Gold prices: Where's a leprechaun when you need one?

Dow…3 ounces!

Skip to next paragraph Bill Bonner

Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning (dailyreckoning.com).

Our old friend Ronan McMahon has been keeping us up to date. Ireland is going broke, he says.

The Irish foolishly borrowed too much money during the boom years. The banks foolishly lent too much money. And then the government foolishly said it would bail them out…even though the total exposure was four times Irish GDP. Yesterday, they foolishly took over Ireland’s biggest bank, Anglo Irish. And now they’re going broke. The losses are probably more than they can handle.

But it’s been worth it. What a ride the Irish have had! They were the poorest people in Western Europe…then, they became the richest people in Western Europe. And now they’re back to being the poorest…

It would have been better if they had had a better sense of architecture during the fat years… They wouldn’t have blemished the island with so many ugly buildings. Alas, the Irish will have to live with the stain of their prosperous years for generations…

Of course, the same could be said for the USA. All those wretched suburbs and condos… All those shopping malls… All those parking lots…

Not to mention all that debt!

Yes, we will live with the bubble rubbish and residue for many years.

But Ronan said something interesting. We were discussing Irish property. There’s a lot of it for sale. Buyers can practically name their own prices. But the choice properties are still in the hands of the insiders. When they see something go down to where it is a bargain price…they snap it up.

This signals to us that the whole process of debt destruction still has a long way to go. The assets still have appeal. Investors still think they can make money by buying low and selling high. In other words, they still think there is a bias towards the upside.

They haven’t given up. They’re still eager to buy – at the right price.

But just wait. When the end comes…they won’t be interested at any price. Some of the finest properties will go “no bid.” Then, the players…the insiders…the smart money will all be convinced that property is a losing proposition…and that you will never make money by buying real estate – because it always goes down. Then, when the insiders have given up. Then, and only then, can you expect to make any real money.

It’s no different in the stock market. What investors want now are bargains. They think that they can make money, by buying at the right price. Then, as the “recovery” comes their stocks will go up. They think the bias of the stock market is still upwards.

Certain well-known investors – for whom we have an enormous lack of respect – claim that stock prices always go up “in the long run.” These super bulls are forever predicting “Dow 36,000” or “Dow 100,000.” And they’ll probably be right. Someday, the Dow will probably hit 100,000. And you’ll be able to read about it in your $50 newspaper while you’re drinking your $100 cup of coffee.

This week, Jeffrey Hirsch predicted a Dow over 38,000 by 2025 – a gain of about 5% per annum, without dividends. Maybe he’ll be right too.

But stocks don’t really always go up. Au contraire, every stock you buy will eventually go to zero. Your only hope is that you expire worthless before it does.

As for the lot of them, remember that most of their profits and share price growth is an illusion. Let’s say you “buy the market.” You just get an ETF representing the index…or simply buy the Dow stocks. The companies make money. Their share prices go up.

But wait. Where do their revenues come from? Where do their profits come from? Aren’t they just taking money from each other…and from other businesses and consumers (who are also their employees…that is, a cost center)? How can they ALL go up? They can’t really. They can only grow as fast as the economy itself. Competition keeps profit margins with a fairly narrow band. So, their share of the economy is limited. And since the economy is quoted in money…they can’t really go up more than money itself.

In other words, if there were just $100 in a town, and the businesses in the town were worth half that amount, they would be worth $50. Total. No matter how much progress the town made, as long as the amount of money stayed constant, they would still only be worth $50 (though that money could be worth much, much more in terms of what it would buy).

Gold is stable money. It’s the closest thing we have to a fixed monetary unit. The supply increases, but only about as fast as the rest of the economy increases. So, over thousands of years its “price” – in terms of how much you could exchange in for – has been more or less constant.

If stocks were really becoming more valuable you’d expect that they would become more valuable against a fixed quantity of real money – gold. But look at what has happened. At the beginning of the 20th century, the Dow was 66 and an ounce of gold was about $20. “A $20 gold piece” was a unit of exchange. So it took a bit more than 3 ounces of gold to buy the Dow. Then, at the bottom of the bear market in stocks in the ’30s, again it took about 3 ounces of gold to buy the Dow. And again, at the bottom of the bear market in ’82 you could buy the Dow for less than 3 ounces. At one point, a single ounce would do it.

Currently, it takes a bit more than 8 ounces to buy the Dow. Hmm… You could get the Dow for about 8 ounces of gold in the ’10s…again in the ’20s…the ’30s…the ’40s…the ’50s…’70s…’80s…and now finally, once again, in 2010.

And that number is probably going down. The bear market in stocks still hasn’t reached its bottom. When it does, you’ll almost certainly be able to buy the Dow for 3 ounces of gold.

Stocks for the long run? Ha ha….

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How to Create a Personal Household Budget

In times when money is getting a little tight and the job market more uncertain it is important to learn how to control your spending. Learning to effectively create a budget as well as being able to stay within it's boundaries will not only help reduce stress but will also teach you the basics to plan for a successful retirement. Below are 5 great tools to use to successfully create and manage your household budget.

Fixed Vs. Variable Costs
You might remember these terms from your economics class some time ago. Fixed and variable expenses are not just important to know for a business, but should also taken into consideration when creating a personal budget. In a nutshell, a fixed cost is a cost that will occur no matter what and are typically related to a necessity. Your rent or mortgage is a great example. A Variable expense on the other hand varies in size and is dependent on the frequency of use. Having a cell phone plan that is not a flat monthly rate, but charges you by the minute is a good example.

It is important to differentiate between the two costs when planning for your current as well as future finances. If you want to reduce financial stress than the key is to reduce your fixed expenses to the minimum level without having to compromise too much quality of life. Think about this when renting a place for example. Having a lower fixed expense each month will give you much more financial freedom: If times are "bad" then you have the option to spend less, and when times are "good" you have the luxury to spend a larger portion on fun things (variable) such as shopping sprees, vacations, dinners, and so on.



Itemizing and Creating Budgets within each Expense
Write down each expense first such as: Rent, Insurance, Utilities, Cell Phone, Groceries, Shopping, Entertainment, and so on. Next write a dollar amount next to each item. This amount is your spending limit for each expense that you will have to stick to. This will be quite easy to do for your fixed expenses since they are not changing. Groceries should be considered a fixed expense since you will have to eat no matter what. Think about how much you are spending on groceries each month. Start by thinking about how often you go shopping, and how much you spend on average on each trip. Do this for all variable expenses as well. When you are done, add up all the numbers to get your total monthly budget.



Compare Your Budget to Your Income
Look at your paychecks and add them up so that you get your monthly total income after taxes. If you get paid bi-weekly then this means you will be getting paid 26 times per year. Take a paycheck and multiply the amount times 26. Then, to get the monthly total, divide this amount by 12.

You now know what your monthly post tax income is as well as your monthly budget. Make sure that your income is higher than your spending and you will be in good shape. If it isn't, than you have two options: 1. Work more or get a second job to increase your income, or 2. lower your budget. If you are planning on re-evaluating your budget, think about what item on your costs to reduce that will have a minimal effect on your quality of life. If you budgeted $200 for entertainment, but never go out for a drink, dinner, or movies, then this might be the right cost to reduce.



Be Persistent and Consequent
Follow your budget and stick to it! Creating a budget and then not following it is absolutely pointless. To follow your budget, keep track of your expenses. Find a system that works for you and follow it. One way of doing it is by creating folders labeled with each expense. Safe your receipts and put them in each designated folder at the end of each day. If this is too cumbersome for you, then think about purchasing a software to help you keep track. A popular one is Microsoft money. It can automatically keep track of each type of spending, every time when you are using credit cards that are linked to the program. Once again, find a system that works for you and one that you can easily follow. At the end of each month, do a quick review on your expenses and see where you can improve.



Plan Ahead
Sometimes expenses come up that are not planned for. Your car breaks down and to repair it will be quite costly is a classic example. Such expenses are common and sooner or later will happen. Because of such expenses it is important to plan ahead. Set money aside each month especially for this reason. The difference in your income and your budget will be the amount put into your "emergency fund". Knowing that you have such safety, will give you the ease of mind needed to live a stress-free life.

