It seems that President Bush and Fed Chairman Bernanke are speaking everyday. No matter what they do or what they say the economy is still in the tank. We have a slowing economy, a economy in a Recession and at the same time expanding Inflation. Actually we have been in an inflationary economy for some time but they changed the way the measured this inflationary number to make it look good in the media.
Meanwhile the price of gas and food the core essentials for our cost has been going up and up for years now. Oil has hit $110/barrel, the EUR/USD is at a all time high of 157 and then Yen has dipped below 100.
Once again the Fed(a private bank) is trying everything they can to eliminate the
issue that they have caused. Since 1999 they have been missing the mark with interest rate changes and now it has all caught up to them and they know they have no
control of what is continually happening in the market. They have caused the problem and it is now affecting the entire world economy.
Our Banks are failing 'cause the way the FED has manipulated the dollar and now no country wants our dollar. Our country is in debt with only funny money at it's disposal. What will come of this. Well there will be an adjustment period. Sorry to say our economy will be hit hard. I believe that it has to be a grass roots effort for American to get out of this. We as citizens of this country need to get involved. We need to push our government to get rid of the Federal Reserve, Issue our own money, U.S. Treasury Note, instead of Federal Reserve Notes, got back to the Gold Standard and start paying back the debt and get rid of the IRS and our Unconstitutional Tax Code run our country like the Financial Power House it used to be.
We as people must stop spending money we do not have and start building wealth, and we must force our government officials to do the same. We really need good leadership in our country, and practice financially sound principles to build an economy and a nation that lives in a open society with true transparency, honesty
and integrity. THe greed and desception must end. THat is what has caused this problem and what will continue unless you elinimate the cause.
Friday, March 14, 2008
Wednesday, February 27, 2008
As the dollar falls what will happen to interest rates
As the US economy continues to slow we are seeing more weakening of the US dollar.
The dollar has fallen over 200 pips in the last day to over 1.50. This is clearly stating that people are selling the dollar at a lot faster pace than they are buying. Could it be the the foreign countries that have US dollars are now deciding to sell. The Iranian's are threatening to start selling oil in non US dollars, Consumer Confidence declined in February, with the index at 75.0, down from 87.3 in January and much was lower than market forecasts dropeped to 81.0. This is the lowest level since 2003.
If the US consumer is no longer spending money what will be driving our economy. The US people have been spending more than they earn for many years, the last year the saving rate in the US was a negative 1.5% meaning they are spending more than they earn. This with the way the US Government is in debt continues to weigh on the dollar.
Fed Chairman Bernanke will be speaking the next couple of days testifying on the Hill on the State of the Economy, which doesn't look good. It looks like they will continue to cut rates (over-night lending rates), but we are yet to see how that will effect the long term rates. Although the rates on the 30 years mortgage are dropping, the qualifications and the home prices make it more difficult to get these loans.
New home sales info will be out today and I am not sure were they will come in but I am thinking that they won't be good. So it still doesn't look as if we have hit the bottom. The problem is much deeper than what we are seeing. The selling of the CDO's to foreign banks is just adding to the problem in that it is effecting world wide banking.
The issues of the US economy doesn't look good. It just seems that there is more negative news to come. The way that the US people can help is to not follow what our government does and that is creating debt. Don't spend that which you do not have! It's time for American's to spend their money wisely, invest their money wisely and contiue to pay down their debt. It has to be a grass roots effort to change the financial situation in this country for good. If we don't start doing the right thing we can't expect our government to do the right thing.
Just in.... dispite the FED involvement in cutting rates interest rates just ticked higher.
The dollar has fallen over 200 pips in the last day to over 1.50. This is clearly stating that people are selling the dollar at a lot faster pace than they are buying. Could it be the the foreign countries that have US dollars are now deciding to sell. The Iranian's are threatening to start selling oil in non US dollars, Consumer Confidence declined in February, with the index at 75.0, down from 87.3 in January and much was lower than market forecasts dropeped to 81.0. This is the lowest level since 2003.
If the US consumer is no longer spending money what will be driving our economy. The US people have been spending more than they earn for many years, the last year the saving rate in the US was a negative 1.5% meaning they are spending more than they earn. This with the way the US Government is in debt continues to weigh on the dollar.
