No Guarantee

In solitude I hunger for the days of long ago. Where a gentle summer breeze carries me away to a world much different than now. A world filled with peace and tranquility though unrecognizable today. A world that has morphed into a harshness where many troubled souls continue to languish in quiet desperation hoping and praying for better times ahead. They too hunger and thirst for those days of so long ago. What should be a joyous coming holiday season millions the world over are caught in a whirlwind of despair. Then there are those so fortunate indeed who are too often caught up in selfish motivation that don't even realize how blessed their lives actually are. For they can't seem to fathom the realities so many face. Self embellishment, not the lest bit concerned of how others fare. Why they should concern themselves for the troubles others face. Shielded behind the wall of apathy where money plays it's part. They have taken for granted all that they have so why give the many thanks for their blessings so far? It always seem to be that the more materialistic people become the more they want. The many apathetic attitudes have carried over to this time of year.

The commercialism of today has set the tone for more selfish whims to be displayed. It is no more apparent than what se see today that many can't wait to rush through Thanksgiving only to run out the door in hopes of beating the growing crowds besieging so many stores. The avalanche of humanity stampeding to get the latest gadget is not a wonder to behold. Lost in translation of the holiday season is the fact that today society has been corrupted by what really doesn't matter. Lost is the reverence of this time of year now replaced by commercialism glorifying materialistic majesty in practically every facet of genre.

It is around this time of year that it never ceases to amaze the display of gluttony by so many has only gotten worse while millions the world over lay impoverished where just having shoes on their feet would be celebration enough. But, there still no guarantee for those many souls who wait so desperately hoping this time of year their days of suffering, woe and despair will finally disappear.

The clock is ticking, no time to spare, are days may be numbered no joy to renew. After years of disingenuous policies by the powers that be have squandered the hopes and dreams of much of humanity. The hopes and dreams have all died on those vines of so many lost opportunities. They have taken away the avenues to success and in the process have intensified the tempests of torment around the world today. The struggle for survival continues to mount. To think the troubles are a world away as many a politician continues to say is a plain distortion of reality today.

What should be a festive time of year is clouded over by doubt and fear. But, for many are oblivious, don't seem to care for the commercialism they see has been overwhelming displacing the realities. No benevolence they share, where selfish motivation is all that they care. Even many of the powers that be continue to assault the impoverished multitudes who continue to grow in numbers with each stroke of the pen. The reversal Robin Hood mentality has already taken hold. Just look at the numbers of late for they underscore the real dangers we face. But, then again leave it to our most prestigious members of state where already have common core curriculums in place in every state. Where 3 X 5 = not 15 but some unknown figure that remains to be seen. It is not any wonder now why we can't get it right.

Without that helping hand that so many need those financial wizards of Washington have stopped extending that helping hand. They can't seem to understand what they have done. In short sighted thinking have exasperated an already feeble economy. Unfazed, they continue to cease to amaze the acumen to which they famously ignore the very public that they are supposed of serve. It is no more evident with this coming year for millions of Seniors their plight only worsens. When our dubious legislators passed legislation concerning Social Security where cost of living increases make it possible for seniors to stay in their homes, buy food, pay utilities, and keep paying those Medicare Part B premiums that have increased this year will get no cost of living adjustment. A cost of living adjustment that still won't keep pace with all the other rising costs of today just because gas prices per gallon we pay at the pump today are not as costly as they once were. It really is a perverted sense of equation when it comes to cost of living adjustments for our seniors.

To add salt to the wound as they say over 600,000 seniors already are in reverse mortgage foreclosures. And, without a cost of living increase the prognosis is that thousands more will be faced with foreclosure. All those TV adds that we see more frequently today when either Fred Thompson or Henry Winkler push reverse mortgages as a useful financial tool are really beguiling the public into thinking that it is free money when in reality all reverse mortgages are nothing more than a home line of credit that has to be paid back with compounding interest. Leave it to Einstein who visualized compounding interest as the eighth wonder.

Now when government has almost come to an impasse the points of contention have always been placed on the backs of our citizens who can least afford the luxuries that many of our powers that be take for granted. No shame or remorse from the powers that control. But, for us depending on safety nets in place there is actually no guarantee. One day for certain just when we can't say if policies are not changed those guarantees that we have depended upon for life's basic necessities will be ripped away.