Hendrik Pohl is the owner and founder of United E-Commerce LLC. In his free time he enjoys sharing the things he has learned from starting successful businesses by writing and publishing articles for online magazines. If you are looking for Holiday presents that will allow you to stay within your budget, he suggests you look at the following cheap neckties, cheap bow ties, and cheap designer cufflinks.

Wedding Planning On A Budget

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Stock prices aside, small investors will lose money on fees

I’m going to make a little illustration about investments using the stock of Verizon (VZ) as an example.

Skip to next paragraph Trent Hamm

The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.

On September 18, 2009, a share of stock in Verizon closed at 29.59. In the following months, Verizon issued four dividends of $0.475 per share. On September 24, 2010, a share of stock in Verizon closed at 32.64.

Let’s say, hypothetically, that we chose to invest $1,000 in Verizon on September 18, 2009, and chose to withdraw it on September 24, 2010. Our $1,000 would have bought 33.8 shares of Verizon stock. Over the course of the year, then, we would have received $64.22 in dividends. At the end of that year, we sell the stock for $1,103.23. Our total earnings on that investment would have been $64.22 in dividends and $103.23 in stock returns, right?

Not so fast.

First, the dividends would be subject to income tax. In this case, the dividends would appear to be qualified dividends, which means that they would be taxed at a rate of 15% by the federal government and possibly more by state and local sources. $9.63 of that dividend gain goes away.

Second, you’re going to have to pay your brokerage for the cost of buying the stock, as well as the cost of selling the stock. Let’s say, hypothetically, that you’re using E*Trade. The cost of the buy would be $9.99. The cost of the sell would be $9.99. That’s another $19.98 off the top – although that $19.98 is tax deductible.

Third, the gain on the sale would be a long tern capital gain, so 15% of that gain goes to the federal government. Your gain was $103.23, so you’d be paying $15.48 in taxes for that $103.23 gain.

All in all, your expenses for your gain add up to $45.09. Just like that, 25% of your gain is gone.

Even if your investment is a loser, you still lose more. Let’s say that over that same timeframe, VZ went from a starting price of 32.64 to a closing price of 29.59. You’re still out the $19.98 in brokerage fees (it’s tax-deductible, though). However, you only buy 30.64 shares of stock. You only earn $58.21 in dividends and you lose $93.36 on your investment, a net capital loss of $35.15. Add that to your $19.98 in brokerage fees and you’re down $55.13 on that investment.

What’s the point of this story? Investing has costs. You’re taxed if you gain anything and you’re getting hit with brokerage fees whether you win or you lose.

Some forms of investing have lower costs than others. If you invest directly with an investing house like Vanguard, for example, you can essentially invest without fees, meaning you only have to deal with the taxes on your gains. However, you’re limited to the offerings that Vanguard has available, plus there are often stiff minimums for investing.

You could also simply invest in the money market account at your local bank. There are no costs there, either, and your balance isn’t at risk; however, your returns will be low.

The bigger your investment, the smaller the impact such costs have on you. At the $1,000 level, the investment fees described above eat up about 2% of your balance. If you’re investing $10,000, the fees eat up only 0.2% of your balance. If you’re investing $100,000, the fees eat up only 0.02% of your balance.

Thus, for beginning investors, it’s absolutely vital that you know the total cost of ownership of an investment before you even consider it. Because even a small fee can really hammer your total return, such fees are very important to the beginning small investor.

That’s why my advice to beginning investors is this: invest your money in a savings account to start with and spend some time learning first. Know exactly what you’re going to invest in – and what all of the costs of that investment are – before you put your money in. Set up an automatic savings plan that keeps building the balance of that investing savings account so that when you do decide to make your move, you have a solid amount of money to make your first move.

Yes, you might “lose” some gains by only having the cash in a savings account. However, if it’s in a savings account, it’s not at risk of a loss, you’re not paying fees, and it is earning you a return. If you invest elsewhere without studying up, the fees and the taxes can easily eat up a big chunk of whatever you gain – and make a loss more painful than it already is.

Start slow. Don’t subject your money to fees or put it at risk without knowledge. Learn as much as you can and don’t make a move until you know the costs and feel confident about it.

How do you start learning? I suggest starting with The Bogleheads’ Guide to Investing. Read it slowly. Read it again. Move on from there by digging into some of the recommended titles. Keep going until you feel confident and comfortable with investing, then move forward. You’re better off taking it slow and making good moves from the start than flailing about and losing a bunch of your money to fees and taxes.

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Household Budget Worksheets

Provides personal and household budgeting tools and advice.

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Household Budget

When someone mentions the word budget, most people cringe at the thought. Some think it is the monetary equivalent of going on a diet.

A budget, simply put, is a tool to manage your money. It will put everything into perspective for you, so you can actually see where the money is going. Once you know where your money is going, you will then understand your financial short comings. Every one has short comings, and all are different. Some have too much luxuries, and some too much debt. Some are financing cars that are just too expensive for their income, others get the biggest home they cannot even afford. Most people just take on a lot of unsecured debt such as credit cards. With a budget, you the consumer will understand how to improve your situation. It is either cut your spending or raise your household income. For some it may have to be both.

A budget is not all doom and gloom. A lot of times people that find a working budget, wind up staying with one, even after their financial problems are resolved, because it takes all the guess work and uncertainty out of money and household finances.

The hardest part about getting on a budget is starting. Really, that is the hardest part, just getting started. Once you get going, it gets easier, and eventually routine. You will find that you are able to pay off debt, leaving more and more money left over every month. Eventually you could become debt free, and more money left over than you know what to do with. You will find that you wont need all them extra credit cards after all.

Just imagine how much money you would have left over, if you had no debt. Or how much money gets wasted in the course of a month. You will be amazed. I was. Getting a Free Online Budget is easy. Just visit my site, and follow the link at the bottom of the "home page", or "free tools" page to get your personal finances under control.

You can do it all for free "Credit Resolution Help" pages

http://www.creditresolutionhelp.com

Create A Household Budget

Today, I heard some more dismal news about foreclosures, inflation and job losses. We now have two generations of over spenders, over indulgers and "gotta have it nows". Things are scary out there and it's time for us all to tighten the belts and watch our spending, otherwise we will all become statistics of financial failure. But where do you start? The first step is to create a household budget.

To create a household budget system does not have to be complicated messes of spreadsheets and percentages. The biggest problem with most budgets is that after spending an insane amount of time completing it, most people save them to their hard drive or file them away in a drawer, but never put them to use. Think about it, we do not even see cash money anymore. We use debit and credit cards for everything. The paper budget is just one more way to ignore the actual money coming out of our pockets.

Below is a low tech, high success, simpler way. This is the way my 93 year old grandmother did it and with the exception of a couple of cars and 1 mortgage, she never borrowed a penny on credit. It worked for her family through difficult times, job losses, wars, layoffs and retirement. It worked for me as a working student and helped me to pay cash for college. This effective household budget system can work for you now.

Step 1: Create an accurate and complete list of all - and I mean all, weekly, monthly and yearly expenses. Don't forget birthdays, Christmas, special events and vacations. You also should definitely have an emergency category.

Step 2: Once you have listed all of your expenses, gather enough envelopes and label one for each expenditure. For example, you will at least have one for your mortgage/rent, gasoline, insurance, groceries, each estimated utility bill, entertainment. Don't forget the envelope labeled "Savings".

Step 3: Before the beginning of each month, put the actual amount of cash money that you will need for each expenditure in its respective envelope. What you are doing here is physically seeing where all of your money is going.

Step 4: Now, pay for each expenditure out of these envelopes. If your envelope for gasoline is getting low or becomes empty, you may have to decide which other envelope you will steal from to fill your tank. You may have to take from entertainment or some other non-essential to cover a high utility bill. If you do, however, you will also find yourself adjusting your thermostat before the next month rolls around. You will also find yourself trying to save money on groceries, gasoline, stupid bank fees and ridiculous expenditures. If your grocery envelope is empty before the end of the month, you may have to pass on the Oreos or ice cream. One note, try to never steal from your "Savings" envelope. Also, if at the end of the month you have money left over in any envelope, place the leftover cash into your savings.

