One in seven Americans struggles to get enough to eat, the government reported ….

Source:
http://www.reuters.com/article/healthNews/idUSTRE5AF42220091116?rpc=64

Recent news articles have brought to light the fact that almost 47% of households in the US currently have zero or negative federal tax liability.

We take a closer look at this lack of liability across each income level, highlighting the percentage in each range that will not pay any taxes.

Source:
http://www.mint.com/blog/trends/who-is-paying-taxes/

International trade exists on the premise that every country cannot produce all that they require using their resources within a given cost bracket and/or quality requirements. International Trade is the exchange of goods and/or services between entities from two or more different countries. In economics, we attribute International Trade to Comparative advantage. Mankiw states ‘all countries can benefit from trading one another because trade allows each country to specialize in doing what it does best.’ This simply means that countries have an advantage over the others in producing a particular good or service which the others may not be able to produce at a given price point or quality requirements. This puts the competitive advantage in the hands of the former and allows the latter to procure goods and services from the countries which are more competent in producing that good or service, and allow for the buying country to employ its resources in production of other goods and services. International trade also includes transfer of resources of production, particularly capital, from one country to another. This, however, does not go to say that countries that do not trade internationally don’t produce all of the goods and services required by them.

Benefits of International Trade

International trade, at face value, has one basic benefit – allowing for purchase of goods and services at low prices. This puts more income in the hands of households as they can use their disposable incomes in purchasing cheaper goods and services. The country as a whole benefits as well as its resources can be applied in producing goods and services which it has a comparative advantage in producing and add a larger contribution to its GDP. The sellers of an exporting country get the advantage of increasing their prices in-line with the world prices, which would ideally be higher than the domestic prices if the exporting country has a competitive advantage in producing the commodity to be exported. This puts in more money into their pockets, hence increasing their profitability and their contribution to the GDP and tax revenues. Trade can also force prices to fall. If the domestic producers face competition from foreign countries which offer similar commodities at lower prices, they have to, normally, lower their prices in order to maintain competitiveness. This allows for households to purchase goods and services at lower prices, hence increasing their individual purchasing powers. This, however, only stands true if the commodities in concern are close substitutes or are almost identical. In cases where commodities being imported are of inferior quality, then they act like inferior goods and their sales increase once incomes fall. Exports also allows for countries to earn Foreign Exchange which not only helps them meet their international debt obligations, but also allows for an appreciation of their currency. Exports also allow for domestic producers to achieve higher economies of scale as they have the opportunity of producing more of a commodity, hence absorbing a larger amount of fixed cost at any given time while reducing their prices as lesser fixed costs are charged per unit. International trade also provides consumers with a wider variety of options to choose from for the same or similar product types as imports from other countries may be distinctly different in functionality and aesthetics from the domestic produce.

Losses from International Trade

International trade increases dependency of countries on other countries. Countries that import essential commodities from other nations become dependent on the exporting nations for the fulfilment of the need of their people of that commodity. This happens because the domestic producers are often de-motivated from producing imported commodities of identical attributes that are available at lower prices in the market. These producers move on to production of other commodities and reduce the domestic supply of these commodities. This also limits growth of industries in the importing country as incentives that a producer derives from operating in a particular industry may be minimized with the introduction of import substitutes, which may be of superior quality and utility. Often, countries import essential commodities that cannot be produced domestically or can only be produced in small quantities which do not meet the demand for them. For example, most countries around the world import oil from OPEC, Venezuela etc. as their domestic supplies don’t match up to their domestic produce. This makes them dependent on these oil exporting countries for a commodity as basic as oil. If these countries stop exporting oil, most of the world would come to a standstill in a matter of weeks as the worldwide demand can only be met by their supply. On the flip side, if producers of a country find comparative advantage in international trade of a particular commodity, they start focussing on exports of that particular commodity and can sometimes manage to have an upper hand over some country, which they may use to their benefit. Another aspect of this is that producers, who focus on exports, increase the domestic prices in line with the world prices, which essentially reduces the purchasing power of consumers as they have to shell out more cash for the purchase of the commodity in concern. The fact is that very high dependence on foreign imports can often lead the trading countries to become susceptible to the economic, social and political environmental variables of their counterparts.