There is still time to thwart impending catastrophe but only through collective participation can a democratic republic survive. It takes a united effort to wield the sword of equality in this time of need. To get back to a semblance of those wondrous days of yesteryear would be so refreshing for many this time of year. Where peace and understanding held us together. The guarantees we had then were honored and not take for granted. When there was not just Social Security but pensions were taken, and one could actually put some of their paychecks in savings where there was an actual interest rate that rewarded savers. Many a baby boomers parents could be assured of these three guarantees. The effort is needed now to guarantee that the future is there for all to share.

The torch will pass this next November so that a new generation should be guaranteed that the avenues of success will not be blocked and the safety nets for all those in need will be their lending that helping hand to overcome life's adversities. To secure the future of this nation requires the knowledge to use the tools that are available is up to each and everyone of us. No longer can we lie in apathy. A collective caring contributing to ending the quagmire that has squandered too many avenues of economic growth and stability for far too many Americans has to be the choice we make. Dr. Tim G Williams

Turkey: A Rising Economic Power

The Middle East is sometimes viewed as an economic failure story. But at the Western fringe of that region, a new global economic powerhouse is rising - Turkey, the transcontinental country positioned strategically between Asia and Europe. With a Gross Domestic Product (GDP) of USD786 billion for 2014, the nation opens its doors to investment across multiple sectors. Will Turkey continue to be a safe haven for investment and can it be a springboard into Europe and the Middle East?

Turkey's steady progression

The 1980's marked a turning point in Turkey's history. The liberalizing reforms by visionary Prime Minister, Turgut Ozal opened up the economy. Even though the latter years were marred by economic disruption, the Kurdish conflict and a banking crisis, Turkey's economy consolidated its gains after 2002 when the Justice and Development Party (AKP) came into government. The AKP have since made concerted efforts to institute structural reforms, new fiscal policies and macroeconomic strategies to attract foreign investment.

Turkey's steady GDP growth - an average of 13 per cent (year-on-year) from 2002 to 2012 - is proof of its progress. As of June 2014, Turkey is the 17th largest economy in the world and the sixth largest compared to the countries in the European Union (EU), which Turkey still does not belong to, but which it would like to join.

Growth potential

Global investors have every reason to explore this burgeoning economy for business opportunities. Some pull factors that make Turkey an attractive destination for diversified Foreign Direct Investment FDI include:

Strategic location

Turkey's strategic location - at the intersection of Europe, Central Asia and the Levant - provides access to major markets and 1.5 billion customers across Europe, Eurasia, Middle East, and North Africa. This makes Turkey a springboard for accessing a market worth approximately USD25 trillion. The country also plans to further develop three key hub ports to position itself as a leading regional shipping logistics center. The largest port project underway - the Candarli Port - is estimated to provide 11.4 million twenty-foot equivalent units upon full completion, at a cost of €910 million.

Turks: a young and skilled labor force

Turkey has a population of 77.7 million (for 2014), with 50 per cent of the population under the age of 31 - which makes it home to the largest youth population among all European nations. 610,000 students graduate from its universities and around 700,000 students graduate from its high schools every year. Around 50 per cent of these students are from vocational and technical high schools, positioning Turkey well for high-tech and R&D investment.

Robust infrastructure

Turkey's infrastructure plays a key role in maintaining strong growth. It continues to upkeep new and highly developed infrastructure in transportation, telecommunications and energy.

North of Istanbul, a new airport is under construction at an estimated cost of €22 billion. A bridge is under construction at a cost of €2.6 billion across the Bosphorus strait that separates Europe from Asia. Moreover, Turkey's extensive transportation system facilitates sea and land communication with other European countries.

At the same time, Turkey plays an important role as an energy transit partner. Geographically, the nation is located in close proximity to more than 70 per cent of the world's proven oil and gas reserves. Some projects undertaken to increase connectivity include the Baku-Tbilisi-Ceyhan (BTC) pipeline (2006) and Baku-Tbilisi-Erzurum (BTE) Natural Gas Pipeline (2007) projects - aimed to ease transit for energy imports across European nations. Turkey is located close to more than 70 per cent of the world's proven oil and gas reserves.

