It looks like more massive selling across the board in today's markets. I echoed Krieger's comments a couple weeks ago that the Central Planners would try their hardest to drive down commodity prices in advance of more money printing. It looks like they are getting it done. Remember this is pure manipulation. I can't imagine that people want to invest in their money in treasuries. That is a losing trade, guaranteed. The real rate of return is -2.5% right now. And that's if you believe inflation is only 3.5%.
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Disney isn't the only thing that cost a lot of money with raising a child.
The Inflation of Life
Your little bundle of joy is going to require a wad of cash.
The cost of raising a child from birth to age 17 has surged 25 percent over the last 10 years, due largely to the rising cost of groceries and medical care, according to the Department of Agriculture, which tracks annual expenditures on children by families.
The government's most recent annual report reveals a middle-income family with a child born in 2010 can expect to spend roughly $227,000 for food, shelter and other expenses necessary to raise that child - $287,000 when you factor in projected inflation.
And, no, the bill does not include the cost of college or anything related to the pregnancy and delivery.
"If you sat down to tally up the total cost of having children, you'd never have them," says Timothy Knotts, a father of four and a certified financial planner with The Hogan-Knotts Financial Group in Red Bank N.J. "It's a very expensive adventure."
Talk about a life-changing event. That's a lot of vacations, clothing, and restaurant dinners you may no longer enjoy.
Plan Early
Ultimately, of course, the decision on whether or not to expand your family has little to do with dollar signs.
For most prospective parents, kids are the central priority around which all other lifestyle decisions get made - career moves, housing choices, where to live.
Because of its financial impact, however, it's wise to begin planning for parenthood as early as possible, says Matthew Saneholtz, a certified financial adviser with Tobias Financial Advisors in Plantation, Fla.
"You don't want to get too hung up on whether you're ready financially, because no one is ever really ready and it works out in the end, but you do want to think about how you see that first year with a new baby," he says.
Among the first issues you'll want to address:
Will you both return to work or will one of you quit to care for the child?
Does your employer offer maternity or paternity benefits?
Are you going to need a bigger car?
How much will your health insurance premiums climb after baby makes three?
You won't necessarily have control over the process, but you should also discuss how many children you'd like to have and when you'd like to have them, as that affects the timeline for getting your financial house in order.
Ideally, says Saneholtz, you should pay off your credit cards and put retirement savings on autopilot before you welcome a baby.
The four-bedroom house with a fully equipped nursery can wait.
Couples should resist the urge to splurge on a house at the top of their dual-income budget, says Knotts, since you may change your mind about whether or not to return to the office after the baby arrives.
"Our advice to clients is any time there's a life changing event, be it a baby or your own retirement, don't make any huge changes," he says. "Take your time. Do you want to be in a different school district, or closer to relatives or work? There's a lot to think about."
Testing 1-2-3
Prudent parents-to-be should also practice living on less before the big day arrives, says Chuck Donalies, a certified financial planner with Investment Planning Associates in Rockville, Md.
"Review all your expenses and cut out what you can," he says. "Almost every household budget has some fat in it."
Keep in mind that your annual medical expenses will almost certainly rise after you bring your newborn home.
Mark Lino, a USDA economist, notes that healthcare costs for the average family have increased 58 percent over the last decade, faster than any other expense component in the survey.
"With kids in particular, you're going to have emergencies, and while you might go without for yourself, you're going to take your kids to the doctor when they have a fever," says Knotts. "Someone's going to break an arm or knock out a tooth, and that could cost you a few hundred or thousand dollars each time."
As a starting point, Knotts suggests living on 90 percent of your after-tax income, using the money you save to fund an emergency account worth three to six months of living expenses.
If one of you plans to quit work to care for the child, your new spending plan should reflect the projected loss of income.
You can also apply those dollars toward a life insurance policy after the baby comes along, says Donalies, providing protection for your little one (and your spouse) in the event something happens to the breadwinner.
Donalies recommends a term life policy that covers your family until well after your child is out of college.
"The cost of a term life policy is so low that you should have a policy until your child reaches age 30," he says.
Ka-ching: Child Care
If you both plan to continue working, and you don't have family willing to provide free labor, you'll have to factor child care costs into your budget.
Such costs vary by region, as does the type of care provided, but the average annual price tag for full-time care in 2010 for an infant in a child care center ranged from $4,650 in Mississippi to $18,200 in the District of Columbia, the National Association of Child Care Resource & Referral Agencies reports.
