The Plain Truth: Economy

Economy

October 20, 2012

What If Henry Ford Ran Walmart?

Working on the assembly line (Photo credit: Wikipedia)

Think you know??? You probably don't

Henry Ford is famous for mass-producing the automobile with an assembly line. But the part of his legacy we should be looking back to and learning from today was born in 1914 -- one year after his assembly line's implementation.

This was when he effectively doubled his workers' pay to $5 a day, a move Fortune magazine recently declared one of "the greatest business decisions of all time."

Some folks then and now misinterpreted this move as an act of charity on his part. But what actually motivated Ford was profit.
At the time, employee turnover at Ford (F) was high (similar to Walmart today, where 70% of employees hired leave within the first year). And no wonder -- completing the same task over and over again on an assembly line is boring.

This left the company with the ever-growing expense of recruiting, interviewing, and training new employees to fill their shoes. By doubling employee pay, he successfully convinced employees that working on the line wasn't so bad after all ... at least not while making twice what they'd make elsewhere.

The move -- which cost nearly $10 million at the time to implement -- became "one of the finest cost-cutting moves we ever made," according to Ford himself. Productivity jumped and employee turnover dropped from 370% to just 16%.

And a Consumer Revolution Began ...

Read the whole story here>>>>>>>>>>>>>>>>>

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October 16, 2012

Troubling News: U.S. Families Now Carrying About As Much Debt As Before The Recession

image from consumermediallc.files.wordpress.com

We’ve been toting quite a heavy load, economically speaking but it appears that for the average U.S. family, the debt burden has been lightened to where it was before the recession. That means that all of the unwieldy home mortgage debt, credit card debt and other debt loads have been trimmed down, making us more aerodynamic as we try to … [More]

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September 20, 2012

The Plain Truth: Judge Napolitano Takes On The Fed

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September 14, 2012

Federal Reserve launches QE3

The Federal Reserve:Biggest scam

(NBC NEWS) The Federal Reserve said Thursday it will take new steps to boost the sluggish recovery including buying an additional $40 billion of mortgage debt every month for the foreseeable future.

It also said it would continue with moves to drive down interest rates and spur investment until the labor situation improves.

“If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability,” the Fed said in a statement.

Read the full story ›

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August 31, 2012

Senior Citizens Ruined by Obama Economy, Media Silent

Brochure from 1961 with basic advice about Social Security cards (pages 1 and 4) (Photo credit: Wikipedia)

Senior citizens whose lives depend on their saved earnings are in crisis because of the economy – but somehow, because there’s a Democrat in the White House, the media says nothing. In a concise and brilliant column in USA Today, Glenn Reynolds of Instapundit.com delineates how shockingly bad the situation is for seniors.

Reynolds starts by noting that the basic elements of seniors’ savings:

"...interest rates on bonds, CDs and money market accounts are at historic lows. Money markets are down 0.35% and CD’s are 0.90%. Stocks are lower than they were five years ago."

The University of Tennessee law professor then posits this: Years ago, when seniors could accrue 5% on their savings, a $360,000 portfolio of CDs would garner $18,000 a year in interest, which amounted to $1500 a month. Combined with a Social Seurity payment that was roughly equivalent, the total would be $36,000 a year, $3,000 a month.

But in the current economy, that 5% becomes 0.9%, which means instead of receiving $18,000 a year, the total becomes $3,240 per year, or about $270 a month. Add the same $1,500 a month from Social Security, and the senior is now living on a mere $1,770 a month – just $21,240 a year. That's almost cutting their income in half. MORE>>>>>>>>>

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August 24, 2012

U.S. economy worse than Europe

The Ponzi Scheme (Photo credit: Wikipedia)

(National Post) At a European conference on the sovereign-debt crises that I attended this week, my overwhelming conclusion, after listening to many experts, is that the U.S. is in far more trouble than Europe.

This was brought home by calculations presented by Larry Kotlikoff of Boston University at a lecture held at the International Institute of Public Finance, the biggest gathering of public-finance experts in the world. Greece may be bankrupt, but the U.S. looks like a giant Ponzi scheme.

