Archive for the ‘Economy’ Category

A small word called tax

Thursday, March 12th, 2009

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Filing taxes is something that is dreaded by the common man every year. However it seems our ancestors would be as dreadful as we are since the history of tax can be traced to as long back as 3000 BC in ancient Egypt. Tax was historically collected from the people in the form of a percentage of the crop yield, and this had to be handed over to the Pharaoh. Taxes have evolved over the years, and in modern taxation systems, tax is solely collected in the form of money, and is usually performed by a government appointed agency.

While the collection of tax has always been debated, funds collected by the taxation process are used for various purposes mainly for providing greater benefits and improve the level of basic services such as water, energy and waste management for the people. The rate of tax is fixed by the government, but can be increased depending on the economic condition of a nation. During the eighteenth century, England was at war, and the tax burden increased dramatically by 85% over this period.

In the modern society, taxes can be seen everywhere and they have become a part of life. With the introduction of the Value Added Tax (VAT) in 1954, all commercial activities were tagged with the tax label, and the consumer had to pay a tax for any commodity that he or she buys. History however has seen the weirdest of tax schemes. In Britain, a tax was imposed on windows by William Pitt, as it was considered to be a luxury possession. Nero the Roman Emperor taxed urine, as it was used as a raw material for a number of chemical processes. Peter the Great, the czar who modernized modern Russia is said to have introduced soul tax, for the maintenance of armed forces.

Tax havens evolved as a direct economic response to the principle of taxes, as places where taxes were levied at an extremely low rate or not levied at all. Tax havens can be traced to ancient Greece, where sea traders deposited foreign goods in Greek island to evade the two percent tax imposed by Athens. The oldest tax haven is said to be the Channel Islands dating as far back as 1006 A.D, although economic commentators suggest that the first “true” tax haven was Switzerland. Most European governments had to pay for reconstruction costs for damages suffered during the World War I using the taxpayer’s money, but Switzerland’s neutral policy during the war allowed it to maintain a low level of tax.

Evasion of tax is considered to be a crime, and the non-paying entity or individual can be subject to civil penalties such as fines or forfeiture or criminal penalties such as incarceration. In spite of this, individuals and companies try to evade tax, considering it to be a burden on their income. Individuals have tried various means to evade tax, with the strangest being a person trying to claim his dog as a dependent. Yet another instance saw a man trying to save tax for the money that he had made from donating sperms, claiming that he had been depleted.

With economies on a downturn, tax is becoming the focal point of all discussions on reviving shattered economic conditions. Council taxes have been increased in some places to bring some money in the exhausted council coffers, and Japan is considering cutting tax rates to boost economic demand. Tax has never been so much in the limelight, and it is becoming increasingly clear that this small three letter word will play a big role in the months to come.

Japan, Mexico, Australia and New Zealand’s Currency Falls

Friday, March 6th, 2009

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Japan’s yen will fall to 102 to the U.S.’s dollar as of tomorrow. The yen had been as strong as 87.12 to the dollar in January and has lost 8.8% since then. The forecast calls for the yen to fall 4% more in the next 3 months. Mexico’s peso has dropped 32% since September. The peso is 16th out of the top 16 most-traded currencies, showing the largest drop and the worst performance also since September. For the fourth week in a row, Australia and New Zealand’s dollars fell against the U.S. dollar. The dollars also fell against the yen. Australia’s economy shrank in the fourth quarter and grew less than expected in January. What is going on here?

Though misery loves company, I don’t think we (by “we” I mean the United States) would wish our economical woes on any other country. So is our economy falling because of the currency issues in foreign countries or are they failing because of our falling dollar and failing stocks?

Because the yen and other Japanese accounts are declining, their investors started and continue to purchase foreign securities. In February, the yen had its worst monthly drop in 13 years, and Japan’s overseas stocks and bonds rose to record numbers. At the same time, Japan’s Prime Minister Taro Aso’s disapproval rating also rose to record highs. Carry trades could have helped Japan borrow foreign currencies with low interest rates and invest in nations with high borrowing costs. Don’t think that the U.S. is safe because our big investors could start purchasing foreign securities also, starting this whole downward spiral.

Mexico’s peso fell 1.4% to the U.S. dollar after an announcement of the country’s currency commission regarding changes to the foreign-exchange auction system. Yesterday the peso was down another 1% to 15.39 to the U.S. dollar. The same currency commission said it will offer to buy $100 million worth of pesos a day in order to guarantee that the central bank’s projected foreign reserve accumulation is sold. Even high ranking Mexican officials say that this will not be enough to jump start Mexico’s economy and failing peso. Mexico is in a state just below panic at this time and if things continue falling, the U.S. is going to have to step in before this goes too far. Just like any other nation, the United States could end up like this at any moment.

Australia has an overall negative dynamic which will be the main issue pushing their dollar lower. The Aussie dollar fell from a value of 64.3 U.S. cents two days ago, to 63.9 U.S. cents yesterday. Even New Zealand is feeling the pain, their dollar falling from 50.2 U.S. cents to 49.8 cents yesterday.

The thing to remember is for one, we are not the only ones feeling this bite of economical downfall. Different countries are hurting to different extents and in slightly different ways, but we can all empathize because if we’re not there, we have been or know we will be. Besides focusing on rebuilding the United States’ economy, we have to remember that the world will follow. This is not the first time we have seen crises and it won’t be the last. Your best weapon in this battle is staying informed and using that knowledge to the fullest.

Libor and the Dollar

Thursday, March 5th, 2009

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Libor or the London Interbank Offered Rate, was introduced in early 1984 after it became apparent that an increasing number of banks were trading actively in a variety of relatively new market tools. The British Bankers’ Association (BBA) noted that these new tools notably interest rate swaps, foreign currency options and forward rate agreements, brought in more business and greater intensity to the London Interbank Market. However they were also worried that future growth would be hindered unless there was a standard introduced.

Hence, Libor was introduced as a standard and would become the British Bankers Association’s yardstick for interest swap rates.  This standard also incorporated the fixing of BBA interest settlement rates which became a part of the overall package officially known as the BAIRS terms – the BBA standard for interest swap rates. Ever since it was introduced, the Libor has been used as the official standard for calculating the rate of reference for the British Pound Sterling and other currencies including the US dollar.