The average annual cost for full-time care of a 4-year old drops to $3,900 in Mississippi to $14,050 in the District of Columbia.
Nannies are more expensive still.
According to the International Nanny Association, nannies who live outside your home can cost more than $3,000 per month for full-time care, and as an employer you'll be required to pay their Social Security taxes.
Ka-ching: College Tuition
There's no rule that says you have to help your child with college expenses, of course, but if you plan to do so, you'd better start budgeting for that as well.
The average cost of a four-year college for in-state residents, including tuition, fees, room and board, climbed 6 percent for the 2011 and 2012 academic year, averaging $17,131, the College Board reports.
A public four-year school for out-of-state students cost an average $29,657 this year, while four-year private colleges cost more than $38,000 per year.
Knotts cautions parents, however, to save for retirement first before throwing money into a tax-advantaged 529 college savings plan. After all, there are no scholarships or loans for retirement.
Manage Money and Expectations
Finally, remember that it's ultimately you who decides how much you're willing to spend on your kids.
Families with higher incomes, for example, tend to spend more on discretionary expenses like Apple (AAPL - News) iPods and Decker Outdoor's Uggs - things your child may want, but doesn't need.
The USDA report shows that a family earning less than $57,600 per year can expect to spend a total of $163,440 on a child from birth through high school; parents with an income between $57,600 and $99,730 can expect to spend $226,920; and families earning more than $99,730 can expect to drop $377,040.
"Kids don't have to have all this stuff," says Knotts. "We are a generation where we feel like we need to give our kids all of these experiences, but you can do a lot with your kids without spending a lot of money."
Children may be a blessing, but they don't come cheap. Families that plan ahead not only have better control over their budgets, but are often able to do more with less. They're also better positioned to ensure their own financial goals don't get derailed along the way.
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The next few pieces are from Krieger's blog.
CIA Whistle Blower, Robert D Steele, Reveals The Truth About Government
Posted on May 9, 2012
This is an extremely powerful 10 minute clip that I suggest everyone take the time to watch. What I find so remarkable about it is the fact that this speech was given over two years ago and I am just seeing it today for the first time. It demonstrates that there are many, many brave people speaking out, but the mainstream media just has a total blackout on these sorts of folks in what must be at this point a deliberate strategy to keep most Americans stupid, ignorant debt slaves. What I really found interesting, particularly given my recent launch of this blog, is the emphasis he put on such activities as being key to turning this whole thing around. The concept of “citizen journalists” being extremely important, which certainly appears to be taking off. His description of the Bilderberg group as “nobodies who wanna be somebodies combined with somebodies on their way down” is just classic. This guy is good…
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House of “Representatives” Fails to Fully Fund Mortgage Task Force
Posted on May 9, 2012
My Take: There is no rule of law in America. I repeat. There is no rule of law in America. I mean this is incredible, the House of “Representatives” couldn’t come up with $55 million to fund a task force to investigate mortgage fraud. $55 million. Yet we printed trillions to bail out the people and institutions that destroyed the economy with zero hesitation. This is why no one believes in this country’s institutions or Federal Government any longer. It is a criminal syndicate. Ah just another day in the United States of Banana Republic.
Key Quotes:
When New York attorney general Eric Schneiderman appeared before the Congressional Progressive Caucus in late April, he asked the members to help him obtain funding for the Residential Mortgage-Backed Securities working group, which he co-chairs. “If you want to help me badger everybody, that’s good,” he said. “I’m a good badger by myself but I know there are some experts in this room.”
The bill provided only a fraction of the $55 million the DoJ asked for in its budget request for “investigating and prosecuting financial and mortgage fraud.” Waters proposed re-appropriating some money in the bill from the NASA program to fully fund the $55 million request.
Representative Brad Miller also rose in support of Waters’ amendment. Though Miller was turned down for the job of executive director—because, he believes, the working group was afraid of industry blowback.
Unfortunately, when put up for a voice vote, the Waters amendment failed in the Republican-dominated chamber. Her case wasn’t helped when Representative Chaka Fattah, also a member of the progressive caucus, spoke in opposition to the amendment, citing concerns about the loss of NASA funding.
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324,000 women dropped out of the nation’s civilian labor force in March and April as the number of women not in the labor force hit an all-time historical high of 53,321,000, according to the
Bureau of Labor Statistics.
