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American Debt: How Did It Come To This?

American Debt: How Did It Come To This?

The American debt, namely the total amount of money the federal government owes (including the deficit and the interest on borrowed money) is of circa $13 trillion this year, and is increasing at a fast rate. Out of this huge sum of money, some $8 trillion is owed to bond mutual funds and foreign governments, that is, to those that bought US governmental bonds, and the rest of $5 trillion to government trust funds such as Medicare and social security. But despite the fact the US owe a staggering half of trillion dollars to Japan and another half to the United Kingdom and China, most part of the national debt, namely 78%, is owed to domestic businesses and government entities. Has a whole nation deceived itself? Well, some lost big and some won big, but in the end everyone lost. Paradoxically, this is the truth.

Citizens have been encouraged to live on credit for decades, but that was fine as far as people could finally settle their debt; and they had to, if they wanted to borrow again as they were used to. But this habit became catastrophic with the real estate bubble. In less than a decade (1997-2006), the price of an average house had increased by 124%. Encouraged by these developments, a lot of owners refinanced their houses at lower interest rates, taking out a second mortgage based on the price increase. What they did with the money so easily earned? That’s simple: they spent it; only between 2001 and 2005 the refinancing money spent had doubled. But they have never thought that house prices could go down, credits could be impossible to obtain and mortgages to pay off and, therefore, that their properties would eventually be foreclosed by banks. But that’s exactly what happened.

And this was still only the tip of the iceberg. These prime borrowers had at least something to lose in favor of the crediting banks. But with the sub-prime credits granted to people that presented high risk of default (2004-2006), the banks remained completely exposed. And, as expected, they lost, and lost big. Besides, the bubble was over and house prices went down. Few could afford to buy them even so. So, at best, banks remained with a lot of houses they couldn’t sell. The question is how was such substantial crediting without the right securities possible in the first place? If the borrowers, just normal citizens, without sophisticated financial knowledge were unconsciously getting more and more indebted, what happened with the lenders – major banks – expert in financial intricacies? Why should they doom themselves to bankruptcy, lending unconsciously, at random?

Well, believe or not, exactly the government and the banks encouraged, if not generated the indebtedness, by financial deregulation, changed laws, poor financial enforcement, off-balance financing and elaborate financial creations such as derivatives, CDOs, CDSs, MBSs and other such. When regulators themselves come with tricks for circumventing the laws, there is no surprise that not only the common citizen loses but also those that weakened the laws. In these conditions, the $700 billion amount used by the government to rescue the banks that caused this havoc in the first place does nothing but confirms the self-deception scenario. In this way, all have become deeply indebted: citizens, the banks and the federal government. The paradox has been unraveled.

Possible solutions would be less government and consumer spending, more production and, of course, investment in reliable assets (definitely not houses), which warrant gains. So, if you still have money, buy gold!…

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Owning Physical Gold – The Ultimate Safe Haven

Owning Physical Gold – The Ultimate Safe Haven

Paper currencies have come and gone throughout history, only gold has maintained its place on the market and has always been on top. At the same time, gold is the oldest form of money and people have used it in trades, businesses and so on since its special qualities have been discovered. As other currencies, the yellow metal has faced some ups and down, however in comparison with paper currency gold has increased intensively when the inflation took off in the 1970s.

With stock markets at record lows, banks closing and government bailouts on the rise due to the critical times we live in today`s world, people started looking for viable forms of investment. Gold proved to be as both viable and durable investment on the present market. While there are many forms of investment such as shares, virtual metal and so on, buying gold in physical bars or coins is not only safe haven, more, with a wise decision.

The reasons why to own physical gold are numerous, starting with the fact that the yellow metal holds its value for a long time, it`s price generally increases at a greater rate over the long term, while paper money or other types of investment usually don`t. In the last decade, gold has reached a high price for over 1,200 pounds and it will probably stay as this for quite some time compared with the dollar that has brought the world terrible financial crisis.

Another strong reason for which you should consider buying gold is that by owning and keeping it in physical form in your possession, you will still be able to purchase consumables with it in case your economies were to disappear overnight. The precious metal will remain strong in times of recession and as a proof in the past couple of years successful businessmen but also, ordinary citizens, have chosen this form of investment.

