Economists now believe that the Bank of England will begin to cut rates in the later part of this year. However, if inflationary figures still show an upward trend then the central bank will not be able to cut too steeply. There is no doubt that whatever action the bank takes, it cannot stop the impending recession that will be much more biting than people realize.

Let's ignore "Equatorial Guinea" because they have like two hundred people and I can't point it out on a map. Come on, we are behind drunken Ireland now? Oh, and look, we are like $100 behind. I blame the currency exchange slapping us across the face! Damn you George W. Bush! (George W. Bush is so terrible as a President, that people look at his Father and say, "Eh! He wasn't too bad!")

And the United Arab Emirates? They may have a better GDP per capita, but at least in America you can LEGALLY do the following you can't in the UAE: Kiss someone in public, be gay, sunbath, have sex with someone you aren't married, practice the religion of your choice, criticize your leaders, and women can drive cars (well -maybe that last one isn't so bad).

In fact, America, come on, we don't even have the largest mall anymore! We invented the mall! And, no, yeah, we don't even crack the Top 10? I mean, crap - we are losing to Jin Yuan and Cevahir? See below:

And, get this! The largest mall in America is in Minnesota. But, the largest mall is America is actually ... drum roll ... majority owned and operated by Canadians. Okay, I like Canadians and do not have a problem with this. We can call it even because - as I was driving up to Thunder Bay from Minnesota, after crossing the border the first three buildings I saw were 1) a bait anjd tackle shop, 2) gas station and 3) a HOME DEPOT! Canada felt like Minnesota more than I wanted it to. I wanted to go to a different country, and I got Canada.

Alright America -- pick up the slack!

This article, published on a British investing web site, corroborates what I've been saying about the American economy and makes exactly the point that I made in Chapter 1 of Five Short Blasts - that the state of the American economy is much worse than the government's macroeconomic indicators would lead you to believe.  Pay particular attention to Mr. Edelson's graphs of GDP growth, unemployment and inflation.  I've been repeating over and over that:

1. GDP is a poor measurement of the health of our economy.  Mr. Edelson's graph represents per capita chained GDP - the better measurement I've been pushing - which shows that the U.S. economy spends more time in recession than it spends in real recovery.
2. I've been saying that unemployment (the official rate is currently 5.5%) is grossly understated and that the weekly jobless claims report, which shows that about 13% of our work force files for unemployment every year, is a much better measure.  Mr. Edelson corroborates this with his "shadow unemployment" rate of 13.7%!
3. I also made the point in the book and continue to make the point that inflation is understated.  Mr. Edelson's graph reveals that inflation is currently running at 12.6% instead of the government's official rate of about 5% (less, if you let the government strip out things like food and energy to arrive at what it calls the "core rate").  Read Mr. Edelson's explanation of how the government has used gimmicks to strip out most of inflation's effects. 

The article goes on to recommend an investment strategy, which doesn't necessarily reflect my own views.  Take it for what it's worth.  But I highly encourage you to take a look at the article and check out Mr. Edelson's graphs.  Here's a few hi-lites from the text of the article.  First, his take on GDP:

Larry Edelson: Thank you! Since the 1980s, Washington has changed and manipulated the way it measures almost every major economic stat — inflation, GDP, unemployment, even money supply — to fit its own political agenda.

John Williams ( www.shadowstats.com ) is a real number cruncher, and he has exposed this deception by continuing to measure those key numbers the same way the government used to, using the same metrics the government used to swear by!

... We had a much deeper recession in 2002, an attempt to recover, and more recently, a second recession starting in late 2006 or early 2007. In other words, the big picture for this entire decade is a double-dip recession. Meanwhile, the government claims we're not in a recession. It's ridiculous.

Next, his take on unemployment:

The unemployment situation is also much worse than the government admits: The government publishes a whole series of unemployment numbers — U1, U2, all the way up to U6. But the most widely used unemployment rate — the one the public hears about every month — is U3. Here's the line representing U3. It's now at 5.5%.

Plus, the government also publishes the unemployment rate called U6, which is the government's broadest measure. That's now at 9.7%.

Martin: Most people aren't aware that the government itself admits we have 9.7% unemployment in the U.S. But on top of that, you're saying it's even worse?Larry: Yes, during the Clinton Administration, the government decided to stop counting long-term discouraged workers — people who had given up looking for a job for more than a year.

Result: The number of discouraged workers in their stats dropped from the 5 million range to less than 500,000.

Martin: So 4.5 million discouraged workers magically disappeared from the government's unemployment count?

Larry: Into thin air! Like they didn't exist! So you have to add those discouraged workers back into the ranks of the unemployed, just like they did before the Clinton years.

Martin: So what's the broadest measure of unemployment today, based on the way the government used to calculate it?

Larry: It's this red area — 13.7% unemployment. That's much closer to the true unemployment rate in the U.S.

Martin: That's hard for most people to believe.

Larry: Is it really? I think it's very consistent with the fact that so many Americans are suffering an income crunch. And it also jibes with the fact that so many Americans have had to borrow so heavily to make ends meet.

Martin: That makes sense. If people are wondering, "Why was the Fed so frightened in the early part of this decade? Why did they pump up the housing bubble? Why did Americans take out so many home equity loans?" — then this picture you're painting of the true GDP and the true unemployment helps us answer those questions.

Finally, his take on inflation:

The key is how the official Consumer Price Index — the CPI — is also being used to brainwash the public, unfortunately.

Here's the CPI: 5% inflation. I guess if you don't eat, don't drive or don't buy anything, or if you're in high office and all that is taken care of for you, then maybe you're experiencing low inflation. But for nearly all other Americans, the government's CPI figures are horribly understated.

Martin: Explain how that's done.

Larry: Starting in the 1980s, the government made two major, fundamental changes to the way they calculate the CPI.