The civilian labor force consists of all people in the United States 16 years or older who are not in the military, a prison, or another institution such as a nursing home or mental hospital and who either have a job or are unemployed but have actively sought work in the previous four weeks and are currently available to work.
The civilian labor force is a subset of what BLS calls the civilian noninstitutional population, which includes all people in the country 16 or older who are not in the military, a prison, or another institution such as a nursing home or mental hospital.
This year (in both January and April), only 57.6 percent of the women in the civilian noninstitutional population were in the labor force. That is the
lowest rate
of labor force participation by American women since April 1993, according to historical data maintained by BLS.
The rate of female participation in the civilian workforce peaked twelve years ago--in April 2000--when hit 60.3 percent.
In February, according to BLS’s seasonally adjusted data, 52,833,000 American women were not in the labor force. In March that climbed to 53,090,000—a one-month increase of 257,000. In April, it climbed again to the historical high of 53,321,000—a one-month increase of 231,000 from March and a two-month increase of 488,000 from February.
In February, there was an historical high of 72,706,000 women in the labor force. But in March, that dropped to 72,529,000—a decline of 177,000. And in April, it dropped to 72,382,000—a decline of another 147,000.
Thus, in March and April, according to the BLS data, a total of 324,000 American women dropped out of the civilian labor force.
The number of women added to those not in the labor force in March and April (488,000) exceeds the number of women who dropped out of the labor force during those two months (324,000) because women who newly turned 16, or left the military, or were released from prison or another institution during those two months and then did not seek a job were added to the ranks of those not in the labor force.
BLS says that for a one-month change in the number of women in the labor force to be statistically significant it has to be greater than about 260,000. For a three-month change to be statistically significant it has to be greater than 400,000. Thus, the two-month increase of 488,000 in the number of women not in the labor force is a statistically significant trend, but the two-month increase of 324,000 women who dropped out of the labor force is not. However, if at least 76,000 additional women drop out of the labor force in May the trend will become statistically significant.
Moreover, BLS says the decline of female participation in the workforce over the past year has been statistically significant—dropping from 58.3 percent in April 2011 to 57.6 percent this April.
For both males and females combined, the rate of participation in the labor force dropped to 63.6 percent in April—the lowest rate since December 1981.
Recently, however, women have been leaving the labor force in larger numbers than men.
From February to March, the number of men in the labor force actually increased by 14,000—rising from 82,165,000 to 82,179,000, according to BLS. From March to April, it dropped back down to 81,983,000—a one-month decline of 196,000.
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ICBC has been the most aggressive of China's "big four" banks in expanding overseas.
According to the Fed the bank has total assets of roughly $2.5 trillion.
It will buy up to 80 percent of the US unit of the Hong Kong-based Bank of East Asia, which operates 13 branches in New York and California.
As part of the deal ICBC and two state-backed financial firms -- China's sovereign wealth fund the China Investment Corporation (CIC), and Central Huijin Investment -- will be recognized as bank holding companies, regulated as commercial US banks.
The broad expansion of China's footprint in the US market comes amid a series of financial reforms in China that could begin to open the lucrative market to US firms.
After the May 3-4 meeting, the US Treasury noted China had made "encouraging progress" on a number of issues sought by the Obama administration, including taking steps toward a more open and market-oriented financial system.
The Fed said Wednesday that the ICBC proposed acquisition, which is "relatively small," would not have much of an impact on the banking market.
"The combined deposits of the relevant institutions in the Metropolitan New York banking market represent less than one percent of market deposits," the central bank noted.
The competition includes Bank of China branches in the New York metropolitan area, and CIC, which has a noncontrolling stake in Morgan Stanley.
ICBC will pay $140 million to buy an 80 percent interest in Bank of East Asia USA, China's state news agency Xinhua reported in January 2011, at the time the deal was signed.
"This unprecedented acquisition of a controlling stake in a US commercial bank by a mainland bank is strategically significant," Xinhua quoted ICBC chairman Jiang Jianqing as saying.
The Fed said its Board also consulted with the China Banking Regulatory Commission, the country's main banking regulator, and pointed to steady improvement in regulation since its founding in 2003.
"For a number of years, authorities in China have continued to enhance the standards of consolidated supervision to which banks in China are subject, including through additional or refined statutory authority, regulations, and guidance," it said.
In other Fed board decisions, Bank of China, the third-largest bank, won approval for a branch in Chicago. Bank of China operates two insured federal branches in New York City and an uninsured branch in Los Angeles.
