Longevity for You
Stephen Lau
Stephen Lau
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A Financial Crisis - 2008?
by
Stephen Lau
January, 2008
It turned out that 2007was a year of financial crisis - or at least it was brewing for one (see below).
I do not want to make any financial prediction no more than I did last year. The financial picture of 2008 is dismally depressing. The Dow opened the year with a big drop; the mortgage crisis has worsened; the housing market has shown no resign of recovery; and the American dollar has continued its decline. At this point in time, it is difficult or impossible to see any light at the end of the tunnel.
Now is not the time for regret or worry. Life is stressful enough without additional financial burden. Your longevity living has to go on. Now is the time to create wealth mindset through the innovative Emotional Financial Techniques to brace yourself for the difficult times ahead.
Always do your best, and let God do the rest.
Learn how your can survive the upcoming recession or depression, which could wipe out billions of dollars in lost jobs, savings and homes. Learn the Insiders' Guide to Surviving a Financial Crisis.
For smart money management in times of financial crisis, go to my website Smart Money Management Resources.
A Financial Crisis - 2007?
by
Stephen Lau
January, 2007
2007 may be a year of financial crisis.
I am neither a financial expert nor a Wall Street guru. I do not know anything more than you do, or those financial wizards, for that matter. But do they really know more than everybody else? Nobody holds a crystal ball in his or her hands. What is going to happen to the financial world at large is everybody’s guess. That said, there are certain fundamentals that require only commonsense to fathom. And these economic fundamentals may not paint as rosy a picture as the media would like you to believe.
1. The U.S. dollar is generally weak, and for some good reasons:
· The war on Iraq has drained the U.S. government financially. To date, the Congress has appropriated almost $356 billion dollars, and the cost of war is escalating. The cost of war is $8 billion per month or $96 billion a year. The war itself is breeding ground for a financial crisis.
· The United States is the greatest debtor in the world, and its national debt is currently 8.3 trillions (with 12 zeros, in case you do not know how much is a trillion). The current national debt does not include the future obligations for Social Security and Medicare payments. This does not bode well for long-term growth in a debt-ridden economy, making it more vulnerable to a financial crisis.
· The federal deficit is increasing at an alarming rate, not to mention the unbalanced trade deficit with the rest of the world. This may trigger a global financial crisis caused by the U.S. dollar.
Since President Nixon took the gold standard out of the dollar, the American government has been printing dollars like there is no tomorrow. Some day and somehow these dollars will come home to roost. The dollar’s real worth is only a perception, and such perception may change drastically any time. After all, the dollar is nothing more than fiat money (printed out of thin air), and all fiat money in history eventually went down the drain and became worthless. What makes you think the U.S. dollar is in any way different? A financial crisis may be caused by the devaluation of the U.S. dollar.
· More and more central banks have announced that they are moving away from the U.S. dollars. Who can blame them? In other words, they may not continue to support the dollars - and that is not good for interest rate, which does not bode well for the stock market, the housing market, and the consumers, who contribute to some 70 percent of the U.S. economy. Without foreign support, rising interest rate may precipitate a financial crisis.
2. The U.S. stock market is still on the upward climb. But the raging bull may have aged, and aged far too much, and is now losing its energy. Frankly, how much further can it run? With little room for upward swing, a severe downturn for the stock market is more likely than not. What goes up must come down, and a financial crisis may accompany the downward swing.
3. The housing market does not bode well. With housing prices continually spiraling down, foreclosures reaching new records, and one trillion dollars worth of mortgages reportedly going to be reset in the year ahead, the U.S. housing market may be heading towards a “harder-than-soft landing.” The worse may not be over as the media would suggest. Max Fraad Wolff in the Asia Times, says housing prices fall 30 percent in a downturn, over a period of about four years. If that is so, this one may still have a long, long way to go down, and a financial crisis may be as inevitable as sunset.
4. No housing boom, no consumer spending. No consumer spending, no economic growth. Without the boom, there will be a bust. This is the major concern for Ben Bernanke, the Federal Reserve Chairman. Shouldn’t it be your concern too for a potential financial crisis?
The U.S. economy depends on consumer spending (70 percent of GDP). Unfortunately, consumers are not earning any more money. So the only way they can increase spending is by borrowing. And what can they borrow against, except their houses? The American culture of spending more than they can earn with the money they don’t have has to come to an end sooner or later. The day of reckoning is inevitable. Hopefully, you are not one of those individuals who endorse and perpetuate this culture of unrestrained spending. Be prepared: any decline in housing may knock the wind out of the consumer, and out of the economy. Expect the unexpected: any downturn in the economy may play havoc with your personal finance. Be prepared for a financial crisis.
The housing boom has created as much as 43 percent of the new jobs added since 2001. Any housing boom cannot last forever. Once it is over, many people may lose both their jobs and their credit, and in such times what they need most is what most don’t have - savings. Don’t let yourself be mired in such a dire financial situation.