First, they began making adjustments for the quality of the products. For example, if a textbook has color pictures in it, they say it has a higher value and, therefore, they recognize only a portion of the price increase.

Martin: But as a practical matter, if a college professor requires a certain textbook, the student still has to buy it and pay whatever it costs, right?

Larry: Of course! The second major thing they did was to plot some key items on a log scale. The net result is that they reduce the weight of items that go up in price, but increase the weight of items that go down in price. It's absurd, but they did it for a reason: To hold down the inflation adjustment for Social Security payments. Their real agenda was to underpay retirees by covering up the true inflation.

Martin: Let's assume the government never changed the CPI. And let's calculate the CPI the way they did before these changes were made.

Larry: Then you'd get the red area in this chart: According to Shadow Government Statistics, consumer price inflation in America is now galloping along at the rate of 12.6% per year.

Martin: 12.6% consumer price inflation in the United States today!

Larry: Yes. And I think that jibes with most people's experience. That's why foreign investors are getting fed up with our dollar. That's how the world is buried in a tsunami of counterfeit dollars — and every one of them is falling in value, gutting the buying power of your dollars at the rate of 12.6% per year! At that rate with compounding, your cost of living doubles in less than six years!

Martin: Which is maddening for people on fixed incomes.

Larry: Absolutely maddening. You have millions of people who scrimped, saved and invested to build a nest egg — to ensure a dream retirement. Now, many could wind up barely surviving, financially dependent on their families. Plus, you have millions of people who are losing their #1 source of retirement savings — the equity in their homes. Worst of all, you have millions of people who trust the government's numbers and are sleepwalking towards disaster. That's what we're so worried about.

If you'll check my "2008 Predictions" you'll see that, back in November of 2007, I predicted a recession and, counter-intuitively, rising inflation and interest rates.  Here's Edelson's forecast:

Martin: In your opinion, what's the worst-case scenario?

Larry: The worst-case scenario is a hyperinflationary depression. But whether it goes that far or not, I think we're going to see one of the greatest inflationary spirals in decades. That sums up my views.

If you've picked up a newspaper, turned on the radio or television, you've heard the R word: recession. But what does it mean and how does it affect the average person? Pete returns with what I hope is a bi-weekly blog entry. Today, it's all about recession.

What is a recession?

A recession is when the gross domestic product of a country or region shrinks for two consecutive quarters. Since the idea of this is to put fancy economic terms into words normal people can understand, let me try that again...

The Gross Domestic Product (or GDP) of a country is the total value of all the goods and services produced within the country. If you add up the economic value of every single manufactured item and service sold (a ridiculously huge concept to think about) you get the country's GDP. Canada's GDP in 2006, for example, was $1.178 trillion -- that's the total value of every Tim Hortons coffee, dollar-store umbrella, sky-diving lesson and grocery bill sold during the whole year. In simple terms, if that number gets bigger, the economy is expanding. If that number gets smaller, the economy is contracting.

In finance, years are divided into quarters -- periods of three months. So by a literal definition, a country is in recession when its economy shrinks for six consecutive months. Strictly speaking, that hasn't happened yet in Canada or the U.S.A. But my hunch is we're pretty damn close.
What do people think a recession is?

The term "recession" tends to get bandied about when people want to express that some aspect of the economy -- average salaries, housing prices, unemployment, the stock market -- seems to be getting worse. If your stock portfolio is tanking, your house value is plummeting, and you can't find a job, you might assume that "we're in a recession." Technically, all of those things can be happening, but as long as GDP is still increasing, it's not a recession. A country can be in a recession while real estate prices are rising and the stock market is booming -- but that's probably unlikely to happen for very long as these things are all interconnected.

How do we end up in a recession?

That's a tricky one. The economy is a delicate balance between countless different factors. Any change in one typically has an impact on all the others. But it's also true that no single factor is any more powerful than any other. As I said, a recession happens when the total value of goods in an economy starts to shrink. That can happen for a bunch of reasons -- the country runs out of the natural resource on which their economy was based, businesses get scared of their prospects so they stop expanding their business and hiring new people, a large number of people lose their jobs (which means they have no money to buy stuff, which means companies stop making money because they're not selling stuff, so GDP tanks) -- anything, really.

Any aspect of the economy (in this case GDP) can be so irrationally dependent on the ones around it that if something big and bad enough impacts any one, that will reverberate into the others. It's an unsatisfying answer, but there isn't really any one reason why recessions happen. The important thing to realize is that they're unavoidable, but they're not the end of the world when they happen. They're very cyclical, so recessions sometimes hit for no other real reason than the economy has been doing too well for too long, and it needs to slow down and take a breather.

How does it affect the everyday citizen?

Lots of ways. Probably the most direct one is the job market. If the economy is shrinking, there are less jobs to go around to the same (or larger) number of people. So it's a lot harder to keep your job, or get a raise -- or find one, if you haven't got one. It's a little more indirect, but recessions often have an impact on things like house values and the stock market. If people don't have jobs, there's less people out there willing and able to buy your house off of you -- and they're not willing to pay quite as much as they used to. So even if your job is rock solid, a recession would impact you that way. Similarly, in a situation where companies are seeing their profits shrinking, people are a lot less willing to own them as investments. Why would I pay to own a company that makes less money today than it did yesterday? And may make less tomorrow? Chances are, at the very least, I'll only buy that stock off of you for a reduced price.

The economy is like a big pie. If it's a recession and the pie's getting smaller, it's a lot harder to get the same size slice you're used to getting, and hold on to it.

