If the convenience of credit cards has got the better of your spending avarice necessitating the services of a debt counselor, is it still possible to manage one’s credit card debt?
By: Ringo Bones
Admit it, most of us has come to the point of availing ourselves the services provided by credit card companies after an acquaintance of ours started touting the life saving convenience of credit cards. Not to mention that obligatory first-hand testimonial of a harrowing life-saving payment usually involving a stay in the emergency room. Nonetheless, every one of us should remember that once and for all credit cards are not the best thing since free money they are touted to be.
Ask every financial consultant worth his or her own salt and they will more often than not tell you that high-interest credit cards can be the most expensive form of money you can have in your budget. Time and time again they will recommend that the most cost-effective way to use your own credit card is to pay off the balance each month. At the very least, protect your credit standing or your very own credit rating of the card-issuing bank that you signed-up with - which can “easily” done by making sure you don’t let the level of your outstanding balance run away with you by your monthly payments. Even though these are just your unseemly basic debt management procedures, they can be a beneficial guide for the frequent credit card user.
Another method of keeping high-interest credit card debt at bay – as recommended by most financial advisers – which is also works in avoiding lingering credit card debt is by converting the balance into a personal loan. Personal loans usually have a lower interest rate, but it will only work if you have the fiscal discipline to avoid running your credit card debt again. This can be relatively easy if you take the necessary steps in reviewing your pattern of expenses to get to the root of why you had incurred such high credit card debt in the first place. At least it is way less costly than asking for debt advice from a debt counselor paid by your very own money.
Friday, March 13, 2009
Credit Cards: Our Best Friends?
Given their convenience and pro-consumer advantages, are credit cards really the “Devil Incarnate” they are touted to be?
By: Ringo Bones
Despite of the latest high-level exposé of the predatory lending practices of some credit card companies, from a legal standpoint, majority of credit card company’s by-laws are actually pro-consumer. Even though – through varying degrees of factuality – all credit card use (spending?) problems can be “conveniently” blamed on cardholder’s inability to curb spending avarice. While the truth lies somewhere between your credit card being the closest thing of your money acting as your very own consumer advocate and credit rating agency, or just the best thing since free money.
If you are strong enough to resist the temptation of using cash on items that can be purchased by a credit card – in spite of the shopkeeper’s promise of an attractive discount via cash purchase – then be prepared to enjoy the penultimate benefit of using credit cards to buy stuff. The main – if not the overriding – advantage of paying with your credit card is that if you don’t receive what you were promised – very useful in mail order and on-line transactions – you, the customer, can always dispute the charge with the credit card company. All credit card companies have the legal right to temporarily withhold payment while it conducts its own investigation.
Although credit card companies usually protect you – their valued client – if you don’t get what you pay for, but not if you merely change your mind about a purchase. Credit card companies has the advantage of having the legal authority of doing this type of caveat emptor for you. Just be sure to pay your monthly obligations on time to keep interest rates of your charges low and please never forget to curb your spending avarice. Other than that, your credit card – as promised by your credit card company – could really open new doors of purchasing opportunity for you.
By: Ringo Bones
Despite of the latest high-level exposé of the predatory lending practices of some credit card companies, from a legal standpoint, majority of credit card company’s by-laws are actually pro-consumer. Even though – through varying degrees of factuality – all credit card use (spending?) problems can be “conveniently” blamed on cardholder’s inability to curb spending avarice. While the truth lies somewhere between your credit card being the closest thing of your money acting as your very own consumer advocate and credit rating agency, or just the best thing since free money.
If you are strong enough to resist the temptation of using cash on items that can be purchased by a credit card – in spite of the shopkeeper’s promise of an attractive discount via cash purchase – then be prepared to enjoy the penultimate benefit of using credit cards to buy stuff. The main – if not the overriding – advantage of paying with your credit card is that if you don’t receive what you were promised – very useful in mail order and on-line transactions – you, the customer, can always dispute the charge with the credit card company. All credit card companies have the legal right to temporarily withhold payment while it conducts its own investigation.
