of a growing nation for a means of exchange rendered such devices irrelevant.
Today the situation is reversed. Non-commercial demand for dollars is collapsing in much of the global economy, in part because the Fed is transferring something like three quarters of a trillion dollars annually from individual and corporate savers to the Wall Street banks. And even this vast subsidy will be insufficient to prevent the ultimate restructuring of the top three U.S. banks. What will Fed Chairman Ben Bernanke and the other members of the FOMC say to Dianna and the millions of other Americans impoverished by their policy errors when we have to break up the top-three U.S. banks anyway?
Forget more QE. If the FOMC does not soon allow interest rates to rise and thereby rebalance the policy equation between American savers and borrowers, then we fully expect to see gold prices climb further. Fed Chairman Ben Bernanke and the FOMC will hand the detractors of the central bank led by Rep Ron Paul (I-TX) the political issue they need to eliminate the Fed once and for all. And President Barack Obama will be wearing the concrete booties that once belonged to President Herbert Hoover. Unlike your worthless greenbacks, you can take that to the bank.
Read more: http://www.businessinsider.com/fed-zero-rate-policy-destroying-america-2010-10#ixzz12uaKHMFk
http://www.businessinsider.com/fed-zero-rate-policy-destroying-america-2010-10
The latest jobs report came out on Friday. Overall, another 95,000 jobs were lost in September. Maybe they should start calling it the no-jobs report. Ezra Klein crunches the numbers to explain why the addition of 64,000 private sector jobs is pitifully inadequate:
That's about 35,000 less than the 100,000 or so jobs needed to keep up with population growth. It's about 180,000 less than the number of jobs needed to get back to 5 percent unemployment in the next 10 years. It's about 257,000 less than the 320,000 jobs needed to get back to 5 percent unemployment in five years.
In other words, the economy is not bouncing back any time soon. Even worse, it's clear that Washington is not up to the task of creating the conditions for the job growth the country so desperately needs. And as we find ourselves in the silliest stretch of the electoral silly season, it doesn't inspire confidence that the government that emerges on November 2nd will do any better.
A deep-seated cynicism is not an unreasonable response. But I'm pleased to report that hundreds of thousands of Americans across the country are choosing to react by taking action. As a result, a parallel economy is being created by people who, finding there are no jobs, have decided to create their own.
Of course, this burgeoning parallel economy doesn't mean the government is off the hook. But while millions of Americans are waiting for the government to do the right thing in terms of bold infrastructure spending, a payroll tax holiday, etc, etc, many have decided to stop waiting.
Through the creative use of technology, social media, and a focus on community, this new wave of small businesses is making its mark in a true convergence of left and right. At the moment, our government may be can't-do, but more and more of our citizens are solidly can-do -- and irrepressibly American.
To turn a spotlight on this nascent movement and encourage its continued growth, HuffPost is launching Small Business America, a new blog sponsored by FedEx where entrepreneurs can exchange ideas, get advice, and keep up with the latest small business news. Small Business America's contributors will run the gamut from CEOs to mom-and-pop business owners to policy-makers, business writers, professors, and social media experts.
Some of those we'll be featuring in our first week include:
- Aaron Patzer, founder of the online personal finance site Mint.
William Aulet, Managing Director of the MIT Entrepreneurship Center.
Karen Mills, Administrator of the Small Business Administration.
Tim Westergren, Founder of the online radio site Pandora.
Christopher Hytry Derrington, whose company helps firms outsource their work to rural America instead of overseas.
Small Business America will also feature the first-person accounts of people who have already jumped in and started their own business -- as well as those thinking of taking the leap.
One of those forced by circumstances into creating her own business is Brenda Carter, whose story is featured in Third World America. A grandmother living in Marietta, Georgia, Carter had worked as a manager of information systems at the same company for thirteen years. Then, in 2007, she was suddenly laid off. "Imagine getting up every day for 13 years and suddenly that part of your life just ceased," she wrote. "I cried and cried and cried. I just could not believe it."
