The True Lessons of the Recession
The West Can’t Borrow and Spend Its Way to Recovery
by Raghuram Rajan
Raghuram Rajan is Professor of Finance at the University of Chicago
Booth School of Business and the author of Fault Lines: How Hidden
Fractures Still Threaten the World Economy.
Foreign Affairs May 2012 True Lessons of the Recession
Click link above for the article
original article link: http://faculty.chicagobooth.edu/raghuram.rajan/research/papers/FA%20May%202012.pdf?goback=.gde_3194930_member_114651426
As Good As (Better Than) Gold!
by Kevin Lasko
My dad passed away on July 8, 2011 from a massive heart attack at the age of 89. He was a great man and even better father. He was also an avid coin collector, nothing high end, but he really enjoyed looking at his collection and showing my children. He also had a few 1 ounce gold bullion coins which he gave to me after his passing. He always liked having “a little security money” if anything ever hit the fan!
A recent policy premium notice came in the mail for one of my children in February with a due date of March 1, 2012. The base premium for this policy is $1,727.12 with an origination year of 2000. This is a “plain vanilla” whole life policy with a large mutual company. It has no paid-up additions rider on it so I am “stuck” with only putting this amount ($1,727.12) in the policy. With the run-up in gold over the past few years, I wondered if “cashing in” a 1 ounce gold coin would be prudent to pay for the premium or do I “let it ride,” as gold has done nothing but go up in the last 8 – 10 years? With the economic problems in this country as well as worldwide it is a good safety net.
I began my research!
On February 28, 2012, spot gold closed at $1,788. This is fairly close to my policy premium with a little extra to take my wife out to dinner. The same day I called up my life insurance company and asked them the following question: “If I make my premium payment of $1,727.12 how much will my child’s policy cash value increase?” After a few minutes, I was told that the current cash value in the policy was $8,776, and with the current payment plus the additional dividends and interest due, the cash value would increase to $11,168. After a little 3rd grade arithmetic, I calculated the difference to be a gain in the policy cash value of $2,392 or $665 above my premium payment.
No decision had to be made. Do I think gold is going to gain an additional $665 in the next year or should I guarantee the $665 gain in my policy now?
Hey dad, your grandchild says, “Thank you!”
This is why just looking at interest rates has gotten so many people into financial trouble. We must also understand interest volume & interest velocity.
Compare how much you are paying with how much you are earning — in dollars rather than percentages.
First we will begin with how much you are really paying? Follow the instructions below.
Click on picture to enlarge
A Concise History of the Fed
Admit nothing. Explain nothing.
Mayer Amschel Bauer Rothschild, founder of the International Banking House of Rothschild said:
“Let me issue and control a nation’s money and I care not who writes the laws.”
Categories: A Concise History of the FED, FINANCIAL EDUCATION 101, GreenBacks, How Banking Really Works, OBJECTIVES of the FEDERAL RESERVE
1. Cash Back Credit Cards charge the businesses 3% of every transaction whenever you use your credit card. And that is on top of a monthly fee they charge just for the privilege of being able to accept payment from you with a credit card versus cash or cheque.
The bank does not give you the cash back. No money comes out of their pockets.
**Note: There are several dozen more branch locations. Please check the Federal Reserve district near you
When asked what he thought about the recession in 1991, Sam Walton of Walmart replied, “I thought about it, and I decided not to join” He went on to quadruple his business over the next two years. While his competitors were all downsizing, he was up-sizing. No one has been able to catch up since that time.
Click here to view video
It is your choice to have the news become part of your personal reality or not. Do the money rampage, by Abraham
Interest is always working. It is either working for you or against you. You are either earning interest, paying interest or losing the opportunity to earn interest. There are no other scenarios.
As a society we have been trained to look at certain aspects of banking in a limited way because by so doing we can easily be manipulated into thinking something we are offered is a good thing for us, when in fact it isn’t.
There are multiple market myths and half truths that have distorted what people believe is helping them financially when in fact it is hurting them. Basically we have been taught to do what the banks want us to do and think the way they want us to think.
We are taught to focus on interest rates without considering in the least, the cost involved. We are taught to chase high rates of return on our investments and low rates on what we are charged but never to understand the difference in the interest calculations and the dollars involved, which has nothing to do with the rates involved. More »
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