International Monetary Fund Shows America's Decline Yet How Do You Invest?

The International Monetary Fund (IMF) shows America's decline as a percentage of the world's purchasing power and that China will take the no. 1 positon in five years.  Brent Arends of Marketwatch writes a brilliant article on the IMF Bombshell so please click the link to review it.   With China's economy to likely surpass ours in 2016, it's interesting how more articles are being published about this very topic and the devaluation of the US dollar yet not much is being done.  CNBC's article on Don't Like a Weak Dollar? lends more current news on the dollar. 

Given some grim current news about the US dollar, our national debt and the decline of US dominance with regard to the IMF, how do you invest? 

It's a provacative question that many are pondering in the back of their minds as they go about the day caring for children, working a job, and/or sidelining it in retirement.  My parents are baffled by what the future holds if things don't improve.  Many of the baby boom generation seeking to retire and enjoy social security are perplexed at IF they should retire rather than when.  Health insurance, medical bills and medicines are high and tend to take away a larger portion of their fixed income than originally calculated.  For those of us twenty plus years away from retirement and/or funding a child's college, it's perplexing where to seek the best return for your investment. 

My recommendation is to first assess your financial situation as well as your time horizon.  If you are a young person, then you have time to invest and reap the benefit of the power of compounding.  If you are working and are starting a family, it's time to invest in good quality growth investments.  If you are nearing retirement, it is important to sock away as much as possible and focus on a balanced account. By all means, it is wise to pay off all your debt.  There are ways to do this, and while each individual case is unique, I recommend that you seek the advice of a professional. 

We can't worry about the IMF statistics nor America's decline.  America historically has combatted many unbelievable scenarios where we were the underdog, yet the underdog prevailed.  I have NO MAGIC wand but I have faith in the American capitalistic spirit that remains in few of us today.  Should we correct certain measures, we as a nation will remain a strong economic influence in the world.  Invest in America is still a good idea.

Children & Their Financial Future

In listening to a local financial advisor talk radio show over the weekend, a caller called in a question asking how can he explain to his children the importance of investing and saving for the future?  The guy went on about how you want to accumulate assets so that you won't have to work as hard when you get older in life.  In my opinion, he missed THE real key and that is TIME.  Children have time and the ability to benefit from the power of compounding over a longer period of time.

Today, children are not being taught prudent financial managemet.  Even at Walmart, children can get a FREE piece of candy for opening up a credit card account.  Dave Ramsey commented that that was low on the corporation's part to lure in future customers.   Credit cards and their balances are high, yet subjecting children's credit history to this activity when their income is nonexistent is ludicrious. This is a recipe for financial disaster and perhaps we are seeing some of the first signs of these credit problems with the Recession of 2007-09. 

Children look down upon work and earning money. It's hard to believe that young teens expect to make $20 an hour and do nothing for it.  There are some hard working teens in our area but most want to waste time on the computer, check out the latest in fashion or goof off in other ways.  I certainly don't have many high school kids knocking on my door offering to mow the lawn or do handy work.  Where are the children working these days, if they are?  McDonald's is looking to higher many employees this year, yet many high school kids look down upon that line of work.  It is sad because people used to embrace hard work, develop good character and people skills and help support the family. 

If weird in America means that your child works a decent paying job, doesn't do drugs, and brings home an above average credit card, then what may be even more weird is for them to not have any debt, fund their college though jobs, savings and/or scholarships, and have an investment portfolio.  I commend the parents and child willing to follow that path in America.

Cyber Criminal Activity is On the Rise

When you get secured e-mails from your local bank about a serious announcement such as the one below, it ought to grab your attention.


Email continues to be a favorite target for cyber criminals to compromise sensitive information of businesses and individuals. In fact, emails have recently been sent purporting to be from such large organizations as the IRS and NACHA, the national electronic payments association, encouraging users to click on web links and download malicious software. These emails are fraudulent. Should you receive an email like this from the IRS, NACHA, or any unknown source, we encourage you to delete it immediately (don’t open, click links, or accept downloads).

For military families, it is an uncomfortable feeling to deal with this issue. 

It is important to beaware of this activity, report any suspicious items to your bank or other, and do NOT respond to these e-mails. Delete them.  Do not open them.  Do not click links.  Do not accept unknown downloads.  Most important, do not give out any personal information. 

It is being vigilent with these criminals that will curtail their success rate and cause them to see other means, preferably the legal way.