She didn't know what she was going to do, but then had an idea. Her mother, to help pay the bills as a single mother in New Orleans, had sold pralines door-to-door. "People would knock on our doors at all times of night asking to purchase these pralines," she said. "So as I was sitting at home I thought 'Hey I can do this too! This is something I can do and am comfortable doing.'"
And now she's the proud operator of a growing praline operation -- except instead of selling door-to-door, she's doing it computer-to-computer. Her online store can be found here. "Times are changing and so must we," Carter says. "We need to be supporters of ourselves, otherwise we will not survive."
Americans have a lot of passion and ingenuity, and there is a clear market in helping bring them to market. Enter Etsy.com and Cafe Press, which have now grown large enough to have a multiplier effect rippling across the country.
Etsy was founded in 2005 by Robert Kalin. Then 25, he was an aspiring furniture designer feeling frustrated by his attempts to sell his work online. So he created a streamlined platform for handmade goods of all kinds, and launched it from his apartment.
The site's mission? "To enable people to make a living making things, and to reconnect makers with buyers. Our vision is to build a new economy and present a better choice." Which is exactly what Etsy.com is doing. And along with creating jobs, this new economy is creating connections, and caring, and community. As Kalin said in a 2009 interview:
One of the most important things anyone can do right now is create jobs. What's important is to empower people to make a living, and I support renting and running a 9,000-square-foot workspace in Red Hook, Brooklyn, that provides other small businesses with affordable studio space. And we have big community dinners there once a week for networking and sharing our ideas.
Etsy's effect is being felt far beyond Brooklyn. Colleen Fields, 54, lives in a remote town in the mountains of North Carolina. Two years ago, she was laid off from her job as a newspaper subscriptions manager. "I must have sent out a thousand or more resumés and applications," she told The Huffington Post. "I applied for a job at a convenience store, and they said they had over 200 applicants. It's just crazy. There are no jobs around this area."
A friend suggested she look into Etsy. Not exactly computer literate, she nevertheless gave it a try. In December 2009 she opened her online store, Gemstones and Wire, selling necklaces, earrings and handmade clay vases. She wrote about how some women pay all their family bills with small businesses started through Etsy. "I'm just not one of them yet. I would love to be one of them," she added.
Several other successful sites have followed in Etsy's footsteps. Among them is Bonanza, which, with its "friendliest social community online," aims to put the human element back into e-commerce, "making people relevant again."
Then there is ArtFire, which started two years ago in Tucson, Arizona. It provides a platform for "handmade goods, fine art, vintage, designed items, supplies and media," and aims to "celebrate the unique individuality of artists and crafters around the globe."
Cafe Press was started in 1999. Based in San Mateo, California, the company provides on-demand printing for mugs, t-shirts and products designed by users, "uniting and rewarding self-expression." It now gets 11 million unique visits a month and, with its 6.5 million users, adds around 2,000 new, independent shops and 45,000 new products every day.
Another great example of making a business out of helping people make a business is Recession Wire. Begun in February 2009 by Sara Clemence and Laura Rich, who were laid off when Portfolio magazine folded, and partner Lynn Parramore, the site aims to "chronicle the 'upside of the downturn' through personal stories, helpful advice and reportage on the changes underway in these hard times."
In its small business section, the site features articles like: "How to Bootstrap Your New Business Wisely," "Don't Close Your Business, Change It," and "A Cool, Free Way to Figure Out a Business Idea's Potential."
At Inc.com, the website of Inc. Magazine, the editors aim to provide "advice, tools, and services, to help business owners and CEOs start, run, and grow their businesses more successfully." Its start-up section includes advice on writing a business plan, running a home-based business, naming a business, how to incorporate, and financing.
StartupNation bills itself as a "free service founded by entrepreneurs for entrepreneurs." Headed by Jeff and Rich Sloan, two experienced entrepreneurs, who started the site to share their "years of in-the-trenches experience," the site features blogs, forums, advice, and networking tools.
