Segment 1: The Ideal Home-Based Business SEGMENT BEGINS AT 00:46 Learning a new skill that can lead to a new income stream is more important than ever in our age of economic uncertainty. In this highly empowering segment, entrepreneur/trading coach Jerry Robinson...
Good-Bye “Cheap” Chinese Goods…
When my daughter was younger, I used to offer her 25 cents for every item that she could find in our local Wal-Mart store that was not “made in China,” or some other Asian nation. Needless to say, she rarely walked out of the store with any money. And while “made in China” used to be synonymous with “cheap and poorly made” goods, it now appears that the “cheap” part of that equation may be going away rather quickly. Last week, the sum of all consumer fears was confirmed. The cheap gadgets, apparel, and toys imported from China, that we Americans have come to love and treasure, may now no longer stay “cheap.” This according to the Hong-Kong-based logistics and consumer-good sourcing company, Li & Fung, which is one of the largest suppliers of Chinese goods for Western retailers, especially Wal-Mart.
In a report released last week, the company stated:
“The world has basically been in a low-supply-cost era for the last 30 years. The change in wage policy in China in 2009 — and the subsequent significant higher export prices — brings this status quo to an end.”
Mainland China has been paying their employees unbelievably low wages for decades because 1) it could, and 2) to prop up its export-led strategy. However, a rash of employee suicides in recent years has forced a re-examination of Chinese labor rates and working conditions.
In 2011, wage rates are increasing in China and will continue to do so as the country continues to rapidly grow its overall economy and its middle class. In addition, prices for inputs, such as raw materials, have risen dramatically, leading to higher prices at the consumer level.
Translation: You might want to stock up on any of those “can’t live without” imports from China soon as they will never be any cheaper than they are now… In other words, the era of cheap goods is over.
The Truth About the 401(k)…
As we have been telling you for years, maxing out your 401(k) (above the employer match) is just about one of the dumbest financial moves you could ever make. It seems the financial services business is just now finally beginning to figure out why. Learn more here…
(And will somebody please send the memo to Dave Ramsey and Suze Orman… Bless their hearts. Their mantra for years (until just recently) has been: 1) Max out your 401(k), 2) Buy a house because they always go up in value 3) Avoid gold and silver because they are terrible investments and 4) Put all your extra money into mutual funds. Ouch! Maybe this explains why 95% of American reach the age of 65 dead broke.)
British Protest of Budget Cuts Turn Violent…
An estimated 250,000 British public workers took to the streets of London over the weekend to protest new “brutal” spending cuts in government jobs and services. Teachers, nurses, firefighters, NHS workers, students and others spent the day in mass protests. While they were mostly peaceful, some violence did erupt. Over 200 were arrested and 66 were injured in the demonstrations.
And now… New research indicates that the average British worker is bringing home $1,600 less than two years ago due to the effects of inflation. The “official” inflation rate in the U.K is running at 4.4%. Many fear 5% or more is on the way soon.
News on Social Security Income…
The Federal government is projecting a COLA (cost-of-living adjustment) increase in Social Security benefits for 2012 – the first time since 2009. And while the hike in benefits may come as good news to many seniors who have lost money in both the stock market and the housing market, it will be overshadowed by a new hike in required Medicare premiums. For most, the net result will be no raise in income, despite the COLA increase. You can read more here.
In a recent interview, FTMDaily.com founder and economist, Jerry Robinson, stated: “Those who are dependent on only one or two fixed income streams are highly vulnerable to wave of U.S. inflation that lies ahead. Now more than ever, individuals need to begin cultivating multiple streams of income that can help them stay financially afloat amid times of economic turmoil.”
Through our free monthly webinars and our subscription-based quarterly newsletter, FTMDaily.com is educating thousands of people on how to create financial freedom by diversifying their savings, their investments, and their income.
Also In The News…
1. FORECLOSURE NATION: The national vacancy rate crept up to just over 13% according to last week’s decennial census report. That’s up from 12.1% in 2007.
2. CURRENCY UPDATE: “Tough talk” from the Federal Reserve on the need for higher U.S. interest rates helped stabilize the dollar over the weekend. But the big news is the Australian dollar, which rose to its highest level against the U.S. dollar since 1983 last week.
3. CONSUMPTION TRAP: Real disposable income fell by 0.1% in February as consumer prices jumped by the largest amount since July 2008, the Commerce Department reported Monday.
4. U.S. SAVINGS RATE: The savings rate fell to 5.8% in February from 6.1% in January.
5. PORTUGAL RATINGS CUT: After lowering Portugal’s credit rating by two levels last week following the government’s resignation, Standard & Poor’s is warning today that it could further downgrade the country’s credit rating this week. Portuguese 10 year bond yields are currently at 8.16%.
It’s beginning to happen. After decades of funny money, the world is finally waking up and smell the coffee. Gold is finally beginning to replace fiat currency as the currency of choice. And who’s buying its? The central bankers who sold us on the funny money. The irony is unreal.
Why So Serious?…
Its time to laugh a little. Here’s a sampling from the some of the late-night jokers.
“President Obama had to use another door to get into the White House yesterday after he got home and the entrance to the Oval Office was locked. When he couldn’t get in, Obama said “Holy cow, is it 2012 already?” –Jimmy Fallon
“A man in Texas used his obituary to ask for donations to anyone running against Obama in 2012. And then his ghost was offered a nightly show on Fox News.” –Jimmy Fallon
“Dennis Kucinich wants to impeach President Obama over Libya. There’s a very good case against impeachment. It’s called “Joe Biden.” –Jay Leno
“I read about a three-year-old boy in China who weighs 132 pounds. In fact, he’s so overweight that he can barely walk to work in the morning.” –Jimmy Fallon
Cartoon of the Day…
Jerry Robinson – FTMDaily.com
Jerry Robinson is an economist, published author, columnist, international conference speaker, and the editor of the financial website, FTMDaily.com. In addition, Robinson hosts a weekly radio program entitled Follow the Money Weekly, an hour long radio show dedicated to deciphering the week’s economic news.
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