India’s Case

Pre-liberalized India (Independence to 1991) had a whole lot of trade barriers, particularly pertaining to imports. The government followed an import substitution policy in order to help develop local industries, most of which remained stuck in their infant stage for a large part of this period. During this period, India only managed to attain a, what was then known as, the “Hindu Growth Rate”, i.e. 2-3% growth in GDP every year. The problem here was that the country was still developing and such a growth rate was unacceptable, given the resources the country had. And with the growing population of the country, serious action was required to ensure survival. The tipping point, perhaps, was a point in time during the early 1990’s when the country only had enough foreign exchange to purchase a few more days of oil – an essential commodity for survival. When India turned to international lending institutions, they were clear on their approach – open up your borders for trade and investments. This led the country toward liberalizing its trade policies. Cut to about 17 years later, the country is growing at about 8.7% per year with adequate foreign exchange reserves. All this can be attributed to international trade. For example, India has a competitive edge in IT services – specifically software’s and business process outsourcing. This industry is primarily dependent on providing services to US based organisations which hire India’s resources as the labor required for these services is significantly cheaper in India than the US. This motivates US based companies to employ Indians in India and Indian companies for obvious reasons. The government gains as foreign exchange keeps pouring in and unemployment is cut marginally. The employees get jobs that pay a decent sum of money for their services. Everything, however, isn’t all hunky-dory. India’s dependence on the US has increased significantly as India’s growth has been also because of foreign investments pouring in from various countries which means that if the American economy faces a recession, the Indian economy suffers as well – which is exactly what’s happening right now. The overall growth rate of the country is affected and expected to fall down to a 7% mark as opposed to the projected 9+% mark. The people employed in these organisations suffer as their career growth takes a beating, banks and financial institutions also face the crunch. India’s trade dependence with the rest of the world then makes it more vulnerable to their actions than it would have been had it not liberalized. It is then a matter of choice – slow growth vs. Vulnerability to the world’s economies.

Reference: Mankiw, Economics

Manila, Philippines (11.04.09) – While households in many countries were busy preparing for their traditional Halloween and while the Philippines was then hit by a typhoon in northern regions during the 31st of October 2009, Members of the Church of GOD International (MCGI) have gathered for a different kind of celebration, and it was to celebrate the 29th anniversary of Ang Dating Daan (The Old Path) in broadcasting.

MCGI members, the celebrators of the event, have gathered for the program’s celebration collaborating with their weekly thanksgiving course that MCGI is faithfully doing as preached by Bro. Eliseo Soriano, Presiding Minister of MCGI and the famed host of Ang Dating Daan program. MCGI members came together from different monitoring centers in the country and in abroad, having the Ang Dating Daan Convention Center, Apalit Pampanga as the host venue of the event.

Ang Dating Daan being a renowned religious program not only here in the Philippines but in many countries abroad, has received many awards and recognitions. In fact, it has been a recipient of 29 awards to this date, including that of Federation of Filipino Consumers, Inc., Development of Filipino Youth Inc., People Vision Magazine, National Biographic and Historical Research and the most recent Gawad Amerika Awards, citing the program as The Most Informative Religious Program in 2006. Its website angdatingdaan.org, bagged Philippine Web Awards’ The Most Popular Website for six consecutive years. Its segment “Biblia ang Sasagot, Itanong mo Kay Soriano” (The Bible shall answer, Ask Bro.Eli) has always been exceptional and never been imitated by other religious program.

After its opening prayer, the event had started with a greeting and inspirational remarks from Bro. Daniel Razon, Vice Presiding Minister of MCGI. He gladly mentioned before the congregation that there have been a total of 500 people who have been baptized from different chapters across the globe; in North America, South America and Latin America, and in Africa; while in the Philippines, there are newly baptized members from La Union, Davao del Sur jail, Leyte, Palawan and Apalit, Pampanga respectively.

Subsequently, Bro. Eli had greeted the congregation and acknowledged the support of the guests and viewers alike who patronized the program Ang Dating Daan.  Customarily, Bro. Eli preached a biblical topic for the thanksgiving of the MCGI congregants into two parts.

The anniversary presentation was celebrated with series of songs of praises by the MCGI members all around the globe. Some of the countries where MCGI chapters are situated and had participated are UAE, Australia, South American countries, as well as countries in Africa and Europe.

The celebration that the MCGI congregation held is a proof of its successful endeavor in propagating the Gospel in worldwide scope through its 29-year old program Ang Dating Daan. The program is presently being viewed in UNTV37 and the TOP channel in American and European countries. Bro. Eli’s preaching also extends into blogosphere through his official blog esoriano.wordpress.com (written by Elsie Morante and Robert Clarita Jr)

(CFD.net.au – Contract for Difference, Share, Forex, ETFs, Commodities Traders) – The latest personal and business lending figures add further weight to the argument that Australia’s economy is rapidly heading back to business as normal.

