Blah Days As Food and Gas Prices Rise

I don't know about other households but mine is feeling the pinch at the gas station and grocery store.  Forecasters predict food and gas prices to rise even more this summer.  Tomatoes have been a luxery item of late.  I am even learning how to buy milk and freeze it just to cut back on my number of trips to the store.  One of my neighbors did away with their garden one summer because it was too much to handle but now they are gearing back up the garden to feed a family of six this summer.  I've reduce my eat out bill and am even reducing sitter costs.  Whatever the case may be for your household or situation, it is wise to pinch pennies, get creative with meals and reduce trips. 

Just this past weekend at the mall, one store was offering you 25% off anything in the store that day just for coming in it.  I've noticed coupon adds for Gap and Bannana Republic like never before.  Forever21 store was packed at the mall and it's simply because they are selling cheap clothes that meet the practical needs of their customer.  I bought one dress for $14 and plan for it to be my one buy this summer.   There's an increase in advertising and sales promotion but my question is THIS working to generate sales or are these stores still operating in red from the current economy?

My skeptic perspective is reigning high these days as I myself cut back on a lot of expenses and try to do more at home or in more economical ways.  Wives of Faith has reinstated its Coups for Troops program so definitely sign on for that deal if possible. 

If it is like going back to the 1970s where we do more potluck suppers and other creative but cost-reducing ways to socialize, then I believe that we are foreshadowing a challenging and punitive time in our country's business economic future. 

Jubilee Celebration on the News of Bin Laden's Death; What This Means for Our Financial Future

It's all over the news about the death of Osama Bin Laden.  Many Americans will remember where they were the day that news broke about US Special Forces taking out Osama Bin Laden, the mastermind behind the 9/11 attack on the United States of America 10 years ago.  Crowds have gathered at many landmark locations such as Ground Zero, The White House and other public venues.  Many are jubilee about this news.  The War on Terrorism succeeded at a near impossible mission.

What does this mean from a financial perspective?

Our US dollar may see a quick uptick in today's markets; however, it is expected to be another day in the market.  See Stock Futures Gain article and Asian Stocks Rise as US Earnings Gain artcle.  US Corporations will continue to prevail amidst current economic, political and weather conditions.  Fundamentals are being tested, and what is interesting if you are a keen business follower is how certain businesses prevail under the various conditions that they must operate.  Today is no different from previous days as Americans go to work.

Concern is mounting about a retaliation from the jihad.  Talk is about suicide bombers and other.  If Osama Bin Laden has been made a martyr, then the craziness of murder will pick up for reasons that is detrimental to human life.  Hamas condemns killing article.  Question for many is when will this War on Terrorism end (especially on US taxpayer wallets not to mention those of us in the military who watch loved ones serve)?  For business travelers especially those Americans traveling internationally, it is imperative that you be careful and be safe for many Americans could be targets for future retaliation.  It is wise to research insurance and put a revised policy in place.  Also, if you can, it is important to meet with a financial planner to determine a good financial future for your family as well as an attorney to revisit legal documents.  Having peace of mind that this arduous task is done will bode well for future financial security.

Day of Financial Reckoning article comments about several points which I disagree.  The US military should not be scaled back especially in Afghanistan just to cutback on expenses pertaining to the budget.  Military operations are carefully scrutinized by the higher ups, and I think that we all pray in America that the elected politicians will do what is right (not what is politically deemed a right or left direction).  Cheers to our US Military and Special Forces on a mission well-done!

In the wake of this celebration, it is important to keep financial perspective as we embark on a new chapter in the War on Terrorism. 

Higher Food Costs That Will Trouble Your Wallet

Food prices are high and are going higher.  According to a Wall Street Journal article written about the CEO of Smithfield Foods perspective on his business and the real world he is living, it's getting harder to bring home the bacon. 

Devaluing the US dollar is contributing to inflationary pressures and is lowering your purchasing power.  Politicians can do something here, if they so choose. 

Ethanol prices or the price of corn is going higher.  If 40% of the corn supply is allocated toward ethanol, then the demand for corn goes higher.  World populations are growing and demand is higher for food. 

For us military spouses who are shopping, it's challenging to determine what to do next.  For retirees or those on fixed incomes, it's more challenging because the trade-off is now do I buy my medicine or my food?  While many may not care and just go further into savings or debt to maintain their current lifestyle, it's becoming increasingly alarming to many who do care.  The future outlook looks grim or entails more creative ways to fund your current lifestyle. 

Reminders of the Great Depression and the more challenging times in the 1930s perhaps indicate the present cycle.  Natural disasters such as earthquakes and floods are shockers.  A lackluster economy that is trying to rebound is dim on the horizon.  Cutbacks on many levels are occurring.  The elderly population is fearful.  The baby boom generation is starting to retire and draw on social security.  College graduates cannot find jobs upon graduation.  Middle-aged workers are working longer hours for same or less compensation. 

Higher food costs that will trouble your wallet stems from the upswing in corn.   Meat prices will surge.  Milk and dairy products will increase in price.  Bread will go higher because it is a grain-item. 

If you track your food prices and can get the best deal for your dollar, it will help you and your budget as we as a nation endure an economical time unmatched since the 1930s.

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.