S&P Negative Outlook on US Dollar

According to the Financial Times, the S&P credit agency downgraded the dollar from stable to a negative outlook.  Our national debt is of huge concern.  Wall Street saw the color red on just about all screens today as concern grows about the U.S. not addressing its budget deficit. This is reflected in the down rating.  Even FoxNews reports a negative rating should jolt politicians in the United States to resolve this budget deficit. 

If you go to US National Debt Clock's web site page, you will see some shocking numbers.

Raising the debt ceiling may put a patch on things but the bottom line is change has NOT happened.  The debt is destroying opportunities for our future generations.  Our forefathers would be rolling over in their graves if they knew of the present financial situation for this country.  Ed Morrissey writes a good wake-up call on how Americans need to reduce debt to income.  Keep in mind that U.S. households versus the U.S. Government are not as much alike as you would think.  If you read the Consumerism Commentary on The Budget Deficit and Debt, you will understand a subtle difference. 

This is just the beginning of a long road ahead for America to get itself out of a budget deficit, turn the economy around and pay down its national debt.  The bells and sirens have gone off.  Wall Street showed its reaction today.  Time will tell what will come. 

WAR of the CURRENCIES

If Donald Trump's wake-up call about a 25% tariff on imported goods from China doesn't strike you enthusiastically, then consider this:  we are at war and it is a war of the currencies. 

China devalues its currency by up to 40% so that US manufacturers can't compete with goods and services imported from China.  A trade tariff may be a wake-up call that's come too late (it could have been made in the 1990s).  President Hu has criticized the US for it's plan to buy $600 billion of debt to stimulate the economy.  (How come the U.S. media hasn't cared to comment about this....Instead, all that is on the news is who got killed, what charity organization got what, what the weather did in this part of the country or a picture of a cute dog up for adoption).  China has a vested interest in our monetary system since it holds billions of dollars in government debt (or U.S. Treasuries).  I find this debt issue alarming.  There is justification for the dollar being a financial product of the past and the yuan to emerge as the next dominant currency of exchange.  (Jim Rogers sells many of his books translated into the Chinese language if you look on his official web site page). 

The Eurodollar back in the 90s was intended to compete directly with the U.S. dollar.  Europe imitated a similar financia approach to the United States with one major problem....they were not a unified nation under similar laws nor similar fiscal systems.  Hence, today's challenges presents a major setback for the Euro.

Critics and experts can all say what they want to say.

Speaking in China at a gathering of finance ministers from the Group of 20 economic powers Thursday, U.S. Treasury Secretary Tim Geithner said that "weaknesses and inconsistencies" in global exchange rate policies are among the biggest challenges facing the international monetary system according to CnnMoney.com.

What many fail to communicate to the American people is the importance of a unified economic force to remain competitive in international markets.  As the average American goes to work and brings home a paycheck, it's discouraging because of the longer hours, less pay and/or benefits and less time with family.  Americans are in debt and use debt to maintain a standard of living that is not sustainable over the long haul.  The Unions cannot make demands today that were once influential.  We as a nation are just not as competitive as we used to be. 

Our National Debt is of grave concern to those who care about the future for our children and grandchildren.  What is to become of this debt?  How can we maintain interest payments?  Why won't politicians halt the bleeding and do what the American people elected them to office to do?  While Donald Trump's run for the Presidential Office may seem a side-kick to the GOP or funny to some, I say "You Go Donald Trump, and please help me save this country for the sake of our children."

Shutdown Looms As Hype Continues

For those in the military and dealing with the added financial stress in your daily life, it is wise to consider ways to get by on less until this mess is cleaned up.  The hype and news about government shutdown and hiccups in military pay will continue.  There are some major future financial challenges looming for our country, and until the politicians and other elected officials can fix it, it will be a stressful time for many.

Wives of Faith posted one of my current articles dealing with financial stress called Tune Out Financial Stress and Tune In to God.  If you are a believer, it will provide some spiritual relief.  If you are not a believer, it will encourage you to revisit your current spending behavior. 

What a Government Shutdown will mean is this:  essential positions will remain in effect and some will be furloughed.  For the military, you will report to work and receive a paycheck when the government reopens.  Granted, there will be a paycheck for one week of work.  Questions remain about future military paychecks so if and when you receive your paycheck on the 15th (it will likely be two paychecks rather than one because of internal operations to generate the payment), it is prudent for you, your spouse and your family conserve and cover your bare minimum payments.  Doubt is high about when the next paychecks will be made. Hence, for the next pay period scheduled at month-end, it is questionable at this time whether you will get paid or not. 