Owning physical gold means you have to safely store it in your home, or if you buy a substantial amount is better to keep it in a safe vault in a bank or private gold dealers. As a conclusion, the precious metal is seen as a safe haven because its price tends to rise when equities are falling and as a result your gold holdings should increase in value. Experts affirmed that those who bought gold in 2009 can reach a profit up to 30 percent if they sell it this year. So not only it preserves the wealth but it can also bring you a lot of profit.…

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Five Tips For Buying a Rural Property

Five Tips For Buying a Rural Property

If you have decided to buy an investment property in the country then there are a few things you need to be aware of. It is important you understand that life in a rural area is a lot different from suburban or city life, and that although it may look peaceful and quiet, life in the country can be busier than you may expect.

Agricultural industry

When buying a property you need to be aware that agriculture can be a noisy and smelly industry. If you think you will be buying a property away from noise and pollution just because you are in the country then you would be wrong. People working in agriculture use machinery, such as tractors, harvesters and stock trucks, so expect traffic noises. Animals, such as sheep, cattle and chickens, can be quite noisy when there are a lot of them, so look at what type of farm is next door to the property you are interested in. If the sound of roosters crowing at dawn is going to drive you crazy then you might not want to live next door to a chicken farm.

Action

Know what action you can take to improve your property. If you have fallen in love with a property but are turned off by what is over the neighbours fence, then think about what you can do it improve your property. To minimise noise, dust or block out an unsightly neighbouring shed, for example, you can plant windbreaks. A farmer is not usually required to minimise impacts from their agricultural enterprise so be prepared to have paddocks next door turned from lush green grass to a ploughed area, for bushland to be felled for more pasture or for windbreaks to be planted that block your view.

Rural roads

Sharing the road in a rural area is different to sharing a road in the suburbs or city. It is common for stock to be moved along the side of a road, or even across it, and it is your responsibility to give way to livestock. Slow down and be prepared to have to wait. Road surfaces can vary in the country too, with unsealed roads being common. Roads are not always in great condition either, even bitumen roads. There are certainly no street lights either, so be careful driving at night and use your high beams.

Pests

As a rural property owner you are responsible for managing pests on your property, which includes both feral animals and weeds. Rabbits destroy crops and spread disease, and foxes kill many lambs and even newborn calves. Weeds are a major problem and noxious weeds in particular need to be removed.

Services

When buying a property keep in mind that you won’t necessarily have access to services, such as gas, electricity or even a road. Properties a long way out from town often don’t receive a postal service, and a school bus may not go past your front gate either. You are likely to have a septic tank instead of being connected to the sewerage system, and you won’t be connected to town water either and will need rain water tanks for drinking and washing.…

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Business Gifts and Who to Give Them to

Business Gifts and Who to Give Them to

Every year companies debate whether or not invest in business gifts and if they do, who they should give them to. Budget plays a large part in the decision making process but it is not the only important consideration. Matching the gift and perceived value to each recipient is extremely difficult even if you know your clients well, let alone if you don’t. The value of the investment made in the gift and the potential return is also something that maybe people don’t like to think about but nevertheless is equally as important.

We give gifts to our family and friends for special occasions and over holiday periods because it is customary for us to do so and we enjoy giving. To some extent it is expected of us because of the commercial hype that has developed over so many years. However, our business associates do not expect us to give them gifts and are usually pleasantly surprised if we do. A big problem arises if we have a huge number of business contacts because not very many companies can afford to give to them all. If they know each other, the problem is magnified because people who don’t receive gifts will be envious of those that do and offended because they didn’t receive one.

As John Lennon once said “there are no problems, only solutions” and this is certainly true of an experienced, professional business gifts supplier. You can make a list of names, placing the most important clients at the top of the list, work out the budget that you can allocate and then have a meeting with your supplier. In the armory of business gifts at his disposal he will be able to advise you on how many gifts he can supply for the money available and if he’s good he’ll be able to provide a gift for everybody. He will have access to personalized bags, clothing, caps, leather products; laser engraved metal pen sets, clocks, watches, backpacks, sports bags, crystal, USBs, umbrellas and so many more items.

You may also want to include some valued customers on your business gifts list together with members of your staff for outstanding achievements. However, tread carefully if you want to use them for new business because that can be a minefield of etiquette. If you are bidding on a contract, giving the decision maker a gift will be seen as a bribe. It would probably never cross your mind to bribe someone but no matter how good your intentions are – don’t do it.