Fed Chairman Bernanke will be speaking the next couple of days testifying on the Hill on the State of the Economy, which doesn't look good. It looks like they will continue to cut rates (over-night lending rates), but we are yet to see how that will effect the long term rates. Although the rates on the 30 years mortgage are dropping, the qualifications and the home prices make it more difficult to get these loans.
New home sales info will be out today and I am not sure were they will come in but I am thinking that they won't be good. So it still doesn't look as if we have hit the bottom. The problem is much deeper than what we are seeing. The selling of the CDO's to foreign banks is just adding to the problem in that it is effecting world wide banking.
The issues of the US economy doesn't look good. It just seems that there is more negative news to come. The way that the US people can help is to not follow what our government does and that is creating debt. Don't spend that which you do not have! It's time for American's to spend their money wisely, invest their money wisely and contiue to pay down their debt. It has to be a grass roots effort to change the financial situation in this country for good. If we don't start doing the right thing we can't expect our government to do the right thing.
Just in.... dispite the FED involvement in cutting rates interest rates just ticked higher.
Friday, February 22, 2008
Your Mortgage and How it Prevents You from becoming Debt Free
In continuning the theme of working on understanding how paying large amounts of interest will keep you in debt and prevent you from creating networth and financial freedom in your life let's look at why eliminating your mortgage is the one most important area you will need to concentrate. Many people do not know but the word Mortgage is actually a concatenation of two French words: the word Mort which means "death", and the word Gage which means "pledge". So in effect, a mortgage is a "death-pledge". When you get your 30 years mortgage you are basically making a pledge of death in paying it off.
The banks will generally structure a home loan for 30 year term. This allows them to maximise the interest payments they will receive from you. You will actually pay 50%of the interest in the first 7 to 8 years and only pay one half the principle (the amount you borrowed) in the first 21 years. Typically you are paying
1 and 1/2 the amount you borrowed in interest alone. So if you had an average loan of let's say $200,000 at 6% you would pay a total of $431,677 back to the bank, meaning you would pay $231,677 in interest. That's money you will never see again.
On this same loan you will pay $111,263 in interest the first 10 years.
Many people have given up on ever gettting rid of their mortgages and their debt. They just expect to have it for their entire lifetime. If one is to move every 7 years (the national average) to a new home they will repeat the same of paying 50% of the interest on the money they borrow over and over again. And although the property values would increase over time paying interest to the bank is like throwing money out the window. Realize the banks are in business to make money, NOT to be your friend, although you can have good relationships with the people at your bank, these people do not own the bank, the people who own the bank are in business to make money, lots of money.
Finding waying to cancel interest on your primary mortgage is probably the quickest and most efficient way of eliminating debt and getting on your way to increasing your networth. It just makes sense to not pay all that interest and start using your money in ways that will benefit you and your family and eliminate debt and increase your networth.
The banks will generally structure a home loan for 30 year term. This allows them to maximise the interest payments they will receive from you. You will actually pay 50%of the interest in the first 7 to 8 years and only pay one half the principle (the amount you borrowed) in the first 21 years. Typically you are paying
1 and 1/2 the amount you borrowed in interest alone. So if you had an average loan of let's say $200,000 at 6% you would pay a total of $431,677 back to the bank, meaning you would pay $231,677 in interest. That's money you will never see again.
On this same loan you will pay $111,263 in interest the first 10 years.
Many people have given up on ever gettting rid of their mortgages and their debt. They just expect to have it for their entire lifetime. If one is to move every 7 years (the national average) to a new home they will repeat the same of paying 50% of the interest on the money they borrow over and over again. And although the property values would increase over time paying interest to the bank is like throwing money out the window. Realize the banks are in business to make money, NOT to be your friend, although you can have good relationships with the people at your bank, these people do not own the bank, the people who own the bank are in business to make money, lots of money.
Finding waying to cancel interest on your primary mortgage is probably the quickest and most efficient way of eliminating debt and getting on your way to increasing your networth. It just makes sense to not pay all that interest and start using your money in ways that will benefit you and your family and eliminate debt and increase your networth.
Tuesday, February 12, 2008
Are you Paying to Much Interest
Of course one of the major deterrents to financial freedom is the amount of interest that you will pay to the bank. Banks loan people money and make their money on the interest they charge. They entice us with these low introductory rates which enables us to go out and charge things that we do not really need. We do this for the instant gratification to help us feel better and because we have been programmed to spend. Where this effects our networth is that we do NOT realize what this purchase will cost us over time, What is the time value of money?