Micro-financing, another entrepreneurship model greatly enhanced by the web, has been around for awhile. But the founders of InVenture Fund wanted to take the model to the next step. It was launched in October 2009 because, as the site says, "traditional microfinance models weren't doing enough to lift communities out of poverty." The problem was that the 75 million or so borrowers around the world were locked into loans they had to repay, sometimes at interest rates of 30 percent. InVenture finds microloan recipients who have good track records and gives them the financing to expand, with no fixed repayment schedule. "Give entrepreneurs an opportunity for real financial and social growth," the site says, "and they'll lift not just themselves but their communities out of poverty." A portion of the site's profits is then invested in responsible community programs, like clean water and education.
Indeed, one of the hallmarks of this entrepreneurial movement is community -- including an emphasis on local food, local agriculture, and sustainable business practices. One of the ironies of this new wave of small businesses is how the global reach of the web has been so pivotal in connecting people to their own communities.
Judy Wicks, the owner of the famed White Dog Cafe in Philadelphia, founded the Business Alliance for Local Living Economies (BALLE), which now has 80 local chapters in the U.S. and Canada. To spread the local food gospel of the White Dog, Wicks also founded Fair Food, which connects local family farms with city dwellers.
In Lexington, Kentucky, Fresh Stop is an attempt to bring the benefits of community-supported agriculture to those who couldn't normally afford it. Forming partnerships with churches, Fresh Stop asks those who can afford it to pay a bit more for what they buy, which subsidizes those for whom the fresh -- and healthy -- food would otherwise be out of reach.
Whether you're directly involved in a small business or not, I hope you'll check out Small Business America. After all, we're all affected by the well-being of the communities we live in. At least for the time being, real solutions are less likely to come from politicians than from the thousands of people in thousands of communities taking the initiative to connect, share, and create.
I love how human this movement is. It's fueled by technology, but at its core is a real person connecting to another real person. As Twitter founder Biz Stone said of his company: "Twitter is not a triumph of tech. It's a triumph of humanity."
Technology is what will allow this very American movement to scale up and begin to have a real impact. But it's in our backyards and basements that it begins. "To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections," wrote Edmund Burke. "It is the first link in the series by which we proceed towards a love to our country, and to mankind."
Click here to check out Small Business America... and let us know what you think.
eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
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eric seiger
eric seiger
eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
Meanwhile, also in the <b>news</b>…
This entry was posted in News and tagged alex carlile, david anderson, harrogate council, mike gardner. Bookmark the permalink or use the short url http://ldv.org.uk/22006 for twitter and emails. Follow any comments here with the RSS ...
eric seiger
If you don't believe Reggie, try this from Chris Whalen.
The Fed's Zero Rate Policy Is Destroying AmericaChristopher Whalen, Institutional Risk Analytics | Oct. 12, 2010, 9:55 AM | 9,401 | 33
"Crown of Thorns"?
Pearl Jam
Ament/Fairweather/Gilmore/Gossard/Wood
In this issue of The Institutional Risk Analyst, we turn the camera eye on two different perspectives on the continuing crisis affecting the U.S. economy, the Fed's deflationary monetary policy and the surging price of gold. We look at how the rapid changes now underway in how consumers and investors alike view the dollar will affect the risk picture facing banks, companies and individuals. BTW, tomorrow IRA cofounder Christopher Whalen will be travelling back to the heartland to visit our friends at Indiana State University. We will give a talk entitled: "Do Americans Need a New Deal?" More on this theme next week.
Last week The IRA traveled to Washington D.C. to participate in the latest event sponsored by our friend Alex Pollock at American Enterprise Institute, "Living in the Post-Bubble World: What's Next?" We received a great deal of media buzz before and after the event, but the most poignant comment came in this unexpected and very disturbing letter from Dianna in Rockford, IL:
"I have no way of knowing if this message will ever actually reach you. Nevertheless, I want to extend a most sincere message of appreciation for one of the comments you made during recent participation in an American Enterprise Institute symposium. You are the only financial guru /analyst whom I have heard make any reference to the devastating impact of extraordinary quantitative easing on "grandma" and her carefully laid financial plans. Many middle class retirees have no generous government or corporate pension. We have had to plan and save prudently for retirement. Now, as we watch returns on CD's plunge from an average 5% to an anemic 1.5%, we also experience a plunge from a comfortable retirement into a state of severe "penny-pinching". You were correct...not only do we have to cut back on gifts for the grandchildren, we are also drastically curtailing many discretionary purchases, travel to spend time with family and so forth. I have heard NO other analyst speak to this impact on responsible retirees who thought they had done all the right things to prepare for the "golden years". It just felt good to realize that there is at least one individual who has given any consideration to this fallout from "Fed" policies."