For veterans, it is important to understand that the Veterans Services could be interupted (as sorry as I am to type this information) because of issue with government shutdown and budget cuts.  The Washington Post with Bloomberg post an interesting article about the Budget 2011 and how this vote will determine the future direction financially for this country. 

Hype will continue.  Many will fuel anger as a negative sentiment rises amongst people both in and out of the military.  Mismanagment in Washington is unacceptable, and to be in this position of suffering the consquence of poor decision-making makes for an ugly day at the office especially when it's in a combat zone.  (I am appauled that folks in line of fire are having this added financial stress added to a stressful time already.  Thank goodness, I am not the only US citizen who feels this way.) These issues have occurred in our country's history, and while I have not pulled out my history books to state those facts, the issue remains that your military paycheck is jeopardy. 

It is wise to review your finances, stockpile your cash, scale back your current spending in ways you knew not, and wait for what will evolve.  It is wise to focus on what is within your means and control rather than what is not.  For example, I normally go to the hair salon for a cut and color.  It's not a cheap bill.  Because we are paying medical bills for our son's surgery, I went to a different hair salon for a $15 haircut and then colored my hair at home.  Total cost was $25.  That is substantially less than what I had paid (about $100).  It was risky but I took a chance because we needed the money to go elsewhere (classic economics on opportunity cost). 

This time will pass, and if you can weather the storm, the hype and the financial stress, it will be a wonderful character-building time.  My grandmothers survived the Depression and passed on to me awareness for saving up for that rainy day.  Today is such the day as our country embarks on a challenging time. 

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Stock Pick of the Month: ABT

Each month, I select and review investment in a stock. (Future write-ups will be better...am swamped with tax season et al).

This month, my pick has been ABT or Abbott Laboratories. It's a great company that's been around for years.  They pay a dividend and have been higlighted in Better Investing magazine.

Double check your military paycheck & Update on Government Shutdown

While a government shutdown was averted late Friday, many military families and federal employees breathed easier about a paycheck potential this week.  Given the last minute resolution, many officials had prepared paychecks to reflect one week's worth of pay rather than two.  When you receive your paycheck, it is important to double-check your statement and make sure that it is accurate.  According to Bryant Jordan's article on Shutdown Fear Could Split Troop Paychecks, the Defense Finance Accounting Service will make payment; however, it may be two separate paychecks.  The first will reflect April 1 - April 8 and then April 9 - April 15 according to Paycheck Chronicles.  This affects active, reserve and guard.  Retired are not affected by this government shutdown because trust funds are in place to finance those checks.  By the way, the freezing military pay for three years is false according to snopes.com as this was a recommendation met with high opposition before it was shelved.

The outcry from the military community is rising.  Many go paycheck to paycheck and are scared about financing their mortgages, car payments, medical bills and other bills such as credit cards, child care costs and other.  The average age of military personnel affected by all of this is in the 24-35 years of age.  Various comments include demands for elected politicians to take a paycut, the negative reaction of military spouses who are not 100% sold on this military life, and requests for people who want to cut military pay to go do the job themselves.   

Amazingly, there is great patriotic support for our military and its families from so many people.  A single soldier fighting in Afghanistan appreciated the remarks and outcrys from many as this countered his hurt at serving his country.  THANK YOU FOR YOUR SERVICE TO OUR COUNTRY and WE SUPPORT OUR TROOPS go a long way for these brave men and women deployed in a combat zone.  Many military spouses are rallying to support their loved ones as well as those military members deployed without the support of family and friends.  For example, the Women's Auxiliary is sending supplies and notes of thanks to deployed servicemen and women, and for some, this is their only mail.  How wonderful that we reach out to our fellow countrymen willing to put themselves in harm's way regardless of politics.  A 29 year serviceman commented that this no pay is a disgrace to those who put their lives on the line. 

The Ensuring Pay for Our Military of 2011 is drawing attention on Facebook as well as military writers such as Rich Maze of Army Times (Shutdown hurt military families).  Bill proposal by Rep. L. Gohmert of Texas is receiving interest and over 5,000 people have liked it on Facebook.  H.R. 1297 Ensuring Pay for Our Military Act 2011 has 153 sponsors as it was posted on March 31, 2011. 