Related Posts:

• In Plain English: Interest Rates
• In Plain English: Net Worth

At Bethel Heights, we've been talking a lot in recent years about succession planning and our identity as a family business. I've been reading as much as I can get my hands on about the roll of family business in the modern American economy. I'd be curious to hear from anyone who knows more about this study conducted by faculty from Kennesaw State University, Loyola University Chicago, and Babson College. It's dated 2002. I'm curious whether these statistics have changed since its release:

"(F)amily-owned business accounts for 89 percent of total annual U.S. tax return filings. They generate 64 percent of the Gross Domestic Product. And, they employ 62 percent of the nation's workforce."

Big numbers. I'm curious to know where that number has gone in the last six years.

Right now, my nuclear family is gearing up for our end-of-summer visit to BHV. I'm getting stoked for Aunt Marilyn's hummos, my dad's spaghetti ala carbonara, an exhaustive taste through the cellar, a visit to the new property to see how things are coming along, and hopefully some really constructive planning at our big annual meeting.

**Hopefully my amateur photography will inspire Uncle Terry to post some of his really fantastic, off-the-hook vineyard and winery shots.

Jessica Dudley Casteel (Jessie)

Last Six Years

Year - GDP Growth (%) - IIP Growth Rate (%)

02-03 - 3.84 - 5.74

03-04 - 8.52 - 7.02

04-05 - 7.45 - 8.35

05-06 - 9.40 - 8.15

06-07 - 9.62 - 11.55

07-08 - 9.03 - 8.13

Source: Dalal Street Journal

First, from John Fernald, VP at the Federal Reserve Bank of San Francisco:

The relatively strong incoming data suggest that growth in the second quarter was close to trend, after two anemic quarters. Going forward, the continuing and, indeed, intensifying pressures from housing, credit markets, and commodity prices, are likely to weigh on activity for some time. However, the fiscal stimulus program should help support growth in the current quarter.

No specific estimate is given, but from this chart it looks like his guess is between 2.5% and 3%:

Next, from First Trust, a "more bullish" estimate of 3.0%:

Yes, it is true that the home building and autos sectors have been hammered. But, it is not true that this weakness has spread. Outside those sectors, the economy is not just healthy but downright strong, reflecting relatively low tax rates and loose monetary policy.

Federated, a bit more reserved, raised their estimate from zero growth to 1.2%:

Federated has increased its own 2008 economic growth estimates largely due to the expected stimulus of federal rebate checks and the lagged impact of the earlier aggressive series of Federal Reserve rate cuts.

I'll keep a running table of these estimates as I find them.

www.StainFreeMedia.com www.MySpace.com/StainFreeMedia www.YouTube.com/TheloniousChannel

(source)

Economic growth is the increase in value of the goods and services produced by an economy or a country. It is the percent rate of increase from one year to the next in gross domestic product or GDP of an economy or a country. In order to correct for the population sizes of different economies and countries, GPD per capita rather than national or total GPD is used.

GDP per capita of an economy is often used as an indicator of the average standard of living of individuals in that country, and economic growth is therefore often seen as indicating an increase in the average standard of living. "Average" means that GDP growth is not the same as poverty reduction. GDP growth per capita does not provide information on the distribution of income in a country/economy. A rise in the average standard of living can be accompanied with greater inequality and poverty for some or even many.

Therefore separate measurements of distribution or inequality and poverty are necessary.

However, there is a strong correlation between these measurements. As an empirical matter, economic growth (annual growth in GDP per capita) and poverty reduction go hand in hand.

(source)

(source)

Since growth and poverty reduction go hand in hand, it is of the utmost importance that those who care about poverty reduction do everything possible to promote economic growth. Even though our knowledge about the kinds of policies that stimulate growth is limited, we know that some things in some circumstances drive economic growth and others do not. Good institutions, good education, investments, respect for human rights and the rule of law, free markets etc. are generally considered to be good for growth.

This doesn't mean that economic growth is all that matters, that poverty reduction follows automatically from growth or that only policies that are targeted on growth can generate poverty reduction. This kind of "invisible hand" theory, or "trickle down" theory has been discredited. Other policies such as redistribution are also necessary for poverty reduction. Policies specifically aimed at poverty reduction can even benefit growth. It's interesting to note that poverty reduction is one of the drivers of growth. So the causation goes both ways, as is often the case in correlations.

Policies that are effective in increasing the incomes of the poor--such as investments in primary education, rural infrastructure, health, and nutrition--are also policies that enhance the productive capacity of the economy in aggregate. (source)

So specific policy measures aimed at improving the lives of the poor are necessary. An exclusive focus on fostering growth is wrong. One could even say that the focus on the poor is the priority, and that measures aimed at growth are only a means to help the poor, and only one means among many. This has become known as the difference principle of John Rawls: social and economic inequalities are to be arranged so that they are to be of the greatest benefit to the least-advantaged members of society.

"From this perspective, it can be entirely rational and proper for a government to select, among two competing growth strategies, the one that has greater potential payoff for the poor even if the aggregate growth impact is less assured. (source)

The necessity of a double priority - pro-growth combined with anti-poverty measures - is known as the Poverty-Growth-Inequality Triangle:

(source)

Another concept that has been invented is that of "pro-poor growth".

There is a correlation between poverty reduction and economic growth, not because economic growth automatically and single-handedly reduces poverty, but because policy makers consciously try to reduce poverty and thereby promote growth. Growth is good for the poor, but growth without poverty measures will be unequal growth, growth which doesn't benefit everyone equally. When the pie gets bigger and the slices stay of the same relative size, then the poor benefit from growth equally in absolute terms because their slice also gets bigger in absolute terms. But not in relative terms compared to their fellow citizens. However, this is the debate about inequality and relative poverty which is distinct from the more urgent debate about absolute poverty. Growth can indeed lead to lesser gains, no gains at all or even absolute losses for some people at the bottom of the income distribution scale, for example those people who were previously working in factories that were closed because of the industrial reforms necessary for overall growth (such as liberalization). However, this is unlikely because the available evidence suggests that measures of income distribution such as the Gini coefficient are quite stable over time within countries (source). This is undoubtedly the result of policy makers embracing the double priority.