Taking business gifts to a first meeting in China, Japan or Spain will make you very popular but it will be frowned upon in the United States and the UK so if you have international business interests some cultural education will benefit you if you are contemplating first contact business gifts.Every year companies debate whether or not invest in business gifts and if they do, who should they give them to? Budget plays a large part in the decision making process but it is not the only important consideration. Matching the gift and perceived value to each recipient is extremely difficult even if you know your clients well, let alone if you don’t. The value of the investment made in the gift and the potential return is also something that maybe people don’t like to think about but nevertheless is equally as important.…

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Personal Accident Insurance: The Advantages Of Having One

With Urbanization reaching new heights, road accidents have increased over the years. Roads have developed and extended to the remote parts of the country. People are quite able to afford their personal vehicle. This development also brings a major problem in the scene, road accidents.

Road accident victims are mostly rushed to the nearest hospital available; it can be private or government. In such situations, one should have all-covering accident plans. Accidental Insurance covers can help in financing all the hospital and medical costs during treatment.

These plans are available in abundance in the market, but you must look for the best. Let us discuss a few reasons as to why buying an Accident Insurance cover can do well for you.

Benefits of Accidental Insurance Plans

Sharing of Financial Burden:

A good Accidental Insurance cover can help you lessen the financial burdens by almost 70%. The insurance company will pay your hospital expenses such as medicines, disability covers, occupational compensation, etc. thus, and it will help you financially and mentally as well.

Affordability:

Personal Accidental Plans are affordable so that every section of society can have access to it. The Accident Plans’ premiums are set based on the financial situation of the beneficiary. The insurance policy is your savings as you will save your money during any undesirable emergency.

Cover for Accidental death:

In some cases of accidents, a person can even end up dead. A good Accidental Plan will provide you a 100% compensation in such a situation. Thus, you are getting the benefits of two things in the money of one. The insurance cover may also compensate for the funeral and repatriation cost.

Hassle-free claim:

If someone is involved in an accident, claiming his insurance is the first worry in his mind. Accidental Insurance Plans provide you with a hassle-free settlement process. There are no prior medical check-ups involved to claim the amount insured. What you need to keep in mind is that you are getting treatment in a hospital included in the company’s network.

Add-on benefits:

The Accidental Insurance Policy may provide some additional benefits other than hospital expenses. A good insurance plan may also fund the education of the dependent child and allow some daily cash benefits. In certain cases, a percentage of the insured sum is offered for the treatment of minor accidents, including fractures and burns.

What to keep in mind:

Before buying an Accidental Insurance cover, one must keep a few things in mind to gain maximum benefits. Make sure that the accident plans that you buy must cover previous injuries and self-inflicted injuries. There are options to opt for either a personal plan or a group plan, or a family plan depending upon needs. Thus, you must reach out to a consultant and discuss your needs.

People should understand the importance of an Accidental Insurance cover and opt for it as soon as possible. An early subscription has its benefits in the long term for the insurer.…

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Tell Tale Signs Of A Risky Investment

Tell Tale Signs Of A Risky Investment

When we invest, we want to make money. Its a simple concept but often that simple concept leads to us making some dire investment decisions that not only loses us money but can keep us from investing in the future. Investing, in the right hands can be very powerful and can allow your money to work hard for you. In the wrong hands however, it can be disastrous.

Its said that there are 2 emotions that drive all investment decisions – fear and greed. Fear is what makes us overly cautious while greed is what makes us insufficiently cautious. Expert investors are those who can control these 2 emotions. Can you? Well, we all think we can but when the moment presents itself we often succumb to the temptation of either making too much or risking too much.

the truth is that all investments carry risk. Along with risk comes reward and unless you risk you cannot be rewarded. the key is to take smart and calculated risks. The problem is that greed can easily set in cause horrible investment decisions. Risky investments usually have risk written all over it, but if you are a novice investor its really hard to tell. We’ve all see illegal investment scams catching out the elderly. Why? Because they are usually uneducated and vulnerable.

So, how can you tell is an investment is too risky? Usually if it sounds too good to be true then it is.

– Anything that guarantees your investment 100% is usually a scam.

– Anything where you can not see where your money is being invested is usually a scam.

– Anything that operates from so-called tax havens are usually a scam.

– If the company or investor that’s investing fro you does not have a reputable name that’s been in business for a while, then its probably a scam.

If you do want rapid growth on your money, stick to reputable investment houses and companies that are national. Not only will your investment be more secure but they will probably make much better investments than some private company that has no reputation.…