Why does this budget system work? Because rather than just writing down the numbers, you actually see the money coming in and rolling out. It becomes far more real. When an envelope is empty, it's empty and that is a very real, very scary sight. The most important thing that you will discover is how much money you have been blowing on stupid things without realizing it. You will learn to prioritize your spending to make sure that you can cover all of your necessary expenses. Best of all, you will be taking control of your money with this effective household budget system.

See how easy it is to create a household budget!

Good luck. P.S., You're going to love your big, fat Savings envelope.

This system really does work. Being on a budget is the first step towards getting out of debt. Learn how you too can be debt free, just click here.

College savings plans: Skip that MBA

Brick and mortar institutions of higher learning, while still in their early stages, are dying. You need only look at your recent Wall Street Journal or Financial Times newspapers for an example of discouraged companies refusing to hire overpriced labor. Colleges are simply churning out graduates who demand wage compensation for skills they haven’t developed. As an example, look at the unemployment rate of MBA’s in 2009 versus 2007.

Skip to next paragraph Mises Economics Blog

This is the institutional blog of the Ludwig von Mises Institute and many of its affiliated writers and scholars commenting on economic affairs of the day.

Unemployment Rate among US MBA Graduates

(% of students without job offers three months after graduation)

1. YALE UNIVERSITY, SCHOOL OF MANAGEMENT

in 2009: 8%

in 2007: 6%

2. WASHINGTON UNIVERSITY, OLIN BUSINESS SCHOOL

in 2009: 8%

in 2007: 4%

3. HARVARD BUSINESS SCHOOL

in 2009: 8.8%

in 2007: 3%

4. STANFORD UNIVERSITY, GRADUATE SCHOOL OF BUSINESS

in 2009: 10%

in 2007: 3%

5. MIT, SLOAN SCHOOL OF MANAGEMENT

in 2009: 12.8%

in 2007: 2%

6. UNIVERSITY OF MARYLAND, SMITH SCHOOL OF BUSINESS

in 2009: 13%

in 2007: 2%

7. UNIVERSITY OF CHICAGO, BOOTH SCHOOL OF BUSINESS

in 2009: 13.5%

in 2007: 2.4%

in 2007: 2%

Yet, in spite of all the headlines about MBA programs needing reform, MBA enrolment is still increasingly high.

The question that is never asked among these debates is why companies require degrees instead of skills? Or more specifically, why do companies still believe that degrees translate into skills? Aside from the glut of college students via the government-vehicle of cheap credit and the problem embedded in signaling education, at some point in time consumers must ask what it is they receive from these brick and mortar institutions that they couldn’t receive free through internet.

For example, students of my discipline, mathematics, may learn math from the comforts of their home, in a series of progressive youtube videos (starting from arithmetic and ending at second semester calculus) from wonderful free sites like Khan Academy . Furthermore, these students may purchase the previous edition of their math textbook (usually only a few years old) for roughly 1/10th of its original price. Or, the more ambitious student may receive the equivalent of an undergraduate degree in mathematics from the professors at The Massachusetts Institute of Technology; having access to online textbooks, lecture notes, problems, examples and video lectures all for free at MIT OPEN. Or, even here at the Mises Institute, students may study under the classical liberal tradition at The Mises Academy for about the cost of a college textbook.

The point is simply that the internet is changing the way we educate ourselves in subjects like mathematics, and employers and institutions of higher learning are lagging behind. There is still, and, simply, may always be demand for physical classrooms (but even this is need of reform)

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View the original article here

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Household Budgeting - How to Plan a Budget

The financial aspect of running a household should be looked at as if it were a business. Household budgeting is the title to give to your family money management scheme. It is most important to learn how to plan a budget and then take steps to implement the plan into everyday living.

There are two main categories to balance out: Income and Outgoing. When the month is over, it is time to look at the results of both areas and see who won. If Income wins and there is money left over, the family business is in the black. If Outgoing wins and there is a money deficit or bills went unpaid, the family business is in the red.

Planning ahead is what makes flexibility in the budget possible. If you know in advance that there are increased or additional expenses coming up, it is possible to plan to accommodate those extras. Place such planned expenses alongside other regular payments, such as monthly direct debits or payments to energy suppliers. If you find that you are over committed, planning ahead allows you to make needed adjustments in spending or earning.

Shop around for advice on spending, and gather up some tools to work with in creating your plans.

Planning the Budget

- Detail on paper all Income from all sources.

- Detail on paper all Outgoings, including bills, direct debits (for example, phone bills, standing orders to gas suppliers council tax payments and so on), everyday items and occasional costs.

- See which way the balance goes; more Income on the plus side or more Outgoings on the negative side.

Priorities

- Food and shelter should always top this list.

- Transportation to work.

- Special child costs for day care, medical care.

- Everything else. This includes credit and debit bills and miscellaneous spending.

Laying out the Budget

- This is the easy part. Make five columns across a page, one for each week of the month. Every three months there will be an "extra" week. At the top of the page, list the month name. At the top of each column, enter the date of the week with the week beginning on a Sunday.

- In each weekly column, list every item that is due during that week, with the date next to it.

- At the bottom of each column, put the total for Outgoings for that week. This will tell you how much money you need for every week of a month. Do this at least three months in advance.

- Now list all Income on a separate page, including any tax credits, child credits and other benefits for each month.

Now that you can physically see where the money goes each month, prioritise spending. See where bills can be reduced or adjusted. Most of this will be under discretionary spending like entertainment and eating out. Plan how you might increase Income through using new work income, play group savings, flex time and other ways to boost income. Planning ahead will cut costs in the long run, allowing the family financial business to remain balanced.

Marcus Galon is a regular contributor and expert on UK energy suppliers

Household Budget - A Great Financial Tool For Your Family

There are many types of budgets that a family can put into use; however one of the most useful budgets around is the household budget. Let's face it, family life usually revolves around the home, so setting up a household budget can be an extremely practical way to manage and control your finances dealing with your home. Here are some tips on how to get the most use out of your household budget.

For most families, the majority of their living expenses usually relate to their home. They include mortgage or rent, the cost of utilities such as electricity, gas, cable, phone, etc, home improvement costs, home insurance and tax costs and expenses for groceries. Many families even include child care, transportation and entertainment costs into their household budget.

Creating a household budget is about understanding what your expenses are, then matching them up to your income and making sure that you are not living beyond your means. There are many tools and resources available to help you create a household budget including household budget worksheets, educational resources on creating an individualized budget and how to stick to your budget. A household budget can easily tell you where the majority of your expenses are and help you control these expenses so that they don't get out of hand. For families that are struggling financially, a household budget can put them back on track of living within their means and help them free up money for important purchases that will need to be made in the future.

While a household budget is usually easy to create and implement, the hardest part is to find the discipline to maintain it. Cutting back on the things that you enjoy the most such as entertainment, vacations and eating out can affect morale, however proper financial management of your household expenses now can help you avoid financial pitfalls later down the road.

For more information about creating a family budget visit http://www.ourfamilybudget.com and sign up for our free budget tips newsletter.

Useful Guide on Selecting a Household Budget Spreadsheet Software

Creating a household budget using the traditional pen-and-paper method has almost become the thing of the past. Today, more and more people are turning to more sophisticated ways to make their budgeting tasks a lot faster and easier. One of the best tools in effectively planning a family budget is a household budget spreadsheet software program, which is widely available on the Internet nowadays.

Choosing the best budget spreadsheet software can be difficult if you have no idea on what you exactly need. If you don't know the exact features you're looking for, then the safest bet would be a user-friendly spreadsheet software that can be easily used even by beginners. Look for this quality in a software program for household budgeting to avoid the hassle of using a very complicated program. To know if a household budget spreadsheet software is user-friendly, try several programs online and see which ones are easy enough to use by people with basic budgeting and computer skills. The layout of the spreadsheet should not only be easy to understand, but also be able to present all the necessary information in a glance. It should contain just the right number of graphics and details to avoid confusion for its user.

Another important feature of a household budget spreadsheet program is the flexibility to allow the user to enter all elements of the family budget. It must allow some space for the income sources, expenses, and utilities. That way, you can plan your family's finances more efficiently.

You can find several home budget spreadsheets with standard add-ons such as calendar, calculator, savings planner, and credit card manager. The spreadsheet software you will use depends on the add-ons that you think are suitable to your budgeting needs.