Commercial finance has been stubbornly weak since the global financial crisis froze credit markets, but posted a 5.6 per cent bounce during August with $28.5 billion borrowed according to the Bureau of Statistics’ seasonally adjusted figures.

The more stable trend figure was still negative, -0.3 per cent for the month, but indicated the rate of decline in commercial finance is easing.

The personal finance figures also recorded a bounce, up 4.1 per cent to $7.2 billion borrowed by households for non-housing related purchases, much of it on credit cards.

However, as revealed in last week’s release of the housing finance figures, loans for owner-occupied homes fell 1.7 per cent during August.

Lease financing was still a weak point, falling 9.4 per cent seasonally adjusted, and 0.7 per cent in trend terms, but it is a relatively small category of finance, only accounting for around $400 million in August.

Source: Economy receives borrowing boost

Research says that effects of downturn will not hit some parts of Britain for several months – and that local councils need to prepare for this ‘aftershock’

(CFD.net.au – Contract for Difference, Share, Forex, ETFs, Commodities Traders) –

By Seyoon Kim

Governor

Lee Seong Tae

left the seven-day repurchase rate at 2 percent in Seoul today and said the Bank of Korea “will maintain an accommodative policy stance for the time being and do what is needed to bring about the continuation of the recent improving pattern of econ …

By Seyoon Kim

Governor

Lee Seong Tae

left the seven-day repurchase rate at 2 percent in Seoul today and said the Bank of Korea “will maintain an accommodative policy stance for the time being and do what is needed to bring about the continuation of the recent improving pattern of economic movements and financial market stabilization.”

The outlook is a U-turn from September, when Lee signaled he may act to stem rising property prices and mortgage lending, triggering speculation that interest rates would increase as early as November. The central bank today said those concerns had eased as borrowing slowed.

“This statement suggests that the Bank of Korea is putting some faith in the ability of the authorities to cool down the real estate market without hiking overall rates,”

Frederic Neumann

, senior Asia economist at HSBC Holdings Plc in Hong Kong, said in a note. “The official statement, surprisingly, appears more dovish than the previous one.”

South Korea’s financial regulator said yesterday it plans to further tighten regulations on non-banking finance companies’ lending to households starting Oct. 12. The loan-to-value ratio in mortgages will be lowered to 50 percent from 60 percent in parts of Seoul, the Financial Supervisory Service said.

Consumer Borrowing

Low interest rates have spurred consumer borrowing, with bank lending to households expanding for a seventh straight month in August before falling in September. Loans to households climbed 3 trillion won ($2.6 billion) to 405.1 trillion won in August and fell 1 trillion won in September, the Bank of Korea said.

Governor Lee, speaking after the last review on Sept. 10, said the central bank would “consider a revision” to policy direction should signs emerge that the monetary easing isn’t appropriate.

The currency reached the strongest level in a year today on speculation the central bank would signal plans to raise rates. The won was little changed after the decision. Korean bonds rose, bringing the yield on the benchmark three-year note down by 9 basis points to 4.4 percent, according to the Korea Stock Exchange.

Threat to Recovery

Finance Minister

Yoon Jeung Hyun

earlier this week warned that unwinding economic stimulus policies too soon would “impede” the recovery.

The central bank cut the benchmark interest rate by 3.25 percentage points from October to February, the most aggressive easing since the bank began setting a policy rate a decade ago, to cushion the economy from the global recession. The government also increased spending this year to support demand.

The economy expanded 2.6 percent in the second quarter, the fastest pace in almost six years, and the benchmark Kospi Stock index has risen more than 40 percent this year.

“The recent improving trend in real economic activities has been maintained,” the central bank said in a statement today. “In the coming months, the Korean economy is likely to maintain its positive growth,” helped by the improvement in the world economic environment and as companies rebuild inventories, it said, adding that “a number of uncertainties surround the actual pace.”

The Bank of Korea’s decision came as other central banks begin to indicate a willingness to raise rates. Federal Reserve Chairman

Ben S. Bernanke

said yesterday the central bank will be prepared to tighten monetary policy when the outlook for the U.S. economy “has improved sufficiently.”

To contact the reporter on this story:

Seyoon Kim

in Seoul at

skim7@bloomberg.net

Last Updated: October 9, 2009 01:04 EDT

Source: Bank of Korea Keeps Rate at 2%, Signals It’s on Hold (Update1)

Neighbors move in and neighbors move out. There goes the updated paper version of the neighborhood directory, which was just hand delivered to the doorsteps of neighbors last month.