Now you know why we at IRA take time away from our business to engage in public debate about how the world of finance affects real people. And you also see the horrible damage that the Bernanke Fed is inflicting upon real American in order to bail out the large Wall Street banks. And the irony is that all of this damage and sacrifice by Dianna and tens of millions of American individuals and businesses who depend upon interest income to survive will be for naught. The Big Banks will have to be restrructured in any event using the resolution authority in the Dodd-Frank legislation.
We also heard from our friend Henry Smyth, proprietor of Granville Cooper Asset Management Ltd., which features a unique gold fund that is comprised solely of rolling forward positions in the noble metal. The fund is domiciled entirely out of reach of America's spendthrift government and settles via Julius Baer in Zurich. (Disclosure: IRA co-founder Chris Whalen is a neighbor of Smyth and an introducing party of GCAM.)
Smyth, who we know from our Mexico days, has been pestering us since the summer about a chart created by his colleague Zeke Brustkern that illustrates the growth of the demand for gold over the past decade and how the increased estimates each year understate the actual market performance. Click here to see the gold chart which Smyth explains below:
"What this graphic aims to elucidate is the evolution of parabolic estimates of the future of gold price over the last five years. Starting with five years of data, from Sept. 2000 through Sept. 2005, a growth projection is forecasted through Sept. 2012. Each subsequent year another projection is crafted adding the additional data points into the curve's slope estimate. Five curves are portrayed in all, representing data from Sept. 2000-Sept. 2010, all projecting through 2012. What becomes clear is that despite using estimation methods intended to represent rapid parabolic growth, the estimated values continue to fall short of the real asset value appreciation. With the exception of 2008/2009, each passing year has brought substantial upward revision of growth projections, and has continued to do so throughout 2010."
Consider these two data points: First, an American retiree named Dianna who has seen her retirement savings rendered worthless by the ill-considered policy actions of the Federal Open Market Committee. Second, the action of the gold market, which is likewise suggesting that fiat paper dollars have no value. If you take the two observations together, it suggests to us that the Fed's actions are feeding global deflation and that the next leg down in the U.S. financial markets could be particularly severe -- especially if the Fed resumes printing more funny money.
While some analysts are calling for a mild devaluation of the dollar, what we see forming ahead could be something far more dramatic and potentially disruptive to the world economy, namely a protracted period of deflation driven by the subserviant position of the Fed vis-a-vis the largest banks. This new shrinkage will not only see gold moving higher but will also see the dollar collapse a la the FDR dollar devaluation of the early 1930s. This crisis is being caused by Fed zero interest rate and quantitative easing ("QE") policies.
As we have said before and we'll say again, the FOMC's zero rate policies imply that the dollar and all assets denominated in dollars have no value. Stocks, bonds and other financial assets depend upon income to make these obligations money good. Without a positive return, there is no reason to hold dollar assets. When President Abraham Lincoln introduced fiat paper dollars backed by nothing to finance the Civil War, these pieces of debt originally were convertible into Treasury notes that paid interest. But the need of a growing nation for a means of exchange rendered such devices irrelevant.
Today the situation is reversed. Non-commercial demand for dollars is collapsing in much of the global economy, in part because the Fed is transferring something like three quarters of a trillion dollars annually from individual and corporate savers to the Wall Street banks. And even this vast subsidy will be insufficient to prevent the ultimate restructuring of the top three U.S. banks. What will Fed Chairman Ben Bernanke and the other members of the FOMC say to Dianna and the millions of other Americans impoverished by their policy errors when we have to break up the top-three U.S. banks anyway?