A spreadsheet software for your household budget can be a valuable tool to avoid problems regarding your family's finances. Take advantage of this tool to make budgeting a lot easier for you.

Learn more about Household Budget Spreadsheet, please visiting http://www.gsyywz.com/general/why-household-budget-spreadsheet-is-essential/

Corrections and amplifications: On Andrew Mellon, Sebastian Mallaby, and General Motors

Robert Reich, guest blogger for csmonitor.com, recently responded to criticisms of his writing. In this file photo from December 2002, Prof. Reich basks in applause after announcing he will run for governor of Massachusetts.

John Nordell / The Christian Science Monitor / File

Enlarge By Robert Reich, Guest blogger / October 4, 2010

1. A group calling itself “Stand Up For America” says I took Herbert Hoover’s treasury secretary Andrew Mellon’s words out of context in my post “Republican Economics as Social Darwinism” (September 26); and that, in any event, today’s Republicans who call for small government at a time of sky-high unemployment aren’t anything like Hoover or Mellon; and besides, many Democrats are calling for small government, too.

Skip to next paragraph Robert Reich

Robert is chancellor's professor of public policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Clinton. He has written 13 books, including 'The Work of Nations,' 'Locked in the Cabinet,' and his most recent book, 'Aftershock: The Next Economy and America's Future.' His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

“Stand Up For America,” whoever they are, seem blissfully ignorant of American history. Beginning with the Great Crash of 1929, Hoover and Mellon called for a balanced budget and argued that what came to be known as the Great Depression was due to excessive spending by government and individuals. (Many industrialists and most classical economists of the time agreed.) Hoover’s and Mellons’ efforts to cut spending and allow market forces to “purge the rottenness out of the system,” in Mellon’s immortal words, only prolonged and deepened the Great Depression.

2. Former Washington Post reporter Sebastian Mallaby wrote a generally favorable review of my book “Aftershock” for the New York Times Book Review. But Mallaby began his review by attacking me for something I don’t assert in the book.

“Reich insists instead that American consumers, and particularly the middle class, have been buying too little.”

Mallaby proceeds to argue this can’t be right because

“For years, the United States has consumed more than it has produced; the excess demand has sucked in products from abroad, which is why the nation has run a trade deficit. The idea that the economy has suffered from a lack of demand is, shall we say, eccentric.”

My argument is just to opposite. For three decades American consumers managed to maintain demand despite flat real wages. They did this by sending women into paid work, working longer hours, and then borrowing to the hilt. But all these coping mechanisms have come to an end. So it’s only now that we have to face the reality that most Americans have not shared in America’s prosperity.

In addition, Mallaby is confused about the trade deficit. As economists at the Center for Economic and Policy Research said in response to his review:

Actually, there are few economists who would say that the United States had excess demand throughout most of the last decade, so Robert Reich is exactly right on this point and Sebastian Mallaby is completely wrong. The trade deficit was the result of an over-valued dollar.

This is actually very basic economics. The value of the dollar determines the relative price of foreign and domestic goods. If the dollar is sufficiently over-valued then the United States could be running a trade deficit even when demand is grossly inadequate — as is the case at present. The high dollar makes imports very cheap for people in the United States, which causes us to consume large amounts of imports. It also makes U.S. exports expensive to people living in other countries, which means that we will have weak exports. It is remarkably that Mallaby is apparently unfamiliar with this basic logic and that his mistake was apparently not caught by the editor.

3. My September 22 post, “GM Has No Business Using Our Money on Campaign Contributions,” summoned a rejoinder from Bob Ferguson, Vice President for Government Relations. He tells me “no corporate dollars are used in these contributions. No taxpayer funds were involved.”

Mr. Ferguson explains that the contributions have come from GM’s employee-funded PAC. Of course, even when PACs are funded by employees – that is, executives – the money often comes from the corporation, because executive pay packages are negotiated with an understanding that the executive will pay a certain amount into the corporate PAC. When I asked Mr. Ferguson whether anything like this happened at GM, he said “this is not done at GM. Our code of business conduct would prevent any link between compensation and PAC participation.”

I stand corrected.

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The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on www.robertreich.org.

Vox News

The Comedy Central's Jon Stewart and Stephen Colbert are drawing closer to the institutions they love to mock. President Obama even gave a nod to their upcoming rallies in Washington. When that happens, they need to retreat, analysts advise.

Global News Blog Global News Blog

Leanne Sarco is a ranger at Grand Isle State Park, located on a barrier island off the coast of Louisiana. When the oil spill closed beaches and canceled her job running a summer program for children, she asked her boss if she could rescue hermit crabs instead. Her effort attracted volunteers from far and wide.

She recruited Facebook friends to save Gulf Coast's hermit crabs.

When park ranger Leanne Sarco saw oil-covered hermit crabs on the Louisiana beaches, she started her own project to clean and save them.

View the original article here

Fiscal responsibility: investing in our children's future

Investing in the future takes many forms. It ranges from teaching children to save their quarters from the tooth fairy, to saving money to put them through college, to spending tax dollars in fiscally responsible ways.

Photo illustration / OJO Images / Newscom / File

Enlarge By Diane Lim Rogers, Guest blogger / October 4, 2010

The paper I was invited to write for a spring conference (the William B. Ruger Chair Workshop on “Economics and Security: Resourcing National Priorities”) at the Naval War College has been published. (Right after attending the conference I had written only about what I learned about defense/national security spending.) The entire monograph can be found here, and my paper appears on pages 81-88. Some of my favorite parts (leaving aside my never-ending rants about the Bush/Obama tax cuts):

Skip to next paragraph Diane Lim Rogers

'EconomistMom' (Diane Lim Rogers) is Chief Economist of the Concord Coalition, a non-partisan, non-profit organization which advocates for fiscal responsibility, and the mom of four (amazing) kids to whom she dedicates her work. She’s been blogging since Mother’s Day 2008.

As parents, many of us baby boomers make “investing” in our kids a priority in our household budgets. We pay for our kids’ music and dance lessons, team sports, and after-school academic enrichment and health-promoting (fitness) programs. We make sure they go to the doctor and dentist regularly, and we even pay to give them perfectly straight teeth as a warm-up to paying for college. And we pay for tutoring and test-preparation classes and encourage them to do their best with their studies in the hopes that they will get into a good college that we can manage to pay for and will turn out to be a “good investment.” What makes all of our parental efforts worthwhile isn’t always measured in purely monetary terms, but all of us certainly hope that we help set our kids on a path to a high “quality of life.” And I think most of us hope that our kids’ lives will be of even higher quality than ours have been.

That is why any parent should be particularly concerned about the budget outlook: it directly undermines all of our personal efforts to provide for our kids and set them on that good path. We contradict ourselves if on the one hand we are saving for our kids’ college educations but on the other hand are clamoring for more deficit-financed tax cuts or benefits for ourselves.

…

I consider myself a “deficit hawk,” but I certainly don’t think the goal should be a perfectly balanced budget with a zero deficit in every year. Running a debt can be valuable, because it can allow us (whether as a society or as a family) to achieve a higher standard of living than what is possible if relying on current income alone, particularly when the borrowing makes possible investments that increase future income. But if we borrow too much and use it to buy things that do not increase our future income, we can get into an economically “unsustainable” situation where the burden of the debt we carry grows faster than our income—and we cannot keep up. (Examples from the family budget: borrowing for college is less worrisome if college boosts future income; borrowing to buy a home is not a problem if the interest rate will not “balloon” in the future and if the home’s value is expected to rise; borrowing for a flat-panel TV because you don’t have a job right now to pay for it . . . not so smart!)

…

Advocating for “fiscally responsible” government is not the same thing as arguing for a smaller government. Often people who say they want a smaller government really don’t want a smaller government; they just want lower taxes. The “right” size of government from a fiscally responsible perspective is that which we are willing to pay for in taxes. And the “right” level of taxes is that which is adequate to cover the cost of the government programs we deem worthwhile.

Americans have lost sight of this connection between the government we desire and the taxes we are willing to pay, because we have become too accustomed to persistent budget deficits as the norm, and too often our political leaders mislead us into thinking that there are no budget constraints and that deficit financing is “free.”