The association board recently mailed the ballots for the upcoming election. It is certain that some households will request another paper copy of the ballot, given they even remember to vote. The idea of having the entire neighborhood’s voice heard soon goes out the window when only half of the neighborhood members actually turned in the ballot they received by mail.

Many times neighborhoods turn to custom website developers for a solution. They pay overly expensive fees to create a neighborhood website. Or, due to cost, they solicit the work of a neighborhood hobbyist to create a static solution. Either way neighborhoods pay for this mistake. Updating information on the website requires paying the developers hourly fees for their professional services. Or, in the case of the neighborhood hobbyist, they are out of luck when the creator has moved, their hard drive failed, or graduated from high school.

It is obvious that members of a neighborhood association board work extremely hard for their neighborhood. But, with the right website solution they can efficiently and effectively manage their neighborhood. They can actually spend less time and less money on neighborhood business, and neighbors would appreciate having a single source for obtaining neighborhood information.

Consider taking your neighborhood online with a site hosted with ZavaSites.com.

• Absolutely NO set-up fees.
• Every feature is included in each pricing plan (even invoicing, online bill pay, announcements, alerts, voting, and the groups feature.
• A yearly subscription at an extremely affordable price, just $250/year for 100-single family units.
• A fully functional website that is up and running in only a few short hours.

Here are some of the many features a neighborhood can enjoy:

• Website Hosting
• Custom Domain
• Customizable
• Public & Private Access
• Administrator Access
• Board Member Access
• Neighbor Access
• Password Security
• Neighborhood Directory
• Announcements
• Calendar Events
• Invoicing & Online Payments
• Voting
• Surveys
• Groups
• Forums
• Request Management
• Meeting Notes
• Neighbor Notes
• Photos
• Documents
• Homes For Sale
• Community Information
• Area Map
• Current Weather
• Recipes
• Online Help

To learn more, visit us at www.zavasites.com.

According to today’s NYT, there’s been an upsurge in urban intentional communities.

Are their numbers surging? Hard to tell, though people who study more traditional “intentional communities” — that is, any group of individuals living together with shared values, as in a commune or collective — say that they are demonstrably on the rise. Laird Schaub, executive secretary of the Fellowship for Intentional Community, said his nonprofit’s database has swelled from 614 communities in 2005 to more than 1,300 this year.

Clearly, lots of people—not only the young but others as well—are creating many different kinds of nonexploitative or collective household economies. Perhaps the revolution does start at home. . .

AWESOME NEWS!! Bishie Hunter shirts now availabe at Otaku Connection!!! Go to the store page and check them out!

I’ve been meaning to post a blog for a while now on the rules of cosplay as far as I’ve figured any out. Ironically, I broke about half of them last night at the Ladies of Light Costume Ball, an annual cosplay event at my school. I went as a disturbingly attractive Edward Elric, much to the chagrin (and much to the amusement) of my peers.

Transmutation in Progress

The back of my costume with a duct tape Flamel

See what I mean?

At any rate, here are the rules, with my various violations noted.

1. Play Your Gender. Crossplay generally doesn’t work very well, unless you’re a girl playing a really pretty boy. As a rule, it’s best to avoid cross dressing entirely, because it often just looks wierd or is icky. violation: obvious. I’m a 20 year old woman dressed as a 15 year old boy.

2. Dress For The Weather. If it’s summer, don’t wear an overcoat and ski boots. If it’s winter, dressing in most female anime costumes is ill-advised. Unless you really like freezing your butt off or sweating like a gorram fountain. Violation: again, obvious. It’s September and sunny. I’m in a thick leather trench coat and gloves.

3. Dress For The Venue. There are costumes appropriate to a con that aren’t so appropriate to, say, a conservative Catholic school. . .or in front of your beloved’s parents. One of the reasons I’m not wearing my belly dancer costume to the St. Francis Festival next weekend. Violation: actually, I didn’t violate this one last night! (emphasis on last night. . .)

4. Don’t Make Your Costume at the Last Minute. No one really like a sloppy cosplayer. You really need to take the time to make your costume authentic. Otherwise you’re insulting the character, and the Otaku Police Force will execute you in the most brutal and demeaning fashion for this crime. Violation: I so made this costume the morning before the dance. That’s why half of it is duct tape. I’m waiting for the OPF to knock on my door any day now.

5. Make Sure You Get The Details Right. Are you a brunette playing a blonde? Better bleach that hair. Brown eyes playing green eyes? Color contacts, my friend. People will notice these things. Violation: I definitely didn’t change my hair color OR eye color to match Ed’s. And I didn’t even make automail. I’m a lazy cosplayer who likes her natural hair color too much. Fail.