Just a note about some of the negative aspects of economic growth: the costs for the environment aren't factored in, disasters create economic growth because of the reconstruction...

More on poverty.

"We believe this is India's moment," declares Keystone Chief Economist William T Wilson.

Even under Keystone's projections, India wouldn't match China's current hypergrowth rates for at least another 15 years. And even by 2050, China's economy would be bigger measured in US dollars. But longer term, Keystone contends India will be in a stronger position. It projects that China's average annual growth will peak at 8.8 per cent over the next five years, and then gradually trend downward to under 7 per cent in the '20s and around 4% by the '40s.

Investments

Many signs point to big increases in investment in India, Wilson says. In fact, he estimates investment in India could reach 35% of GDP within a decade, which would enable it to match China's 9% plus growth. One reason is that the savings rate in India rose from 23.5% of GDP in 2001 to 28.1% in 2004. And because of its growing workforce and the decline in family size, India's savings rate should continue to rise to a projected 37% in 20 years. Since investment is highly correlated to domestic savings, that should translate into higher investment and economic growth.

However, India is planning to open up many long-protected sectors that have great allure to foreign investors and that could draw huge inflows of money. They include telecom, where Indian demand now is growing even faster than China's, commercial real estate, and department stores. Although some of the reforms have stalled recently due to domestic political opposition, Wilson believes the government will prevail.

"If you look at the institutional changes and the number of industries that have liberalized over the past five years, the pace has been phenomenal, he says. Wilson predicts India's real estate sector will draw a huge influx of money from foreign hedge funds, and liberalization of retail will be 'the real big bang' for the economy.

Entrepreneurship

They generally have done a good job of taking advantage of new opportunities offered by liberalization since the early 1990s. But the more dynamic companies in India are smaller ones that are led by new generations of entrepreneurs who take greater risks or are more connected to the global economy. These new companies also have more creative managers, argues Debashis Ghosh, another Keystone partner who worked at Ernst & Young.

Keystone focuses on researching mid-sized Indian companies with $10 million to $100 million in annual sales. "The bigger companies are still led by old school types who used to depend on access to government and got huge when there was nobody else in the game. "Because they had scale, foreigners had to deal with them," says Ghosh. "Now, though, the top talent from the Indian Institutes of Technology and the Indian Institutes of Management are flowing into the mid-sized sector. That is like getting a management team of all Wharton and Massachusetts Institute of Technology grads."

Productivity

India has averaged respectable productivity growth of 2.5% a year over the past two decades.

But that can grow sharply, thanks to liberalization of many industries, a literacy rate that has risen from 18% in 1951 to 65% now, and India's rising openness to foreign trade, which has jumped from 15% of GDP in 1991 to 26% now. Manufacturing Surge China dwarfs India as a manufacturing power, especially for export.

And it will be a long time before India, with its inadequate infrastructure and components supply base, will be a serious export rival. But in recent years, India's domestic manufacturing industry has been growing strongly.

What's more, a number of Indian companies are especially strong in high-end manufacturing, such as auto parts, power generators, and medical equipment that requires a lot of engineering.

But when you look at the fundamental drivers growth in the workforce, fixed investment, and productivity -- over the long run the prospect looks a lot more plausible.

經濟放緩通脹減

李曉超在昨天（7月17日）公布中國上半年經濟數據，其中反映經濟增長的國內生產總值（GDP）為10.4%。其中，第二季度的GDP增幅為10.1%，低於今年第一季度的10.6%。上半年生產總值則為130,619億元人民幣。

反映通脹的居民消費價格指數（CPI，Consumer Price Index，即「消費者物價指數」）由年初2月時的8.7%大幅減至目前的7.1%。

不過，李曉超強調，通脹預期還比較強，目前中國內地的經濟依然面臨通脹和就業的兩大壓力。他指：「經濟增速快會增加就業，但同時帶來價格上漲，有需要在其中選擇好平衡點。理想的經濟增長應回落至潛在經濟增長水平，即過去一個較長時期的平均增長速度。」

上半年的通脹當中，食品類和居住類價格的貢獻分別達6.64及1個百分點。食品價升幅達20.4%，而70個大中城市房屋銷售價，仍有10.2%的升幅，居住價格則升6.9%。

PPI擴大成通脹壓力

李曉超認為，當前國內外特別是國外價格上漲較快的形勢下，社會公眾容易產生對價格繼續上漲的預期。下半年價格上漲的因素還比較高，初步測算下半年價格滯後影響（指上半年商品價格上漲對下半年價格指數的影響），將令通脹因而上漲1.8個百分點。

同時，6月份工業品出廠價格指數（PPI）上漲8.8%，漲幅繼續擴大，對通脹也形成了較大的傳導壓力。近期成品油和電價的上調，災後重建形成對建材的需求，都可能形成價格上漲的一些新的因素。

李曉超表示，中國的經濟繼續朝著宏觀調控的預期方向發展，「總體保持了平穩較快運行的態勢」。而下一個階段，會保持宏觀經濟政策的穩定性和連續性，同時也會增強宏觀調控的預見性、針對性和靈活性。

分析員料從緊政策不變

瑞信亞洲區首席經濟分析員陶冬預期，中國從緊政策不會改變，但會有所微調，在個別領域放鬆，例如房地產及出口業。同時，人民幣升值的速度也有可能放緩，以減輕出口企業的負擔：「如果美國不加息，人行亦無加息的需要」。而中國經濟增長風險及通脹風險同時存在，內地通脹有可能由早前的糧食帶動，轉變成全面的成本帶動。

