Lofty Matters

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Tags: ecommerce, increase web sales, sarvasecure, seo, website conversions

Do we really appreciate the magnitude of the financial crisis we see unfolding before our very eyes? It’s tempting to allow the soothing words of politicians to comfort us into believing that this crisis won’t personally touch us…much.

Unfortunately…this is not going to be comfortable and it is very, very real. And it is getting worse with each passing day.

There have been several ideas paraded out in an attempt to put off the inevitable. The economic stimulus checks we all received were great for a few extra trips to Walmart. Did you know that they cost we taxpayers $107 billion and did NOTHING to even slow down the economic downturn?

The next efforts we’ve seen have been the bailouts. These were akin to the little dutch boy with his finger in the dyke holding back the floodwaters.

Last night President Bush presented the latest plan and that is to attempt to protect the growing number of bad debts, failing banks, and dying money market funds. Bush promises that this will effectively end our debt crisis and allow confidence in our system to be restored. Will this work?

Let’s see…

I predict that there will soon be some encouragement for the inexperienced investor to purchase financial assets at low, attractive prices. During this time those that know better will be using this short time of market stability to sell everything that they can for as much as they can.

It’s obvious to the whole world that the US has a huge financial crisis going on here. This latest plan will most likely produce more fear instead of calming nerves. Selling follows fear. World investors abhor risk and following the unveiling of Bush’s latest plan look for these investors to start to bail out on their US investments even faster than they were before.

Unfortunately, the market average will continue its downward trend and our retirement accounts are going to be decimated in the process.

Most Americans have no safety net anymore. Any equity we earned on our mortgages is gone and we are in dangerous debt. As the economy gets worse the unemployment rate will start to climb. At this point the downward trend will begin to get worse fast. Credit card offers will stop. Balance transfer offers will cease. There will be no more lending offers for Americans who are defaulting on all of their current debts.

As this continues where will the Fed get the money they need to fund their plans? They will have two options:

• Borrow from investors who don’t want to lend it to them

or

• Take it from taxpayers who don’t have it to give them

The bailouts that have already occurred have cost us $1 trillion. That’s not the final tab, though. Oh no, no, no. If Fannie Mae and Freddie Mac don’t stop their continued decline that bill to the taxpayers will be more than $10 trillion.

The wise and prudent will take some steps to protect themselves now.

Look for interest rates to begin to rise. This is simple law of supply and demand. With the demand slated to be exceptionally strong, prices are going to go up dramatically. This also means that the Fed will be forced to pay more interest for the money it needs to fund these bailouts.

Obviously, the rising interest rates are going to affect us personally, too. If your mortgage is financed with a variable rate and you have ANY money in the stock market or bonds get it out NOW and pay off your mortgage before you lose even more money in the stock market.

Also…do NOT increase your debt!

If you have been putting money in an employer sponsored IRA you won’t be able to withdraw it without penalty until you are at least 59.5. You can move your balances though. A gold fund or a precious metal fund or a commodity fund is a good place to put your money right now. Experts agree that gold is going to be a safe place to invest during this crisis.

Investing in real assets is the best course of action at this time. This includes natural gas, mining, minerals, energy, agricultural, livestock, farm land, and precious and industrial metals.

While the housing bubble deflation has been going on for some time now…up until now commercial real estate has not yet begun its deflation process.

Watch how this is going to unfurl, though.

• With house prices declining, people can’t borrow on the equity in their homes to fuel their over consumption any longer

• As interest rates rise, ARMs will also rise…as will the cost of anything that is considered a commodity

• This will also affect consumption and force it to decrease

• As consumption declines, the industries and businesses that depend on consumer consumption will begin to fail

• Workers layoffs will begin in earnest and these people will be forced to reduce their consumption even more

• As the unemployment rate climbs, the rents on commercial real estate will have to be lowered

• This will create an implosion of commercial real estate prices that may be even more significant than the implosion of house prices

• As this is happening, consumers will stop being able to even pay the minimums on their credit cards

• This will result in further escalation of pressure on the already hurting lending institutions

Our foremost goal must be preserving what we have worked hard to earn. Please do NOT allow yourself to be comforted into believing that this “will all work out.” There is a huge sell-off looming and once this starts it is going to shake the world down to its very foundation.

Tags: commodity, economic crisis, Fannie Mae, Fed, Freddie Mac, stock market, unemployment rates

Election Theme Yet Again:  “It’s the economy, stupid.”