Renewable energy as a resource for Turkey

Turkey does not own any significant energy resources but its strategic location gives it access to more than 70 per cent of the world's energy reserves. Although 60 per cent of the country's energy consumption depends on imported energy, Turkey has the capability to reduce its dependency by using renewable resources to target 30 per cent of its total energy needs. In 2013, the World Bank Group provided USD1 billion to advance renewable energy and energy efficiency projects in Turkey.

Progressive investment climate

Turkey's reformist and pro-growth political culture keeps investors coming to Turkey. The country promises equal treatment for all investors. As of 2014, it took only six days to set up a company while it takes more than 11 days, on average, to do the same in the countries of the Organization for Economic Cooperation and Development (OECD).

Tax benefits along with incentives for strategic and large-scale investments have succeeded in pulling in FDI. For instance, the Corporate Income Tax was reduced from 33 per cent in 2000 to 20 per cent in 2006.

EU Customs Union

Turkey is a member of the Customs Union with the EU since 31st December, 1995 which covers all industrial goods (except agriculture, public or services procurement). Turkey also has Free Trade Agreements with 20 countries. More Free Trade Agreements are in the pipeline. Most exciting of all, the country is pursuing accession negotiations with the EU. Turkish entry into the EU would create ample business opportunities for local and foreign enterprises within the nation.

Sizable domestic market

With a population of 77.7 million in 2014 and the GDP per capita of a middle-income country (USD 10,500 in 2010-2014), Turkey's domestic market is not to be sniffed at. The country is becoming more and more middle-class. Sectors such as telecommunications and banking have registered strong growth in both user base and revenues.

Broadband internet subscribers have increased from 0.1 million in 2002 to 39.9 million in 2014 and mobile phone subscribers increased from 23 million in 2002 to 71.9 million in 2014. Moreover, there were 57 million credit card users in 2014 when compared to 16 million in 2002.

Istanbul catches the eye of global investors

The city of Istanbul is particularly favored by investors due to its strategic location, well-established infrastructure and educated workforce. Istanbul received more than half of the total FDI projects directed to the country between 2007 and 2012.

As costs in Istanbul reflect the influx of FDI, investors have started exploring other cities such as Izmir, Ankara, and Bursa.

Borsa Istanbul (the Istanbul Stock Exchange) has ascended 30 places on the index of global financial centers since 2012. This improvement highlights Istanbul's potential to become one of the top 10 financial centers in the world.

As costs in Istanbul reflect the influx of FDI, investors have started exploring other cities such as Izmir, Ankara, and Bursa.

Measuring investment Risk

To some degree, Turkey still struggles with corruption allegations and occasional political turmoil, which raises investment risk. What factors should investors watch for?

Low domestic saving rate

In 2014, Turkey had the lowest savings rate among 14 large developing countries - currently equivalent to 12.6 per cent of its GDP. The reason is its huge current account deficit (CAD) which stood at USD70 billion in 2013. Turkey needs to ease overdependence on imports of investment goods to improve this.

Furthermore, the nation is highly dependent on international borrowing - any increase in borrowing rates is likely to have adverse effects on the country's economy. For instance, Turkish bank lenders suffered a substantial loss in May 2015 due to new reforms introduced by the government.

Inadequate Research and Development resources

Investors seeking to buy into innovation will have to look elsewhere, as Research and Development (R&D) capacity in Turkey is not very strong. The government has limited policies in place for research and development capacity building.

Political unrest

The political situation in Turkey has improved tremendously since the moderately Islamic AKP party came to power in 2002. The AKP government introduced several reforms such as the abolition of civilian-military courts, changes to the anti-terrorism law and greater empowerment of labor unions. However, the political instability in Turkey's direct neighbors still poses a threat to the stability of the economy. Turkey is right next door to civil-war-wracked Syria and Iraq. Within Turkey, tensions periodically flare up between the more religious supporters of the current Turkish government and secular Turks who are skeptical of the AKP.