6. Make Sure Your Weapons Don’t Look Too Real. You can get thrown out of most venues for violating this one. At minimum, they’ll confiscate your AK-47 or your broadsword. You’ll just have to deal with those annoying orange tips on your guns. Violation: I haven’t. . . yet.

7. Dress Your Body Type. Curvy girls should wear curvy girl clothes. Scrawny guys shouldn’t be trying to pull off Lara Croft. It’s a matter of practicality. You either have the body for a character or you don’t. Never force it. Violation: I’m pretty sure Ed’s a lot more flat-chested than I am. . . and shorter.

Well, there you go. 5/7 violations. Go me!

And here’s cosplay gone right: my friend and colleague as Light from Death Note. Apparently he doesn’t like it when I try to imply yaoi crossovers.

Ed is written in the Death Note.

Well, that’s it for tonight. I’ll post again the next time something interesting happens.

Until then, I am,

-DTA

In the wake of one of the nation’s warmest and driest winters on record, environment groups today called for new building standards to reduce emissions and water use, and to help Australia’s homes and families cope with future temperature and price shocks.

The call coincides with the release of a new report today, which shows that with the right government support and with efforts to fast-track stronger environmental building standards, Australian homes and neighbourhoods could be emissions free and water efficient by 2020.

The report, Towards climate safe homes: The case for zero emissions and water saving homes and neighbourhoods, is released today by the Australian Conservation Foundation, Environment Victoria, the Alternative Technology Association, Friends of the Earth and the Moreland Energy Foundation.

Environment Victoria’s Campaigns Director Mark Wakeham said the Australian governments had a unique opportunity to reduce emissions and help climate-proof our homes.

“At the moment our inefficient homes are part of the climate change problem,” he said.

“However, the report shows that emissions from the average home can be reduced by more than 75 per cent with energy efficient design and appliances, while the rest of the home’s energy needs can be supplied by renewable energy. This means our houses can be effectively emissions free and part of the climate change solution.

“The report also advocates for a 40 per cent water savings target to be applied to new homes to reduce our dependence on increasingly unreliable water supplies.”

ACF’s Monica Richter said the Federal Government had a golden opportunity to set Australia on the path to zero emission homes by 2020.

“The government has made a good start with its national strategy on energy efficiency, but more needs to be done,” she said.

“We would like to see 7 or 8-star standards introduced in the next 12 months and a stronger commitment to retrofitting existing houses to help low income and vulnerable Australians adapt to the impacts of climate change.”

ATA’s Ian Porter said climate proofing Australia’s homes was not an optional extra but essential.

“Australians recognise that we need to change our homes and many have already shown that sustainability can be achieved with environmental and financial benefits,” he said.

“It is time Governments recognised this and implemented systems to support households to reduce their carbon footprint and save on energy and water bills.”

The release of the report signals the beginning of a new national campaign calling on governments Australia wide to strengthen building standards for new homes, provide green makeovers for our existing houses and set zero emissions and water efficiency standards for new homes and neighbourhoods over the next decade.

ACF Press Release

By Mike Whitney

The slight rebound in housing looks a lot different when one considers how much the Fed is meddling in the market. Fed chair Ben Bernanke has purchased $240 billion in US Treasuries to keep long-term interest rates artificially low while–at the same time–buying $740 billion in Fannie Mae and Freddie Mac mortgage-backed securities (MBS) to provide the financing for new home buyers. It’s the double-whammy; and that’s not all. Bernanke plans to continue buying agency MBS (monetization) until he reaches $1.45 trillion, which will make Uncle Sam the biggest player in the housing market by far. How’s that for central planning?

Ironically, the funds for Bernanke’s housing market rescue plan were never approved by Congress, which means that the Fed committed nearly-$2 trillion with “no down” payment. That makes the Fed’s Treasury buyback program the biggest subprime loan of all time. 

   The fact is, all the recent gains in home sales are all the result of direct government intervention. If interest rates were allowed to rise (as the would naturally) or if  Congress withdrew its $8,000 first-time home-buyer subsidy, or if FHA tightened its loosey-goosey financing (which requires just 3.5% down payment and low FICO scores, the same as subprime!) home prices and sales would continue to drop at a 10 to 15 percent year-over-year rate. Housing has stopped plummeting for one reason alone; the Fed bought the market.