Kotlikoff’s calculations show that U.S. unfunded liabilities total US$222-trillion, the highest of all major OECD countries (12% of the time value of U.S. GDP) once accounting for monetary public debt, Social Security deficits and public-health-care unfunded liabilities. One can quibble with some of the calculations, but no one can doubt that the U.S. is in serious fiscal trouble, more so than any other developed economy.

The U.S. reflects the most extreme case of intergenerational inequality. Generation after generation has participated in a Ponzi game, leaving younger taxpayers to pick up the tab for money effectively borrowed by older generations to spend on unfunded benefits. Kotlikoff labelled such practices as “child fiscal abuse,” a rather strong term but not far from the truth.

Read the full story ›

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August 23, 2012

Study: Middle Class Having ‘Worst Decade In Modern History’

File photo of a middle class housing development. (credit:Michael Melford/GettyImages)

WASHINGTON (CBSDC/AP) – According to a study released earlier this week by the Pew Research Center, the middle class is receiving less of America’s total income, declining to its smallest share since the end of World War II.

The middle class is defined by a household whose income ranges from $39,000 to $118,000. The survey described this group as its “worst decade in modern history.”

The recession technically ended three years ago, but the middle class is still feeling economic woes.

The Associated Press reports that most middle class people feel they have to reduce spending and even fewer feel their hard work will get them ahead in life. Middle class families also feel their children’s future will be the same or worse.

The survey found that 85 percent of the middle class believe it is more difficult now to maintain a standard of living then it was a decade ago.

Click story to read more!

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August 22, 2012

DuPont Could Sell Coatings Division to Carlyle Group in $4.5 Billion Deal

WASHINGTON, DC - SEPTEMBER 06: A sign for the Carlyle Group, a private equity firm, is seen after the company filed papers with the Securities and Exchange Commission for a $100 million IPO on September 6, 2011 in Washington, DC. The firm manages approximately $150 billion in assets and is expected to hold their IPO late this year, or early next year. (Image credit: Getty Images via @daylife)

The Carlyle Group has emerged as the frontrunner in the buyout of DuPont’s (NYSE:DD) Automotive and Industrial Coatings division. It recently upped its bid to over $4.5 billion, with rival bidder Apollo Global Management LLC declining to match the offer.^[1]

We estimate that the Automotive and Industrial Coatings division makes up around 5% of DuPont’s total value, based on the cash flows it can potentially generate. The division is one of the world’s leading automotive coatings suppliers. It manufactures high performance liquid and powder coatings for motor vehicle component manufacturers, the motor vehicle aftermarket, and general industrial applications such as pipes and insulation.

The Automotive and Industrial Coatings division has several large customers in the motor vehicle equipment manufacturer supply chain, many of whom have long-standing relationships with the company. DuPont also has a major research facility and a number of manufacturing facilities dedicated to coatings. Further value is added through synergies from backward integration, as DuPont is a manufacturer of Titanium Oxide, a raw material in the production of coatings. MORE>>>>>

If you want to save money and not pay for this $4.5 Billion dollar boondoggle - CLICK HERE!

OR Visit our EBAY STORE

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August 20, 2012

General Motors Is Headed For Bankruptcy -- Again

English: Logo of (Photo credit: Wikipedia)

President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion. Read More>>>>>>>>>>

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August 19, 2012

Investors Prepare for Euro Collapse

ECB (Photo credit: AlphaTangoBravo / Adam Baker)

Otmar Issing is looking a bit tired. The former chief economist at the European Central Bank (ECB) is sitting on a barstool in a room adjoining the Frankfurt Stock Exchange. He resembles a father whose troubled teenager has fallen in with the wrong crowd. Issing is just about to explain again all the things that have gone wrong with the euro, and why the current, as yet unsuccessful efforts to save the European common currency are cause for grave concern.

He begins with an anecdote. "Dear Otmar, congratulations on an impossible job." That's what the late Nobel Prize-winning American economist Milton Friedman wrote to him when Issing became a member of the ECB Executive Board. Right from the start, Friedman didn't believe that the new currency would survive. Issing at the time saw the euro as an "experiment" that was nevertheless worth fighting for.

