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The economy faces a deflation |
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Sunday, 30 November 2008 |
Another trend is gradually creeping into the nation’s economy, which if
it continues, could fast forward the recession we are experiencing into
something much worse. This trend is a deflation.
In recent months consumers have been delighted to see significant
decline in the prices of gasoline, falling by over $2. Prices have also
been falling in housing, clothing, household appliances, electronic
equipment and automobiles. According to the government’s consumer price
index, in general, prices fell an average of 2 percent within the last
two months. Naturally consumers regard the deflated prices as a
blessing with money being scarce, as they still are able to meet the
cost of some of the things they demand.
However, constant falling prices do not help the economy, which is
mobilized by demand and supply. Falling prices are a sign of falling
demand, since businesses are forced to sell their products and services
at lower price to realize some type of revenue. By selling at
discounted prices, profit margins fall with little surplus to pay
employees or expand the business. This of course increases
unemployment, curtails the flow of money and generally weakens an
already weakened economy. In an inflationary atmosphere, because demand
for goods is high and goods relatively scarce, prices increase
(inflate), which can also lead to negative economic repercussions.
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$1.6 Trillion in Bailout Funds Fail |
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Sunday, 30 November 2008 |
In recent months, small businesses have faced unprecedented
difficulties in securing credit and capital. Today, the House Small
Business Committee examined the recent actions taken by the U.S.
Department of Treasury and the Federal Reserve to assist small firms
and to consider what additional measures are necessary. The Committee
largely found that the $1.6 trillion in federal bailout expenses have
provided little assistance to small businesses, many of which continue
to struggle.
House Small Business Committee Chairwoman Nydia M. Velằuez
Entrepreneurs are facing serious challenges to secure credit on any
terms, leaving many to wonder where the $1.6 trillion in bailout
assistance has gone.
Our small businesses have historically led our country out of tough
times, but now they are unable to secure capital to startup or expand,
resulting in lower job creation and growth during a time when we need
it.
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Brand Obama good for the economy |
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Sunday, 23 November 2008 |
He has roughly two months left before he takes office and already
President-elect Barack Obama is having a positive effect on the
economy. His historic election win has sent a flood of Obama
paraphernalia on the market and with people wanting to own a piece of
history, there is scope for profits from this lucrative business.
In essence, Obama is good for business – especially small businesses.
From street and internet vendors to artists and musicians – people are
cashing in on the Obama brand. There are countless websites with a
variety of T-shirts, mugs, earrings and other paraphernalia, not to
mention art and even music. The Obama brand has more than doubled its
value since election night – and businesses and entrepreneurs are
hoping making a lot more than a little change.
While most of the items are in celebration of Barack Obama’s win, even
the ‘haters’ are cashing in! At the anti-obamastore.com website, there
are ‘Impeach Obama’ bumper stickers for $5 a piece and ‘Don’t Blame Me
I Voted For McCain’ T-shorts for up to $29.99. Of course these tees
feature a picture of… you guessed it… Obama! See, he’s even good for
their economy!
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Cars: Status Symbol or Investment? |
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Tuesday, 11 November 2008 |
While we all have one dream car in the back of our minds, the vehicle
we’d drive if money and gas prices were not an issue, many of us could
become better educated consumers in the automotive arena.
African Americans and Americans of all ethnicity it seems, judge others
based on the car they drive. We make assumptions about finances,
environmental concern, style, taste and personality when looking at the
car a co-worker or neighbor drives. Add to this the fact that many
Americans drive cars that they cannot afford just to make a particular
statement to people they probably don’t even know!
Let’s face the facts. A car is not typically an investment. Cars are
something driven to get us from point A to point B and are depreciating
the minute we drive away from the dealer’s parking lot. Truly
conservative and practical financial analysts would say that spending
the least amount of money on a car and its maintenance and using all
remaining finances to invest in other ways is the smartest financial
decision to make. However, there is admittedly a certain romance and
glamour to driving a car just because you like it.
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Another stimulus package could be a reality |
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Sunday, 26 October 2008 |
Another stimulus package could be on the horizon for small business and
struggling families across the country if Democrats in the U.S. House
and Senate, including Sen. Barack Obama, have their way.
Federal Chairman Ben Bernanke Monday supported the plans of the
Democratic led Congress for a second economic stimulus package. In
comments made before the House Budget Committee in discussions focused
on the recent measures taken by the government to cope with the
national and international economic crisis, Bernanke suggested that
there should be more federal help for states, but warned against
raising taxes in the current economic climate.
In a very frank comment the Fed chairman told the committee that the
nation’s economy faces a fairly long period of underperformance in key
areas and he saw a new stimulus package as appropriate. However, he
also said that such a package must be structured to have immediate
impact rather than funding projects that take a long time bear results.
This was most likely a reference to the $150 billion stimulus package
that is being drafted by Democrats in Congress, which is reported to be
heavy on infrastructure projects.
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