Every weekday morning, as the clock ticks round to 11, a group of six people put together this world’s most important number. This number will later determine the day’s Libor rate or rather the rate banks charge when they lend each other money. To get a sense of the importance of Libor to the financial system you only have to look at the precautions that the team goes to make sure that the figure always gets published on time.

The group is equipped with an emergency evacuation office in Canary Wharf, London. They also have another permanently staffed office at a secret location outside London. Every team member also has a dedicated phone line in their home in case they are prevented from getting to the office, by an incident such as a terrorist attack. Nothing is allowed to come between Libor and the wider world.

However serious questions about the credibility of the Libor were raised, after a study released by the Wall Street Journal, revealed that banks may have downplayed borrowing costs they reported for LIBOR during the 2008 credit crisis. The immediate impact of this meant that banks could have created a false impression about their borrowing. By using the LIBOR to their advantage banks could create an impression that they could borrow from other financial institutions more cheaply than they could in reality. This meant that although the banks were suffering they appeared to be much healthier.

The BBA conducted an internal investigation, and announced that the LIBOR is definitely dependable and can be relied on even during the financial crisis. This was supported by other authorities including the Bank for International Settlements. It was also found that “Although the integrity of the U.S dollar LIBOR fixing process has been questioned by some market participants and the financial press, it appears that U.S. dollar LIBOR remains an accurate measure of a typical creditworthy bank’s marginal cost of unsecured U.S. dollar term funding”

As the U.S. government was set to propose more massive spending to help fight recession, the LIBOR for the U.S dollar increased even as the rate for Euros slipped to a record low. Analysts said that more government aid for the economy would keep dollar Libor rates on a mildly rising trend as the government would likely have to borrow more funds. Under such circumstances, banks do not want to lend out their spare liquidity because there is uncertainty - both about whether the bank will need the cash itself in coming months, and about the financial health of the borrowing bank.

As Libor measures the rates at which banks are prepared to lend to each other, it follows that it also determine the rate at which they are prepared to lend to their customers. It eventually goes on to set the rate of $360 trillion (£210 trillion) worth of financial products worldwide, ranging from mortgage rates to car loans. The big institutions are increasingly dependent on the central banks for cash and until this ends we’ll not see Libor rates falling.

So despite its daily fluctuations, it seems that the lack of trust between banks has rendered the market almost silent.But with the eyes of politicians, bankers and customers fixed on the daily Libor numbers, it seems unlikely that the attention on this world’s most important number will disappear.

How Much Cash do Americans Keep on Hand?

Thursday, March 5th, 2009

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What’s in your pocket?


Americans are losing faith in banks, period. That goes without saying and no explanation is needed. We all know this. The stock market is falling; banks are going down and receiving money just to keep themselves afloat. What is the average American doing? They are stashing their cash or carrying it with them! In the past year, since gas prices started skyrocketing, Americans have started looking twice at their bank accounts and getting nervous. Even then there was talk of there being a recession. People started withdrawing their money in a frenzy and selling their stocks, starting to stash it at home and carrying large amounts in their wallets. So how much money do Americans carry in their wallets, and how much money is stashed in American homes?

The amount of cash Americans carry on their person is directly affected by the area of the country they live in. People in New York and Los Angeles are going to carry way more money than someone who lives in a smaller town like Lorain, Ohio or El Paso, Texas. Since the cost of living is so different, the cash one carries for basic necessities would be much higher in New York City and way lower in Lorain, Ohio. The demographics on carrying money look like this:
The average purse or wallet in the United States contains about $104.

13% of Americans use a piggy bank.

28% of Americans have a coin jar.

15% if people in the U.S. have a large amount of cash hidden in their houses. Out of these people, half of them have it hidden and the other half hide it in plain sight.

1/3 of Americans keep a small amount of cash on hand for emergencies.

Finally, more than 50% of American’s don’t keep any cash at all in the house.

American’s carry cash so they don’t have to use credit cards, foregoing the interest usually incurred in that way. People carry cash because they don’t trust the banks and they haven’t been able to trust banks for at least a year or more. Some carry cash because that’s what they’ve always done and that’s what they were taught to do. Sure a lot of people go into a bank or through the drive through to cash their paychecks, in return getting their cash for no extra fees. What about those who don’t go to the bank and whose checks are automatically deposited? These people will usually hit up the ATM. It’s difficult if possible at all to not incur a fee when using the ATM so this way of obtaining your cash is costing you money. Is the tradeoff worth it?

Some might argue that we’re becoming a no cash society; using less cash and more and more debit and credit cards. I wonder if these people have taken a look at the economy lately because I think we may be going back to using as little plastic as possible.

Can you text me 1000 Dollars please?

Wednesday, March 4th, 2009

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Ever since currency evolved, humans have used it to lend to loved ones or friends and families, or make payments. In the earlier days, the only form of lending money used to be meeting the person and handing it over personally, over a cup of tea. As technologies evolved, and people became more and more busy there was a need for money to be transferred or lent easily. Along came cheques, and it was now easy to write a cheque and send it across.

Cheques were convenient to use, but the whole process was slow and time consuming. Banks later introduced Wire Transfers, which were blazingly fast to transfer money. Wire transfers, however required the person to visit the bank and order the bank to transfer money. Then came the Internet , and it was now possible for the sender himself to log on to his bank account and initiate a transfer to the party he wished to send. With the advent of mobile technologies, we were ushered into a wireless age.

Mobile phones have penetrated into every household. In fact studies have revealed that although 5 babies are born every second around the world, 30 new mobile phones are being subscribed to every day. Evolution of mobile phone technologies has meant that it is now possible to send money to your loved ones, or make a payment to that provider located on the other part of the globe, just by pressing a button on your cell phone.

With a lot of people travelling and moving from their homes in search of employment, money transfer has become a lucrative market for mobile phone companies as millions of people send money across. Mobile money transfer has changed lives in various countries. In Kenya, when it was introduced as M-pesa, the technology provided cut – throat completion to existing money transfer agencies, notably the government-owned Postal Corporation, a market leader with a massive network of agencies.