5. The United States is continuously facing new challenges, not just in the war against terrorism, but the undermining of its overall economic structure. These challenges may bring about a financial crisis.
· The United States is gradually losing its financial advantage. While Wall Street still dominates the money world, but not as much as it used to be, now huge fortunes are being made overseas, thanks to the continual trade surpluses enjoyed by the Asian countries. The United States is becoming more dependent on its economic rivals for money, and that is not good.
Remember the adage: He who pays the piper calls the tune.
· The United States no longer has much of a technological advantage. Technology is shared quickly throughout the world, and today Asian countries are rapidly catching up. Asian universities foster technology development, while American universities encourage and glorify sports.
· The United States is broke. Wages in the United States are stagnant. For years, the minimum wage in the United States has not changed, while wages in China, India, and the rest of Asia are soaring. Relatively, Americans are getting poorer - unfortunately, that is not how the world perceives; in particular, the Americans themselves still think they are rich because they are still spending money on things they don’t need with the money they don’t have in the first place. The United States is recklessly spending its way to national bankruptcy.
In 1999, total outstanding household debt was $6.4 trillion. As of the end of the second quarter of 2006 total outstanding household debt was $12.3 trillion. Many Americans are merely living on borrowed money, in borrowed time, and in a borrowed house. Americans keep on refinancing and re-mortgaging their houses because essentially they have no money. So not just the nation is broke, but also its citizens at large.
In the past decade or so, the financial world has gone haywire. Everyday, new highs and new records are set, and new financial bubbles are created one after another. It seems that the world has gone mad. You are living in a mad, mad world, but you need not be the March Hatter. Focus on your goals and go on with your life as if nothing would happen, but keep your senses sharp for the possibility of a financial crisis. It is not for man to know his fate. We all wish we knew our fate. We all wish we could take some precautionary measures against unpredictable adversity, such as a global financial crisis, that may fall upon us. Unfortunately, that is just a wishful thinking. Prepare for the worst, and be hopeful for the best. To be forewarned is to be forearmed. Don’t let yourself be caught unawares. At this point in your life, you are no longer young and restless; you should be careful and reflective when reversal of fortune, such as a long-overdue financial crisis, strikes.
Copyright© by Stephen Lau
Read other related articles by Stephen Lau
How To Save Money For Longevity Living
Disciplined saving brings about debt-free financial freedom. Prioritize your payment: always pay yourself first in order to save money for longevity living.
Free Money For Aging Diseases
Get free money from private foundation funding and fedeal grants for financial assistance to pay medical bills incurred by aging diseases.
by
Stephen Lau
January, 2008
It turned out that 2007was a year of financial crisis - or at least it was brewing for one (see below).
I do not want to make any financial prediction no more than I did last year. The financial picture of 2008 is dismally depressing. The Dow opened the year with a big drop; the mortgage crisis has worsened; the housing market has shown no resign of recovery; and the American dollar has continued its decline. At this point in time, it is difficult or impossible to see any light at the end of the tunnel.
Now is not the time for regret or worry. Life is stressful enough without additional financial burden. Your longevity living has to go on. Now is the time to create wealth mindset through the innovative Emotional Financial Techniques to brace yourself for the difficult times ahead.
Always do your best, and let God do the rest.
Learn how your can survive the upcoming recession or depression, which could wipe out billions of dollars in lost jobs, savings and homes. Learn the Insiders' Guide to Surviving a Financial Crisis.
For smart money management in times of financial crisis, go to my website Smart Money Management Resources.
A Financial Crisis - 2007?
by
Stephen Lau
January, 2007
2007 may be a year of financial crisis.
I am neither a financial expert nor a Wall Street guru. I do not know anything more than you do, or those financial wizards, for that matter. But do they really know more than everybody else? Nobody holds a crystal ball in his or her hands. What is going to happen to the financial world at large is everybody’s guess. That said, there are certain fundamentals that require only commonsense to fathom. And these economic fundamentals may not paint as rosy a picture as the media would like you to believe.
1. The U.S. dollar is generally weak, and for some good reasons:
· The war on Iraq has drained the U.S. government financially. To date, the Congress has appropriated almost $356 billion dollars, and the cost of war is escalating. The cost of war is $8 billion per month or $96 billion a year. The war itself is breeding ground for a financial crisis.
· The United States is the greatest debtor in the world, and its national debt is currently 8.3 trillions (with 12 zeros, in case you do not know how much is a trillion). The current national debt does not include the future obligations for Social Security and Medicare payments. This does not bode well for long-term growth in a debt-ridden economy, making it more vulnerable to a financial crisis.
· The federal deficit is increasing at an alarming rate, not to mention the unbalanced trade deficit with the rest of the world. This may trigger a global financial crisis caused by the U.S. dollar.
