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Posts Tagged ‘economy’

China is now #2 Economic Superpower

August 16th, 2010

China has replaced Japan as the second most powerful economic force, according to this article at Yahoo. As China gets better at producing more high tech stuff that the world consumes a at furious pace, it’s growth will only continue. How long before it becomes the #1 economic world power?

I still hear many people talk about “cheap labor” in China. Although it is true that the lower labor cost makes it easy to create stuff cheaply, this is a dwindling advantage. As more and more stuff is created by machine, labor cost becomes less and less important.

What does the future hold?

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Why Do We Reward the Reckless and Penalize the Productive?

August 3rd, 2010

Here’s what ticks me off.

I was just reading that dividend taxes may rise. OK, rise isn’t really a good way to put it. Skyrocketing more than 160 percent is a better way to express the pending tax.

Now, I think taxes are necessary evils. I just want a fair, limited system that requires the goverment to live within its means, just like we all do. Is that too much to ask? Apparently, the answer is yes.

But this tax hike is just plain evil.

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Investing, Money, Online Investing AI, US Economy , , , , , , ,

China is Now World’s Second Largest Economy

July 31st, 2010

After reading this article on Yahoo, I really started thinking about how the global economic environment has changed. China is on track to be the biggest and most powerful force in the world. What does that mean for the U.S.?

One thing that I have noticed is that many people like to dismiss China as not being able to compete with America. They say, “Oh, China will never overtake America. Our technology is just too good.” Or some other nonsense. These are the same people who say, “Buy American. We need jobs.”

What is going to happen?

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I.O.U.S.A the Movie

July 24th, 2010

Thanks to Robert, I found a great new resource about America’s precarious financial situation and the future financial chaos. It is a movie called I.O.U.S.A. What better way to learn about economics than through a video?

Curiously, embedding the movie is disabled, so here is the preview instead:

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Is America Sinking into Hopeless Debt?

July 23rd, 2010

After reading this article on Yahoo about the ever-growing national debt, I took a look at the U.S. National Debt Clock. Not only are we having record deficits each year, but the debt per American has reached unsustainable levels.

As you can see, the debt has reached $42,698 per American! And, $119,524 per taxpayer. The average savings in America is a small percentage of these figures.

How is this ever going to get repaid?

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Why Common Advice is Useless

July 21st, 2010

When reading about finances or talking to people, I always hear the same useless advice: “You have to learn to save money.” or “It’s hard because the economy is so bad.”

This kind of talk is really just complaints and useless advice. Everyone already knows that saving money will improve their finances. But they have no idea how to do it.


After reading this great post that Matt found over at My Wife Quit Her Job, I noticed that the reason I like Steve’s blog is because it contains information that is fairly rare. It’s not about saving money, it’s about building a powerful positive cash flow asset. It’s not about lamenting about how hard life is and how hard it is to get a job. It is about how Steve’s profit is going up as unemployment rises and the economy goes down.

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Enjoy Now, Pay Later – The American Way

July 16th, 2010

On of the reasons that our economy is in a precarious position is that it is composed mostly of spending. Specifically, it is created by the desire to consume ever greater amounts of newer and bigger stuff. And we don’t need most of that stuff.

The American Dream

Contrary to popular opinion, most people only spend about 30% of their money on things that they really need. People don’t need a cell phone. They don’t need new clothes or to go out to eat. They can survive just fine on cheap food like pasta or rice or vegetables.

The challenge is that we grow up thinking that if we can buy just one more thing then we will be happy. And the problem is exacerbated by easy financing. The cell phone is a perfect example. If you sign up for service, you can get a deal on the phone and start using it now.

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Do You Expect the Government to be Frugal? Really?

July 7th, 2010

There’s a decidedly strong backlash against government spending.

There’s always a backlash against government spending. It’s only right: we’ve all done our due diligence cutting our own spending, trying to invest properly, and finding new sources of revenue.

We’ve managed to create and live on a budget.

But here’s the thing.  This is nothing new. The movement to force government into the frugality has been going on for a long time. But, each time government services are cut, there’s a huge backlash against that, too. Reagan faced it. In the 1990s, when national parks began to close, budget-cutting was demonized.

What about earmarks? We all hate earmarks, but gladly vote for politicians who hold big check photo-ops into our neighborhood, right?

Here’s the question then: what are we prepared to do to make our government more frugal?

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Depression Solution Part 2: Derivatives and Financial Innovation

July 5th, 2010

pic by Muddy Funkster@ Flickr creative commons

We looked at one depression solution last week: lower or suspend capital gains tax.

The common thinking about the recent economic collapse is that financial instruments, like derivatives and quantification formulas, were the reason for the collapse. This might be like blaming the fuel tank for running out of gas.

To solve our economic malaise, we need more financial innovation, not less.

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Investing, Money, Online Investing AI, US Economy , , , , , ,

Depression Solution: Cut the Capital Gains Tax

June 30th, 2010

pic from jacreative @ Flickr

Another day, another Dow drop.

It’s obvious that all the maneuvering and stimulating have done little to stave off rapidly deteriorating global economic conditions. Like injecting a heart with adrenaline, the programs designed to re-start the economy gave it a boost, but only treated a symptom temporarily and never addressed the disease.

Why? Government money is too diluted. It probably takes almost as much money administering stimulus funds than the actual amount that will seep into the economy.

Austerity programs will only stunt or retract an economy. It’s a great gesture, but growth is the key.

To promote growth, governments should drastically cut, if not totally suspend capital gains tax.
The move would:

Instantly boost the market.
You could reasonably expect a 10 to 20 percent rise in the stock market. You could also expect new companies striving for initial public offerings to come out in full force.

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