The technology has been a boon to most people living in rural areas, who have to rely financially on relatives in the cities. The mobile transfer technology has replaced the much slower postal money orders, and people in urgent need of financial help are being immensely benefitted by it. A similar technology was introduced in the developing market of Afghanistan, where it was particularly relevant since the large majority of population does not have access to traditional banking services.

Even in developed countries like the US and UK, it is estimated that more than $10bn a year is sent back to countries by migrant workers. Based on World Bank estimates, reducing remittance commission charges by 2-5% could increase the flow of remittances by 50-70%. Mobile phone companies are hence, being increasingly attracted to this lucrative market.

Money transfers suffer the risk of being prone to scams, and wire transfers also suffered from money being send by wire to an unknown person. Apparently, the mobile money transfer service is said to be secure, in the sense that it uses security pin codes, for the transaction. So, the next time you need to make a payment, or transfer a 1000 dollars to your loved ones, why not text it?

The Value of a Dollar-It’s more than just 100 Cents

Wednesday, March 4th, 2009

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The value of our dollar depends strongly on the values of the dollars of other countries, exchange rates and interest rates. The interest rate in the United States from the Federal Reserve dropped to 4.75% in September 2007. Other banks around the world did not follow when this happened. This means that the European Central Bank (the home of the euro) has a higher interest rate right now than the Federal Reserve. Basically holding a Euro in your hand would be worth more in interest than holding a dollar in your hand. At this time in the dollar’s life, which would you choose?

Because of this difference in interest rate, other countries around the world are thinking like you and I are. They’re diversifying their holdings from dollars to Eruos and even British pounds for this same reason. In a supply and demand aspect, this situation causes there to be a large supply of dollars making them worth less. This loss in value caused the oil industry to charge higher prices, hence the skyrocket this past summer. Other countries don’t want the dollars they get for oil so they exchange them for Euros. It’s an endless cycle that has only gotten worse, despite understanding the root of the problem.

The dollar dropping is a double edged sword. On one hand, many manufacturers want to produce their products in factories in the United States, bringing us jobs. The reason manufacturers want to bring their factories here because it’s so cheap to run because of the low dollar value yet they can sell them overseas for the value of the Euro. On the other hand, the low dollar causes inflation. We know how bad that can be. Everything becomes more expensive in order to make up for the dollar value going down. Companies still want to make a profit on their goods so the cost of everything rises.

In order to get bonds to sell, they will be cheaper and have higher interest rates. These interest rates correlate to mortgage rates which don’t seem to be dropping anytime soon. Our weak dollar is also scaring away foreign investors who are now afraid to own stock in US companies. Foreign nations who have a lot invested in the dollar have the ability to cause a nuclear financial meltdown for the United States. They could easily exchange their dollars for something else, releasing our money into circulation, causing the value to plummet.

All in all, yes the dollar is worth 20 times less than it was in 1913 but a year or two ago, we knew that and we were used to it. Right now, on top of the 20 times less, it is losing more value in front of our eyes. I’m no one to give financial information but now that you know about the value of the U.S. dollar, just watch what you do with it. Buy and sell carefully because this is a delicate time for our economy.

How and Why to Start a Savings Account

Tuesday, March 3rd, 2009

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Put your money where the bank is.


Get that cash out from under your mattress and your bra is not a good hiding spot. I’ve seen some funny and innovative places that people have hidden their cash but none of those places is safer than the bank. Does your mattress doesn’t pay you to put money under it? Well a bank does.

First things first, you want to find the bank that’s for you. If you’re a walk-in type of person, you’ll want a bank that has a branch in your area. If you’re internet savvy, you might want a bank where you can control everything online. Interest rate is also a big factor you should take into consideration when choosing a bank. The higher the interest rate, the more money you will make putting your money in that bank. Some banks require or “suggest” you start your account with a certain amount. This could be anywhere from $500 to $5000 to much more. Some suggest you keep a certain minimum balance your account. These are all things you want to know before you start putting your money anywhere and before you sign anything!

Next you should decide if you’re saving towards a purpose (like a home or car) or just to save for your future. Something like this can make a difference to the banker when you go to open your account. Decide on an amount from every paycheck that will go into your account automatically. Try not to deviate from this amount. A general rule is 10% of the money you bring in. You could also set up a change jar and save up extra change and dollars in between paychecks. You’ll be AMAZED how much change adds up. Once you’ve chosen your bank and you’re familiar with that bank’s practices, policies and interest rate go ahead and sign up. If you do this online you may have to send in a form with your signature or some official documents.

Why in the world would you want to start a savings account to begin with? Isn’t a checking account enough? Isn’t my pocket enough? Well, to tell the truth, the easier the access you have to your money, the more likely you are to spend it. That’s just a simple fact. You need to have some backup money that you have access to but that isn’t the easiest, first route you go through to pay for something. You need a savings account to save for an emergency. In case your car breaks down or you have something unexpected comes up from across the country. You don’t want to have to pull out a credit card if you don’t have to. Save for retirement, save for college, save up for a vacation. No matter what it’s for, even just a rainy day, even just a dollar here and there, SAVE your money. You’ll thank me later.

Zimbabwe and the dollar crisis

Monday, March 2nd, 2009

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The Zimbabwean dollar was introduced in August 2006, equal to 1000 of the prior Zimbabwean. However, Zimbabwe’s downwardly spiralling economy and hyperinflation caused by Zimbabwe’s involvement in the war in the Democratic Republic of Congo has left its local currency worthless. During the start of the war, inflation was at an annual rate of 32% but later rose to a mind - boggling 231,000,000% in July 2008, forcing the Central Bank of Zimbabwe to introduce a new 100 billion dollar note.

The country now has the highest inflation rate in the world. This means that its own currency, which was once on par with the British pound, has now been reduced to nothing. This has forced Zimbabweans to pay trillions of dollars for buying a loaf of bread. But the worst is yet to come for the Zimbabweans as the prices are doubling every 1.3 days.