中金首席經濟學家哈繼銘舉出三大因素，計有內地通脹壓力持續，企業利潤惡化，加上美國信用危機風險上升，中國將面臨歷史上從未出現的經濟增速下滑與通脹壓力並存的困境，預計內地下半年經濟增長會進一步放緩，全年增長10%，明年經濟增速會顯著下滑，降到8%至9%。他維持今年最多加息一次，以及維持今年人民幣兌美元升值一成的觀點。

企業利潤繼續增長

國家統計局亦公布，上半年企業利潤繼續增長，國企增長一成二七，股份制企業增近一成九，而外商及港澳台投資企業增長一成四，重工業增長一成七，輕工業增長近一成四，都較去年回落。固定資產投資增長加快0.4個百分點至26.3%。

第一產業（農業）增幅為3.5%，第二產業（工業）增11.3%，第三產業則增10.5%，增幅均較去年上半年回落。期內，城鎮居民人均可支配收入8065元人民幣，實際增長6.3%；農村居民人均現金收入只有2528元人民幣，增長10.3%。

http://www.hkheadline.com/news/topic.asp?contid=170&srctype=t

Der 1. Teil war komplett über die Berechnung vom GDP, dem CPI und dem GDP Inflator... Das lief supitoll!! ;)

37 Punkte schonmal fast sicher... Und der Rest... naja keine Ahnung... Aber ich werd schon hoffentlich auf die restlichen 13 Trostpunkte kommen und damit bestehen. Ansonsten werden die Ferien arg unlustig und voll mit Lernshit...

Auf jedenfall werd ich heute Abend mal auf nen Berg fahren und Meditieren. Bissel mit Gott schnacken und vllt n Flasche Woddi mit ihm leeren... Je nachdem ob er wieder was geholt hat weil ich beim letzten Mal eingekauft hatte und er hats ja, würde man zumindest vermuten... Ist immer ganz lustig mit ihm... Manchmal ist er gereizt aber dann immer nur wegen den ganzen Spastis auf der Welt die ihm das Leben (oder das ewige Dasein) zur Tortur machen...

Manchmal geht der mir ja auch mit seinen ständigen SMS aufn Sack... Speziell weil er immer sofort zurück schreibt... Der brauch ja nicht zu Tippen... und seine Handyrechnung brauch er auch nicht zu bezahlen.. Unfair ist sowas! Da finde ich kann der schon mal ne Flasche Woddi kaufen für uns beide... Vorrausgesetzt er will nicht wieder bei mir mitfahren... Besoffen nehm ich ungern Götter mit... Ist mir ne zu heikle Verantwortung wenn dann doch etwas passiert!

Auf jedenfall hat das Beten heute nicht so sehr geholfen wie sonst, vllt ist er ja sauer auf mich... Beim letzten Treffen hab ich ihm den Teppich vollgekotzt... Da war der schon recht sauer... Speziell als ich dann versucht hab die Kotze aus seinem Palastteppich der späten Ming Zeit rauszuwischen...

Ich fands trotzdem lustig... Soll der sich mal nicht so aufregen... Er hat den Teppich ja eh aus dem Kaiserhaus vor 400 Jahren geklaut...
Der alte Dieb :)

Wenn ihr wüsstet, was der alles geklaut hat!

Speziell hier die Menora, den siebenarmigen Leuchter, den Jawhes am Berg Sinai aus 30kg purem Gold gefertigt hat... - genatzt

Was hat Gott noch so im Laufe seiner Geschichte geklaut?

Alle günstigen Ersatzteile für Fiat Coupés, mein Geld vom Konto... und zwar so, dass ich immer, wenn ich wieder Geld drauf packe ich automatisch im Dispo bin, er klaute mir die mein Handy vor 4 Jahren aus der S7 als ich damit Snake spielte und rannte raus, als sich die Türen schlossen, er war mit Sicherheit dafür verantwortlich, dass mir meine Antriebswelle am Auto gebrochen ist und dass ich in Accounting letzte Woche nicht bestanden habe... Das kann ich zwar nicht beweisen, aber jedesmal wenn ich ihn sehe dann grinst der mich so an als ob er wieder was ausgeheckt hat... Naja... wir necken uns immer gegenseitig...

Im Gegenzug verpeste ich seine Umwelt indem ich mein Auto immer extra lange laufen lasse, oft Pfurze, so oft wie möglich Rülpse, beim Kacken das Fenster aufmache, den Katalysator in meinem Auto nicht erneuere, den Müll absichtlich nicht trenne, oft einfach nur in die Büsche der Nachbarn uriniere und wenn er nicht hinguckt auch mal auf dem Rasen parke...

Haha... Da regt der sich immer am Meisten auf!
Genug von Gott.. dem wird schon genug Aufmerksam zuteil! Schluss mit Lustig!!

jetzt muss ich erstmal noch nen Vortrag feritg machen der nachher dann in Business Topics um 15:30 gehalten werden will ;)

Danach dann endlich Schluss und Frei bis Mittwoch, wenn es wieder heißt - Klausur ich komme und verkacke :D

After you're done reading "Growth At Any Cost," check out the rest of their site, which is filled with some good articles.

On a related note, I will be writing a series of essays on the illegal immigration issue for their site in the near future. Stay tuned for details.

After discussing with you a variety of political and economic subjects, I decided today that I should follow the example of George Bush,  John McCain and a host of commentators in admitting that I am not an economist.

However, seeing as economics is perhaps the biggest factor in geo-politics and a major issue in the American elections this year, I decided that I (and everyone else) needed a crash course in the subject--especially because lately the debate has been dominated by the candidates, journalists and political strategists, all of which spin the numbers and none of which are actually qualified to honestly interpret them.

And so, I turned to an independent source that I trust to give me a layout of some basics which I will now share with you. Randy Clayton, CFP, is the founder and a principal of Clayton Financial Services, Inc., a financial planning and investment advisory firm formed in 1984. He is also coincidentally my father.