Fourteen years later, Issing is still fighting long after he's gone into retirement. But just next door on the stock exchange floor, and in other financial centers around the world, apparently a great many people believe that Friedman's prophecy will soon be fulfilled.

Banks, investors and companies are bracing themselves for the possibility that the euro will break up -- and are thus increasing the likelihood that precisely this will happen.

There is increasing anxiety, particularly because politicians have not managed to solve the problems. Despite all their efforts, the situation in Greece appears hopeless. Spain is in trouble and, to make matters worse, Germany's Constitutional Court will decide in September whether the European Stability Mechanism (ESM) is even compatible with the German constitution.

There's a growing sense of resentment in both lending and borrowing countries -- and in the nations that could soon join their ranks. German politicians such as Bavarian Finance Minister Markus Söder of the conservative Christian Social Union (CSU) are openly calling for Greece to be thrown out of the euro zone. Meanwhile the the leader of Germany's opposition center-left Social Democrats (SPD), Sigmar Gabriel, is urging the euro countries to share liability for the debts.

On the financial markets, the political wrangling over the right way to resolve the crisis has accomplished primarily one thing: it has fueled fears of a collapse of the euro.

Cross-Border Bank Lending Down>>>>>>>>>>>>

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Team Obama Has Already Chopped into Medicare

Senate Dems Protest Medicare Cuts - when they actually voted for it with Obamacare! (Photo credit: Talk Radio News Service)

Presumptive GOP vice presidential nominee Paul Ryan should begin his campaign rallies by blasting Eric Clapton's "Before You Accuse Me (Take a Look at Yourself)."

This blues tune perfectly reflects the neurosis of President Barack Obama and his troops. They constantly bellow that Mitt Romney and Ryan lust to cut Medicare. Yet, in fact, it is Team Obama that already has chopped deeply into it.

Obama and his comrades echo each other on this point. Republicans are "weakening the safety net," Obama said Monday. "Romney and Paul Ryan are dead set on slashing seniors' Medicare benefits to pay for more millionaire tax breaks," Democratic strategist Kelly Ward wrote donors on Tuesday.

"It's a rigged deal," Obama political guru David Axelrod told MSNBC on Thursday. "The Ryan budget, endorsed by Mitt Romney, would end Medicare," screamed MoveOn.org.

Read more on Newsmax.com: Team Obama Has Already Chopped into Medicare
Important: Do You Support Pres. Obama's Re-Election? Vote Here Now!

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August 16, 2012

Jim Rogers: It's Going To Get Really "Bad After The Next Election"

English: American investor Jim Rogers in Madrid (Spain) during an interview. Español: El inversor norteamericano Jim Rogers en Madrid (España) durante una entrevista. (Photo credit: Wikipedia)

In a riveting interview on CNBC, legendary investor Jim Rogers warned Americans to prepare for "Financial Armageddon," saying he fully expects the economy to implode after the U.S. election.

Rogers, who for years has been an outspoken critic of the Feds policies of "Quantitative Easing," says the world is "drowning in too much debt." He put the blame squarely on U.S. and European governments for abusing their "license to print money." In the U.S. alone, the national debt has surged to nearly $16 trillion, that's more than $50,000 for every American man, woman and child.

"[They] need to stop spending money they don't have," Rogers said. "The solution to too much debt is not more debt... What would make me very excited is if a few people [in the government] went bankrupt..." Rogers added.

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August 15, 2012

Ground Beef at Record High's

Raw Ground beef (Photo credit: Wikipedia)

The average price of ground beef hit a record high in the United States in July, according to data released Wednesday by the Bureau of Labor Statistics.

The BLS has been tracking the average price of a pound of 100% ground beef since 1984. In July, it cost $3.085, up from $3.007 in June.

Prior to June, the average cost of 100% ground beef in the United States had never topped $3.00. More>>>>>>>>>

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August 14, 2012

Food Prices to Skyrocket in Coming Food Crisis

Activist Post

You don't have to be survivalist or a doomsdayer to recognize the practicality in having some food stored away for a rainy day. In fact, it's simply becoming common sense to have a certain amount of bulk food storage in your house.

But these days, with record droughts ravaging the bread basket of America coupled with runaway money printing by the Fed, food inflation is creating a dangerous scenario but also a fantastic investment opportunity for average folks.