Since President Nixon took the gold standard out of the dollar, the American government has been printing dollars like there is no tomorrow. Some day and somehow these dollars will come home to roost. The dollar’s real worth is only a perception, and such perception may change drastically any time. After all, the dollar is nothing more than fiat money (printed out of thin air), and all fiat money in history eventually went down the drain and became worthless. What makes you think the U.S. dollar is in any way different? A financial crisis may be caused by the devaluation of the U.S. dollar.
· More and more central banks have announced that they are moving away from the U.S. dollars. Who can blame them? In other words, they may not continue to support the dollars - and that is not good for interest rate, which does not bode well for the stock market, the housing market, and the consumers, who contribute to some 70 percent of the U.S. economy. Without foreign support, rising interest rate may precipitate a financial crisis.
2. The U.S. stock market is still on the upward climb. But the raging bull may have aged, and aged far too much, and is now losing its energy. Frankly, how much further can it run? With little room for upward swing, a severe downturn for the stock market is more likely than not. What goes up must come down, and a financial crisis may accompany the downward swing.
3. The housing market does not bode well. With housing prices continually spiraling down, foreclosures reaching new records, and one trillion dollars worth of mortgages reportedly going to be reset in the year ahead, the U.S. housing market may be heading towards a “harder-than-soft landing.” The worse may not be over as the media would suggest. Max Fraad Wolff in the Asia Times, says housing prices fall 30 percent in a downturn, over a period of about four years. If that is so, this one may still have a long, long way to go down, and a financial crisis may be as inevitable as sunset.
4. No housing boom, no consumer spending. No consumer spending, no economic growth. Without the boom, there will be a bust. This is the major concern for Ben Bernanke, the Federal Reserve Chairman. Shouldn’t it be your concern too for a potential financial crisis?
The U.S. economy depends on consumer spending (70 percent of GDP). Unfortunately, consumers are not earning any more money. So the only way they can increase spending is by borrowing. And what can they borrow against, except their houses? The American culture of spending more than they can earn with the money they don’t have has to come to an end sooner or later. The day of reckoning is inevitable. Hopefully, you are not one of those individuals who endorse and perpetuate this culture of unrestrained spending. Be prepared: any decline in housing may knock the wind out of the consumer, and out of the economy. Expect the unexpected: any downturn in the economy may play havoc with your personal finance. Be prepared for a financial crisis.
The housing boom has created as much as 43 percent of the new jobs added since 2001. Any housing boom cannot last forever. Once it is over, many people may lose both their jobs and their credit, and in such times what they need most is what most don’t have - savings. Don’t let yourself be mired in such a dire financial situation.
5. The United States is continuously facing new challenges, not just in the war against terrorism, but the undermining of its overall economic structure. These challenges may bring about a financial crisis.
· The United States is gradually losing its financial advantage. While Wall Street still dominates the money world, but not as much as it used to be, now huge fortunes are being made overseas, thanks to the continual trade surpluses enjoyed by the Asian countries. The United States is becoming more dependent on its economic rivals for money, and that is not good.
Remember the adage: He who pays the piper calls the tune.
· The United States no longer has much of a technological advantage. Technology is shared quickly throughout the world, and today Asian countries are rapidly catching up. Asian universities foster technology development, while American universities encourage and glorify sports.
· The United States is broke. Wages in the United States are stagnant. For years, the minimum wage in the United States has not changed, while wages in China, India, and the rest of Asia are soaring. Relatively, Americans are getting poorer - unfortunately, that is not how the world perceives; in particular, the Americans themselves still think they are rich because they are still spending money on things they don’t need with the money they don’t have in the first place. The United States is recklessly spending its way to national bankruptcy.
In 1999, total outstanding household debt was $6.4 trillion. As of the end of the second quarter of 2006 total outstanding household debt was $12.3 trillion. Many Americans are merely living on borrowed money, in borrowed time, and in a borrowed house. Americans keep on refinancing and re-mortgaging their houses because essentially they have no money. So not just the nation is broke, but also its citizens at large.
In the past decade or so, the financial world has gone haywire. Everyday, new highs and new records are set, and new financial bubbles are created one after another. It seems that the world has gone mad. You are living in a mad, mad world, but you need not be the March Hatter. Focus on your goals and go on with your life as if nothing would happen, but keep your senses sharp for the possibility of a financial crisis. It is not for man to know his fate. We all wish we knew our fate. We all wish we could take some precautionary measures against unpredictable adversity, such as a global financial crisis, that may fall upon us. Unfortunately, that is just a wishful thinking. Prepare for the worst, and be hopeful for the best. To be forewarned is to be forearmed. Don’t let yourself be caught unawares. At this point in your life, you are no longer young and restless; you should be careful and reflective when reversal of fortune, such as a long-overdue financial crisis, strikes.
Copyright© by Stephen Lau
Read other related articles by Stephen Lau
How To Save Money For Longevity Living
Disciplined saving brings about debt-free financial freedom. Prioritize your payment: always pay yourself first in order to save money for longevity living.
Free Money For Aging Diseases
Get free money from private foundation funding and fedeal grants for financial assistance to pay medical bills incurred by aging diseases.