"First a recession (official definition), is back to back quarters of negative GDP (gross domestic product). GDP is essentially the some total of all the things we produce. If we (the US) produced less this quarter than we did the previous quarter, then we would have a decrease. Since it is a trailing number (meaning we would have to go two quarters of less production to be "called a recession), I truly don't know (and no one knows) if we are in a recession. The first two quarters of 2008 have been positive growth (although less than 1% growth). It would be correct (and safe) to say that we are in a period of slower economic growth. But, to put it all in perspective, last year the US and the EU both produced about $ 14 trillion of goods. Some statistics show the US, some the EU as larger, but both amounts are very close. In comparison, China produced 3 trillion (about 22% of that the US or EU produced), and Russia produced 1.3 trillion (less than 1 tenth of EU or US). So both China and Russia are growing faster than the US or EU, but they are a long, long way away from being equals economically. If US or EU grew production by .13 trillion (130 billion) this year, then we would say that thier economies grew less than 1% (stagnate growth). If Russia's economy also grew buy .13 trillion (130 billion) then it would be "tremendous" growth. But actually both economies grew by the same amount.
Statistics always need to be examined and understood, because all countries and political parties use them to make a point. Let me give you another example.
We (the US government) planned to spend 2 trillion more on social programs this year. After Congress got through with it, we only spent 1.8 trillion more. Is this a cut in a government program, or simply a reduction in the increase? You can "spin it" anyway you'd like."

Source: Eurostat

I would like for everyone to check out fairtax.org for more information about the FairTax system. I will be posting several entries about the FairTax proposal, but here are a few unique facts to think about. Once you digest the following facts, take a look at fairtax.org or read The FairTax Book by Neal Boortz and John Linder. This book is an easy read and will explain the FairTax system and the arguments against it!

Did you know that Congress had to pass an amendment to the Constitution to install an income tax? February 12, 1913 marks the day the Sixteenth Amendment was ratified and making it "constitutional" to tax our income!

Did you know that it costs America $265 billion a year to prepare and file tax returns and 6 billion hours to do it?

Did you know it took us 113 days of work to pay for our tax burden? This is longer than any other thing we pay for: (we work 108 days to pay for food, clothing, and housing combined)

I bet you didn't know that 32.58% of all tax returns paid no tax?

Business decisions made to reduce tax burden versus increase revenue results in an 18% loss to GDP.

There are many more staggering statistics out there about our current tax system. The FairTax is the answer to our economy, our country, and our lives. Look into it and let your congresspeople know you are for this kind of change.

We're not in a recession. That's what top economists are saying right now. And technically, they're right; a recession is defined as two consecutive quarters of negative growth. Our Gross Domestic Product (GDP) increased by 1% for the first quarter of 2008 [1], so we're not in a recession. Never mind falling home prices or the mortgage debacle that has sunk Bear Stearns and IndyMac. Try to forget that oil prices hovering around $140 dollars a barrel are crippling family budgets not only at the gas pump, but through rising food and commodity prices linked to increased energy and transportation costs. Don't even mention the rumblings of a credit-card crunch coming in the next few years.

I want you to pretend that average family wages haven't flatlined since 2000 [2] and that our unemployment rate isn't 5.5%, up 1% from early 2007 [3]. None of these things mean we're in a recession. Focus on the GDP. Our economy is growing, damn it. President Bush today called our current economic blight "a time of uncertainty" and "a tough time" [4]. In a testimony on Capitol Hill this morning, FED chairman Ben Bernanke referred to our economic outlook as "skewed to the downside," but didn't use any characterization that suggested recession [4].� As long as the bottom line--our GDP--grows, economists seem to be okay with the financial markets. This is just a passing hiccup. "Slowdown." "Downturn." "Hard times." Pundits right now are playing a game called "Find-a-synonym-for-recession-that-is-technically-accurate-but-not-lying-to-the-public."

My problem with this whole "not a recession" business goes beyond the current economic tumult. It begins with the disconnect between the financial pain ordinary Americans feel and ends up with our pathologic obsession with "economic growth," i.e. a rising GDP. Too many investors, economists, and politicians are willing to throw anyone and anything under the proverbial bus to keep our GDP soaring, even if doing so hurts consumers, the environment, or the entire nation. What is the GDP? Well, crudely speaking it is the measure of all goods and services produced during the fiscal year. Gross Domestic Product includes the corn we ship to Africa, the revenue from Delta Sonic car washes, General Motors' social security payments and the salaries of American Airlines employees. Because the measure of GDP is so broad, many economists and politicians believe that GDP is a fairly accurate gauge of a nation's economic strength or weakness.� However, the sheer breath of GDP also tends to obscure some disturbing details.

While overall GDP may be increasing it's critically important to look and what is growing and why. For one thing, salaries are included in the GDP. As noted earlier, the average family income has been stagnant since 2000 (actually decreasing by 1% [2]), yet the income of the highest wage earners is skyrocketing. According to IRS data in 2005 (the most recent statistics available), the average income of top 1% earners rose 14% from the previous year, while those in the bottom 90% (everyone but the top decile) fell 0.6% [5]. The average income increase to those in the top 1% was $139,000. If the wages of a majority of Americans are staying flat but the top earners are seeing ballooning salaries, this will have a net positive effect on our GDP, all other factors notwithstanding (this is obviously an oversimplification, as you get into issues like which demographic invests more, purchases more, saves more, etc.).

