Every once in a while something happens that sets the world of pop culture on its head. The latest in these events is the emergence of Susan Boyle – an unassuming charity worker from a small village in Scotland. The most basic of digging on the internet shows that Ms. Boyle spent the last ten years caring for her ill mother before she passed away and that she’s never had a relationship with a man or, as she calls it, she’s “never been kissed.” [Read more…]
Why The Rest Of The World Should Be In Fear…
According to one report in an international newspaper, now is the time for the rest of the world to start getting a little bit worried about a rise in American power. No, we’re not coming at you with preemptive wars and no, we’re not going to try nation building in new parts of the globe. No, we’ve got something much more positive in store…for us, at least.
Americans are saving their money again.
That’s right. Americans have finally begun to reverse their trend of spending more money than they earn, at least in some small part. The good folks north of the border at the Globe and Mail ran an article about this returning phenomenon the other day where they shared some historical stats:
Americans are suddenly spending less than they earn. While that might not sound heretical or surprising – how long can you go on spending more money than you earn? – it is an epochal moment for the free-spending United States. After saving an average of more than 7 per cent of disposable income until almost 1990, the United States went into a savings tailspin. Savings rates fell, in fits and starts, from 8 per cent, through 6 per cent in the early 1990s, to 2 per cent around 2000, to the ignominy of a negative savings rate by mid-2005.
Now, however, that is changing rapidly. November economic data showed U.S. savings spiked to 2.8 per cent of disposable income, up from zero at the beginning of 2008. Is it that Americans have suddenly figured out that saving is a good thing, or are they taking some sort of moral stand against profligate spending?
Look at that! At the beginning of 2008, Americans were saving zero percent of their disposable income, but towards the end of the year we were up around three percent. Alright! Go America! What does this mean for the world? The writer of this piece, Paul Kedrosky, gives us some idea…
To put it in context, a U.S. savings rate of minus 1 per cent meant roughly $2-million a minute was flowing out of U.S. consumer savings into other things, mostly consumption, like TVs and home renovations, and so on. Or, on an annual basis, that worked out to almost $1.3-trillion exiting the U.S. banking system for other places.
Turn that around, however, and things get very different, very quickly. At a 3-per-cent savings rate, the United States will see $3.8-trillion showing up next year in the banking system just from domestic savers. At 7 per cent, almost $9-trillion will come rushing in as part of the savings tsunami. It is a fire hose of money pointed at the banks, and it’s just beginning.
Ha! How about that, world? The market is up the creek right now, but America is going to get its value back and we’re going to get it from saving more of our own money. It’s simple cause and effect, right? If you want more money in the banking system without draining more taxpayer dollars, then you PUT IT there via savings accounts.
And that’s just what this country is fixing to do. Let’s go bigger and better than a 3% savings rate. All Americans should sit down and look at their personal annual budget and try to earmark 5% of their annual earnings for savings only. And why not go even bigger and better than that? Budget 5% of your income for savings and another 5% for donations to one or two United States-based charitable organizations of your choosing. Your first 5% helps provide for your future and your second 5% helps to build up another community within your own nation.
If you can afford to do it, then why not?
Are You Finding Big Deals Out There?
With the economy in the shitter, there is a lot of talk about how retail stores are almost being forced to drop their prices in order to bring in more revenue. The other day there was an article in the New York Times that started with a great little sentence which put this phenomenon into a concise statement:
For weeks, reluctant consumers have forced retailers to lower their prices — and lower them again and again — before they even considered opening tight wallets and purses.
Consumers have every right to be cautious with their dollars! You can read the rest of the article (which is pretty good) at your leisure, but I loved that first sentence so much that I wanted to create an entry around it.
I’ve also been looking around in the post-Christmas shopping scene looking for some good deals. As I suggested in a previous post, the post-Christmas sales are the best time to store up on stuff for next year’s holiday. I spent $25 on a new Christmas tree at Target and about $25 at Wal-Mart on Christmas cards, bags, candles, blankets, and some other stuff for next December. All of this stuff was half-price so it was a pretty good deal.
But I haven’t found any major, big ticket items that I’ve wanted to purchase. So I wonder if anyone out there has seen anything like that in their travels. Have any of you seen a big “Black Friday” type deal in any of the post-Christmas sales? Better yet, did you buy whatever item caught your eye? I think that many people will be looking for these deals, finding them, and then opting not to spend their money on the big ticket item anyway.
Times are tough and, as if they didn’t already know it, retailers are in for a rocky 2009.