During times of economic uncertainty it can be especially difficult to determine a safe place to protect your savings. Countless financial advisers offer advice on asset protection and other ways to keep your nest egg performing slightly above inflation. However, many of these strategies involve paper investments that come with risks.

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Social Security surplus dwarfed by future deficit

Social Security - Ratio of workers to beneficiaries (Photo credit: Wikipedia)

WASHINGTON (AP) — As millions of baby boomers flood Social Security with applications for benefits, the program’s $2.7 trillion surplus is starting to look small.

For nearly three decades Social Security produced big surpluses, collecting more in taxes from workers than it paid in benefits to retirees, disabled workers, spouses and children. The surpluses also helped mask the size of the budget deficit being generated by the rest of the federal government.

Those days are over.

Read the full story ›

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100 Million Poor People In America And 39 Other Facts About Poverty That Will Blow Your Mind

Dees Illustration

Michael Snyder, Contributor
Activist Post

Every single day more Americans fall into poverty. This should deeply alarm you no matter what political party you belong to and no matter what your personal economic philosophy is.

Right now, approximately 100 million Americans are either "poor" or "near poor". For a lot of people "poverty" can be a nebulous concept, so let's define it.

The poverty level as defined by the federal government in 2010 was $11,139 for an individual and $22,314 for a family of four.

Could you take care of a family of four on less than $2000 a month?

Millions upon millions of families are experiencing a tremendous amount of pain in this economy, and no matter what "solutions" we think are correct, the reality is that we all should have compassion on them. Sadly, things are about to get even worse. The next major economic downturn is rapidly approaching, and when it hits the statistics posted below are going to look even more horrendous.

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August 13, 2012

Gerald Celente: There Is No Recovery, It's A Cover Up

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August 01, 2012

The Real Crash is dead ahead as 2008 is forgotten

English: Dow Jones Industrial Average Jan 2006- Nov 2008 (Photo credit: Wikipedia)

By Paul B. Farrell, MarketWatch

SAN LUIS OBISPO, Calif. (MarketWatch) — “Facebook will become the poster child for the current social-media bubble,” warns economist Gary Shilling in his latest Forbes column, “just as Pets.com was for the dot-com bubble.” Yes, Wall Street is repeating the 2000 dot-com crash as today’s social-media bubble crashes and burns.

Think history folks: Remember 2000-2002? The economy suffered a 30-month recession and a brutal bear market. The Dow Jones Industrial Average peaked at 11,722, then crashed, losing over 4,000 points dropping below 7,500, down more than 43%, with massive losses of more than $8 trillion in market cap.

July 29, 2012

Ford’s Steel F-150 Pickups Could Get Aluminum Body Makeovers To Save On Fuel Costs

English: 1953 Ford F-100 pickup truck Category:Ford F-100 (Photo credit: Wikipedia)

Is it the end of the super steely era? Ford is reportedly mulling over a decision to use aluminum panels in its F-150 pickup trucks, which have utilized steel panels since the vehicle's birth decades ago. The company has already moved toward technology that helps its vehicles save on gas, and this aluminum move is yet another, as it will cut 700 pounds out of the pickup. That's a lot less truck to move.

The Associated Press says the change will happen with the F-150s appearing on the market in July 2014. It's a big move, as the pickups are Ford's cash cow and the top-selling vehicle in the U.S. for 30 years. Not to mention Ford's a widespread and devoted customer base which could be resistant to any more big changes in the beloved vehicles.

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July 26, 2012

Down Goes Britain: The UK Economy Tumbles Deep Into Recession

Image

Michael Snyder, Contributor
Activist Post

The economic crisis that is sweeping Europe is starting to hit Britain really hard. Over the last couple of years economists have been warning that we can't let the "contagion" spread from troubled nations such as Greece and Portugal to the rest of Europe. Well, it is too late for that now. Spain and Italy are coming apart at the seams at this point, and even "stronger" nations such as the UK and France appear to be deeply troubled.