Americans are desperate for economic leadership.

Both candidates are relying heavily on promised tax cuts to fix the economy’s major problems. No surprises here, however…both have fallen back on their traditional party instincts.

McCain promises to keep tax rates low for all and to reduce corporate tax. This is a traditional Republican recipe for jump starting a suffering economy and creating jobs.

Obama is proposing tax cuts for the many that will target help on the middle classes. He will eliminate tax cuts for the very wealthy and reserve them for those that need it badly.

The Federal budget deficit, already at $400 billion, will absolutely grow in the new fiscal year.

Spending on healthcare, energy security, and alternative power all may be in danger if the candidates are serious about their promise to balance the books. The market’s lackluster response to the latest economic boost shows that whoever wins in November will face a long struggle to get America strong again.

It is not clear whether the result of the upcoming election will have an impact on either the economy or prospects for investors. Basically, the most powerful man in the world is less influential than one might think.

The actions taken by the Federal Reserve have had a much bigger influence on the US economy than the President’s tax relief package.

As for the markets, a research firm has released statistics showing that the Dow Jones average has risen an average of 7.2% a year under Democratic presidents compared with just 3.6% a year under Republicans.

Let’s not forget the important of the balance of power between Congress and the White House. When Democrats have controlled Congress (predicted to occur this year) the post-election year has been good for investors under a Democrat President (+12% on average) but poorer under a Republican (-1% on average).

History shows that a positive stock market performance between August and October of an election year precedes the re-election of the incumbent party about 80% of the time.  A weak stock market has a similar ability to predict a change in party.

No one has said this won’t be interesting!

Tags: Congress, democrat, Economy, Federal Reserve, McCain, Obama, Presidential election, republican, stock market

Families with college-bound children are feeling the uncomfortable pinch of the tightening economy. Is this you? In tough economic times it can make it seem impossible to get a continuing education for your child or children.

There are options, however. Don’t let the economy steal your child or children’s education opportunities. As you know, an education is fundamental to securing the future that most people want to achieve.

Did you know that the more applications you submit to different colleges, the more options you’ll have as far as the financial aid assistance you will succeed in finding? Learn more about college application assistance at CollegeZapps.com.

Press Release:

Student Aid Requests Soar - Families Feel Pinch in Tight Economy

Littleton, CO – August 27, 2008 – Facing a sputtering economy, escalating tuition costs and a rise in college admission applications; would be college students are applying for financial aid in surging numbers. Nationally, 8.9 million students filed federal student aid forms during the first half of 2008, a 16.3 percent increase over the same period last year.

For decades, the federal student loan program has helped tens of millions of students pay for college. About 47 percent of families borrow money to help get kids through college, according to a study released August 20th by lender Sallie Mae and Gallup. The study affirmed that federal loans are easily the most popular source of borrowing.

“The student loan industry has experienced a volatile year and the impact of this volatility is starting to trickle down to parents and students. Tighter lending standards and falling housing prices have made it harder for parents to tap home-equity loans and lines of credit to pay their kids’ education bills,” said David Kenney, CEO of CollegeZapps. It is critical for parents and students to have options. If you don’t apply – you can’t be accepted. If you are not accepted to multiple colleges - you don’t have choices.”

“Each college has a different cost of attendance based on factors such as tuition, fees, room, board, projected expenses and regional costs of living. Parents and students want to weigh their best options of grants, scholarships, loans, and work study,” continued Kenney.

In an interview titled “The Credit Crisis and Student Loans” on the PBS Nightly Business Report, Brian Lee Sang, Financial Aid Director at American University said, “It’s creating issues where families are coming to us asking us for institutional help, saying, hey can I get more money any way to try to help get us through the spring semester. But I think more colleges are going to see even more of this and feel the impact of this next year.”

Families are looking for more options.

CollegeZapps www.collegezapps.com has opened a window of options for parents and college applicants by simplifying and streamlining the college application process. With CollegeZapps completing actual college applications is now fast, accurate and professional. Students can spend more time choosing what colleges best fit them, applying to more colleges in less time, and reducing the redundancy that comes with filling out multiple application forms.

CollegeZapps recommends applying to as many as 10 colleges and dividing them up into three groups:

Group one: Apply to colleges where you feel you’ll most likely to be accepted. These are usually called “safeties” or “back ups.”
Group two: Apply to colleges that are overall good matches, with a high probability that you will be accepted. These are colleges that fit academically and socially.
Group three: Apply to “reach” colleges. These are colleges that present an admissions challenge.