Forget more QE. If the FOMC does not soon allow interest rates to rise and thereby rebalance the policy equation between American savers and borrowers, then we fully expect to see gold prices climb further. Fed Chairman Ben Bernanke and the FOMC will hand the detractors of the central bank led by Rep Ron Paul (I-TX) the political issue they need to eliminate the Fed once and for all. And President Barack Obama will be wearing the concrete booties that once belonged to President Herbert Hoover. Unlike your worthless greenbacks, you can take that to the bank.
Read more: http://www.businessinsider.com/fed-zero-rate-policy-destroying-america-2010-10#ixzz12uaKHMFk
http://www.businessinsider.com/fed-zero-rate-policy-destroying-america-2010-10
The latest jobs report came out on Friday. Overall, another 95,000 jobs were lost in September. Maybe they should start calling it the no-jobs report. Ezra Klein crunches the numbers to explain why the addition of 64,000 private sector jobs is pitifully inadequate:
That's about 35,000 less than the 100,000 or so jobs needed to keep up with population growth. It's about 180,000 less than the number of jobs needed to get back to 5 percent unemployment in the next 10 years. It's about 257,000 less than the 320,000 jobs needed to get back to 5 percent unemployment in five years.
In other words, the economy is not bouncing back any time soon. Even worse, it's clear that Washington is not up to the task of creating the conditions for the job growth the country so desperately needs. And as we find ourselves in the silliest stretch of the electoral silly season, it doesn't inspire confidence that the government that emerges on November 2nd will do any better.
A deep-seated cynicism is not an unreasonable response. But I'm pleased to report that hundreds of thousands of Americans across the country are choosing to react by taking action. As a result, a parallel economy is being created by people who, finding there are no jobs, have decided to create their own.
Of course, this burgeoning parallel economy doesn't mean the government is off the hook. But while millions of Americans are waiting for the government to do the right thing in terms of bold infrastructure spending, a payroll tax holiday, etc, etc, many have decided to stop waiting.
Through the creative use of technology, social media, and a focus on community, this new wave of small businesses is making its mark in a true convergence of left and right. At the moment, our government may be can't-do, but more and more of our citizens are solidly can-do -- and irrepressibly American.
To turn a spotlight on this nascent movement and encourage its continued growth, HuffPost is launching Small Business America, a new blog sponsored by FedEx where entrepreneurs can exchange ideas, get advice, and keep up with the latest small business news. Small Business America's contributors will run the gamut from CEOs to mom-and-pop business owners to policy-makers, business writers, professors, and social media experts.
Some of those we'll be featuring in our first week include:
- Aaron Patzer, founder of the online personal finance site Mint.
William Aulet, Managing Director of the MIT Entrepreneurship Center.
Karen Mills, Administrator of the Small Business Administration.
Tim Westergren, Founder of the online radio site Pandora.
Christopher Hytry Derrington, whose company helps firms outsource their work to rural America instead of overseas.
Small Business America will also feature the first-person accounts of people who have already jumped in and started their own business -- as well as those thinking of taking the leap.
One of those forced by circumstances into creating her own business is Brenda Carter, whose story is featured in Third World America. A grandmother living in Marietta, Georgia, Carter had worked as a manager of information systems at the same company for thirteen years. Then, in 2007, she was suddenly laid off. "Imagine getting up every day for 13 years and suddenly that part of your life just ceased," she wrote. "I cried and cried and cried. I just could not believe it."
She didn't know what she was going to do, but then had an idea. Her mother, to help pay the bills as a single mother in New Orleans, had sold pralines door-to-door. "People would knock on our doors at all times of night asking to purchase these pralines," she said. "So as I was sitting at home I thought 'Hey I can do this too! This is something I can do and am comfortable doing.'"
And now she's the proud operator of a growing praline operation -- except instead of selling door-to-door, she's doing it computer-to-computer. Her online store can be found here. "Times are changing and so must we," Carter says. "We need to be supporters of ourselves, otherwise we will not survive."
Americans have a lot of passion and ingenuity, and there is a clear market in helping bring them to market. Enter Etsy.com and Cafe Press, which have now grown large enough to have a multiplier effect rippling across the country.