Future outlook

Turkey's GDP growth rate is projected to remain steady at 3.6 per cent through 2016 - a far cry from the heady growth in its heyday, but still respectable for a middle-income country. Its liberal and attractive investment climate will continue to help Turkey to invest in sectors such as infrastructure, telecommunications and energy.

The government has set a goal of generating over USD250 billion in GDP by 2023 through investments in energy, transportation and information technology. Such projects are intended to attract big players to invest in the Turkish economy.

There is no doubt that Turkey is a large and important country that holds a great deal of promise as a market as well as an investment location. Its geographic location and skills base make it an excellent hub to export to the Middle East and Europe - and one that is deeply under-appreciated among the international business community. Turkey is an oasis of stability and development in a turbulent region of the world.

However to realize its full potential, Turkish policy makers need to put in place effective long-term institutions to protect its gains in attracting foreign investment. It also needs to address the problems of corruption and potential political divisions in the society between religious and secular Turks. Such divisions, if not addressed through strong, independent and fair institutions that command respect from all Turks, can lead to political instability of the sort that has plagued another middle-income country in the past decade, Thailand.
By Nidhi S Kumar

Why Do We Consume Luxury Goods, But Spend Little Time Enjoying Them?

It can be perceived that day by day, the number of populace investing in Luxury Goods/Services is cumulative. For example, if one was to observe posts on Instagram or Facebook, there would be an increasing number of designer handbags, luxurious meals and luxury cars to be seen. At the same time, it can also be observed that the usage of these products is significantly lower than depicted on social networks. So are people investing in luxury goods and services only for conspicuous consumption?

Conspicuous consumption is a term used to describe investment into luxury goods and services in order to display wealth, or economic power. Veblen (1899) came up with this term when introducing his concept of Veblen goods, which Luxury goods and services fall into. Veblen goods contradict the law of demand. The law of demand states that an increase in price leads to a decrease in quantity demanded. However the price and quantity demanded of Veblen Goods are directly proportional; an increase in price leads to an increase in quantity demanded, and a decrease in price leads to a decrease in quantity demanded.

The reason behind this links once again to the concept of conspicuous consumption. Individuals wish to be seen purchasing expensive goods, in order to appear as wealthier, or stand out by being able to access goods which are not simply accessible for everyone. The use of social media enables individuals to do this as they simply take a photograph of themselves and/or the luxury Veblen good, and display it on Instagram or Facebook for everyone to see. This provides them with the economic power they desire. Social Media has also been a cause of this emerging trend, as it has allowed people to create ideas on how certain goods can give individuals a certain image, and so people can be investing in goods simply to post images of them on social networks, and obtain a certain image within society.

The concept of Veblen Goods and Conspicuous Consumption can therefore be used to explain why individuals spend a prodigious amount of money on luxury goods and services, but spend diminutive time utilising them. It indicates that individuals are more interested in portraying their economic power publicly rather than for their own use. This phenomenon also reveals why an increase in price leads to an increase in demand for these goods, individuals who are able to invest in Veblen Goods are an exception to the general law of demand, in a way that they are more economically powerful, so as a result, achieve their desire of Conspicuous Consumption. By Kainat Ali

The Great Commodity Crash

After four nationalized TV debates the cast of Republican contenders continue to show a resolute in self embellishment on how they and they alone are the next great savior of our nation. But, it was in this latest show of showmanship by all that underscored the embodiment of failing to grasp just how fragile our economy really is. An economy that is so fragile it is right on the verge of falling into an abyss where there is no return. So many missed opportunities to educate the viewing public on what are the actual causes of why the American Dream is out of reach for many millions of Americans today. And, not to mention not one word was uttered about the drastic effects that climate change has on the overall economy. Then of course everyone on that stage is in denial that "Big Oil" is a leading cause of carbon emissions.