Although credit card companies usually protect you – their valued client – if you don’t get what you pay for, but not if you merely change your mind about a purchase. Credit card companies has the advantage of having the legal authority of doing this type of caveat emptor for you. Just be sure to pay your monthly obligations on time to keep interest rates of your charges low and please never forget to curb your spending avarice. Other than that, your credit card – as promised by your credit card company – could really open new doors of purchasing opportunity for you.
Tuesday, March 3, 2009
Microcredit Versus the Global Recession
As various financial institutions fall by the wayside, will Dr. Muhammad Yunus’ microcredit program hold its own against the onslaught of the on-going global economic turmoil?
By: Ringo Bones
Even though Dr. Muhammad Yunus’ Grameen Bank and the microcredit / microfinance program that it fostered could trace its beginnings back in 1982, it is only after Dr. Yunus won the 2006 Nobel Peace Prize that his poverty elimination scheme gained worldwide fame. He even gained fame as the “Banker to the Poor”. The underlying success of Grameen Bank’s microcredit / microfinance program has been – according to Dr. Yunus’ own words is that: “poor people can, and do, repay loans”. As a poverty elimination scheme that is congruent with the long established global financial system, Dr. Yunus is largely credited with making microfinance / microcredit a socially responsible and viable business model.
When the global credit crunch went full steam during the last quarter of 2008, many have wondered whether Dr. Muhammad Yunus’ novel poverty elimination “financial company” could become insolvent. After all, he conscientiously made his microfinance / microcredit program’s business model congruent with the established global financial system. But the program’s 98% payment / payback rate has been it’s saving grace during increasingly tough economic times. Even the fledgling Grameen Bank America that started serving the “financially depressed” parts of New York City back in January 2008 seems to be holding its own, despite of scores of banks teetering on the brink just a stone’s throw away from Grameen Bank America’s offices.
As the global credit market seems to be currently grinding to a halt, an overwhelming majority of microfinance / microcredit schemes modeled after the ones established by Dr. Yunus seem to be holding their own, which is very fortunate for the rest of us because financial companies that provide microfinance / microcredit loans are very vital in developing countries as they are – more often than not – the only source of small business loans and start-up capital loans. Surprisingly, it works even better than the dysfunctional foreign aid system whose own rigmarole is powerless against white-collar corruption. In the long-term, microfinance / microcredit schemes could be a more economically viable way out of poverty - even foreign aid dependency – in developing nations.
Dr. Muhammad Yunus’ Grameen Bank has even been wholeheartedly welcomed in the Islamic World due to its adherence of Sharia Banking Laws – i.e. the use of tangible / concrete assets as collateral. Plus, the money provided by these microfinance / microcredit schemes are used in bricks and mortar business establishments like fish and vegetable markets – even if the bricks and mortar more often than not are just twigs and thatched straws. Nonetheless, these are far more tangible than those overly complex credit derivatives designed by financial engineers in leading American Ivy League institutions.
By: Ringo Bones
Even though Dr. Muhammad Yunus’ Grameen Bank and the microcredit / microfinance program that it fostered could trace its beginnings back in 1982, it is only after Dr. Yunus won the 2006 Nobel Peace Prize that his poverty elimination scheme gained worldwide fame. He even gained fame as the “Banker to the Poor”. The underlying success of Grameen Bank’s microcredit / microfinance program has been – according to Dr. Yunus’ own words is that: “poor people can, and do, repay loans”. As a poverty elimination scheme that is congruent with the long established global financial system, Dr. Yunus is largely credited with making microfinance / microcredit a socially responsible and viable business model.
When the global credit crunch went full steam during the last quarter of 2008, many have wondered whether Dr. Muhammad Yunus’ novel poverty elimination “financial company” could become insolvent. After all, he conscientiously made his microfinance / microcredit program’s business model congruent with the established global financial system. But the program’s 98% payment / payback rate has been it’s saving grace during increasingly tough economic times. Even the fledgling Grameen Bank America that started serving the “financially depressed” parts of New York City back in January 2008 seems to be holding its own, despite of scores of banks teetering on the brink just a stone’s throw away from Grameen Bank America’s offices.