The government of Zimbabwe is left with various economic problems, after having abandoned earlier efforts to develop a market-oriented economy. Local residents, having left with no option, were forced to buy food and other essentials from neighbouring Botswana, South Africa and Zambia.

The falling economy meant that the exchange rate for the Zimbabwean dollar fell from 24 old Zimbabwean dollars per U.S dollar (USD) in 1998 to to 250,000 prior or 250 new Zimbabwean dollars per US Dollar at the official rate. This was equivalent to 120,000,000 old or 120,000 revalued Zimbabwean dollars per US Dollar on the parallel market, in June 2007.

In the wake of the crisis, Zimbabwe introduced the new Z$100 trillion banknote, and announced that Zimbabweans would be allowed to use other, more stable currencies (e: g the Euro) to do business, alongside the Zimbabwean dollar. However during this period Civil servants were not being paid their salaries and there was widespread discontent among Civil servants, with teachers refusing to attend schools because they were not being paid. Nurses and doctors followed suit and the government was put under extreme pressure.

In an effort to curb the inflation, the RBZ announced that a further 12 zeros were to be taken off the currency – reducing one trillion dollars to one dollar. Meanwhile, as unrests continued to grow among the working class, the government announced that civil servants would be paid in foreign currency and appealed for them to return to work. It was agreed that soldiers and civil servants would be paid in US dollars to help revive the shattered economy. Some 130,000 government employees were paid $100 a month tax-free, replacing their local salaries. Soldiers were the first to be paid in vouchers redeemable for cash. Analysts felt that this was the first concrete step from the new government to prevent a collapse of the system, and restore sanity and trust among the people, for the government.

Poor health, corruption and controversial programmes introduced by the government have seen Zimbabwe dropping from being Africa’s strongest economies to one of the worst economies in the world. The advent of the dollar in the Zimbabwean economy was seen as a ray of hope for the people of Zimbabwe. Zimbabweans have a long way to go to restore the lost pride of its nation. In the dollar, Zimbabweans can look at the world’s dominant economy as a guiding star to lead Zimbabwe out of its economic crisis and pave the way for a better future for the people of Zimbabwe.

Dollarization in Foreign Economies

Tuesday, February 10th, 2009

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dollarizationThe term “Dollarization” is when the inhabitants of a country use foreign currency along with (or in place of) their own domestic currency.  Dollarization is not only applied to usage of the United States Dollar, but generally to the use of any other country’s foreign currency as the accepted currency.  Some other currencies that are widely accepted outside of their issuing country of origin are:  the Euro, the South African Rand, the Russian Ruble, and both the New Zealand and Australian Dollars.  For today, however, we’ll focus primarily on the United States Dollar.

Dollarization has never really received much attention, due to the fact that it was generally believed to be politically impossible until 1999, when Jamil Mahuad (then President of Ecuador) attempted official Dollarization through economic reforms of Ecuador’s economy.  He declared a freeze on the country’s bank accounts, in an attempt to control inflation.  This economic plan ultimately lead to a military coup and Mahuad was ousted from office.

Since that time, there have been several other countries that have considered and implemented it as that country’s official policy.  El Salvador, for example, officially adopted the United States dollar in 2001.

Dollarization can fall into three basic categories:

1.  Official Dollarization:  The dollar is the only legal tender, officially adopted, and there is no local currency.  Some examples of countries where this has happened are:  Panama, El Salvador, and Ecuador.  Since their independence in 1903, for example, Panama has used only the United States Dollar exclusively.

This reduces the foreign country’s economic risk, providing a secure, stable economic environment.  These generally tend to be “developing” countries, with transitional economies, especially those with high inflation.

Amazingly enough, the United States Government does not have to provide approval to allow for another country to use its currency as legal tender.

2.  Unofficial Dollarization:  This occurs when private agents, generally in private transactions, prefer the foreign currency over the domestic currency. They might hold, for example, deposits in the foreign currency because of a bad track record of the local currency.  The practice might be widely accepted in that country, but is not classified as “legal tender” by the country’s government.

This can sometimes occur in countries where the United States Dollar has become more prevalent in circulation than the country’s own local currency.  This can be difficult to reverse.

3.  Semi-Dollarization:  Also known as a “Bimonetary System”, foreign currency is legal tender, but plays a role secondary to domestic currency.  Both the United States Dollar and the country’s own currency are used interchangeably.  Cambodia and Lebanon are two countries that practice this, for example.

There are both advantages and disadvantages to Dollarization for a country.

The advantages would be:  Fiscal discipline, resulting in lower inflation and financial stability.  This results in business being easier to conduct within that country, due to the resulting “peace of mind“.  The United States Dollar, for example, has never been devalued, nor has the United States’ notes ever been invalidated.  For a country that has had a past history of bank failures, devaluation and inflation, the temptation of adopting the United States Dollar is strong.

Some disadvantages would be:  Loss of control by the local government, as they lose power and control over inflation and fiscal policy.

It has been estimated that approximately 40-60% of existing United States currency circulates outside of the U.S.  This estimate has been further reinforced by the actions of the U.S. Government, which produced posters and pamphlets between 2003 and 2006, outlining the new look and anti-counterfeiting features of the “New” United States bills in an ASTOUNDING 24 LANGUAGES!

So, the next time you travel outside of the United States and encounter U.S. Currency, or even the next time you pull a Dollar out of your wallet, beaten and worn, looking like it has been “Around the World”, ask yourself:  Where has it been, What countries it has seen,  and how many different hands it has been exchanged through?

To find out where YOUR dollar has been, please visit our FREE Online Dollar Tracking System by clicking on “Enter a Dollar Bill” on the menu above!

Wallet Phones

Wednesday, December 24th, 2008

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wallet phoneWhat’s your idea of a bad day? Imagine leaving home without your wallet or purse? Does this sound like the makings for a very bad day? If it does, perhaps you should read on to discover why things might not really be as bad as they sound.