  The same rule applies to the stock market, where the Fed’s quantitative easing (QE) and liquidity injections have sparked a 6-month bear market rally sending equities to the moon. It’s all Fed intervention. A recent report by Egan-Jones Ratings And Analytics traces the Fed’s lavish liquidity handouts pointing out the precise sectors of the market that have been most effected:

  “Massive monetary stimulus is good for asset prices (stocks, bonds, houses, commodities) in a weak pricing environment and soft economy. The Federal Reserve has doubled its balance sheet from $1 Trillion to $2 Trillion effectively adding $1 Trillion to our economy. In addition, the Fed has through an alphabet soup of facilities i.e. Term Auction credit, Asset Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, Term Asset Backed Securities Loan Facility, Primary Dealer and other Broker Dealer Credit, Other Credit Extensions, Term Facility, Maiden Lane LLC one, two and three, Money Market Investor Facility, added approximately $3 Trillion in loans and over $5.5 Trillion in guarantees of private investments. While these latter funds are technically loans, they get renewed regularly.

So where has all the money gone? The chart below shows the rise in the stock market causing the valuation to be somewhat extended in our view – some liquidity found a home here. Large rises in just the last month in small cap stocks, plus 17%; most shorted stocks, plus 17%; stocks with the lowest analyst rating out performing those with the highest rating by 380 basis points, all suggest some speculation……
Commodities have had a nice rebound from their lows with copper hitting new highs. High yield bonds have out performed investment rated bonds as investors are willing to bet on a faster recovery and start to reach for yield.
These are indications of excess liquidity finding outlets.” ( “Fundamentally…Disconnected”  Egan-Jones Ratings And Analytics, hat tip zero hedge.com)

Let’s summarize: The Fed is goosing the stock market and subsidizing the housing market. Bernanke has slashed interest rates to zero percent, underwritten the entire financial system with $12.8 trillion in loans and guarantees, and flooded the financial system with liquidity. The Fed has  also doubled its balance sheet to $2.08 trillion which is the equivalent of dropping the Fed Funds rate to -1 percent.  As Mark Gongloff of the Wall Street Journal opines, “The Fed is essentially paying people to borrow money.”

Indeed, the Fed has done its level-best to keep the market from correcting, but isn’t it a bit of a stretch to call it a “recovery”?

In truth,  Bernanke is in a pitch-battle with deflation and the outcome is still uncertain. Deflation has spread to every sector of the economy; retail, travel, luxury items, autos, building supplies, home furnishings, electronics. No business has been spared. The C.P.I. inflation-gauge has slipped into negative territory and is now at -2.1 percent. Prices are headed down and spending is falling fast. Unemployment is soaring, wages are dropping, and the average work-week has been sliced to just 33 hrs. And, as we noted, housing prices have flattened out, but only because of unprecedented government intervention into the market. Otherwise, real estate would still be stretched out on a marble slab.

  Most people think it should be easy to beat deflation. They think all the Fed has to do is flip a switch and print more money. But there’s more to it than that, especially when trillions of dollars in credit suddenly vanishes in a poof of smoke. That’s what happened last September when Lehman Bros imploded and reduced the financial system to rubble. Global stock markets crashed, interbank lending collapsed, capital flows stopped, and payrolls and inventories were slashed. The gigantic credit-purge thrust the economy into deflation, a condition which persists to this day.

 Economist Irving Fisher tackled the problem of deflation 76 years ago  in his masterpiece “Debt-Deflation Theory of the Great Depression”. Fisher showed how over-indebtedness eventually triggers a chain of events beginning with debt liquidation and ending in distress selling, huge capital losses, and violent economic contraction; the same challenge that Bernanke faces today.

Irving Fisher:

“Unless some counteracting cause comes along to prevent the fall in the price level, such a depression as that of 1929-33 tends to continue, going deeper, in a vicious spiral, for many years. There is then no tendency of the boat to stop tipping until it has capsized….

On the other hand, it is always economically possible to stop or prevent such a depression simply by reflating the price level up to the average level at which outstanding debts were contracted by existing debtors and assumed by existing creditors, and then maintaining that level unchanged.” (Irving Fisher)

Clearly,  Bernanke is following Fisher’s advice and doing everything in his power  to reflate asset prices and avoid a bigger crash. But it’s still too soon to tell whether his strategy will work. We’re still in the early innings of a humongous system wide credit-implosion event.  
 
 The term “deflation” relates to a drop in the general price level, something not seen in the United States since the Great Depression. As economist John Bellamy Foster points out,  deflation squeezes corporate profits even if costs and productivity remain the same.  When profits fall, heavy layoffs and wage reductions ensue.  