Agricultural Bank of China, the fourth-largest bank, was set to establish a branch in New York City, where it already operates a representative office.
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This is from CNBC last week.
Wall Street is starting to sound a little spooked.
Citigroup on Wednesday issued a client note that just a few weeks ago would have read like satire. “We think central banks in the U.S., euro area, Japan, and the U.K. could and should do much more” to stimulate growth, said the firm’s economists, led by Willem Buiter. Yes, these institutions, which have already pushed their respective interest rates to historic lows and made unprecedented efforts to buy government bonds and other securities, are not being aggressive enough, the firm argues.
Specifically, Citi advocates a three-pronged approach: First, lower interest rates “all the way to zero” in the two regions, the U.K. and euro area, where they aren’t basically at zero already. Second, carry out “more imaginative forms” of quantitative easing of any or all types of “less liquid and higher credit risk securities” beyond government bonds. And third, engage in “helicopter money drops,” by which they mean the fiscal authorities in each region should join forces with the central bank to pump money directly into their respective economies.
It is these latter two — the most controversial of the bunch — which Citi argues will be most effective in boosting growth across these four struggling regions. There are two primary factors, however, holding many policy makers (and much of the public) back.
One is fear of the known — that is, inflation . Today’s troubles couldn’t be more different from the supply-side woes that hurt growth and fueled inflation in the 1970s and ‘80s, but plenty still don’t see it that way (and many who have lived through hyperinflation episodes in the past are understandably fearful of a repeat). There is also a legitimate case to be made that broad deflation would serve developed economies far better than continued inflation; the trouble, however, is that advanced economies are not well-equipped to manage deflation, especially wage deflation, and that deflation in isolation is a far different story than deflation coupled with high debt loads, which is unfortunately the situation advanced economies are stuck in today.
The second is fear of the unknown. Citi is basically calling on policy makers to try anything and everything to boost growth. The trouble is that policy makers aren’t programmed to work like that. Entrepreneurs, maybe. But policy makers, who have to answer to the public, to political opponents, to themselves? They are perhaps the least likely group of people in the world to baldly adopt a “try anything” approach for fear of the many unintended consequences it could have (consequences that will define their legacies, no less). This is why the “muddle through” approach is almost always the default one. Indeed, even the grandest of gestures (think the U.S. “bazooka” stimulus and bailout schemes) are rarely as grand as they are billed at the time.
Knowing this, Citi nevertheless rattles off a series of “try anything” schemes that policy makers could adopt: “abolishing currency completely and moving to E-money on which negative interest rates can be paid as easily as zero or positive rates,” for one. Taxing holdings of bank notes (originally a Depression-era suggestion), for another.
The firm acknowledges that the case for such drastic moves to lower real interest rates is not “quite as strong today, especially in the U.S. and U.K., as it was in the ‘08-’09 period.” Citi also acknowledges that as U.K. inflation has been persistently running higher than the Bank of England’s target, policy rates there perhaps “should actually be higher.” And it admits that while recessions wreak havoc on pension funding capabilities, so too do extended periods of ultra-low long-term interest rates. It adds that policy makers are partly standing in their own way by not being more explicit about the lengths to which they are willing to go to generate growth. And that in some cases, such as financial reform, supply-side issues may be impeding effective monetary stimulus and ultimately growth.
Still, the firm insists the benefits of further drastic action outweigh the costs. Citi cautions that “quantitative easing,” or central bank asset-buying programs, likely have diminishing effects over time, such that “even doubling or tripling the size would not multiply the effects.” It says the U.S. and U.K. should stop buying government bonds as they have been and, taking a cue from Europe, start buying assets that are less liquid “and/or high credit risk.” (One can hardly blame policy makers for fearing those consequences.) To be sure, Citi’s economists say they doubt policy makers will pursue anything remotely this aggressive.
If there is an area where everyone can agree, however, it may be on taxation. Citi says the “helicopter money drop” they advocate can take the form of infrastructure investment, direct government payments to households, or a “temporary tax cut” (emphasis theirs), any of which would be funded by a “permanent increase in the monetary base.” It should be immediately clear which of these options, at least in the U.S., would be most likely. (A tax cut funded by an increase in the money supply, which is a demand-side stimulus program, by the way, should not be confused with a tax cut that shrinks the size of government, even though it would likely be phrased as such to win over the public.)
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