A Japanese company called “DoCoMo” has created “wallet phones” and is now actively marketing them throughout Japan. These actual cell phones are the size of a credit card and are fitted with a special computer chip which allows users to not only use the phone for things we’d ordinarily use one for, but all allows them to pay for things using their cell phone. Wallet Phones can currently be used just like credit and debit cards all over Japan to withdraw cash from automatic teller machines, pay for purchases in stores and restaurants, vending machines and arcades. It is anticipated that in the near future, owners will be able to check in with their airlines, pay for train rides, rent videos, and even have their office keys built into their cell phones.  Drivers license information could be encrypted into the chip on the phone.While the technology has not quite made it into the United States just yet, it is expected to do so shortly. Wallet phones will be able to be used the same way as a debit cards and can hold more than one credit card. The functionality will provide owners with an easy and convenient way to organize their lives including their financial information at the palm of their hands.

Many people already rely heavily upon their SmartPhones as a way of maintaining their emails, calendars, contact information, to-do lists, appointment setting, photos, music, and of course phone calls. The new wallet phone will take it a step further to allow everything to be incorporated into one simple machine which fits in the palm of your hand, therefore eliminating the need to carry a separate wallet. Now, about getting that tube of lipstick to fit in the cell phone, you’re on your own! In the meantime, look for a Wallet Phone coming to a store near you soon. That way, instead of worrying whether you forgot your wallet or purse at home, you won’t want to leave home without your phone. But hey, look on the bright side, it’s one less thing to remember, right?

Remote Deposit Functionality

Wednesday, December 24th, 2008

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remote depositHave you ever been a few days away from pay day, short on cash, but needing to buy something? We’ve all been there. And face it, most people have done what has been coined as “floating a check” at some point in their lives. You know what I’m talking about; with little to no money in your checking account, you write a check for the amount of your purchase knowing it will take a few days for the merchant to cash the check and the check to make its way from the merchant’s bank to your bank and come out of your account. While risky, this action has made it possible for many Americans to make it from paycheck to paycheck with the things they need. However, thanks to a new technology called “remote deposit” the days of “floating checks” may soon, if not already, be over.

Previously, merchants accepted checks in their store and made daily or weekly deposits at the bank by manually grouping all checks received and calculating the deposit. They then drove to the bank where a teller would confirm the deposit and sometimes place a one to ten days hold on items to ensure they were processed as “clear”, or ensure that there were enough funds in the originators account to cover the amount of the check.  Merchants are unable to access any of the funds that have been placed on hold for the set amount of time. Sometimes it could take days for checks to travel from various banks around the country.

“Remote Deposit” is a technology which makes making bank deposits much easier and faster for merchants. In the store, clerks accept personal checks, business checks, and money orders from customers. They run each item through a small machine which scans the document and records a digital image of the front and back of the document. The image is then grouped and through the use of specially designed software, deposited into the store’s bank account through the Internet. The new technology makes it possible for merchants to access their money faster, eliminate trips to the bank, and makes handling checks much easier for merchants.

As we become a more globalized society, banks have begun to accommodate our lifestyles by providing us with technology that suits our needs quickly and efficiently. The new Remote Deposit technology makes it easier and faster for money to travel. With this technology, writing a check is now almost as fast as swiping a credit card through a terminal. Essentially, the two technologies work much in the same way. While the number of checks written each year in the United States is declining, due to the increased use of credit and debit cards, there are still over 40 billion checks written each year. This new “Remote Deposit” feature makes it easier and faster for these check transactions to take place. However, it also eliminates the time lapse in between the time a check is written and the time it is cashed, to allow for extra deposits to be made.

How Technology Affects Our Money

Monday, December 22nd, 2008

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money technologyToday’s modern technology offers us a multitude of money management methods. We are constantly offered easier ways to pay at stores and while not as numerous, several options are available with regards to how we receive our money. We’ve always been able to pay with cash and checks as well as several forms of plastic including credit and debit cards. But today, new technologies are available that make paying even easier.

Imagine being able to pay for goods and services with just the touch of your finger! A company called “Pay By Touch” has developed a scanner that is currently being used in hundreds of supermarkets throughout the country. Customers do not have to carry credit cards, cash, or checks with them because they are conveniently able to go through the check-out line, scan their finger print, enter a phone number and select a bank account or credit card to pay for their groceries with. Customers do have to complete a short enrollment process prior to being able to utilize the program. Upon enrolling, their unique fingerprint is scanned, and an encryption program converts it into forty unique points and keeps the information confidential. When the customer touches the special scanner, the forty points are recognized and the transaction can take place easily and quickly.

Another new “contactless” technology called “Blink” makes it possible for customers to simply wave a card within four inches of a reader and within a second or two, receive a tone or a beep when their payment is complete. Nothing exchanges hands with anyone and no signatures or pin codes are necessary. The technology works by a Radio Frequency IDentification (RFID) tag inside of the card. The tag contains information about its owner including account numbers and balances so that it can charge the correct account, similar to the way a debit card works. The cards contain the same security levels as a regular credit or debit card and special coding is used to scramble the customer’s information so it cannot be stolen. This new technology makes paying faster and easier by an estimated 53% in comparison to swiping a credit card and 63% faster than paying with cash. It has become popular with convenience stores and quick-serve restaurants as these stores aim to get customers in and out as quickly as possible.

Another way technology is affecting how we handle our money is in the ways in which we are paid. Today, most employers offer at least two forms of payment: Check or Direct Deposit. Another new technology gives yet a new option for payrolling employees, this is especially important in a nation where 12 to 15 million individuals still don’t have a bank account. Typically, employees who do not have a bank account are forced to go to a supermarket or check-cashing store to receive their pay. These stores usually charge a convenience fee for their services. In the 1990s however, Payroll Cards were invented. Similar in looks to a regular debit or credit card, these cards allow employers to send electronic signals to the cards which represent the amount of money the employee is supposed to receive. The card then works as a “pre-paid debit card”. Utilizing these cards are cheaper that issuing paper checks. It is also safer than a paper check because they are less likely to be lost or stolen and are easily replaced in the event of either of these options. In addition, employers are able to save money because they don’t have to pay for postage or other expenses associated with mailing paper checks to their employees.  

Thrifty or “Green”?