As the global credit market seems to be currently grinding to a halt, an overwhelming majority of microfinance / microcredit schemes modeled after the ones established by Dr. Yunus seem to be holding their own, which is very fortunate for the rest of us because financial companies that provide microfinance / microcredit loans are very vital in developing countries as they are – more often than not – the only source of small business loans and start-up capital loans. Surprisingly, it works even better than the dysfunctional foreign aid system whose own rigmarole is powerless against white-collar corruption. In the long-term, microfinance / microcredit schemes could be a more economically viable way out of poverty - even foreign aid dependency – in developing nations.
Dr. Muhammad Yunus’ Grameen Bank has even been wholeheartedly welcomed in the Islamic World due to its adherence of Sharia Banking Laws – i.e. the use of tangible / concrete assets as collateral. Plus, the money provided by these microfinance / microcredit schemes are used in bricks and mortar business establishments like fish and vegetable markets – even if the bricks and mortar more often than not are just twigs and thatched straws. Nonetheless, these are far more tangible than those overly complex credit derivatives designed by financial engineers in leading American Ivy League institutions.
Monday, February 2, 2009
Recession v. Super Bowl XLIII
For many years, the NFL Super Bowl Sunday has been an American institution in more ways than one. Will the current economic recession be its downfall?
By: Ringo Bones
More than just an end-of-season finale for the NFL, the American Super Bowl Sunday has for years been a magnet for multi-million dollar 30-second advertising slots. But the slow inexorable creep of the on-going global recession began to manifest itself in America in a dramatic way during the second half of 2008 via layoffs and stock market free-fall. Will this inevitably ruin the 2009 Super Bowl XLIII?
Big-time sports advertising in America has always been about profits and ease of moneymaking. When the crude oil tycoon J. Paul Getty started the cable-based sports channel ESPN, you can be sure that he’s not doing it for humanitarian reasons. Given that the “R” word – that is recession – has already behaving like Frankenstein’s monster set loose on an unsuspecting public, will it eventually take down one of the most hallowed American of institutions – that is the Super Bowl Sunday?
The on-going global economic downturn has finally make itself felt on American soil when a week before Super Bowl Sunday – the 2009 Super Bowl XLIII in Tampa, Florida. According to NBC there are still four 30-second advertising slots that remained vacant. Whereas in the past, 30-second advertising slots – despite costing millions of dollars – are snapped up by interested parties as soon as they are made available. Does the vacant advertising slots point out – especially during the Super Bowl – that America is now indeed in a deep recession?
In spite of all the doom and gloom, the hallowed institution of the American Super Bowl Sunday still managed to provide a refuge for die hard fans to forget, just for a moment at least, the on-going global economic downturn. If Americans still manage to have a good time in spite of a “relatively austere” Super Bowl – in advertising terms at least. Then, the Super Bowl, together with the die-hard fans, can safely manage to hold on for things to get better – even though it means spending more money.
By: Ringo Bones
More than just an end-of-season finale for the NFL, the American Super Bowl Sunday has for years been a magnet for multi-million dollar 30-second advertising slots. But the slow inexorable creep of the on-going global recession began to manifest itself in America in a dramatic way during the second half of 2008 via layoffs and stock market free-fall. Will this inevitably ruin the 2009 Super Bowl XLIII?
Big-time sports advertising in America has always been about profits and ease of moneymaking. When the crude oil tycoon J. Paul Getty started the cable-based sports channel ESPN, you can be sure that he’s not doing it for humanitarian reasons. Given that the “R” word – that is recession – has already behaving like Frankenstein’s monster set loose on an unsuspecting public, will it eventually take down one of the most hallowed American of institutions – that is the Super Bowl Sunday?
The on-going global economic downturn has finally make itself felt on American soil when a week before Super Bowl Sunday – the 2009 Super Bowl XLIII in Tampa, Florida. According to NBC there are still four 30-second advertising slots that remained vacant. Whereas in the past, 30-second advertising slots – despite costing millions of dollars – are snapped up by interested parties as soon as they are made available. Does the vacant advertising slots point out – especially during the Super Bowl – that America is now indeed in a deep recession?
In spite of all the doom and gloom, the hallowed institution of the American Super Bowl Sunday still managed to provide a refuge for die hard fans to forget, just for a moment at least, the on-going global economic downturn. If Americans still manage to have a good time in spite of a “relatively austere” Super Bowl – in advertising terms at least. Then, the Super Bowl, together with the die-hard fans, can safely manage to hold on for things to get better – even though it means spending more money.