According to numbers that were released just this week, the UK economy has now contracted for three quarters in a row. During the second quarter of 2012, the UK economy shrunk by 0.7 percent. That was a much larger contraction than the 0.2 percent contraction that economists were forecasting. At this point we have got a definite trend going. During the fourth quarter of 2011, the UK economy shrunk by 0.4 percent. During the first quarter of 2012, the UK economy shrunk by 0.3 percent. And now in this latest quarter the contraction of the UK economy appears to be accelerating.

This economic downturn in the UK is being called "the longest double-dip recession for more than 50 years". So will Britain soon look like Greece and Spain and Italy or will it be able to pull out of this nosedive in time?

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July 12, 2012

Food Price Spike Dead Ahead: US Cuts Corn Crop Forecast By 12% As 56% Of America Is Under Drought Conditions

Who knew the next black swan would be deep fried? The biggest piece of imminent food inflation news over the past months, coupled with what is shaping up to be another record hot summer (for the best tracking of real-time electricity consumption primarily for cooling news we recommend the following PJM RT tracker of power load), has been the collapse in the corn harvest due to the worst drought since 1988 as 56% of America is in drought conditions. Today, the US just added some burning oil to the popcorn by cutting the corn-crop forecast by 12% to 13 billion bushels on expectations of a 13.5 billion harvest. Then again, who needs corn, when you can have cake?

Bloomberg explains:

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July 11, 2012

Schiff: European-Style Debt Crisis Will Strike US

WE'RE ON A ROLL (Photo credit: SS&SS)

U.S. attempts to stimulate itself out of the present downturn aren't working, and sooner or later bondholders will turn against the country in much the same way as investors in southern Europe today, says broker, author and financial commentator Peter D. Schiff.

The country remains mired in a depression, Schiff tells Newsmax.TV, and Federal Reserve attempts to stimulate the economy via quantitative easing — asset purchases from banks that inject liquidity into the economy to encourage investment and hiring — delay the day of reckoning when the country will have to tighten its belt and pay its bills.

Meanwhile, loose monetary policies today will pump up inflation rates tomorrow, and haven't made a dent in high unemployment rates they were supposed to make in the first place.

Story continues below video.

Read more on Newsmax.com: Schiff: European-Style Debt Crisis Will Strike US
Important: Do You Support Pres. Obama's Re-Election? Vote Here Now!

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July 10, 2012

Strap Yourselves in: Jim Rogers Explains Why We Are Going to Have ‘Financial Armageddon’

English: American investor Jim Rogers in Madrid (Spain) during an interview. Español: El inversor norteamericano Jim Rogers en Madrid (España) durante una entrevista. (Photo credit: Wikipedia)

According to Quantum Fund co-founder, free market advocate, author, and regular lecturer of finance at the Columbia University Graduate School of Business Jim Rogers, the EU’s decision to recapitalize its banks won’t do anything to fight off the oncoming “financial Armageddon.”

“Just because now you have a way to get [EU governments] to borrow even more money, this is not solving the problem, this is making the problem worse,” Rogers said during an interview on CNBC on Friday.

“People need to stop spending money they don’t have. The solution to too much debt is not more debt. All this little agreement does is give them (banks) a chance to have even more debt for a while longer,” he added.

Rogers went on to argue that the deal does very little to improve the finances of crumbling nations such as Greece and Spain and that governments need to stop rescuing failing banks, even if it results in “financial Armageddon.”

“What would make me very excited is if a few people went bankrupt or a few people started paying off their debt. We are going to have financial Armageddon anyways, when the rest of the world is not going to give these people any more money,” he said.

Watch via CNBC:

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Technorati Tags: CNBC, Columbia University, European Union, Free market, Friday, Jim Rogers, Quantum Group of Funds, Rogers

June 22, 2012

THE DOLLAR

Graph explains it all!

click on image to enlarge

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June 12, 2012

NET WORTH OF AMERICAN FAMILY FALLS 40% IN 3 YEARS UNDER OBAMA

The Great Recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday, with middle-class families bearing the brunt of the decline.

The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.

The biggest drops occurred among middle-income Americans, whose wealth was inextricably linked to the housing market boom and bust. Meanwhile, the wealthiest families actually saw their median income rise slightly.

MORE>>>>>>>>>

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