Etsy was founded in 2005 by Robert Kalin. Then 25, he was an aspiring furniture designer feeling frustrated by his attempts to sell his work online. So he created a streamlined platform for handmade goods of all kinds, and launched it from his apartment.
The site's mission? "To enable people to make a living making things, and to reconnect makers with buyers. Our vision is to build a new economy and present a better choice." Which is exactly what Etsy.com is doing. And along with creating jobs, this new economy is creating connections, and caring, and community. As Kalin said in a 2009 interview:
One of the most important things anyone can do right now is create jobs. What's important is to empower people to make a living, and I support renting and running a 9,000-square-foot workspace in Red Hook, Brooklyn, that provides other small businesses with affordable studio space. And we have big community dinners there once a week for networking and sharing our ideas.
Etsy's effect is being felt far beyond Brooklyn. Colleen Fields, 54, lives in a remote town in the mountains of North Carolina. Two years ago, she was laid off from her job as a newspaper subscriptions manager. "I must have sent out a thousand or more resumés and applications," she told The Huffington Post. "I applied for a job at a convenience store, and they said they had over 200 applicants. It's just crazy. There are no jobs around this area."
A friend suggested she look into Etsy. Not exactly computer literate, she nevertheless gave it a try. In December 2009 she opened her online store, Gemstones and Wire, selling necklaces, earrings and handmade clay vases. She wrote about how some women pay all their family bills with small businesses started through Etsy. "I'm just not one of them yet. I would love to be one of them," she added.
Several other successful sites have followed in Etsy's footsteps. Among them is Bonanza, which, with its "friendliest social community online," aims to put the human element back into e-commerce, "making people relevant again."
Then there is ArtFire, which started two years ago in Tucson, Arizona. It provides a platform for "handmade goods, fine art, vintage, designed items, supplies and media," and aims to "celebrate the unique individuality of artists and crafters around the globe."
Cafe Press was started in 1999. Based in San Mateo, California, the company provides on-demand printing for mugs, t-shirts and products designed by users, "uniting and rewarding self-expression." It now gets 11 million unique visits a month and, with its 6.5 million users, adds around 2,000 new, independent shops and 45,000 new products every day.
Another great example of making a business out of helping people make a business is Recession Wire. Begun in February 2009 by Sara Clemence and Laura Rich, who were laid off when Portfolio magazine folded, and partner Lynn Parramore, the site aims to "chronicle the 'upside of the downturn' through personal stories, helpful advice and reportage on the changes underway in these hard times."
In its small business section, the site features articles like: "How to Bootstrap Your New Business Wisely," "Don't Close Your Business, Change It," and "A Cool, Free Way to Figure Out a Business Idea's Potential."
At Inc.com, the website of Inc. Magazine, the editors aim to provide "advice, tools, and services, to help business owners and CEOs start, run, and grow their businesses more successfully." Its start-up section includes advice on writing a business plan, running a home-based business, naming a business, how to incorporate, and financing.
StartupNation bills itself as a "free service founded by entrepreneurs for entrepreneurs." Headed by Jeff and Rich Sloan, two experienced entrepreneurs, who started the site to share their "years of in-the-trenches experience," the site features blogs, forums, advice, and networking tools.
Micro-financing, another entrepreneurship model greatly enhanced by the web, has been around for awhile. But the founders of InVenture Fund wanted to take the model to the next step. It was launched in October 2009 because, as the site says, "traditional microfinance models weren't doing enough to lift communities out of poverty." The problem was that the 75 million or so borrowers around the world were locked into loans they had to repay, sometimes at interest rates of 30 percent. InVenture finds microloan recipients who have good track records and gives them the financing to expand, with no fixed repayment schedule. "Give entrepreneurs an opportunity for real financial and social growth," the site says, "and they'll lift not just themselves but their communities out of poverty." A portion of the site's profits is then invested in responsible community programs, like clean water and education.
Indeed, one of the hallmarks of this entrepreneurial movement is community -- including an emphasis on local food, local agriculture, and sustainable business practices. One of the ironies of this new wave of small businesses is how the global reach of the web has been so pivotal in connecting people to their own communities.