Monday, January 19, 2009
Minting Pennies and Nickels: Not Economically Viable?
Due to the rapid rise of commodity prices – especially metals - during the start of 2008, the cost of minting American pennies and nickels is now twice their actual face value. Weird economics at work?
By: Ringo Bones
When the global economic downturn instigated by the subprime mortgage crisis of the summer of 2007 started to be noticed on American soil during the first quarter of 2008. The US Mint or The Bureau of the Mint also started to notice that it’s now worth twice as much to “make” pennies and nickels than their face value – i.e. the coin’s buying power - due to the increasing prices of “coinage” metals like copper and zinc.
Noting that it now costs 2 US cents to make an American penny (a US 1 cent piece) and a nickel (a US 5 cent piece) now cost a dime or 10 US cents to make. It would only be a matter of time that the US Treasury Department will tell The Bureau of the Mint in Washington, D.C. to stop minting coins because they’ll be losing money - weird economics has finally arrived. Given that a typical American “Honest Abe” penny is 98% zinc while an American nickel is 25% nickel and 75% copper. The three metals – namely zinc, nickel and copper - whose trading values went through the roof during the first part of 2008 makes it easy to see why that minting coins using these traditional coinage metals is now more expensive compared to a generation ago.
Most countries around the world has since abandoned using gold and silver as coinage metals since making them costs way more than the coin’s intended face value, looks like copper, zinc and nickel will now be deemed too expensive for coinage use. Some countries have even resorted to using steel and aluminum to keep the cost of minting coins down. Especially during the early 1990’s when Sumitomo attempted to unlawfully manipulate copper prices in the London Metals Exchange by hoarding large stocks of copper for six years.
In the US, grassroots movements like Americans for Common Cents has been busy campaigning for the US Government to keep minting coins because if Uncle Sam ever decides to stop minting pennies and nickels, the penniless could literally become penniless. Like when merchants start rounding-off prices of goods to the nearest dime – given that if the US 10 cent piece or dime becomes the smallest American currency denomination – could cost American consumers 600 million dollars a year in retail expenses.
As we celebrate the 200th anniversary of Abraham Lincoln’s birth and the 100th anniversary of the “Honest Abe” penny in 2009, has the American penny and nickel become an archaic time-wasting transaction of our modern credit-based economy? In my opinion, coins of small denominations – like the American penny and nickel – are still relevant in today’s economic transaction, especially at the retail level. Plus, given that coins are more difficult to counterfeit when compared to paper currency and are less tempting to steal in comparison to credit card data, American pennies and nickels still serve an indispensable part of the American – if not of the global – economy.
By: Ringo Bones
When the global economic downturn instigated by the subprime mortgage crisis of the summer of 2007 started to be noticed on American soil during the first quarter of 2008. The US Mint or The Bureau of the Mint also started to notice that it’s now worth twice as much to “make” pennies and nickels than their face value – i.e. the coin’s buying power - due to the increasing prices of “coinage” metals like copper and zinc.
Noting that it now costs 2 US cents to make an American penny (a US 1 cent piece) and a nickel (a US 5 cent piece) now cost a dime or 10 US cents to make. It would only be a matter of time that the US Treasury Department will tell The Bureau of the Mint in Washington, D.C. to stop minting coins because they’ll be losing money - weird economics has finally arrived. Given that a typical American “Honest Abe” penny is 98% zinc while an American nickel is 25% nickel and 75% copper. The three metals – namely zinc, nickel and copper - whose trading values went through the roof during the first part of 2008 makes it easy to see why that minting coins using these traditional coinage metals is now more expensive compared to a generation ago.
Most countries around the world has since abandoned using gold and silver as coinage metals since making them costs way more than the coin’s intended face value, looks like copper, zinc and nickel will now be deemed too expensive for coinage use. Some countries have even resorted to using steel and aluminum to keep the cost of minting coins down. Especially during the early 1990’s when Sumitomo attempted to unlawfully manipulate copper prices in the London Metals Exchange by hoarding large stocks of copper for six years.