John Bellamy Foster:  “But the real fear of deflation has to do with the enormously bloated financial structure and the huge debt load of the economy…  In a deflationary economy,  debt has to be paid back with bigger dollars (worth more over time).  This then creates a debt-deflation spiral, enormously accelerating financial meltdown.  As Fisher put it, “deflation caused by the debt reacts on the debt.  Each dollar of debt still unpaid becomes a bigger dollar, and if the over-indebtedness with which we started was great enough, the liquidation of debt cannot keep up with the fall of prices which it causes.”  Stated differently, quoting from The Great Financial Crisis (p. 116), “prices fall as debtors sell assets to pay their debts, and as prices fall the remaining debts must be repaid in dollars more valuable than the ones borrowed, causing more defaults, leading to yet lower prices, and thus a deflationary spiral.” (Interview of John Bellamy Foster on the Great Financial Crisis, Monthly Review) http://www.monthlyreview.org/mrzine/foster270209.html

It is this “deflationary spiral” that Bernanke is trying to avoid at all cost, even if he destroys the currency in the process. (Which he appears to be doing) Despite the Fed chairman’s steely resolve, the economy has continued its historic nosedive. Consumer spending is falling and households are limiting themselves to the bare essentials. (US households lost $14 trillion in wealth in the last year alone.) Families everywhere are paring back their credit, paying down their debts and rebuilding their nest eggs with what’s left from their skimpy paychecks. Unfortunately, what’s good for the family balance sheet is poison for the economy.

From Bloomberg News: “U.S. consumer credit plunged more than five times as much as forecast in July as banks maintained more restrictive lending terms and job losses made households reluctant to borrow.

Consumer credit fell by a record $21.6 billion, or 10 percent at an annual rate, to $2.5 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $15.5 billion in June, more than previously estimated. Credit fell for a sixth month, the longest series of declines since 1991. (Bloomberg)

US households and consumers have never been as strapped as they are today. They’re dealing with recession the only way they can, by pulling back and hunkering down. That will make it even harder for Bernanke to resuscitate the economy. There’s simply no way to force people to borrow when they’re not interested.  

Bernanke’s deflation-fighting strategy needs to be revamped. The country doesn’t need another credit bubble. The surge in delinquencies, defaults and personal bankruptcies all suggest that the era of easy money and lax lending standards is over. Why not “hang it up” for good. The Fed should be focused on rebuilding the economy from the ground up, paying particular attention to aggregate demand. Demand is what keeps the mighty GDP-flywheel in motion. Wall Street likes to stimulate demand through credit expansion and bubblenomics so they can skim fat bonuses on the front end and then bail out before stocks crash. But this perennial “boom and bust” cycle get’s old for ordinary working people, who just want a little stability and a paycheck that keeps pace with inflation. The best way to avoid “demand shock”–which is at the heart of every recession–is through wage growth and full employment. It’s that simple. When workers get better pay, they buy more more stuff and the economy thrives. Everybody wins!

Well, that was really lame of me, taking so much time off without announcing it. I wasn’t planning on it, but I guess that’s what happens when I go back to college: my friends attack me and I get distracted.

Not that I can really blame them for it. It’s not their faults for missing me, and classes have also taken a toll on my blogging time.

But no matter, I’m back for good, I think.I really want to be, at least.

College is wonderful. It’s good to be around my friends again, to be with my household.But I’m probably most excited about FUAC starting up again this year. We had at least 20 people at the first meeting. I don’t think the school will be able to resist us becoming an official club with the numbers we have. We’re just in critical need of an adviser. That’ll be the biggest challenge, finding a professor who wants to lead an anime club.

In other news, I’ve begun serious work on the next part of Mushi-Hime. Episode 12 should be out by the end of next week, actually. And then, just one more episode, and that project is DONE!

The crazy thing is that by the time I’ve finished it, I’ll have been writing Mushi-Hime for a whole year. That’s right. I started it in September last year. It doesn’t seem like it was that long ago, but that probably explains why I’m so eager to finish it.

Well, time for me to get ready for class! I’ll be back on tomorrow!

-DTA

Well, it’s the dawn of my last week in Traverse City for the year, and I’m a bit ambivalent about. . .

Who am I kidding? I can’t wait to go back to school!

Don’t get me wrong. I love Northern Michigan. I love my job at the winery. Most of all, I love my family. But those bells are ringing me home, and I am so ready to see all of my friends again.

I’m really looking forward to proving myself this semester. I have to, really. But it’s more than that. I genuinely want to do my best, to excel, and, more importantly, to follow my destiny.