…

Those who argue for lower taxes often claim that the historical evidence shows that taxes are not the problem, spending is, because the level of federal taxes as a share of GDP has been around 18 percent of GDP over the past forty years and is projected to remain at or above that level under either current law or even current policy extended. But maintaining a level of revenues consistent with the past proves nothing about their adequacy for the future.

…

Certainly we must do all we can to control the growth in government spending, however, particularly where higher spending does not translate into higher-quality goods and services. On health care reform, we must learn from the demonstration projects and improve the flow of information in the health care market so that wiser public and private decisions can be made and wasteful spending eliminated. But the longer-term challenge will not be solved by cutting only the spending that is genuinely or even sounds like “waste, fraud, and abuse.” Tough choices on what kind of health care the public sector can subsidize and for whom (in other words, decisions about how to “ration” publicly provided health care) will have to be made. Because those choices are tough both economically and politically and will likely take a long time to both be implemented and to make a difference, health care and entitlement reform cannot be our only strategies to close the fiscal gap. Tax policy has to be a big part of the solution, too…

And my conclusion:

Conclusion: Moving from “Budget Scolds” to “Fiscal Inspirers”
As an economist and a mom, I believe that getting our nation back on a fiscally sustainable path is one of the most important ways we can ensure a bright future for our kids. To encourage this, fiscal policy experts need to do more than present the numbers and charts that warn of a scary but hypothetical future for the U.S. economy as a whole. We need to bring the issue down to the level of the family in order to make it immediately relevant to people right now. We need to remind parents that as they are working hard every day to provide for their kids, they need to demand that their politicians do the same for all our kids. Public education and engagement are crucial to not just sound an alarm but create a movement to promote fiscal responsibility as a duty to our kids and grandkids and make the “crisis” salient now. Instead of allowing our leaders to perpetuate the irrational notion that everything will be fine without having to make any tough choices, we need to tap into the inherit optimism of the American people to prove that what Paul Tsongas said (as he started the Concord Coalition in the early 1990s) was and still is right—that “we are better than what we are being asked to be by our leaders.”

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The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.

Vox News

The Comedy Central's Jon Stewart and Stephen Colbert are drawing closer to the institutions they love to mock. President Obama even gave a nod to their upcoming rallies in Washington. When that happens, they need to retreat, analysts advise.

Global News Blog Global News Blog

Leanne Sarco is a ranger at Grand Isle State Park, located on a barrier island off the coast of Louisiana. When the oil spill closed beaches and canceled her job running a summer program for children, she asked her boss if she could rescue hermit crabs instead. Her effort attracted volunteers from far and wide.

She recruited Facebook friends to save Gulf Coast's hermit crabs.

When park ranger Leanne Sarco saw oil-covered hermit crabs on the Louisiana beaches, she started her own project to clean and save them.

View the original article here

Make Household Budget and Stop the Financial Bleeding

This is a topic that most people avoid until they realize that there future financial goals are non-existent and their retirement plan involves working far past when they want to. It's when the sense of financial panic sets in that most people make household budget, and while it's better late then never, stopping the financial bleeding needs to happen much sooner to truly see your financial dreams come true.

Many people get stuck on just getting started. They tend to over complicate what making a budget actually is before they ever begin. Fortunately it is not as hard as some people make it to be. Here's how you get started with your household budgeting plans.

The easiest way to set up a household budget is by looking at your cash flow on a monthly basis. Since we all seem to think of our finances this way it is best to plan around each month and it is simply looking at income versus expenses over that time period.

Determining you monthly income is normally the easiest part of any budgeting process. This is the amount of any and all paychecks you receive over a month's time. If you have a variable income because you work on commission or own your own business you can use an average of the last three months to get this number. Be sure to include any other income as well such as child support, disability income, etc.

Next comes the part that nobody likes; figuring out the household monthly expenses. Start by listing out everything you spend money on in a month's time. Rent, mortgage, car payment, phone, electric bill, credit cards, groceries, entertainment, medical expenses, clothing, dry cleaning, personal care (haircut, nails, etc.), gifts, etc. Some of these expenses are fixed, meaning that they are the same every month while others are variable. For your variable expenses such as groceries go back three months and calculate the average amount you spend each month.

In order to better understand where your money is going it can be well worth the effort to make subcategories for those expenses that can be further broken down. As an example your food category can be broken down into groceries, eating out, snacks from the vending machine, and anything else you may spend money on. The more detailed you are the better handle you will get on your finances.

Once you have totaled your monthly income and expenses subtract your expenses from your income and see what is left over. This "moment of truth" as many people call it can be quite sobering because in almost all instances no one has any idea of exactly how much they spend each month and on what. All of a sudden those little $5 to $10 purchases at the local coffee shop or eating out for lunch hit you right between the eyes and you have that "Ah-Hah" moment.

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Home loans: Mortgage rates fall back to record lows

WASHINGTON

Rates on 30-year mortgages matched the lowest level in decades and rates on 15-year loans dropped to their lowest point in nearly 20 years.

Mortgage buyer Freddie Mac said Thursday the average rate for 30-year fixed loans fell to 4.32 percent, the lowest on records dating back to 1971. That's down from 4.37 percent the previous week and equal to the average rate reached four weeks ago.

The average rate on 15-year fixed loans fell to 3.75 percent, the lowest on records dating back to 1991.

Rates have been at or near the lowest levels in decades since spring as investors poured money into the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields.

In recent weeks, Treasury yields have dipped as bond traders bet that the Federal Reserve will soon boost its Treasury purchases in the hope of giving the economy a lift. That has pushed down rates.

Still, historically low rates have done little to boost the struggling housing market, which had its worst summer in more than a decade.

Fall sales are not expected to be much better. High unemployment and weak job growth have kept people from buying homes. And many of the hardest-hit markets are bracing for a big wave of homes sold at foreclosure or short sales. A short sale is when a lender lets a homeowner sell for less than the mortgage is worth.

To calculate average mortgage rates, Freddie Mac collects rates from lenders around the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.52 percent, down from 3.54 percent a week earlier. Rates on one-year adjustable-rate mortgages rose to an average of 3.48 percent from 3.46 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac's survey averaged 0.8 a point for 30-year mortgages. It averaged 0.7 of a point for 15-year and 1-year mortgages and 0.6 of a point for 5-year mortgages.

View the original article here

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Think about someone who can teach excellently, but doesn't put that talent to use. This teacher is instead doing a desk job because according to him or her that's a safer bet. Now, the desk job can only take the person so far as he or she doesn't really like doing that stuff. However, if this individual had taken the bigger step of going ahead and teaching - overcoming any limitations in the way, like stage fright - its highly possible that he or she would be much better financially stable and empowered today.

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Signs of a biotech backlash?

Esmond, Ill.

On the eve of planting, Paul Taylor, a corn-and-soybean farmer in north central Illinois, made a quick decision.

The signs were auspicious: The sun was shining, the air was warm, the fields were dry. So he returned the 50-pound bags of expensive, genetically modified seed corn that were waiting in his shed and planted instead ordinary hybrid seeds, the kind his grandfather might have sown. An early start and lower seed costs could pay off at harvesttime.

"I'm going to roll the dice on it," he said after planting.

Even as most farmers embrace genetically modified crops, some producers are casting a critical eye on the technology. Corn Belt farmers complain loudly about the soaring cost of seed. The federal government is investigating the industry for anticompetitive practices. Farmers are grappling increasingly with weeds that have grown resistant to Roundup, an herbicide widely used with genetically modified crops, and genetic contamination of conventional crops.

"If you've got your conventional seed right next to your neighbor's [biotech] seeds, the pollen flies," says John Schmitt, a corn-and-soybean farmer in Quincy, Ill., who had to sell a third of his conventional corn at lower prices last year because of contamination. "It's nature."

Even the US Supreme Court has gotten involved, lifting an injunction against the planting of genetically modified alfalfa.

There's little evidence so far that farmers have turned against genetically modified crops. The most popular trait, tolerance to Roundup, allows them to kill weeds easily without harming their crop. Other genes enable crops like corn essentially to manufacture their own insecticide. This saves farmers the trouble and expense of applying insecticide to their fields when a problem arises.