In the US, grassroots movements like Americans for Common Cents has been busy campaigning for the US Government to keep minting coins because if Uncle Sam ever decides to stop minting pennies and nickels, the penniless could literally become penniless. Like when merchants start rounding-off prices of goods to the nearest dime – given that if the US 10 cent piece or dime becomes the smallest American currency denomination – could cost American consumers 600 million dollars a year in retail expenses.
As we celebrate the 200th anniversary of Abraham Lincoln’s birth and the 100th anniversary of the “Honest Abe” penny in 2009, has the American penny and nickel become an archaic time-wasting transaction of our modern credit-based economy? In my opinion, coins of small denominations – like the American penny and nickel – are still relevant in today’s economic transaction, especially at the retail level. Plus, given that coins are more difficult to counterfeit when compared to paper currency and are less tempting to steal in comparison to credit card data, American pennies and nickels still serve an indispensable part of the American – if not of the global – economy.
Wednesday, January 7, 2009
US Treasury Bonds and Securities: A Bubble that’s About to Burst?
With a budget deficit that could reach 1 trillion dollars in order to save it’s own economy, are US Treasury bonds and securities still a sound investment choice in 2009?
By: Ringo Bones
With the critics of incoming US president Barack Obama’s supposedly socialist-leaning economic policies now segueing into the background like their empty rhetoric, the question still remains whether US treasury bonds and securities are still the safe-haven investments that they are touted to be. Or are they the latest speculative bubble just waiting to burst?
With the US government now printing money at an unprecedented scale and the government spending deficit that is predicted to reach over a trillion dollars just to save the American economy, financial analysts around the world are now casting their doubts over the long-term profitability of US treasury bonds and securities. Because if you choose to invest in US treasury bonds now, there’s no telling of it’s actual value when it matures. Looks like when one invests in US treasury bonds he or she will be primarily driven by patriotism rather than for profit. If he or she is willing to overlook the inherent disadvantages of financial and / or speculative bubbles.
Since US treasury bonds and securities was no longer the safe-haven investment vehicle that it once was, what are our options? In my opinion, investing in gold is a better bet right now because gold is not backed by credit – i.e. it has inherent value of it’s own. But if the patriotism issue is really nagging you, here’s my view on this: Does investing in a less desirable financial instrument in order to “help keep our fellow Americans employed and off welfare” both economic common sense and patriotic?
My answer to this is a really big fat no. Investing your hard-earned money in a less desirable financial instrument in order to “help keep our fellow Americans gainfully employed and off welfare” does not really make economic common sense or is really patriotic, it is just thinly veiled charity. A charity that most of us succumb into every time we use “liberal guilt” as a defense mechanism every time we are emotionally blackmailed into buying something we don’t really need. And by the way, when it comes to good business practices, emotional blackmail is still illegal.
But if you are like me – and many others - who still believes that America under the helm of President Obama, miracles – especially economic miracles – can still happen. Then by all means invest in US treasury bonds and securities as your patriotic duty to help keep the American economy strong. But beware and be very aware that the current state of the US economy still resembles some rickety contraption being held by bailing wire and the good intentions of a czarist-era mad Russian. Which is my latest assessment given the aftermath of the Bernard L. Madoff fraud that could put Charles Ponzi and his start-up pyramid scheme to shame.
By: Ringo Bones
With the critics of incoming US president Barack Obama’s supposedly socialist-leaning economic policies now segueing into the background like their empty rhetoric, the question still remains whether US treasury bonds and securities are still the safe-haven investments that they are touted to be. Or are they the latest speculative bubble just waiting to burst?
With the US government now printing money at an unprecedented scale and the government spending deficit that is predicted to reach over a trillion dollars just to save the American economy, financial analysts around the world are now casting their doubts over the long-term profitability of US treasury bonds and securities. Because if you choose to invest in US treasury bonds now, there’s no telling of it’s actual value when it matures. Looks like when one invests in US treasury bonds he or she will be primarily driven by patriotism rather than for profit. If he or she is willing to overlook the inherent disadvantages of financial and / or speculative bubbles.