Another issue to consider is whether or not the purchases which drive growth are beneficial to society. Pharmaceuticals and surgeries are included in the GDP. Divorce attorney fees are in there too. Day care fees? You bet. It goes without saying that Starbucks coffee and Burger King sales are packaged in that big, broad, Gross Domestic Product. Let's look at a small section of that list: Eating out. This includes McDonald's, Applebee's, coffee shops, gas station snacks, etc. Food at restaurants costs more than food purchased at a grocery store or local market, contains more calories, and comes in larger portions (see the excellent book Mindless Eating by Cornell professor Brian Wansink). Generally speaking, people who eat out more contribute more to the GDP than people who are the same in all other regards except consuming less. Also generally speaking, people who eat out more often are more likely to become obese, diabetic, or suffer heart disease than people with identical habits that consume less from restaurants and fast food chains.

Heart disease is both the number one killer in America and a booming industry. The United States spent $289 billion on pharmaceuticals in 2006, which was close to half of worldwide drug revenues [6]. Think Plavix. Crestor. Lipitor. Vytorin. Ask your doctor about the purple pill today!� So as we are consuming higher amounts of less nutritious food, we are pumping money into the food industry and by extension, the GDP. When a majority of us fail to exercise, our bodies fall apart and we get angioplasties and boxes of pills, which also heftily boost the GDP.� Running down the street in the evenings and cooking your own food doesn't do a hell of a lot to boost economic growth. At this current juncture it appears our economic growth is helped more by irresponsible health behaviors than healthy ones.

Outside of the realm of health, other societal breakdowns fuel economic growth, too. I mentioned divorce lawyers count towards the GDP. While a marriage license is cheap, divorce litigation often runs into millions of dollars. What is the more lucrative engine for growth, fidelity or huge cash settlements? And single parents have difficulty raising children by themselves, so along with households where both parents are overworked, this is becoming the Age of Daycare, which of course pumps money into The Economy. Let's get away from societal ills and health.

What about good old fashioned consumer spending like shiny new TVs and cellphones? In an age where the average home has multiple television sets and more electronics than anyone can count, how do you get the consumer to buy more? New models! Better features! Bigger sizes! Why be content with your old 19 inch TV when you could have a 25 inch plasma screen? Who wants to be stuck with a boring cell phone when you can have one that surfs the internet, takes pictures and does your taxes (model coming 2009)? Is excessive consumption in general good for individuals or society? While advertising, consumerism, and materialism have always been a component of American life, it seems we are now bombarded with advertisements and entertainment suggesting that we should never be content with our current possessions. After all, if you stop buying �stuff,' you hurt The Economy.

None of this essay has even touched on the environmental considerations of rampant consumption in pursuit of a higher GDP. Our nation currently uses 20,687,000 barrels of oil a DAY [7]. And yet we are so desperate for more oil Congress is seriously debating opening up the last swathes of untouched land and water for petroleum drilling in ANWR and the US coastal shelf.� We have already gutted Appalachia and the Mid-West through strip mining and continue to excessively log the Pacific Northwest. Any arable land in between is used for agriculture to feed growing populations which eat more and more than they used to. These things too, are a boon to the GDP.

Growth cannot be infinite. Demand for some products will wane. Personal resources and credit can only be extended so far. Oil, minerals, wood, and clean air are finite resources. Make no mistake, I am not some Luddite or anti-capitalist fanatic, but merely a concerned citizen who thinks our country needs to find a balance between consumption and conservation. We need to stop sacrificing our health, our personal wallets, our society, and our environment just for the sake of growth. GDP. The Economy. Despite clever framing and posturing by pundits and economists, the uncertainty and financial hardship felt across the country is real and painful. Using economic terms to sugar coat problems doesn't help our financial system. Glossing over unemployment, wage disparity, excessive consumption, burdensome debt, mindless consumerism, and exploitation of natural resources doesn't make a sick economy healthy, but is rather the equivalent of not going to the doctor because you fear bad news. Avoiding a diagnosis only lets the disease fester and get worse. How long will it be before this country wakes up and realizes the prescription for these recurring credit crunches is spending less, consuming less, and living simply?
For more detailed and eloquent meditations on this topic, I recommend two articles in Harper's Magazine: "Fear of Fallowing, the spectre of a no growth world" (March 2008, http://harpers.org/archive/2008/03/0081958) and "Our Phony Economy," (June 2008, http://harpers.org/archive/2008/06/0082042)
----
References[1] http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

[2] http://www.njfac.org/Wage%20report.htm
[3] http://www.bls.gov/news.release/pdf/empsit.pdf
[4] http://www.nytimes.com/2008/07/16/business/16fed.html?_r=1&partner=rssnyt&emc=rss&oref=slogin
[5] http://www.nytimes.com/2007/03/29/business/29tax.html
[6] http://en.wikipedia.org/wiki/Pharmaceutical_companies#Industry_revenues
[7] http://www.eia.doe.gov/basics/quickoil.html

Per capita: is a Latin phrase meaning for each head. It is usually used in the field of statistics to indicate the average per person for any given concern, such as income.

GDP: GDP is defined as the total market value of all final goods and services produced within the country in a given period of time

Today the whole class is going to make a map of the world identifying countries by per capita wealth.

To work that out we take the value of all final goods and services produced within a nation in a given year divided by the average population for the same year. This will give us the GPD per capita.

Task

Break up into groups, each group concentrates on nations within a given continent. Eg Asia.

Using the “Country Comparison > GDP - per capita (PPP)” list find countries in continent and by its colour that country according to its wealth. Use the colour code in the table below. 

For this exercise you will need a world atlas.

Source: Eurostat

To understand just what’s happening on the global-investing stage - including the steady deterioration of U.S. influence in worldwide markets - several factors are crucial to understand:

China is on the edge of an economic transformation known as "global decoupling," in which the U.S. economy is slowly being excised from its role as a global leader and economic trendsetter. This trend, which will continue for decades to come, means that the U.S. market will no longer be essential for global growth.
As is true of any nascent investment opportunity, the "early in" investors will reap the biggest rewards.
According to the McKinsey Global Institute, from 2005 to 2010 alone worldwide financial wealth will soar from $118 trillion to more than $200 trillion - with the newly capitalist markets of Asia and Europe accounting for the biggest portions of that increase.