Judy Wicks, the owner of the famed White Dog Cafe in Philadelphia, founded the Business Alliance for Local Living Economies (BALLE), which now has 80 local chapters in the U.S. and Canada. To spread the local food gospel of the White Dog, Wicks also founded Fair Food, which connects local family farms with city dwellers.
In Lexington, Kentucky, Fresh Stop is an attempt to bring the benefits of community-supported agriculture to those who couldn't normally afford it. Forming partnerships with churches, Fresh Stop asks those who can afford it to pay a bit more for what they buy, which subsidizes those for whom the fresh -- and healthy -- food would otherwise be out of reach.
Whether you're directly involved in a small business or not, I hope you'll check out Small Business America. After all, we're all affected by the well-being of the communities we live in. At least for the time being, real solutions are less likely to come from politicians than from the thousands of people in thousands of communities taking the initiative to connect, share, and create.
I love how human this movement is. It's fueled by technology, but at its core is a real person connecting to another real person. As Twitter founder Biz Stone said of his company: "Twitter is not a triumph of tech. It's a triumph of humanity."
Technology is what will allow this very American movement to scale up and begin to have a real impact. But it's in our backyards and basements that it begins. "To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections," wrote Edmund Burke. "It is the first link in the series by which we proceed towards a love to our country, and to mankind."
Click here to check out Small Business America... and let us know what you think.
eric seiger
eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
Meanwhile, also in the <b>news</b>…
This entry was posted in News and tagged alex carlile, david anderson, harrogate council, mike gardner. Bookmark the permalink or use the short url http://ldv.org.uk/22006 for twitter and emails. Follow any comments here with the RSS ...
eric seiger
eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
Meanwhile, also in the <b>news</b>…
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eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
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Meanwhile, also in the <b>news</b>…
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eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
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Meanwhile, also in the <b>news</b>…
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eric seiger eric seiger
eric seiger
eric seiger
eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
Meanwhile, also in the <b>news</b>…
This entry was posted in News and tagged alex carlile, david anderson, harrogate council, mike gardner. Bookmark the permalink or use the short url http://ldv.org.uk/22006 for twitter and emails. Follow any comments here with the RSS ...
There has never been a better time to pay off your credit card debt. Credit card interest rates are skyrocketing with the impending recession. Recessions mean job loss, and the credit card issuing banks fear upcoming loss of payments. Not only are credit card interest rates getting higher, but in the event you lose your job, you don't want to be stuck with more credit card bills than you need.
Consider that if you have a $2,000 balance, adding nothing new to the card and paying minimum monthly payments of 3% at a 20% interest rate, you're looking at 183 payments, over 15 years, totaling $2,241! Wouldn't that $241 be more useful elsewhere?
According to this article on MSN Money Central:
23.8% of American households have no credit cards at all -- no bank cards, no retail cards, nothing.
Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.
So together, the households that owed nothing on credit cards equaled 55% of the total.
Of the households that did carry a balance, the median amount owed was $1,900.
Only 29% of households owe $1,000 or more on their cards.
21% owe $2,000 or more.
6% owe $8,000 or more.
4% owe $10,500 or more.
1% owe $21,400 or more.
Getting rid of credit card debt takes determination and willpower. It's easy to pay the minimum payments for years on end, but it's not the smartest thing to do.
Here's how to get rid of that lingering credit card debt.
Step 1: Create a budget. It's not as terrible as it sounds. Be prepared to be shocked at how much you spend. Get your credit card and bank statements together and look at how much you're spending, and on what. $5 here and $10 there really adds up. Create a budget with the realization that the money coming in should always exceed the money going out. If the outgoing money is more than the incoming money, you've got serious troubles. Determine a reasonable amount to spend monthly for food, gas, rent/mortgage, utilities, toiletries, rare and cheap entertainment, etc. If you're finding this too difficult on your own, you can always pay or find a charity personal finance manager to help you.
TIP: Eliminate entertainment expenses and frivolous purchases. Did you have to see that movie in the theatre last week? Did you really need that new lampshade? Shopping for nonessentials and going out should be the smallest portion of your budget.