Sunday, December 21st, 2008

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greenFirst of all, I must confess. I try my best to save a dollar wherever I can. I clip coupons every Sunday. Shop when my local grocer offers double and triple coupons, try to eat out less, but the generic peanut butter, and lower my thermostat by a few degrees to save costs on heating. But has anyone other than me noticed lately how all of a sudden being cheap thrifty, can become trendy, if we call it “going green”?  I mean, have you heard some of the latest trends? Dumpster diving? You’ve got to be kidding me right? Thrift Stores are no back in style? Reusing another person’s trash has become a phenomenal feat because there’s less waste in the landfill.

Don’t get me wrong. I’m not against doing what’s good for the planet. I recycle my cans, my paper, my plastic and basically anything that my local municipality allows. I even have my own garden to grow vegetables free of pesticides. I switched my lightbulbs out for ones that supposedly use less energy and I’ve even stopped using the plastic bags at the grocery store when it’s not necessary. And while I accept that the days of just throwing everything away to end up in a landfill are over, I cannot help but wonder why there are those among us who seem to be taking this whole “green” thing to the extreme. However, it’s illegal to be caught digging through a dumpster. Besides, who knows what you could stumble upon in one of those smelly things!

This brings me to my next thought, is it possible that times have gotten so bad in the midst of our economy that ordinary working folks are actually being forced to search for items in the dumpster in order to make ends meet? I don’t want to seem insensitive as I know there are many Americans among us who have been forced out of their jobs through lay-offs and cutbacks and I sincerely offer them my condolences to them. I know that there are many others who have lost their homes due to foreclosure and again, I sympathize with this awful situation. Yet I cannot understand what motives other than sheer desperation would force someone who has a seemingly ordinary life with a job and a home and a family to search for their next meal in a dumpster.  Again, I don’t mean to sound insensitive as I know there are those who cannot afford to put food on the table and warm clothes on the backs of their family, but from the stories I’ve read online, many Americans are turning by night into dumpster diving savages! When asked why, they say they’re doing our planet a favor and keeping “perfectly good items” out of the landfill.

So my question to readers is: what’s driving perfectly sane people to jump inside of dumpsters? Is it really because they feel that their doing so is going to make the planet better for our children? Or is there another motive below the surface? Perhaps it curiosity of the unknown and bringing out their inner treasure-hunter. I’m eager to hear your thoughts. 

Last Minute Christmas Gifts on a Budget

Sunday, December 21st, 2008

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money christmas treeTime is running short…only a few days left until Christmas. While many are rushing from store to store picking up last minute gifts, others are worried how they can afford to make their dollar stretch as far as possible on gifts this year. If you’re still trying to decide what to give someone in your life, here’s a few last minute, dollar-stretching ideas:

Always a good idea for everyone a gift of food offers endless possibilities. Candy and cookies, breads, sweet breads, muffins, an entire meal or even a mix; taking the time to prepare  something with your hands in thought of someone will show them just how much they mean to you. One of my favorite quick and easy gifts is taking a package of Oreo cookies and dipping them in white and milk chocolate separately. Then you can dip them in sprinkles or coconut or other toppings or just set them on wax paper to dry. Whatever tickles your fancy, your friends and family are sure to love this special treat. Another favorite food gift of mine, is my tradition of cooking an entire meal for my family during the holiday season … it frees up time for them, and it’s fun to get together and talk and relive memories we all share together.

Another great gift idea at the holidays is pictures. Pictures give us memories of special times in our lives. There’s no better gift than a memory to bring a smile to a loved one’s face. Frame a picture of yourself, your family or just your children. Give friends pictures of special moments shared between you. Everyone loves a great photo. Frames can range from exquisite to simple depending on tastes, but regardless the true gift is in the memories shared.

Homemade coupons make a great gift and don’t cost a lot at all. Remember as a child the coupons to Mom for a Hug and a kiss? Updated versions of those coupons can be just as fun…and special for the recipient. Try giving someone a coupon for a home-cooked meal on a busy night or a day spent together watching movies at home. Sometimes simple things go further than anything you can spend money on.

Try visiting stores that might be going out of business in your area to score extra savings on great gifts for those in your life. Many stores are having sales right now as they try to eliminate their inventory, many with discounts up to 70 and 90% off. You’re sure to find something for someone on your list and the savings will be great!

Finally, how about a donation on behalf of someone you know. What a great way to do something good for others and still give gifts that is meaningful for someone on your list. Think of causes that might be special to the person you’re giving on behalf of and look for local charities to donate to on their behalf.

In conclusion, there are lots of great, inexpensive last-minute gift ideas. It just involves getting a little creative and thinking outside the box. Good luck and have a great holiday!

Has Las Vegas Luck Run Out?

Sunday, December 21st, 2008

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dollar vegasThe current global recession is affecting cities across the globe. With the holidays fast approaching, many thoughts ordinarily turn to travel. But on the brink of a global recession, many families are staying put and avoiding costs wherever possible. No stranger to holiday travel, the thought of spending the holidays at home just didn’t seem right to me. Several months ago, I found a great deal on airfare and now I plan to embark upon a trip to the once a recession-proof oasis of Las Vegas, Nevada. That’s right, Sin City! But it seems that even Vegas can’t seem to escape this recession.

Over the years, Las Vegas has grown as speeds so fast that even frequent visitors had trouble keeping up with the growth. Conventions and the entertainment industry have made this desert oasis and beacon for global tourism. In fact, since the 1970s, Las Vegas has remained recession proof. Yet one question, remains on the minds of most Las Vegas Loyalists, “how will this recession affect Sin City”?

Veteran Vegas travelers, my spouse and I are no strangers to the Las Vegas Lights. This trip however, we expect to be a little different. Not only did we receive drastic discounts on airfare and hotel rooms, we’re still plan to make changes on our own in order to protect our nest egg. We’re packing a little lighter to avoid airline luggage fees and leaving more cash at home than we ordinarily would. We were able to score a great room at the Bellagio with a view of the fountains for less than we paid for a room at the same hotel without the view of the fountains back in August. However, one thing I’m quite confident of, the slot machines and the lights will still be on the gambling capital of the world when we arrive this week.  We’ve already purchased tickets to see two well-known shows on the strip and there were no discounts available on those.