Right now, the U.S. economy and that of Asia each account for about 28% of the global economy. But over the next 25 years, the United States will see its share of the global economic pie slip from the current 28% down to 24%.

At the same time, however, Asia’s share will almost double - to 55% of the worldwide economy. And as its size grows, so will its political and financial influence.

But make no mistake: China does pose an investment risk. In the past year alone, China’s markets have been several times been hit by double-digit corrections. The volatility will certainly continue. But faster-than-average growth will continue - in both the short-term and for the long haul, experts say.

By far the biggest investment risk is concentrated in China’s mainland stock markets. And even the shares of China-based companies listed on the venerable New York Stock Exchange aren’t entirely safe.

So how can you balance risk versus return?  By selecting global stocks that are riding the biggest consumer wave in history.  

China’s middle class is 100 million strong and is expected to double in size by 2010.  Back in the halcyon 1980s, the United States had its "yuppies." And the China of today now has its "chuppies," - Chinese consumers who are well educated, who have good jobs - and who have cash that’s burning a hole in their collective pockets.

Indeed, consumer spending is projected to reach $2.3 trillion this year [compare that to the much-larger U.S. economy, which is $13 trillion in size - with as much as $9.1 trillion accounted for by consumer spending]. Nike athletic shoes, thick steaks, jewelry, iPods and iPhones, GPS devices for cars, and all sorts of gadgets are flying off store shelves. Retail sales in China rose by 18% in October, and will rise by an average of 16% for all of 2007. It’s the most explosive market in history and companies from every nation are racing to cash in.

The key to profiting from China, while also managing risk is to pick the foreign companies best positioned to capitalize on these trends. Among them:

Nokia Corp. (NOK), since 82% of China’s urban dwellers use wireless phones.
Daimler AG (DAI) maker of Mercedes Benz cars and sport-utility vehicles, and Tiffany & Co. (TIF), since China will soon be the No. 1 market for luxury goods in the world.
Yum! Brands Inc. (YUM) and McDonald’s Corp. (MCD), since China’s consumers have developed a real penchant for American fast food.

PepsiCo. Inc. (PEP) and The Coca-Cola Co. (KO), because China’s consumer have become quite brand-conscious and want only the best.
Notice any commonalities?  These firms meet our key criteria of profiting "from" China without having to be based "in" China. They offer the built-in safety of globally diversified operations, while also having an extensive - and potentially profitable - exposure to China’s burgeoning consumer market.

If you are more of a mutual-fund fan, there’s one fund that is especially worth your consideration: The U.S. Global Investors Inc. (GROW) China Region Opportunity Fund (USCOX).

Put some holiday cheer - and some profits - in your investment portfolio by buying into some companies that are poised to profit from these trends.

Source: Eurostat

(source: http://solitaireinternational.wordpress.com/2007/05/)

Why do countries with lots of natural resources tend to do worse than countries with less resource wealth, both in terms of economic growth and in political, social and human rights terms? We see that countries which own lots of natural resources such as diamonds, oil or other valuables that are found in the ground, are often relatively poor, badly governed, violent and suffering from gross violations of human rights.

This figure shows the correlation between resource exports as a share of GDP for a number of countries and their GDP growth:

(source: http://www.svt.ntnu.no/iso/resourcecurse/default.htm)

Causes of the resource curse:

There are many possible causes of this curse (also called "the paradox of plenty"):

1. Lack of economic diversification:

Other economic sectors tend to get neglected by the government because there is a guaranteed income from the natural resources. These sectors therefore cannot develop and cannot become an alternative when the resources are taking hits. The fluctuations of the international prices of the resources can cause extreme highs and lows in national economic growth. This is bad in itself, but also makes it difficult for the government to do long term planning, since the level of revenues cannot be predicted. Dependence on one economic sector means vulnerability.

Another disadvantage of concentrating the economy on one resource sector, is that these sector often provide few jobs, especially for local people. The oil industry for example needs highly specialized workers, who are mostly foreigners. On top of that, these sectors do not require many forward or backward connections in the economy (such as suppliers, local customers, refiners etc.), which again doesn't help the local job creation.

Even if the government tries to diversify the economy, it may fail to do so because the resource sector is more profitable for local individual economic agents.

Resource dependent countries also see their best talents going to the resource industry which pays better wages than the rest of the economy or the government sector. As a result, the latter are unable to perform adequately. See point 4 below.

2. Corruption:

Corruption tends to flourish when governments own almost the entire economy and have their hands on the natural resources. More on corruption in a future post.

3. Social division:

Abundance of natural resources can produce or prolong violent conflicts within societies as different groups try to control (parts of) the resources. Separatist groups may emerge, trying to control the part of the territory most rich in resources. This is often aggrevated by existing social or cultural division. Division may also appear between parts of the government (e.g. local government vs central government, or between different parts of the central administration).

The resources therefore may cause divisions and conflict, and thereby cause deficiencies in government, economic turmoil, and social unrest. But the resources may also prolong conflicts because groups which manage to take control of (parts of) the resources may use these to arm themselves or otherwise gain influence and power.

4. Government's unaccoutability and inefficiency:

Countries which do not depend on natural resources are often more efficient in taxing their citizens, because they do not have funds which are quasi-automatically generated by resources. As a result, they are forced to develop the government machinery in an efficient way, hence a reduced risk of government break-down. The citizens in return, as they are taxed, will demand accountability, efficient spending etc.

Conversely, the political leaders in resource-dependent countries don't have to care about their citizens. They create support by allocating money, generated by the resources, to favored interest parties, and thereby increasing the level of corruption. And