But a rising number of farmers are raising questions about the technology, if only because they resent the rising costs. Last year the price of corn seed rose 32 percent; soybean seeds went up 24 percent.

"There just isn't competition out there," says Craig Griffieon, a farmer in Ankeny, Iowa, who shuns biotech crops.

The US Justice Department is looking into complaints of anticompetitive practices in the seed business, where seed giants like Monsanto have raised prices, bought up or pushed aside smaller seed companies, and emphasized genetic engineering over traditional plant breeding.

Most farmers grumbled but stuck to biotech seeds anyway, though many refused to buy the latest and most expensive version that Monsanto was pushing.

"A lot of it, to be perfectly honest, is herd mentality," says John Gilbert, a farmer in Iowa Falls, Iowa, who regularly plants conventional seeds. "They believe Monsanto when they say it's going to yield more."

Still, the rapid increase in the percentage of US farm acres planted with biotech crops has slowed. It rose only 1 percent last year, from 85 percent to 86 percent, the smallest increase since 2001. In Illinois, the percentage of acres planted with biotech corn dropped from 84 percent to 82 percent; biotech soybeans fell from 90 percent to 89 percent.

"The technology has really been hyped a lot," says Doug Gurian-Sherman, author of a 2009 study for the Union of Concerned Scientists that concluded that yield increases have come almost entirely from traditional plant breeding. "Even on a shoestring, conventional breeding way outperforms genetic engineering."

Monsanto doesn't dispute that much of the increase in yields is due to conventional plant breeding. But biotech traits have helped "by protecting yields that would have otherwise been lost due to insects and weeds," says Monsanto spokeswoman Mimi Ricketts.

Even if conventional seeds can produce as well as biotech seed, farmers are finding it harder to find them. That's because most crop improvements produced by traditional plant breeding are sold to farmers only in combination with biotech traits.

Probably a graver challenge is the spread of herbicide-resistant weeds. The problem is worst in Southern cotton fields, where thousands of acres are infested. But resistant weeds like horsetail and giant ragweed are now appearing across the Midwest, too.

Experts say farmers created the problem by relying too heavily on Roundup and the biotech crops that Monsanto developed to use with Roundup.

"The first seven or eight years it was the greatest thing since sliced bread," says Bill Johnson, a weed specialist at Purdue University, who called Roundup "arguably the most rapidly adopted agricultural innovation ever." Now, he says, "We're going to see the value of it erode over time."

Next year Monsanto says it plans to offer farmers more seed options and lower prices for those who want to try out its latest varieties. As for Mr. Taylor, his spring gamble to plant ordinary hybrid corn seemed to be paying off. "We won't know till harvest," he says. "But it doesn't look like a bad decision."

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Obama’s father and Kenyan anti-colonialism

Since WWII perhaps the most potent strain of anti-capitalist, anti-Western ideology has been powered by the conceptions of Hobson and Lenin as much as by those of Marx and the Webbs. On this view, capitalism and its need for markets and profits drives the violent and unjust economic exploitation of non-Western nations and peoples.

Skip to next paragraph Mises Economics Blog

This is the institutional blog of the Ludwig von Mises Institute and many of its affiliated writers and scholars commenting on economic affairs of the day.

Through this ideological filter the dream of socialism became fused to the moral causes of anti-colonialism, and — ironically — both ethnic nationalism and anti-Western internationalism.

When I originally exposed the socialism of Obama’s father — and proposed this revelation as the “Rosebud” which made sense of the puzzle at the heart of Obama’s Dreams From My Father — I mostly ignored the potent legacy of Kenyan anti-colonialism, a central life experience of Obama’s Kenyan father and grandfather.

Well, where angels fear to tread, Dinesh D’Souza has rushed in to fill the void, taking my “Rosebud” thesis and research into Barack Obama, Sr.’s socialism (without acknowledgment), and running with it as far as one could possible go in the anti-colonialist, anti-Western direction — and beyond.

I haven’t read D’Souza’s book or his Forbes article. But I have watched his discussion with Glenn Beck on Fox.

As far as it goes, as a basic presentation of the facts about Obama’s father and upbringing, and what Obama has written in his own memoir, I think it is an essentially factual and useful recounting of important truths about the biography of the President which most of the popular media have willfully withheld from their customers.

As an interpretation of what motivates the President today — family history and university training in left wing anti-colonial theory may well explain why President Obama returned the White House bust of Winston Churchill to the British. But I’m not a fan of connect-the-dots speculative explanation that are far more complicated and far less direct than is the simple and fundamental fact of Obama’s very general, well documented, and life-long interest in the dream and ideology of “social justice”, race-based Marxism, and the post-60s American left.

Of course, one does have to wonder what the alternative history of Barack Obama, Jr. might have turned out to be if Barack Obama, Sr. had studied Mises and Rothbard on imperialism and colonialism while studying economics at Harvard and the U. of Hawaii, rather than “scientific Marxism”, mainstream 1960's development economics, and other such things.

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The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here.

View the original article here

Stock prices fall globally

LONDON

Stock prices on European markets were dragged lower Monday by an expected retreat on Wall Street, at the start of a major week on the economic news front that may go a long way to determining investors' views about the world economy going into the last quarter of the year.

In Europe, the FTSE 100 index of leading British shares was down 26.26 points, or 0.5 percent, to 5,566.64 while Germany's DAX fell 62.27 points, or 1 percent, to 6,149.07. The CAC-40 in France was 38.65 points, or 1.1 percent, lower at 3,653.24.

Wall Street was poised for a fairly hefty retreat at the open later — Dow futures were down 42 points, or 0.4 percent, at 10,726 while the broader Standard & Poor's 500 futures fell 5.8 points, or 0.5 percent, to 1,136.50. With less than half an hour in the trading day, the Dow is down 96 points, or 0.89 percent.

Even though stocks enjoyed one of their best Septembers in years — the S&P 500 index added nearly 9 percent during the month alone, its best September performance since 1939 — sentiment remains fragile ahead of key economic data and a raft of central bank policy statements.

The key release this week comes on Friday with the monthly U.S. nonfarm payrolls report for September. The jobs data often set the market tone for a week or two after their release and investors will be closely monitoring the September data to see if the pace of job creation in the private sector is picking up, as some recent indicators have suggested.

The data could have a bearing on whether the Federal Reserve takes further action to stimulate the U.S. economy — a move likely to lower long-term interest rates.

Many economists predict the Fed will move to buy more government securities — perhaps as soon as its next meeting on Nov. 2-3. The Fed is weighing that option, known as quantitative easing, because its traditional interest-rate lever to help the economy is already at a record low near zero and can't be cut further.

Before then, there is a mass of news that could impact markets, not least interest rate meetings from the European Central Bank, the Bank of England, the Bank of Japan and the Reserve Bank of Australia.

And other economic data, such as eurozone retail sales figures for August, German industrial data and a U.S. services sector survey from the Institute for Supply Management will provide insights into the state of the global economic recovery.

"Pending home sales and factory orders data is due out of the U.S. today, which should bring in some volatility but we could see the cautious tone continue for this week ahead of Friday's nonfarm payrolls release," said Ben Critchley, sales trader at IG Index.

As if the economic news weren't enough, investors will also have to contend with the start of the third-quarter U.S. corporate earnings reporting season. As usual, aluminum company Alcoa Inc. kicks off earnings season on Thursday.

All this will likely lead to volatility in the currency markets, which have been in the spotlight over the past couple of weeks since the Bank of Japan intervened directly to stem the export-sapping appreciation of the yen — the intervention has not helped reverse the yen's path though it may have put a ceiling on its ascent.

The continued relative strength of the yen hurt Japanese stocks earlier and the Nikkei 225 stock average closed down 23.17 points, or 0.3 percent, to 9,381.06.

Elsewhere in Asia, most markets rose. Hong Kong's Hang Seng index jumped 1.2 percent to 22,618.66, with particular strength seen in the property sector. South Korea's Kospi rose 0.1 percent to 1,879.29 and Australia's S&P/ASX 200 added 1 percent to 4,625.30. Financial markets in mainland China are closed through Oct. 7 for the National Day holidays.

As in the stock markets, Friday's U.S. jobs report is potentially the most important likely driver.