TIP: If you're trying to "keep up with the Jonses", stop. Examine your priorities and determine if you'd rather be able to support yourself financially or buy that latest gadget or decorative item. If the answer is "buy", go ahead and give up the idea of financial freedom.
Step 2: Perform plastic surgery. Not the expensive kind, but the cheap kind. Take a pair of scissors and hack up those cards you really want to be rid of. If you can't bring yourself to do that just yet, hide them somewhere at home so you can't use them at stores for impulse purchases. You may need to have a trusted friend or relative hold on to them for you for accountability, so that if you want to "borrow" them you'd better have a good excuse.
Also, stop using your debit card. Use cash from the ATM instead for things like gas, food and your allotted spending budget. Consumers are much more likely to spend more when it's on "plastic", because psychologically it doesn't pack as big of a punch. Choose between throwing away a $20 bill and a credit card. You'd keep the twenty. You'll get the reality check at the grocery store, when handing over $4 in cash for a 12-pack of individually canned soft drinks versus $1 for a 2-liter of the same product.
Step 3: Make your debt payment plan. Sit down with your credit card statements and figure out how much you have on each credit card and what the interest rate is. Start with the card with the highest rate. From your budget, you can determine how much you have each month to spend on debt repayment. Pay the minimum monthly payment on the other cards and put as much money as you can towards the card with the highest interest rate. When it's completely paid down, take that money and apply it toward the second-highest card, and so on, until all the balances are gone. If you can genuinely make a budget and stick to it, you can determine ahead of time when you'll be debt-free.
If you have a credit card with a small balance that isn't your highest-rate card, go ahead and pay it off first. Then you'll know the exhilaration of not owing money, which will give you incentive for the bigger ones. Just take care not to create a new balance!
TIP: If you're having a hard time paying in big chunks, pay weekly. Your credit card company will accept money any time you want to send it. Instead of paying $100 a month, try $25 a week. That will also save you a little in credit interest costs.
TIP: Live well under your means. Ideally, you should be able to save and invest 1/3 of your income if you want to. Are you able to do this now? Use an online retirement calculator to determine how much you should be saving in order to be able to retire.
Step 4: Open your credit card bills and laugh at the zero balance. Now what are you going to do with all this money? Buy yourself a little prize, (using cash!), and then it's time to save and invest.
Once you've become financially responsible and can really stick to your budget, use your credit cards for budgeted items and pay them back monthly in full. Not using credit cards at all can damper your credit score. However, take care not to run the credit cards up again! You want to be debt free and stay that way.
Here's another helpful tip: Type or write this affirmation on some index cards or pieces of paper and tuck them in your checkbook, pocketbook, or wallet: "I always pay my credit card bills in full and on time!" Seeing that here and there will implant the subliminal message that you do not have to overspend. It's also helpful to write meaningful positive notes such as "I am debt free!" or "I am a wise spender!" and tape them on your credit cards, debit cards and checkbooks. That will earn you some strange looks and smiles from store clerks, but it will be a consistent friendly reminder to yourself that you are free of credit card debt - and you're going to stay that way!
Source:
http://moneycentral.msn.com/content/Banking/creditcardsmarts/P150744.asp
eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
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eric seiger
Lujiazui Breakfast: <b>News</b> And Views About China Stocks (Nov. 10 <b>...</b>
China will force banks to raise reserve requirements for the second time this year, foreign wires reported. It is the latest signal of government concern about inflation and lending growth, and may hurt share prices today.
<b>News</b> Poll FAIL - Epic Fail Funny Videos and Funny Pictures
epic fail photos - News Poll FAIL. ... News Poll FAIL. epic fail photos - News Poll FAIL. Submitted by: Unknown. Incorrect source or offensive? G-rated, math is too hard, news, News Poll, opinions, poll, television ...
Meanwhile, also in the <b>news</b>…
This entry was posted in News and tagged alex carlile, david anderson, harrogate council, mike gardner. Bookmark the permalink or use the short url http://ldv.org.uk/22006 for twitter and emails. Follow any comments here with the RSS ...
eric seiger
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