For more information, visit www.collegezapps.com or contact Scot Talcott at (866) 492.7607 or (303) 785.8600.

Did you know that the Consumer Reports Money Lab was recently studying ways to cut monthly costs and they are reporting that it is possible for consumers to save up to $500 per month — even when gas and food prices are going up?

Savings shown are Consumer Reports estimates based on what a range of consumers really spend and can possibly save. Actual savings will depend on individual circumstances.

Optimize life insurance — $110

Life-insurance premiums have dropped dramatically since the 1990s. It would definitely pay to replace a policy bought years ago with a new one. Don’t cancel an existing policy until a new one is in place.

Shop smart for food — $200

Making different choices at the grocery store and when eating out can net monthly savings from $130 to $255. The average family of four can cut their grocery bill by $190 a month by shifting to a lower-cost mix of foods.

How to do it: Plan menus around sales of fresh chicken, fish, meat, dairy and produce and be sure to use those leftovers. Stop buying expensive prepared meals. Eat more low-priced, high-nutrition foods such as beans and potatoes. Try out the store brands and sign up for store discount cards.

Stop paying bank fees — $25

Banks collected about $39 billion in account fees and penalties last year. That figures out to about $28 per month per household. With planning, it’s possible to pay nothing.

How to do it: Bank at large institutions that high numbers of ATMs in convenient locations. Shop for free checking and carefully adhere to provisions for a minimum balance, direct deposit or other conditions to avoid monthly fees.

Call up phone savings — $35

It’s possible to net savings from $15 a month for budget callers to $55 per month for heavy users.

How to do it: Look at few months’ phone bills to see how many minutes are typically used on landline and wireless calls. Comparison-shop among cellular service providers, the local phone company and the cable TV company. Don’t buy more service than you need.

Pay off credit cards — $65

Most consumers who carry a balance owe $2,200. This means they pay 15.2 percent in annual interest charges. Cut this and save $28 per month. About 15 % of consumers carry balances of $10,000 or more and they could save $125 per month if they paid off their debt.

How to do it: Stop using your cards and pay more than the minimum required each month until it’s paid off. If you’re strapped for cash use your stimulus check, garage sales or get a part time job.

Find cheaper auto insurance — $65

Many people have stayed with the same auto insurer for 15 years or more. Depending on your individual profile and where you live, you might be able to save hundreds a month by shopping around.

Are North Americans prepared for what is facing us in the future? The American dream is slowly becoming a nightmare. Our prosperity seems to be built on the believe that exhausting the world’s resources as quickly as possible is the thing to do…without any concern about our neighbors, other life on this planet, or our children.

The rest of the world is waking up to America’s extravagant use of energy and resources and for their own survival they may begin to restrict energy transfers to the US.

An embargo placed on us by other nations?

The Diminished Food Supply in the US

Just how critically low is our food reserves right now?

November 1, 2004 inventory list of U.S.D.A. Commodity Credit Corporation [C. C. C.] owned stocks.

The C. C. C. inventory was as follows: corn - 100,000 bushels, barley -100,000 bushels, oats - 100,000 bushels, wheat [Minus quantities committed to the Bill Emerson Humanitarian Trust] 2,300,000 bushels, non-fat dry milk [minus quantities committed to Dairy/ Donations] 3,700,000 pounds, cheese [minus quantities to Dairy/ Donations] 1,100,000 pounds.

The C. C. C. owned inventories are ZERO for the following commodities: butter, soybeans, sorghum, rice, honey, peanuts, canola, flax seed, sunflower oil and seed, dry peas and lentils.

Let’s do some simple math. If we add these figures and divide them by current U. S. Population we discover our food reserves can be measured in ounces!

We have less than one pound of commodity per citizen.

The “Freedom to Farm” law has a goal to get the government out of supply management and food reserves. Now companies like Cargill, Tyson, and ADM own and manage the world’s food supply and also our security.

There is no surplus of food in our world or this country. Stocks of food and fiber should be viewed as an asset, not a liability. The fact of the matter is the United States now operates with ‘a trade deficit’ with regard to agriculture. No more can “we feed the world.”

Will the world will now feed us?

We are steadily replacing a policy of agriculture trade and food reserves with the export of guns, bombs, and weapons of war.