"Continued deterioration in U.S. economic data would reinforce the already negative sentiment surrounding the dollar, and this Friday's U.S. employment and payrolls report for September, should offer clues as to whether or not the U.S. economy is starting to turn around," said Michael Hewson, market analyst at CMC Markets.

By early afternoon London time, the euro was down 0.5 percent on the day at $1.3717 as it drifted back from six and a half month highs of $1.3793. Meanwhile the dollar was flat at 83.22 yen.

Benchmark oil for November delivery was down 57 cents to $81.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.61 to settle at $81.58 on Friday, the first time it topped $80 a barrel since early August.

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Offshore wind farms: How much is renewable energy worth?

On Thursday, September 23rd, the renewables sector celebrated the opening of the 300 MW offshore wind-farm situated off the Thanet coast in Kent. The wind-farm is the largest in the world. And there was understandable pride when the VIPs, including DECC Secretary of State, Chris Huhne, stared out to sea.

Skip to next paragraph The Adam Smith Institute

The Adam Smith Institute is the UK's leading innovator of free-market economic and social policies. Politically independent and non-profit, the Institute promotes its ideas through reports, briefings, events, media appearances, and its website and blog.

Sweden’s leading energy company, the state-owned Vattenfall, has vigorously espoused the cause for renewable energy for many years. Having built wind-farms in the Baltic Sea, it has now installed 100 3MW Vestas turbines off the Thanet coast. The cost of this wind-farm, much of which is related to the cost of the installed turbines themselves, is between £800 million and £900 million. On a per MW basis, this indicates a cost of between £2.5 million and £3 million.

By way of comparison, the cost of new gas-fired plant is c£500,000 per MW. However, the latter needs expensive gas to operate, whereas wind plants receive their power source effectively free of charge. Capacity levels vary markedly as well. Offshore wind-farms will often be able to generate when their power is not needed – when the wind is blowing in the middle of night for example – and may well be literally becalmed during peak hours of demand. Consequently, offshore wind power is unlikely to be suitable for base-load purposes but it still has a contribution to make within a mixed electricity generation system.

More worrying, though, is the Coalition Government’s seemingly lukewarm stance on new nuclear-build. No public subsidies is the current mantra. Hardly the clarion call to persuade EdF and the German Horizon consortium to invest billions of pounds in new nuclear plant, which would provide the base-load power that the UK will need. Are our energy priorities right?

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Subliminal Messages - How to Effectively Manage Household Chores

These days 24 hours seem to be not enough to accomplish everything you have to do so the entire day. If you're working full time, you have to spend around 8 to 9 hours a day, sometimes longer. When you go home, you need to take care of your household chores. If you have kids, it becomes much harder since you have more people to take care of.

It is not surprising therefore if you find yourself getting burned out and too tired to accomplish even your household chores. Nevertheless, you should also know there are ways to make things more comfortable. Consider the following:

1. Learn to schedule. When you're faced with a lot of tasks besides tending the home, it's only right to come up with a good schedule-and make sure that you're going to stick to it.

2. Prioritize. There are actually certain chores that you don't have to do every day. For example, you can consider having your laundry every other day or twice a week. Gardening can be accomplished during the weekends. You can change the linens once a week or every two weeks. In the Internet you can download a form that you can use to help you schedule and prioritize your list of chores.

3. Ask others to help you. If you have children, you can train them to be responsible at early point in life by delegating simple household tasks to them. You may help you whip those ingredients or set the table. You can teach them how to arrange their beds on their own. In fact, you can ask your husband to help around the home, especially during the weekends. He can take care of repairs and maintenance.

4. Consider hiring a cleaner. There are several cleaners that are ready for serve you. You can definitely find one whose rates fit your budget. You can call them whenever you really don't have a lot of time to take care of your home. On the other hand, you are able to provide a source of livelihood for someone.

5. Put things into their proper places. It's interesting how much time you can save just by returning the items into their right places. Magazines should be back on racks. Return to dressers the wardrobes you haven't utilized. Place unclean dresses into the laundry bins.

6. Enjoy.One of the reasons why you feel so tired when it comes to cleaning is you never really associate household chores with enjoyment. They are tasks too burdensome to handle. Learn to enjoy them. You may play upbeat music while cleaning.

7. Encourage yourself. You can use subliminal messages to help you motivate yourself into cleaning. Subliminal messages may be affirmations, such as "I am proud to live in a clean home" or "I can provide a clean environment for my family" can definitely encourage you to be more effective in cleaning. You can speak the subliminal messages at least a few hours before cleaning or even while you're doing it.

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10 Super Savvy Personal Money Management Tips For the Household Budgeter

One of the most valuable personal money management tips I can offer is to use a budget planner. Having a visual idea of your finances makes the process of keeping track not only easier but more accurate and of course also provides you with that important feeling of control.
Opening an online savings account offers you a much higher interest rate than a branch account. Having no branch or ATM access also means you are more likely to keep your savings than dip into them on impulse as withdrawing from this type of account requires transferring the funds into your normal bank account and usually takes at least 24 hours.
Don't save at the expense of your social life, but don't let your social life stop you from saving. Studies show that people who include an allowance in their budget for enjoyable activities are more likely to stick to their budget and therefore save more in the long term. When you resent your budget and feel restricted by it you will be more inclined to break it and ultimately loose track of the entire thing. Remember, life is all about balance.
Review your budget on a regular basis. By establishing the habit of sitting in front of your budget planner and bills one night a week you will be developing a habit that ensures you are always on top of things. In time you will begin to notice ways in which you can improve your budget while freeing up more cash, or perhaps notice a few leaks that need to be plugged before they get out of control.
When it comes to regular savings, change your mindset. To illustrate; when you receive a bill in the mail you know you can't avoid paying it, there is no way around this, it is a social norm. Start thinking of your savings account as a bill that must be paid and even if that bill is only $5 a week; pay it before you do anything else.
These days most people (in the first world at least) receive their pay cheque as a direct deposit into their bank account. Decide on an amount of money you can reasonably save out of each pay and ask your boss or payroll department to split your pay cheque with a set amount going straight to your savings and the rest going to your normal account. With that small amount out of sight it is also out of mind and you won't miss it.
Did you know that by shopping at convenience stores like the gas station and mini mart you could be paying between 25 - 40% more than you would at the grocery store? So, shop at the grocery store.
Pay loans more frequently; by paying down debt on a weekly or fortnightly basis rather than monthly you will seriously reduce the interest on the loan in the long term.
Get to know yourself and acknowledge your weaknesses, we all have them, for some it's chocolate, for many it's shoes, but whatever your weakness is, don't put yourself in front of temptation. If you know you can't walk past your favourite shoe shop without hearing angels sing at the site of a gorgeous pair in the window; then take a different route.
Finally the last of my personal money management tips is this: learn to save money, emphasis here on the word 'learn'. For most of us a savings habit does not come naturally. Studies show that in order for an action to become a habit it must be done over and over again, I think the standard here is 21 days. But we all know that good habits can be much harder to imprint on our brains than bad ones, so start off small. A great way to learn to save is to choose something you want that is small, say a digital camera for $300. Be specific about your goal by choosing the actual camera model you want then get a catalogue picture of it and stick to the fridge. Now we all know these days purchasing items on store finance is sadly more the norm than actually paying for it with cash, but don't do it. Decide to prove to yourself that you can buy this item by saving your own money and remind yourself that you will be saving on finance fee's as well as hefty interest. You know you need to save $50 a week for the next 6 weeks to get that thing which you desire, so whilst keeping your visual goal in mind set about saving that $50 and then reward yourself by paying cash for that camera in 6 weeks time. As you get into the habit of saving, believe me you will actually begin to enjoy the process of setting goals, visualising them, working towards them and then rewarding yourself at the end.

BudgetMama is a savvy yet simple budgeting logic, what comes in should be more than what goes out, and by setting aside a small amount of funds each pay cycle you can be guaranteed to always be prepared for bills before they come in. Sometimes things are easier said than done, so how do we apply this simple logic into a workable system? Go to => BudgetMama.com [http://budgetmama.com/shop.html] now and see the BudgetMama Budget Planner Worksheet in action. Sarah G, the author and creator of the BudgetMama system offers loads of advise on planning and budgeting for the future while being able to still live without financial pressure today. By adopting the BudgetMama approach yourself you will develop the skills and discipline to control your spending and learn how to cover all your bills whilst still having some money left over at the end of the day. All it takes is determination and with that you can do anything!