As an example, if you were to charge something on credit you will not only pay for that purchase but you will also pay interest on that amount that you charged. In turn you are paying almost twice as must of your original purchase. So you get this low introductory offer, go out and find sometime on sale and you think, "Wow I get a great deal". Now your intention is to pay it off as soon as possible but what happens, you get busy, money gets tight and you just keep paying the minimum payment.
If you were to go out and buy a big screen TV and let's say you spend $2500. Of course they are going to give you a six month 0% interest card to entice you even more, So you purchase the TV with your new credit card, the rate adjust and you end up paying $4148 over time because of the interest you will pay over time. And unless you come up with the money sooner to pay off this debt you will pay for this purchase over the next 13 years. (This calcuation was done at an adjusted interest rate of 15%).
So as you can see you would still be paying for this televison long after you have thrown it away. You see, you are not only throwning the TV away but you are also throwing your money away. Learn the time value of money and how compounded interest can work for you or against you. If you continue to pay high interest charges and don't budget your money or learn good credit verses bad credit it will be a challenge to grow your networth and become financialy free.
As an example, if you were to charge something on credit you will not only pay for that purchase but you will also pay interest on that amount that you charged. In turn you are paying almost twice as must of your original purchase. So you get this low introductory offer, go out and find sometime on sale and you think, "Wow I get a great deal". Now your intention is to pay it off as soon as possible but what happens, you get busy, money gets tight and you just keep paying the minimum payment.
If you were to go out and buy a big screen TV and let's say you spend $2500. Of course they are going to give you a six month 0% interest card to entice you even more, So you purchase the TV with your new credit card, the rate adjust and you end up paying $4148 over time because of the interest you will pay over time. And unless you come up with the money sooner to pay off this debt you will pay for this purchase over the next 13 years. (This calcuation was done at an adjusted interest rate of 15%).
So as you can see you would still be paying for this televison long after you have thrown it away. You see, you are not only throwning the TV away but you are also throwing your money away. Learn the time value of money and how compounded interest can work for you or against you. If you continue to pay high interest charges and don't budget your money or learn good credit verses bad credit it will be a challenge to grow your networth and become financialy free.
Wednesday, February 6, 2008
Is the Market at the Bottom
Well if one listens to the so called "experts" on CNBC on the topic of the economy situation some are saying that we are at the "bottom". Sometimes I wonder where they get their information. They just believe that things will just keep going up. Nothing ever just goes one way. The US economy is in big trouble the main reason being the way they spend money. They set the example for the American people by spending more than they bring in. And the bigger problem is the mis-spending and the money spent on their own interest.
You can even look at the amazing "Mr Greenspan", they glorify this guy as such a financial genius. But what was his motive for making money so cheap and flooding the market with so much money. The problems we face today are do to what Mr Greenspan did. You do NOT solve a debt problem by adding more debt to the equation.
Greenspan made money really easy to come by. But the money was a loan, a loan on your home. Borrow more money from the banks creating more debt. Bad debt! and then
they sold this bad debt, risky debt to banks all over the world. Sooner or later someone has to pay back the debt.
If you personally don't want to experience the ups and down that the market is currently experiencing stop creating debt and find ways to eliminate debt and grow your wealth.
You can even look at the amazing "Mr Greenspan", they glorify this guy as such a financial genius. But what was his motive for making money so cheap and flooding the market with so much money. The problems we face today are do to what Mr Greenspan did. You do NOT solve a debt problem by adding more debt to the equation.
Greenspan made money really easy to come by. But the money was a loan, a loan on your home. Borrow more money from the banks creating more debt. Bad debt! and then
they sold this bad debt, risky debt to banks all over the world. Sooner or later someone has to pay back the debt.
If you personally don't want to experience the ups and down that the market is currently experiencing stop creating debt and find ways to eliminate debt and grow your wealth.
Saturday, February 2, 2008
FED Lowering Interest Rates Should You Refinance
With all the recent news of recession, it still amazes me that less than six months ago, sometime in July, they were talking about how strong the economy was and they were still talking about raising rates. Rates were going up slightly and the refinancesand home sales were way down. Could they not see that things were slowing, are they not following the apparent signals that I have seen for so long.