Respect for the land and those who cultivate and harvest the bounty must be recognized and elevated. Hunger, poverty and war will continue to multiply if we stay on this present course. Why assume all the risks and suffering when there is so much more to be gained from a wise food and fiber policy?

I find myself wondering more and more these days about how realistic it would be to own an electric automobile. Have you ever wondered about the realistic benefits of owning a hybrid vehicle?

A hybrid electric car combines the strengths of a traditional internal combustion engine and those of an electrically powered vehicle.

Here are a few tidbits of info that I find interesting and helpful for a decision like this:

• Nickel-Metal-Hydride is what the batteries that the power comes from are made of. These batteries are designed to be completely discharged and recharged and have the ability to store electrical power.

• The combustion engine found in a hybrid electric car is similar to a normal smaller engine. The engine is smaller and weighs less and this is what makes it more energy efficient.

• Maximum efficiency is achieved because the motor is constructed according to average power used by a hybrid electric car. The specification of the highest level of demanded power directly corrolates to the size of a motor in a typical combustion motor.

If you are getting closer and closer to making a change, I found some really cool information today about converting your existing vehicles to electric.

Electric Vehicles of America says it is possible to convert your gas-powered car to an electric powered car. It even lists car shops were you can have your car converted to electric powered.

At Electric Vehicles of America you will find free detailed calculations for whatever your specific application may be…whether industrial, on-road electric car or electric truck, off-road electric vehicle, electric boat, or even sailboat auxiliary.

The calculations made by Electric Vehicles of America will identify the amperage, horsepower, and running time at various speeds.

~This is not a sponsored entry~

The USDA and major food companies warn food prices are about to get a lot higher. According to the U.S. Bureau of Labor Statistics, food prices rose 6.3 percent during the first five months of 2008.

Food manufacturers and wholesalers have been mostly absorbing fuel increases up to now but they say they can’t continue to do so for much longer.

The demand for corn ethanol has big corporations like Sara Lee and Kraft saying they expect to raise prices as much as 25 percent on products like macaroni and cheese, corn flakes and cookies. Basically anything that is made from corn or eats corn is going to go up dramatically over the next few years.

Fuel prices are a large factor in the price rise, but the cost of corn is pushing prices up more than anything.

Economists predict that this 25 percent increase won’t be the end. Food prices are expected to continue to climb throughout 2009.

Finally! Due to the rising cost of outsourcing, some US companies are starting to look back to within our borders for their manufacturing needs. The comparison between the cost to produce goods in the United States or to produce them abroad has narrowed. For this we can thank a decrease in China’s competitive advantage.

The Chinese yuan has appreciated 18 percent against the dollar in the past three years. This meas that exports are now more expensive and less competitive. Chinese wages have also more than doubled over the past five years and the Chinese government has either lowered or eliminated tax breaks on exports.

Another factor is that oil prices have skyrocketed from $25 a barrel in 2002 to more than $125 today. This expense discourages American businesses from shipping manufacturing operations overseas.

Hard data documenting a shift homeward is not yet available, but a second-quarter survey of 314 member companies showed that 59 percent of respondents have seen “increased costs of materials and supplies imported from abroad” and 30 percent are purchasing more supplies from US sources.

Economic forces make it more attractive for an increasing number of manufacturers to move toward more domestic production. These factories won’t be built overnight, but increases in oil prices and shipping costs are making this much more cost effective.

U.S. production costs are also increasing along with China’s. The study said 79 percent of manufacturers report increased costs for domestically produced goods. Some businesses are finding that reducing costs by cutting overseas shipments sweetens the incentive to manufacture here at home.

Bottom Line…if given the choice, businesses will likely agree that American workers are better than anywhere else. There is a pride in workmanship that is missing in products produced in other places. This is just one of many advantages to producing in the USA.

This is how Bush explained the current economic downturn to a private fundraiser last week.

“There’s no question about it,” Bush said. “Wall Street got drunk, that’s one of the reasons I asked you to turn off the TV cameras. It got drunk and now it’s got a hangover. The question is how long will it sober up and not try to do all these fancy financial instruments.”

The remark was made at a closed-door fund raiser for Republican Pete Olson. No cameras were allowed in but an ABC affiliate in Houston somehow acquired the video and posted it on YouTube.

Ironically, just last week Bush voiced fears about YouTube moments such as this making it to the internet. After asking a room of 400 supporters gathered for a fund raiser in Tucson, Arizona to turn off their recording devices Bush said, “I don’t know a lot about technology, but I do know about YouTube.”