There was one golden opportunity to show some resolve in securing the nations economic stability. But, again failure to capitalize on two specific questions asked by the moderators only precluded that everyone on that stage sought to out point the other. When asked would you bail out the banks should another financial crisis hit like it did in 2008 they all missed the mark. What should have been explained entails that when a person deposits money into a bank whether it is a checking, savings or CD account that money is now property of the bank courtesy of the new financial policies that went into effect this past summer. In essence your money is now the banks. In the event that the bank has made bad investments with your money they bear no responsibility to you, the depositor. Regardless of whether it is an FDIC insured financial institution or not those bad investments are the bank's responsibility. But what happened in 2008 when the government bailed out those same financial institutions that risked it all on failed investments that money from the government did not go back to depositors. All the billions of dollars that was funneled back into the financial sector was borrowed to begin with and all it did was put the country further in debt. That government bailout did not go back to her very people that helped these financial institutions ability to make those risky investments. The end result today is that these same financial institutions have amassed more funds in order to again make extremely risky investments that have all the earmarks of causing another great financial crisis.

Again, this past debate and even the Democratic debates have missed the mark to educate the public on just how bad our whole economic future really is. Today, many economists also have failed to surmise the potential catastrophe lying in wait poised to strike untold devastation on the United States. We must remember that history is an invaluable resource. In remembering what other nations have gone through is a great indicator to understanding the consequences of failing to act to prevent similar scenario's. For 40 years after World War II, one economy was the envy of the world. Its goods were exported globally, spurring incredible growth. Due to the diligence and foresight of General Douglas MacArthur Japan became the economic engine that rivaled the United States. By the late 80s Japan's stocks and housing market were on a massive bull-run. Its corporations were dominating the skylines of cities across the world. Its products were lining the shelves of American supermarkets and department stores everywhere. Sounding familiar? It should because China is now dominating our store shelves. But, back in 1980 the Asian Tiger ruled. Iconic American brand names were and still are taking a back seat in the markets of the world.

The 1980's was an era of unprecedented awakening for the American manufacturing sectors. Our whole economy was now being driven by Japanese imports. Toyota dealerships were opening up on street corners all across America, even in Detroit. Cadillacs were being overtaken by Camrys, the coveted Mustang was overrun by Mitsubishis. All this while the Japanese stock exchange, the Nikkei jumped by over 920% eclipsing every other bull market run on stocks in history. Japan's real estate market soared and by 1989 a single square foot in Tokyo cost over $93,000. At that time it was the most expensive real estate in the world.

Japan was an emerging market success story unlike any the world had ever known, becoming a wealthy developed country in just three decades. And the consensus was almost unanimous: the Japanese were taking over the world. But, then to the shock of virtually everybody something went horribly wrong. The Japanese economic miracle started to rip apart. Its market began a precipitous slide. The Nikkei plummeted over 50% in just two years, and continued its slide to 80% into early 2009! Even today, the Nikkei is 50% off its 1989 high! The question is what happened to cause this sudden collapse?

The answer lies with the greatest resource that drives any economy and the fulfillment of the "Williams Theory of Economic Evolution" Today, the United States is faced with the exact scenario that doomed Japan into falling into their worst economic crisis since before World War II. For over 14 years Japan's stock market and economy declined and for the next 20 years they have only experienced a minor rebound. Still many never imagined Japan's depression would last that long and today not one political candidate is even mentioning or predicting the same fate that awaits the United States.

History is about to repeat itself yet again if we don't come to grips with this imminent threat to our economic future. What make this so dangerous for the security and stability of America's economy is that all the headlines are focused on gold, oil or water. Granted all are contributing factors that drive economies but the one resource that is failing to grab everyone's attention is people, the ultimate commodity. Still many will argue that one resource cannot send a market crashing and an economy into a recession or even a depression and yet history has proven it can time and time again.

In the latest report by the Federal Reserve over $84 trillion is directly affective by our population. When you look at the United States gross domestic product or GDP is only $18 trillion. All this means that the working populations economic impact is four times greater than our GDP, meaning that people are the ultimate force that drives markets. Now when you have political candidates wanting to deport immigrants or support trade agreement that only continue to decimate the American workforce, the very resource that drive economies just think of the double impact on our economic future. A major catastrophe awaits us.