In a city where money will get you whatever your heart desires, it’s difficult to imagine Las Vegas not incurring some sort of substantial slow-down in the days and months to come. With tourism as the nearly sole industry in this desert city, Las Vegas is known for its growth and expansion. Already, over 20,000 construction jobs have dried up in Las Vegas. The Las Vegas Convention and Visitors Authority has launched a new $12 million three-month national campaign in order to attempt to entice conventions to Las Vegas and the dollars spent within them. The city’s convention business has been slipping in recent months as several annual conventions have seen fewer attendees and shorter stays among those that are attending.

So how will our upcoming trip to Las Vegas fair in the midst of a recession? Only time will tell. There’s still a lot to do in Vegas that doesn’t involve gambling. You can bet that we will take advantage of the “Duece’s” public transit line offering $5 bus fare all the way down the strip and onto Freemont Street. We’ll take in our shows, gawk at the Bellagio fountain and enjoy the free laser-light display on Freemont over three blocks of roof covering the street.

How to find your own hidden money?

Tuesday, December 16th, 2008

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hidden moneyDid you ever think that you might be able to find hidden money right under your own nose? What would you do with an extra $1,000-$1,500 per year?

America is all about convenience, but how much is “convenience” costing you? Little indulgences you enjoy on a daily basis might be putting a bigger strain than you realize on your wallet.  Here’s how to add an easy $1,000 to your bank account:

Skip the Starbucks: (okay, you can still have it on special occasions) But seriously, coffee you make yourself is nearly free in comparison to the high priced lattes. Skipping the expensive name even just one time a week can put an extra $200 per year right in your pocket!

Eat out less: I know it’s cliché, but the truth is, spending $5 a day on lunch at McDonalds really adds up. By bringing your lunch, it’s possible to eat for around $1.00 a day. If you work 200 days per year, this results in a savings of $600 per year right into your wallet! Not to mention the added health benefits by skipping the fattening fast foods!

No more bottled water: Not only is it bad for the environment, bottled waters costs $1 a pop or more. By installing a filter for your tap, you can save over $200 per year!

Get a library card: A new novel costs around $30 in the bookstore and can be bought in a used bookstore for $5 to $10. If you read a couple books a month, go to the library and check them out for free. Total savings of $500 per year or more!

Drink wine at home instead of the restaurant: You can usually buy the same bottle of wine for what restaurants/bars charge for the glass. Enjoy it in the comfort of your own home with friends and family and save big!

Clip Coupons: Coupons are easy to clip and many people are able to save big bucks by strategically using coupons for things they already buy. While savings will vary by the time you invest, simple changes like shopping on days when your local grocery store offers double and triple coupons can mean big bucks back in your pocket.

Save on Dry Cleaning: While some articles of clothing must be dry cleaned, the truth is, not everything has to be. Use your good judgment to determine what can really be washed at home. Another option is to wear things more than once before having them cleaned. Many people who work in an office don’t dirty clothing with just one wear. If a clothing article isn’t really dirty, why have it laundered at the price of several dollars per item?

There are many other ways to take a look at little indulgences that really aren’t necessary. Take a look at your weekly spending to determine what unnecessary spending you can cut back by keeping a log of all your expenses for at least one week and then evaluating what you really need versus what is a nice to have. You can thank yourself for your “sacrifices” by rewarding yourself in a year with a fantastic vacation or a great pair of shoes fully paid for by your savings!! 

A Backyard Full of CASH???

Sunday, December 14th, 2008

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dollar cash goldAs we enter into what is expected to be one of the largest recessions in our nation’s history, individuals throughout the United States are faced with the question: “what should I do with my money”? During the Great Depression, many individuals hid cans of coins in their backyards due to their mistrust of the banking institutions. More and more individuals have lost confidence in our current banking system and have begun to question the safety of one of their most safely guarded possessions: money. But what is the best way to protect one’s cash?

Over the years, we’ve all heard of random places to hide money: under the bed, in the freezer, buried in the backyard, in the Bible but where is the best place to put it? My grandmother hid cash for years in the back of her closet between some old quilts that were never used. No one knew about this until after the passed. My husband’s grand-father hid his money throughout his home. He told his widow from his deathbed to throw nothing away in that house without fully going through it. Still to the day, she’ll be going through some old book or other item and stumble upon a $100 bill. Perhaps this was his way of always making sure she was taken care of, but more than likely; he felt it was safer than putting his money in a bank. A close family friend is said to have “millions” of dollars buried in his backyard under a fig tree and while I don’t know if it’s true or not, it does make for a good legend. I’ve often wondered if upon his death, anyone will visit his backyard with a shovel to look for buried treasure!

Of course, burying cash in the backyard is nothing new. During the Great Depression Era, it was common for folks to make “treasure maps” and place their valuables in the ground in coffee cans or old metal boxes. Today a “Ziploc” brand bag, placed in a piece of PVC pipe is a common way to bury cash five feet into the ground. In fact, there’s even an “invention” floating around on eBay called the “Midnight Gardner”. The device is actually a simple twelve by four inch capped, watertight PVC pipe which is said to hold as much as $4,000 in gold, silver, or cash.

Is it a good idea to bury cash? Some say it’s not as the paper money will lose value due to inflation. These individuals recommend investing in gold bullion and burying that as it will hold it value better than cash. There are those that say if the economy got to the point that money invested in banks was gone, that paper money would hold no value either. Others still insist that burying money/gold/etc is a bad idea because it can be easily forgotten or lost. Then, there are those that say that any attempt at “playing it safe” and pulling money out of the economy only worsens the effect of the recession.

In the end, I’m of the opinion that what to do with money is a personal decision and should be made by each individual with regards to what they feel is the safest route for them. As for me, I’ve got a personal stock of cash that I’m seeking a place to hide away for a “rainy day”.