While politics will work itself out over time, the immediate concern to many is how will I meet my current financial needs?  The military is reviewing ways to offer financial help to those families who have mismanaged their finances and/or need help to make payments.  While this is new and in process, it is important to wait and see what evolves in the next week or so regarding the government shutdown. 

Setting aside all the hurt, added financial stress and uncertainty, you will survive this challenging time.  If anything, it is a character-building time to revisit how you manage your personal finances and determine what changes should occur for the next time this government shutdown occurs.  Even if the Ensuring Pay for Our Military Act of 2011 passes, it is no guarantee of future challenges with your personal finances. 

A word of caution:  be certain that who you talk to about your finances is legit.  Fraudulent activity is high especially targeting military personnel and their families. 

Copyrighted 2011 by Stephanie Arredondo

Please see Military Families Affected by Government Shutdown and No Pay if Government Shutdown Occurs. 

Military Families Affected by Government Shutdown

As politicians disagree on government spending (gee, we have to watch our spending...why can't government?  Hmmmm), military families face a financial stress that none deserve, especially added to those families whose servicemember is deployed.  Chris Lawrence of CNN comments about this threat to military families. 

None of this makes for a fun time for military families.  Hype such as It's Time for A Government Shutdown where it's questionable about military tasks serving US security doesn't help ease the rhetoric and talk about the Department of Defense or the Pentagon.  Claiming our wounded veterans as "unfunded liabilities" is harsh.  Granted, tough economic times calls for this long overdue assessment of the Federal Government, but please, it's important to our country to NOT denigrate those wounded in combat.

CNBC does a great job of breaking down areas of the potential government shutdown. 

• For this to occur during Tax Season, it is not the best timing, and disruption regarding you filing your tax return is a factor. 
• Benefits for military veterans may very well be affected,  and while I've reviewed CRDP in a previous blog, it may not be a fun time for those dependant upong those benefits.  Alfa Sugar article on CRDP   
• Since 1980, all federal agencies are required to have plans for who gets affected or not when the potential government shutdown occurs. 

Caution flags are high especially amongst the upper ranking personnel who know who will and will not be affected by this potential government shutdown. 

For many military families, it is recommended that you not get upset and be patient as politics plays out. 

In No Pay if Fed Shutdown Occurs, I comment about this probable interruption in military pay.

For those harboring debt or lacking an emergency fund, it is important to try the following:

1. Please do not panic or stress
2. For debt or monthly payments, it is wise to call the business and make other payment options.   By calling or contacting the business especially if it's related to a medical bill, the party owed will work out a payment plan that will help with your short term needs.
3. Immediately curtail all unnecessary spending such as eating out, having your nails done, etc...  This is a time for beans and rice, brown bag lunches, and other cost cutters.
4. Review your finances to see what you must cover and what you can postpone for the next month.
5. There will be a lot of hype amongst the media, politicians and other venues so it is wise to tune it out and tune in to your personal finances.
6. For those dealing with a deployed family member, I strongly recommend that you contact your church or chaplain.  Legitimately, should you require help and your church home agrees, the church may seek ways to financially assist you during this time period.  Anything to reduce stress on a military family that is already stressed is a great way to say thanks, and though humbling, it is good to say yes and accept this gift.

Copyrighted (c) 2011 by Stephanie Arredondo, aka Alfa Sugar

Disclaimer:  This article is the opinion of the person writing it, and any financial decisions made as a result does not make the writer liable for any action taken.  Please consult your personal financial advisor for more information.

JC Penny offers FREE 8x10 & 50% discount portraiture

JC Penny offers a nice deal to military.  Until June 30, 2011, JCP is offering a FREE 8x10 portrait and 50% off of your entire portrait purchase.  Please complete the JCP coupon and show military ID.

Sharia in America

It is wise to be educated about where the American taxpayer's dollars are being directed.  It is important for our military families to understand what is sharia and why is this relevant to financial matters. 

There are good people in this country and in our military, all who are free to practice their religion.  I've met few muslims who have been nice, hardworking US citizens.  I've met people of other religions, some good and some not good.  All have coexisted well since this nation was founded.  Regardless of the political viewpoint presented, it is important to understand finances in America, how it affects the taxpayer, and the hope of improving our financial markets as well as paying off the national debt in due time.  For those seeking to hinder growth in America, it will be a surprise.  History reinforces the mindset of the American citizen and a culture that thrives in ways least expected. 