Back in the 1950's through early 1960's the birth rate in the United States was around 96% today that birth rate has declined to where it stands at 28%. As it stands today the United States is facing a major shortage which will trigger a economic recession if not a full blown depression in the near future if we fail to address this now. Let's face the facts. Right after World War II birth rates increased so that over 109.2 million were born in just 18 years. Today that 109.2 million are know as the baby boomer generation which represent 32% of the population and over $46 trillion of the nations wealth. This generation now controls 77% of the net worth of the United states. We should point out that the average person now spends the most in proportion to their income at the age of 46. The accumulated wealth reaches it's peak when they reach the age of 64. The baby boomer generation is today's driving force of our economy. But, since 2007 this generation has begun withdrawing from the workforce and retiring. It should be noted that since the mid 1990's the middle class wage jobs were vanishing faster than the jobs created. In short we have had a job shortage with minimal wages which adds to the economic quandary we face today.

The combined impact of so many baby boomers retiring at a rate of over 10,000 per day with an estimated 50 million retiring within the next decade and the continued lack of middle class wage jobs with people filling those employment venues will have a very prolonged impact on the future stability of our whole economic future. When so many millions of skilled workers that are leaving the work force or have been forced out due to governmental policies that have enticed so many businesses to relocate outside the United States the income power that they possessed is lost. This is the crisis at hand.

Some say there is no solution yet it is these naysayers of political expediency are focused not on this most pressing crisis but on maintaining their ego's is the height of their hypocrisy. The economic impact now is being felt. The failure to achieve the Williams Theory of Economic Evolution in the United States is accelerating an economic crisis that will have devastating consequences that will reverberate around the globe. So what is the answer to bring more people into the United States and at the same time rejuvenate employment opportunities with real middle class wages so that instead of failing to achieve the Williams Theory of Economic Evolution the United States will in fact be the one economic engine that will power the third industrialized revolution. The answer lies in implementation of National Economic Reform's Ten Articles of Confederation. By Dr. Tim G Williams

Global Recession

The global economy is nowadays going through a phase of recession. Analysts believe that a slowdown concentrated in emerging markets will drag down demand and see economic activity fall across the world. China is growing at just 4pc, well below the country's official 7pc growth target. Other large economies - Brazil, Russia and South Africa - are already in trouble. China's downturn will affect emerging markets - their exports and commodity prices.

What can we do to sustain in global recession.

1. Produce and sell good quality products by adding value. People will buy the products if they are useful.

2. Stay away from easy money making schemes. They do more harm than good. Invest your resources sensibly as most easy money making schemes have a catch whereby one tends to lose rather than gain.

3. If you are in business, keep your customers. Don't let them go. Give discounts to loyal customers if you have to. It is difficult to find new customers during recession. So keep the old ones.

4. If one loses his job, do what it takes to find a new one: headhunting, relocating or enhancing ones skills by taking up a course. You may temporarily have to settle for a lower paying job or a job less appealing. But something is better than nothing.

5. Reduce spending and save. Avoid going to costly restaurants, resorts and expensive vacations, instead go for family picnics to nearby places. It's important to spend time and enjoy with family but that need not mean spending too much.

6. New business ideas requiring lots of investment and risk can be put on hold. Instead try something that will fetch good returns quickly. Ambitious and challenging ideas need time to be put into practice so go for simple lucrative businesses.

7. Reduce the prices of your products. Recession reduces the buying capacity of most people. So giving discounts and being competitive will keep you going.

8. Find newer ways of reaching out to customers. Go for home delivery of products. As making shopping convenient for customers will attract them.

9. Those investing in stocks should go long. Recession is a good time to buy stocks if you can lock your funds for a long time.

10. Use new ways of attracting more customers. You could do so by advertising more aggressively.

Don't panic during recession. It can actually be a boon to those who sensibly use their funds and tactfully face the competition.

Latest Recession in US Economy

Is a "Recession" really going on in US economy? Is US currently in the state of recession? Are US citizens face-to-face with recession? Are people living under the fear of ending up with loss of their jobs, losing into stack markets, going bankrupt, heading to ever highest inflation in the economy, huge downfall in property rates and a lot more.....

Recession is a state when country's GDP or Gross Domestic Product descents for two sequential quarters. Recession in an economy focuses on negative growth of GDP over two consecutive quarters. This negative growth during recession is more seeable in people's income, bank balances, payroll systems, lowering employment opportunities, reducing retail sales, lower investment returns and various others.