I have a heck of a lot to do, though. Classes will be a lot of work, but I’ve also got to spend time with the Counseling Department working on finding things that will look good on my resume. On top of that, I’m running a club, participating in DDM activities, and playing several long-term games. That’s a lot for one woman to handle!

That’s why I’m so glad I have so many prople looking out for me and helping me. I have the best friends ever!

Well, that’s about it for now. Stay tuned tomorrow for DOUBLE GEEK NEWS!!!!

-DTA

ANSWERS TO LAST WEEK’S QUIZ: “If Quizzes are Quizzical, Are Tests Testicle?”
1. slightly lower
2. Elephantiasis
3. orchid
4. avocado
5. testify
6. Cat
7. Ram or goat
8. Clinton, Montana
9. eye lid
10. 20 and 34.

THIS WEEK’S QUIZ:  “Timeline History of Television”

Inventors in the 19th century speculated on the idea of instruments that would allow people to “see by electricity.” In 1881, an article in Nature magazine surmised that although the idea of transmitting images over great distances could one day be possible, it wondered if the idea deserved “further expense and trouble.”

Jump cut forward: While early television sets from the 1920s had blurry flickering images, technology showed steady signs of improving into the 1930s although the images were still fuzzy. World War II meant that TV was still a rarity for the American family until after 1945 when sales jumped 500% between then and 1948. Before we knew it, we were watching cable TV stations in the 1980s, and then 42% of TV stations were digital by June 2009.

Here’s a timeline history of some of television’s landmark events in programming and technology, with a sprinkling of fascinating facts and goofy quirks.

1. In the early 1920s scientists in the United States and United Kingdom demonstrated the ability to transmit still photos and moving silhouettes using what method?
Microwaves
Radio waves
Sonar
UV rays
X-rays

2. April 7, 1927: The first public broadcast on TV in the United States. Whose voice and image was broadcast?
Al Jolson
Calvin Coolidge
Charlie Chaplin
Charles Lindbergh
Herbert Hoover

3. In 1928, General Electric broadcast what might be considered the first TV drama using a spinning disk and bright lamp to create blurry, off-center images of actors smoking cigarettes while carousing around Europe. In truth, those actors were not in Europe but were instead where?
Boston, Massachusetts
Burbank, California
Hollywood, California
Schenectady, New York
West Orange, New Jersey

4. While regular nationwide TV broadcasts started around 1939, it was in 1947, when the very first TV couple to share a bed appeared on what television show? [The next couple to do so is thought by many to be the animated couple, the Flintstones in the 1960's.]
“Café Continental”
“Cash and Carry”
“Kraft Television Theater”
“Mary Kay and Johnny”
“The World In Your Home”

5. In 1950, which NBC TV show first made use of the laugh track?
“The Alan Dale Show”
“The Goldbergs”
“The Hank McCune Show”
“The Morey Amsterdam Show”
“Your Show of Shows”

6. The color television set first swept the country in 1954. By what year did color TV sales overtake Black and White sets?
1955
1960
1966
1972
1978

7. Initial versions of the TV remote control were still attached to the television set with a cable. It wasn’t until what year that the wireless remote control was invented?
*1955
1963
1970
1977
1985

8. By 1960, what percentage of households in the United States had a television set?
7%
27%
47%
67%
87%

9. In what year did the VCR replace the previous technology of open-reel home video systems?
1962
1967
1972
1977
1982

10. In 1983 what TV show aired the most-watched television series finale in history with almost 106 million Americans watching?
All in The Family
Dallas
The Mary Tyler Moore Show
M*A*S*H
Seinfeld

11. These days there are TV sets in about 110 million American households, and revenue from television broadcasting, cable, TV advertising, and TV-set sales totaled how much money in 2006?
$1.82 billion
$18.2 billion
$182 billion
$1.82 trillion
$18.2 trillion

12. The renewal of the contract for the show The Simpsons in 2009 meant that it would soon overtake which show as the longest-running prime-time scripted TV series?
ABC’s The Danny Thomas Show
CBS’s Gunsmoke
CBS’s Lassie
NBC’s Bonanza
NBC’s Law & Order

ANSWERS WILL APPEAR NEXT MONDAY. But if you really want to know the answers now, go to:  http://www.sploofus.com/triviaquiz/timeline_history_of_television.html

It’s a great trivia web site, and if you join up please mention my user name “billkozy” as a referral, so that I get lots of points worth no money whatsoever. Just bragging rights I guess.