Below are some articles to reference.  What's important is to blend financial matters with current laws so that justice and preservation of government continues to prosper this country. 

American Family Matters reviews how AIG defies US taxpayers.

The AIG-Sharia connection reviews legal aspects on Culture.

Glenn Beck produced a video about Americans funding terrorism. 

Fox News reviews a lawsuit pertaining to this matter as well as the Washington Post.

Even with the Islamic Banking Industry representing $442 billion in 2008, big named financial institutions such as Citicorp, HSBC and Deutsche Bank seek to gain market share by developing Islamic centers catered to this niche area.  The New York Times wrote about how Islamic banking business has grown as a result of oil wealth.  The practice of sharia when it comes to financial matters is intriguing because the approach is similar to venture capitalists.  I like this American captitalistic spirit when it comes to financial matters. 

While there is frowning upon AIG, there is grave concern for our nation.  Setting aside religion and this war we are in whether we want to be or not, the American taxpayer should not be undermined and should not be conned into certain activities that just are not right from a financial perspective. 


Disclaimer:  These articles are referenced and are not necessarily the opinion of the author.  Information provided is for the reader to make an informed decision about financial matters pertaining to the American taxpayer.

Military Children: Camp Opportunity 2011

The Golden Corral Restaurant is sponsoring a FREE week of summer camp for children of disabled or wounded military families.  Camp Corral is a great opportunity for military kids to help themselves to happiness.   There are three camp sessions being held at Millstone 4-H Camp near Ellerbe, NC this summer.  Hurry because registration is available for 400.  Parents are to provide transportation costs to and from camp for their child.

Big Picture Spring 2011

Military spouses:  It is important to get educated in your personal finances.  Understanding the basic economy or the big picture will enhance your knowledge and decision-making when it comes to your personal investments in your 401k, IRA or other investment accounts.

Given the hype that inflation is once again in the news from many credible sources such as The Valueline Investment Survey and investment strategist professionals, it is an interesting economic time in our country.

Stockcharts.com presents a PERF: S&P Sector ETFs chart that affirms what many are discussing.  That the US economy is in an early recovery while the financial markets are seeing maturation from its recent run-up. 

Though the economic recovery is in its early stages, there is an elevation among consumer confidence that's premature yet welcomed causing many to breath a sigh of relief.  Consumer sentiment is up (even though many are being cautious about spending).  Keep in mind that the consumer accounts for 70% of the nation's gross domestic product. 

Industrial production is picking back up with many companies hiring, adding back in shifts/workers to meet market demands, and upping advertising as well as catalog production publications.  This is an encouraging sign.

John Murphy blogs about Bond Yields Jump and how this is favorable for stocks but not for bonds.  Rising bond yields show that the economy is strengthening.  Below he depicts how breakout from the 50 day moving average line for the 10 year treasury note yield has been affirmed technically. 



Interest rates are at lows and have no where to go but UP!  There is risk involved as those with portfolios exposed to a rise in interest rates may suffer a setback.  Fixed-income investments such as bonds, cds, money management, municipals and other bond-related investments will encounter a challenge. Current yield curve is normal.  This is likely to change but not too quick anytime soon.  The Federal Reserve's flow of funds lending shows an uptrend in net lending from banks; however, banks are being more cautious given past financial loss from loan loss provisions and other. 

Housing market has been in the doldrums with a strong downtrend in new home sales and existing home sales going back to 2005.  Many have seen their houses not sell or devalued well below expectations.  In certain respects, housing has seen a correction and has become affordable for some.  As is prudent, many are reluctant to purchase housing because of the tremendous financial loss from the sale of their last home, the job market and certain uncertainties with current employment, and inflationary woes as food costs and energy prices are on the rise.  Real estate agents and other professionals are seeking creative ways to entice activity. 

Global events will occur.  It is unfortunate what's occurred in Japan.  We have yet to see the impact economically it will have on our US economy.  Turmoil in the Middle East/North Africa, the ongoing war in Afghanistan and Iraq, and even the BP spill off the Gulf shoreline are many unforeseeable events that will affect us.  While global events may mobilize many military personnel into activation and relocation, it is a time for the military community to consider local economics surrounding bases and areas of living.  Guard and reserve deal with more localized economics.

In consideration of the US financial markets, it's likely that global events and the risks of inflation will affect any gains made so far.