Reviews and Views

Why a One World Currency is Inevitable

The world is being forced to a point of having to implement a one world currency.  At a minimum a one world currency among the major economies.  There are several reasons that taken together will show that this move is becoming inevitable.

1. The world economies are all linked together now.  None can stand alone whatsoever.  The idea of individual currencies is fading.
2. Interest rates are too low and push away capital.  The continued pushing of interest rates down have caused deflationary effects to emerge.  This is primarily through the work of the US Fed.  The lower the interest rate, the less capital means less investment.
3. Due to deflation, the world economy is poised to decline 2% in 2009, this is unheard of since World War 2.  Certain sectors will have greater contractions.  There is a drastically slowing of world economy afoot.
4. As world interest rates are synchronized to zero, this effectively creates a one world currency regime and the US dollar will be the facilitator of this process, even if itself is replaced in the end.
5. Look for competitive currency devaluations and probably trade wars.  As new financial crisis begin to emerge, some one-world currency will be moved in to fix the controversies.

(for the entire article by Christopher Laird, see http://financialsense.com/fsu/editorials/laird/2009/0729.html)

August 3, 2009 Posted by Bill Wyler | Economy | Leave a comment

Economic Health – miscellaneous comments

Peter Schiff, Euro Pacific Capital, July 31, 2009

There are many commentaries telling us that the recession is over.  If we are seeing a recovery from the recession, then Schiff says, “we are actually sinking into a depression.”  It is not unusual to have periods of false growth following recessions.  During the last boom, “we borrowed and spent too much money, bought goods we couldn’t afford, built houses we couldn’t carry, and developed a service sector economy completely dependent on consumer credit and rising asset prices.  All the while, we allowed our industrial base to crumble and our infrastructure to decay.  Schiff says, “we simply traded short-term gain for long-term pain.”

(from an article, “Happy Days Aren’t Here Again” at http://financialsense.com/fsu/editorials/schiff/2009/0731.html)

Continue reading →

August 1, 2009 Posted by Bill Wyler | Economy | Leave a comment

Another Reason to Start Savings

From an article written by Justice Litle, July 14, 2009, entitled “Guess What Really Brought Us out of the Great Depression?” at http://financesense.com/editorials/2009/0714.html

Consumer savings is usually overlooked as to the real reason the US got out of the Great Depression.  World War II moved millions from unemployment rolls to the military.  Unemployment nearly vanished in months.  However, scarcity became a problem for every citizen.  Income levels rose.  Women were needed as much as men to fill job openings.  Because the country was on a war footing, a sort of “forced savings effort” was in place.  Families had to make do on an “austerity budget”, and wound up banking much of what they earned.  25 cents of every $1 earned was set aside, which setup the stage for an explosion of consumption in the years that followed the War.

This generation is never going back to “the way it was.”  However, there will be new mistakes, new insanities, and new bubbles for now and the foreseeable future.  We have a lot of savings to do.

Old New England maxim:  “Use it up, wear it out, make it do or do without.”

July 28, 2009 Posted by Bill Wyler | Economy | Leave a comment

Hard Times by Richard Benson

3 questions and 3 observations were made by Richard Benson in his article Hard Times.  See the original article at http://www.financesense.com/editorials/Benson/2009/0709.html

Mr. Benson asks a relevant question about how to determine just how bad is the economy.  There are three basic questions:

1. Are people working?  Are people actually employed?
   • In 2009, less than 20% of graduating college students had jobs lined up after graduation.  Compare that to 51% in 2007.
   • Official unemployment rate is currently around 9.5%.  However, when you include those who are not eligible for unemployment benefits, those who want to work but stopped looking, those who are underemployed, and part-time workers who want full-time employment the percentage is much higher (more than double).
2. Are they (those working) making any money?
   • Take a look at tax collections as a way to measure income.  In general state income tax receipts from Jan 2008 to April 2009 were down 26% from the year before.
   • The Georgia Department of Revenue reported on July 1 that tax collections had declined 16 percent to $1.36 billion in June compared to June of last year.  For the full fiscal 2009, which ended on June 30, revenues were down 10.5 percent.   Atlanta Business Chronicles, July 21, 2009.
   • You can see more details in a similar article from the Atlanta Business Chronicles, dated July 10, 2009.
3. Do they (those still working) have any money in reserves?  Does anyone have any financial resources?
   • Though the savings rate has increased, the numbers are questionable.
   • Cash in the bank is real savings.  Paying down credit card debt is not.
   • The number of people collecting food stamps is rising by 4 million per year.  To be eligible for food stamps, you need to have less than $2,000 in resources such as a bank deposit.

Benson recaps the following points:

• 7 million people are collecting unemployment benefits.
• 8 million people are unemployed and collecting nothing.
• 2.4 million people are in jail (1 in 100 adults).
• 51 million are collecting Social Security.
• 12 million more are collecting Social Security Disability.
• 34 million are on food stamps.

Finally, Mr. Benson makes the point that we are experiencing hard times the likes of which most of us have never seen.  The economy is dying and the American press is not focusing on the real economic statistics nor are most of the politicians.   He urges all of us that “It’s time to get grumpy and politically active!”

PERSONAL:  I would like to add that it is time to pray for God’s mercy and wisdom during these “hard times”.  Perhaps He will be so inclined.

July 22, 2009 Posted by Bill Wyler | Economy | Leave a comment