As per experts, the normal period of recession in an economy is about 1-2 years. The whole economy slows down during recession which leads to panic in the country. The hard time of downfall causes lot of stress in the economy. People point out the root of recession towards government. On the other hand, it is important to know that recession is somehow deflation. If the government tries to improve on economy's GDP, it has to invest in a lot more money in order to improve liquidity. But this causes an increase in inflation and ultimately stagflation. Hence, government has to make a choice whether to increase liquidity or reduce increase rate.

The U.S. GDP was down 0.2% in the third quarter of 2008, with U.S. economists forecasting a 0.8% fall in the fourth quarter. International Monetary Fund experts forecast the U.S. economy's growth at 1.6% for 2008. However, they say, in 2009 the U.S. GDP is expected to increase by only 0.1%. Recession has lead to a reduction in global economic growth in U.S., from this year's 3.9% to 3% in 2009, according to IMF experts. Each quarterly GDP report gets three releases..... In their Q3 2008 GDP report, the preliminary report showed a slowdown of .5%, slightly more than the advance estimate of .3% while advance report showed a downfall in growth by .3%, the second time in a year.

During the rough sledding of recession, with all the above mentioned consequences, people certainly look for options to successfully deal with the alarming situation and emerge out of it without getting much affected. But since we survive in this economy, we can't get rid of such a national downfall when every other citizen is suffering. Certainly there are ways to beat the recession in the economy and come out as a more confident one. Lowering down interest rates is one of the major steps that government can take to slightly correct the situation. Everyone in the economy has to be focused towards what they do best. Spend less on luxuries, stick to the necessities, save money are the best steps one can do in their general lives. People should not lose hope and confidence as these are the best remedies to success. After all, this is not the end of the world.

Gold and the New Standard

It's a beautiful thing to behold. It represents scarcity, value, glory and prestige but most of all it represents stability. As these months pass, more and more of my friends who thought I was nuts for suggesting we return to a commodity backed currency over our inflationary, prone to radical abuse monetary system are beginning to seriously consider what was once out of the question - gold.

We are at a precipice today; what was once considered the 'good as gold' greenback is now the least risky of all other currencies denominations, but least risky by no means implies secure and stable. The time has come when real alternatives have to be considered.

The benefit of having one is that it is fully transparent and as a consequence self-correcting since the marketplace controls its value, not a minority of 'masters of the universe' central bankers.
Under a gold standard, governments cannot increase the money supply without buying the equivalent value in gold.

A gold standard is not fool proof. There is the risk of deflation but that was a problem before the era of lightning speed electronic transactions and down to the decimal accounting and limited mining capabilities.

Whatever we do, we have to accept the fact that the Federal Reserve does not perform its function as was intended upon being signed into law under The Federal Reserve Act on December 23rd 1913. Here's a quote on what then President Woodrow Wilson wrote the day he signed it - keep in mind that many question its complete authenticity but having read the history so thoroughly, I believe it is authentic and is ironically verified in the congressional record as authentic.

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson 1913

As ominous as that sounds, consider what President Thomas Jefferson warned about central banking back in 1791. The authenticity of this quote is complete:

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. This issuing power should be taken from the banks and restored to the people to whom it properly belongs. If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered. I hope we shall crush in its birth the aristocracy of the moneyed corporations which already dare to challenge our Government to a trial of strength and bid defiance to the laws of our country" Thomas Jefferson, 1791

All the nations of the world who have sold out their liberty for the false sense of security provided by fiat based currencies in the exclusive control of central bankers need to consider alternatives; gold is only one, if there are others, I'd love to hear them and discuss it openly.

Peter Manousakos
Publisher & Editorial Director
Horus Onoma Group inc.

True Confessions of Bill Emmott

The FT interviews the (thankfully) retiring editor of sister publication, The Economist:

One of his most embarrassing covers, according to Emmott, was in March 1999, about a subject that should have been simple Economist territory: the price of oil. It had its roots in a lunch with an oil company executive, where everybody started musing that, with the oil price at $10, what would happen if it fell to $5? A cover saying that the world was drowning in oil, and noting the possibility of a fall in the oil price, duly appeared. But before the end of the year the price had more than doubled. “It was most embarrassing,” he says candidly.