Golden Rules of Household Budgeting

If you find it difficult to keep your finances in order, here are some tips to help manage your household budgeting in a effective manner.

Communications

The most important point of any household budgeting is to communicate its importance as a family exercise and have the entire family participate in it. A household budget rightfully impacts all the family members, so it's a good practice to have all the members of the family together when starting the budgeting process. No matter what you do, if the whole family does not buy into the importance of living within a budget, you do not have a budget.

Try to communicate in terms of benefits instead of restrictions
Work toward a agreement on spending limits for each family member
Be reasonable and open
Write down what is agreed to


Setting goals

Start the discussion with setting goals. You should break the goals into short-term goals and long-term goals. An example of a short-term goal could be to save for a car in a year, or maybe to clear the debt off credit cards in six months. A long-term goal might be to save for the down payment toward purchasing a house in the next five years.

Once you have the family goals listed, you'll need to figure out the ways which expenses can be cut to meet the short-term and long-term goals. Make a list of your expenses and break them down into two columns. In column 1, put your necessary expenses such as food, housing, clothing, transportation, utilities, etc. Put discretionary expenses such as outings, entertainment, and travel under the other column. Discuss cutting the discretionary expenses first, then consider where trimming the necessary expenses might be possible.

Suggestions for cutting discretionary spending

Cooking at home

Home cooked food is healthy for both, your body and your pocket. There is no need to dine out in order to spend "quality time" with your loved ones. Instead, if you spend the same time with your family at home, you can have more fun in true comfort.

Shop wisely

Don't shop when you are anxious, depressed or excited as you end up spending more than you actually need. Plan your shopping trips. Make a list of everything that you need before you go out to shop, and try to stick to purchasing only the things on that list. Every time you shop for one or two items you tend to purchase something more than what you require. So only shop when you need to and not when you feel like it. If you've set a budget for your shopping, withdraw the money you will spend into cash, and leave the credit and cash cards at home.

Record your expenses.

There is an old adage that goes like this, "Anything that is not measured, cannot be improved." If you apply this thought to your families spending, it only makes sense to record all your expenses. You cannot change what you don't know. Without a record, you don't even know what you don't know. Seeing a record of your expenses makes it very clear if you're working toward your goals or not.

Where you might trim necessary expenses

While many expenses cannot be avoided, it's still within your ability to control and reduce many of them.

Utilities

Turning off lights and other electronics when not in use can add hundreds of dollars back to the average American household. Turning the thermostat up a degree during hot months or down a degree when it's cold keeps a few pennies an hour in your pocket. If there are times of day that nobody is home, consider getting a programmable thermostat and set the temperature 5 degrees opposite of what you consider comfortable for the portion of the day when nobody is home.

Food

Buy generic or store brands of staple foods like flour, sugar, tea. Use coupons for name brand purchases. We save from $20 to $75 dollars each month using coupons on the items we use most.

Involve your children.

Finally, the best way to make your children partner actively in your budgeting program is to make them responsible for it. Give each child their agreed upon allotment of the discretionary funds, make it clear that this is meant to last them the entire month. Once your children start understanding that they are in charge of their own expenses they'll begin to spend money prudently.

Ronnie and Wendy Pitts, own and operate Austin Valley Software Corporation, a web software development business. More information about AVSC can be found at [http://www.austinvalley.com].

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Ticking prime bomb: Fannie Mae's August summary

The Latest release of the Fannie Mae Monthly Summary for August indicated that for data through July, total serious single family delinquency continued to declined.

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'SoldAtTheTop' is not a pessimist by nature but a true skeptic and realist who prefers solid and sustained evidence of fundamental economic recovery to 'Goldilocks,' 'Green Shoots,' 'Mustard Seeds,' and wholesale speculation.

Although this is a notable development particularly in light of the fact that Fannie Mae’s serious delinquency had been rising for over two years, more data is needed before any conclusions can be drawn as to the trend going forward.

In July, 3.62% of non-credit enhanced loans went seriously delinquent while the level was 11.27% of credit enhanced loans resulting in an overall total single family delinquency of 4.82%.

The following charts (click for larger ultra-dynamic and surf-able chart) show what Fannie Mae terms the count of “Seriously Delinquent” loans as a percentage of all loans on their books.

It’s important to understand that Fannie Mae does NOT segregate foreclosures from delinquent loans when reporting these numbers.

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Visa, MasterCard settle Justice Department lawsuit

Washington

The Justice Department on Monday sued the three largest U.S. credit card companies for anticompetitive practices and reached a proposed settlement with two of them, MasterCard and Visa.

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"We want to put more money in consumers' pockets, and by eliminating credit card companies' anticompetitive rules, we will accomplish exactly that," Attorney General Eric Holder told an afternoon news conference. "The companies put merchants and their customers in a no-win situation" and "consumers are being held hostage."

In papers filed in federal court in Brooklyn, the department and various state attorneys general sued all three companies, saying they were attempting to insulate themselves from competition.

At the same time, the Justice Department filed a settlement it has reached with Visa and MasterCard. Court approval of such settlements is usually a formality.

Under the settlement, Visa and MasterCard agree not to prohibit merchants from offering customers discounts or rebates for using a particular kind of card. Visa and MasterCard also must allow merchants to express preferences for the use of a low-cost card within a network or other form of payment.

The lawsuit says the card companies are impeding merchants from promoting the use of competing credit or charge cards with lower acceptance fees.

Each time consumers use a credit card to make a purchase, the merchant must pay a fee. Such fees brought in $35 billion last year to the three credit card companies and their affiliated banks.

"We're partway there" with the proposed agreement with Visa and MasterCard, Assistant Attorney General Christine Varney, head of the department's antitrust division, told the news conference.

"We remain open" to seek a settlement with American Express," Varney added.

At mid-afternoon, shares of American Express were down more than 6 percent; Mastercard was down less than 1 percentage point, and Visa was up less than half a percentage point.

Joining the lawsuit were state attorneys general from Maryland, Connecticut, Iowa, Michigan, Missouri, Ohio and Texas.

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The Need For Household Budgeting

The cash flows in a typical modern home are very dynamic, in the sense that there are a lot of income sources, and expenditures being made on a daily basis. Add to that the various loans, mortgages, investments, etc., and the importance of household budgeting becomes self-evident.

Need for Home Budgeting

It can become extremely difficult to keep track of all the financial activities in a household, and hence, budgeting must be used as a tool to effectively manage finances. The advantages of household budgeting are:

Track spending - If you've been wondering, "Where the hell did all the money go?", then it is time to get serious about budgeting and learning to identify where your hard earned money is going.
Checking habits - You may not be a spendthrift, but a certain habit like shopping could leave a dent in your savings. This can be pinpointed via budgeting.
Financial goals - If you intend to save money and arrive at a particular financial position later on, you need to discipline yourself and take to smart budgeting. Ambitious financial aims can't be fulfilled without the severest form of self-discipline.

How to go about it

There are no hard-and-fast rules about household budgeting. Some people do it in their own unique ways, while others prefer to go by the more conventional, trusted methods. At the same time, there are a few guidelines one could profit from:

Record keeping - the first thing you need to do is to set aside a diary or notebook and maintain a budgeting record. You can also opt to maintain the record on your computer by using spreadsheet programs to perform a few complicated financial calculations as well.
Discipline - Budgeting requires discipline. Too many people give up on a day's record-making and procrastinate after a hard day's work. And when the next day comes and goes, they either forget what their expenses during the previous day were, or simply throw their hands up and stop keeping a record. Household budgeting is just not something you should take chances with.
Professional help - It is possible that you may not be in a position to keep the budget of the household. For instance, you may too busy too have time for anything else. In such a case, take professional help and make sure you approach a reliable and trusted budgeting solutions company.

It is true that household budgeting can be very frustrating at times. After all, it can be annoying to note down every insignificant little detail all the time. However, it is only by maintaining this discipline that you can hope to reap any financial rewards.

Leon van der Walt is a regular contributor to the financial site http://www.financial-inspiration.com and writes on topics like home budgeting to help people get their finances under control.