Now they are finally seeing that the economy is in a downturn, they are lowering rates and finally seeing the writing on the wall. The economy is slowing, I could have told you that a year ago, knowing that the bad lending practices and easy money would eventually come back to hurt the economy. Now with continual slowing housing market they are trying to stimulate the economy by lowering rates. Will this work? Well we are yet to see.
Many people are still worried about their mortgages and resetting loans. So is it a good time to refinance? Could be. Yes rates are coming down but qualifications are tighter. Now if you have a loan that is about to reset because you got into an option arm some time ago and your payment is about to adjust it might be a good time to refinance. But make sure you know what your goals are in refinancing. The banks
or mortgage people are hungry for your business but make sure that you get all the fact. Make your loan officer show you the best options.
If you are in a good loan and just want to consolidate bills and free up alittle cash a Home Equity Line of Credit (HELOC) may work out better. There is a program offered by United First Financial that can show you how you can use a HELOC to consolidate bills to free up more money to eliminate debt. The program can show you how to use that extra money to become debt free in as little are 8 to 11 years.
Finding out the best option for you and your family will take a little research. Don't just follow the media and the rumors. Find out for yourself the best solutions that work for you. Get educated to empower yourself to financial freedom.
Now they are finally seeing that the economy is in a downturn, they are lowering rates and finally seeing the writing on the wall. The economy is slowing, I could have told you that a year ago, knowing that the bad lending practices and easy money would eventually come back to hurt the economy. Now with continual slowing housing market they are trying to stimulate the economy by lowering rates. Will this work? Well we are yet to see.
Many people are still worried about their mortgages and resetting loans. So is it a good time to refinance? Could be. Yes rates are coming down but qualifications are tighter. Now if you have a loan that is about to reset because you got into an option arm some time ago and your payment is about to adjust it might be a good time to refinance. But make sure you know what your goals are in refinancing. The banks
or mortgage people are hungry for your business but make sure that you get all the fact. Make your loan officer show you the best options.
If you are in a good loan and just want to consolidate bills and free up alittle cash a Home Equity Line of Credit (HELOC) may work out better. There is a program offered by United First Financial that can show you how you can use a HELOC to consolidate bills to free up more money to eliminate debt. The program can show you how to use that extra money to become debt free in as little are 8 to 11 years.
Finding out the best option for you and your family will take a little research. Don't just follow the media and the rumors. Find out for yourself the best solutions that work for you. Get educated to empower yourself to financial freedom.
Thursday, January 31, 2008
If You Carry Bad Debt You Will Never Suceed Financially
We all have debt but the question is it good debt or bad debt. Now good debt can work in your favor if you are leveraging properly and can use that money to create a better financial situation. But most people in the US are caring bad debt and this is something that most people don’t want to deal with and try to avoid dealing with the situation straight on. Many people get into debt for reasons beyond their control while others create bad debt through poor decisions or mis-managing their money.
Once one is in debt it can be a never ending process to get out of debt but there are ways. Consolidation ones ongoing debt through some type of debt consolidation loan can be a great way of freeing up more discretionary income, but this freed up cash must be used as leverage to pay down the debt. Personal lines of credit and home equity lines of credit (HELOC) are a great way to consolidate debt, free up cash flow and pay less interest over time.
Many people over the years have used their homes as an ATM or credit card and piled more and more debt into their primary mortgage. Using a HELOC to consolidate debt is similar to refinancing but the problem lies in the fact the 30 years mortgage that you are getting from the bank is a front ended interest loan, meaning you are paying most of the interest up front. If you use this type of loan to consolidate debt you will be paying more interest over time that using a simple interest loan such as a HELOC or a personal line of credit
Once one is in debt it can be a never ending process to get out of debt but there are ways. Consolidation ones ongoing debt through some type of debt consolidation loan can be a great way of freeing up more discretionary income, but this freed up cash must be used as leverage to pay down the debt. Personal lines of credit and home equity lines of credit (HELOC) are a great way to consolidate debt, free up cash flow and pay less interest over time.
Many people over the years have used their homes as an ATM or credit card and piled more and more debt into their primary mortgage. Using a HELOC to consolidate debt is similar to refinancing but the problem lies in the fact the 30 years mortgage that you are getting from the bank is a front ended interest loan, meaning you are paying most of the interest up front. If you use this type of loan to consolidate debt you will be paying more interest over time that using a simple interest loan such as a HELOC or a personal line of credit
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