There was also that 2 December 2004 leader on “The disappearing dollar” that said “the [US] dollar could tumble further and further.” The end of 2004 proved to be a major cyclical low for the USD. Contrarian indicators don’t come much better.

Homeland Investment Act and the Dollar

The Swedish Newspaper Dagens Industri this morning published an article that tried to explain the much debated weakness of the Swedish Krona during the spring. According to the article, the U.S. Homeland Investment Act could provide a useful clue. The HIA has let U.S. firms repatriate profits earned abroad during 2005 and a Dollar/Euro chart suggests that it has had a dollar positive impact.

Dagens Industri provides a chart showing "U.S. direct foreign investment" to support its reasoning:
Looking for other opinions on the web, I came up with the following: The investment blog "Always Bet on Black" cautiously exclaimed itself to be "a modest USD bull" in early December. In October TaxProf had an estimate on the amount of repatrieated money tha he found to much exceeded estimates:

Well, here's what has happened: In nine months the law has increased the flow of repatriated foreign capital by a whopping $225 billion. J.P. Morgan estimates that another $75 billion will return to America in the fourth quarter. About half of these returning funds were profits from pharmaceutical companies and much of the rest from such high-tech firms as Dell, IBM and Intel. We can't resist noting that this $300 billion of repatriated capital is nearly double the estimate by Congress's hapless Joint Tax Committee, which had assured us this time last year that not a dime more than $165 billion would arrive. To quote Britney Spears: Oops, they did it again.

Maybe it is time now for the fall in the dollar that economists has been waiting for during quite a while?

Free Lunch for Writers!

Some of us that are writing about the economy, especially with applications to finance, are sometimes getting away with earning almost free lunches. At least we sometimes get good paid by stating the bleeding obvious. If demand rises relative to supply, prises increase! Regions where this rise is the strongest will be net importers of the good in question!

From the Wall Street Journal via Institutional Economics:

in a world of excess saving relative to investment, not only will real interest rates be driven down, but some country or group of countries must run current-account deficits to absorb the excess saving

Update: Broken link fixed, thanks to Frans for pointing it out for me, and for the link from his post on a nearby issue. It seem that things like the changing distribution of world growth, directions of investment flows, and the new level of international interest rates are things that we still could discuss some more.

Job Vacancies Down

The number of new job vacancies were down for yet another week, according to the latest weekly report from the Labour Market Administration. Now the picture is beginning to look less optimistic than it did in the beginning of this year and in the end of last. The Riksbank wrote in its latest Inflation Report under the headline "Signs of improvement in the labour market" that "the number of new job vacancies reported to employment offices has risen". As is clear from the diagram is that this rise has slowed and reversed during the last couple of months. (Being more careful with seasonal adjustment makes the situation look brighter for the recent months, but worse for the beginning of the year. At any rate, the situation seems worse than it did according to the Riksbank's description)

Economists, Noise-Traders and Journalists Happy Together

One of the large public Swedish pension funds, AP3, indicated last week that they had sold out their entire holdings of (Swedish) bonds, among those the inflation-protected. Considering the long-term nature of the funds' cash-flows, which the bonds probably to some extent matched, this must be seen as is a huge bet on an (faster than implied by the yield curve) increase in long-term interest rates. I've personally seen how such a bet have been made: the trader needs risk in his or her portfolio. He or she also need a good arguments behind that risk-taking, arguments that should point to in what direction the risk should be taken (black/red manque/pair). The (macro-) economist, who has been shouting for a long while about a bond-bubble and unsustainably low levels on bond yields in particular and interest-rates in general, is happy to eventually find someone who listens. If the bet fails, as it has before, they blame each other and others have to pay.

The most annoying part in the current story is that the journalists at Svenska Dagbladet (Swedish leading daily conservative) happily have refrained from doing their job, uncritically referring to the huge short-position on bonds by writing that AP3 has "reduced the risk in their interest-rate bearing portfolio". Technically true, but in its context a lie.