Since US treasury bonds and securities was no longer the safe-haven investment vehicle that it once was, what are our options? In my opinion, investing in gold is a better bet right now because gold is not backed by credit – i.e. it has inherent value of it’s own. But if the patriotism issue is really nagging you, here’s my view on this: Does investing in a less desirable financial instrument in order to “help keep our fellow Americans employed and off welfare” both economic common sense and patriotic?
My answer to this is a really big fat no. Investing your hard-earned money in a less desirable financial instrument in order to “help keep our fellow Americans gainfully employed and off welfare” does not really make economic common sense or is really patriotic, it is just thinly veiled charity. A charity that most of us succumb into every time we use “liberal guilt” as a defense mechanism every time we are emotionally blackmailed into buying something we don’t really need. And by the way, when it comes to good business practices, emotional blackmail is still illegal.
But if you are like me – and many others - who still believes that America under the helm of President Obama, miracles – especially economic miracles – can still happen. Then by all means invest in US treasury bonds and securities as your patriotic duty to help keep the American economy strong. But beware and be very aware that the current state of the US economy still resembles some rickety contraption being held by bailing wire and the good intentions of a czarist-era mad Russian. Which is my latest assessment given the aftermath of the Bernard L. Madoff fraud that could put Charles Ponzi and his start-up pyramid scheme to shame.
Saturday, January 3, 2009
The Lowdown on Commodities
The current low price of commodities – especially that of crude oil - had lessened the impact of the global financial crisis to most sectors of the economy even though it will be very bad in the long run. A good time to cry wolf?
By: Ringo Bones
The world’s leading economist had already reached a consensus and had been warning us for sometime that the low prices of economies resulting in the lack of demand due to the global economic downturn. Will be bad in the long run – even if the global economy recovers sometime in the future – because producers are not making the necessary investments to expand current production to meet possible future demands. The proverbial “ticking time bombs” in the commodities market are copper and crude oil whose prices could skyrocket way pass their 2008 peak once the global economy recovers causing an increase in demand.
Violent price rises will be the norm – rather than the exception – when it comes to commodities prices when the global economy recovers around 2010 or so. Due to lack of current investment to expand production, demand for copper and crude oil in 2010 might not be met fast enough - which could be a headache to commodities trading. Especially when it comes to the demands of emerging economies in Asia like India and China whose economies are not as badly affected as those in the United States and Europe despite of the tragic job loss figures. Plus the increased affluence of consumers in Asia could also send prices of wheat, corn, and soybean skyrocketing past their 2008 levels due to these food crops being diverted into meat production as animal feed.
The world’s policymakers better start consulting their economic advisory team on how to plan ahead to avert disastrous and violent commodity price volatility in the near future. Even if the global economy eventually recovers, it could derive our poorer brethren of their daily bread if the recovery plan is ill conceived. Making that “dramatic” percentage-point rises in the global stock market a rather Pyrrhic victory for stock market traders.
By: Ringo Bones
The world’s leading economist had already reached a consensus and had been warning us for sometime that the low prices of economies resulting in the lack of demand due to the global economic downturn. Will be bad in the long run – even if the global economy recovers sometime in the future – because producers are not making the necessary investments to expand current production to meet possible future demands. The proverbial “ticking time bombs” in the commodities market are copper and crude oil whose prices could skyrocket way pass their 2008 peak once the global economy recovers causing an increase in demand.
Violent price rises will be the norm – rather than the exception – when it comes to commodities prices when the global economy recovers around 2010 or so. Due to lack of current investment to expand production, demand for copper and crude oil in 2010 might not be met fast enough - which could be a headache to commodities trading. Especially when it comes to the demands of emerging economies in Asia like India and China whose economies are not as badly affected as those in the United States and Europe despite of the tragic job loss figures. Plus the increased affluence of consumers in Asia could also send prices of wheat, corn, and soybean skyrocketing past their 2008 levels due to these food crops being diverted into meat production as animal feed.
The world’s policymakers better start consulting their economic advisory team on how to plan ahead to avert disastrous and violent commodity price volatility in the near future. Even if the global economy eventually recovers, it could derive our poorer brethren of their daily bread if the recovery plan is ill conceived. Making that “dramatic” percentage-point rises in the global stock market a rather Pyrrhic victory for stock market traders.
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