The Canadian Dollar

Wednesday, November 26th, 2008

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The Canadian Dollar, like its name suggests, is the major currency of Canada. To tell it apart from other the canadian dollardollar denominated currencies around the world, the Canadian dollar adopted the letter ‘C’ in front of its dollar ($) sign. Currently, the Canadian Dollar is amongst the top-ten most traded currency in the world.

Dating back to 1858, the first Canadian coins which was struck in 1 cent, 5 cent, 10 cent, and 20 cent denominations, were issued by the Province of Canada. Other coin denominations like 50 cents, 1 dollar, 2 dollars, 5 dollars, and 10 dollars were issued much later to meet the public demand. Canadian Coins are minted and produced by the Royal Canadian Mint. The facility is located  in Winnipeg, Manitoba, and currently issues coins in denominations of 1 cent, 5 cent, 10 cent, 20 cent, 50 cent, 1 dollar, and 2 dollars. These coins are also called, in respective order, a penny, a nickel, a dime, a quarter, 50¢ piece, a loony, and a toonie.

The designs on the reverse and obverse side of these coins also usually revolves around Canadian symbols, like wildlife and the effigy of Queen Elizabeth the Second, although some pennies and dimes of the yesteryears, which are still in circulation, carries the image of King George the Sixth.

Issued between 1813 and 1815, largely due to the War of 1812 where it was used during the emergency, the first form of paper money issued in Canada were the British Army Bills. These were denominated between 1 and 400 dollars. The first banknotes, however, were issued in 1817 by the Bank of Montreal. Other chartered banks around the country also followed suit thereafter and began issuing these notes for several decades to come. Prior to the year 1858, many notes were issued in currencies like shillings, pounds and dollars, resulting in varied denominations such as 1 dollar, 2 dollars, 3 dollars, 4 dollars, 5 dollars, 10 dollars, 20 dollars, 25 dollars, 40 dollars, 50 dollars, 100 dollars, 500 dollars, and 1000 dollars. This ceased after 1858 though, and only dollar denominations were used from then on.

the canadian dollar2The Province of Canada began issuing paper money beginning 1841, and these notes were produced for the government by the Bank of Montreal between 1842 and 1862. The notes were issued in denominations of 4 dollars, 5 dollars, 10 dollars, 20 dollars, 50 dollars, and 100 dollars. The Province of Canada began officially issuing its own paper money in 1866, and these came in denominations of 1 dollar, 2 dollars, 5 dollars, 10 dollars, 20 dollars, 50 dollars, 100 dollars, and 500 dollars. After the year 1896, denominations of 500 dollars, 1000 dollars, 5000 dollars, and 50,000 dollars were issued and used for bank transactions only.

In 1935, the Bank of Canada was founded and began issuing notes in denominations of 1 dollar, 2 dollars, 5 dollars, 10 dollars, 20 dollars, 50 dollars, 100 dollars, and 500 dollars, and 1000 dollars, officially ceasing the currency issuing operation of the chartered banks in 1944. As part of the fight against money laundering and organized crime, in the year 2000, the Bank of Canada stopped issuing 1000 dollar notes and began withdrawing them from general circulation.

To date, Canadian dollar banknotes issued by the Bank of Canada remains of legal tender in Canada. Just as American Dollars are accepted by many Canadian merchants and businesses in cities which are near the American/Canadian border, the Canadian Dollars are also accepted by some businesses in the northernmost cities of the United States.

The Rate Of The United States Dollar

Tuesday, November 11th, 2008

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The United States Dollar is the single most recognized paper currency in the world. Not only does support allrate united states dollar major transactions, whether domestically and internationally, but it is also the most used and preferred currency in the business world today, internationally. Understanding and knowing the value and the rate of the United States Dollar against other major foreign currencies and the impacts it has on the financial markets can do a lot for those who have or are planning to invest in the international financial markets. The rate of the United States dollar has and will continue to be the fundamental basis for many other international currencies, for many years to come.

The rate of the United Dollars is also the most telling indicator in gauging the status of the United States economy. This is because by simply knowing its rate, one will also be able to compare the strength of the economy of the United States against the economies of the nations and countries around the world. Because the international currency markets are based on the simple practice of trading with multiple different currencies, knowing the rate of the United States dollar will give an extra edge against the odds of making a profit when investing in this form of market. This is because the currency market is the single largest market in the world and the the United States dollar, given its vast use and utilization, plays a huge and significant role in ensuring a constant and lucrative worth in gain upon investment.

united states dollarThe rate of the United States dollar will also determine many other things, like the price of groceries or clothing, to spending on vacations overseas through exchange rates, to the price of gas and utilities. How much value it carries depends solely on the economy of the United States. The United States Dollar is also kept as a reserve currency amongst nations and countries, all around the world, which gives it that added influence in determining the strength of the global economy. It is also used as the major form of payment for raw materials, especially in the energy sector, making it even that more indispensable. Knowing the rate of the United States dollar will also tremendously help in analyzing the risk of investing in the forex market, so being able to tell how much the dollar is worth will allow investors to identify where to best trade their investments to allow a profitable income to be made from the international currency exchange markets.

It is safe to conclude that the rate of the United States dollar is the single driving force in the currency and financial markets today, and while other international currencies may influence the markets to a certain degree, the rate of the United States dollar is still the most important as it is considered the most credible and safest investment in term of currency trading. There are so many ways to learn about the rate of the United States dollar and its correlation with the international currency market and the internet is one of them.

The Dollar Bill and The US Economy

Monday, November 10th, 2008

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Throughout history, the dollar bill has seen the best and worst of times, and the current economic state ofdollar bill economy the country leaves very little to say about the positive impacts it once had in the international markets. The trillion dollar question that’s been running through the minds of so many today is: will the US dollar continue to decline in value or will it elusively begin to rise against all odds and obstacles, and make a come back again, more stronger and resilient than ever?

The value of the dollar bill declines when it loses its value in correlation to other foreign currencies. This results in diminished purchasing power on foreign trade, which will surely increase the price of imports, further causing inflation. When this happens, foreign investors will begin to sell of their US holdings, and the imminent crumbling of the financial market will ensue. It doesn’t help that the country’s current deficits amounting to trillions of dollars is owed to foreign countries through heavy lending, neither.

Due to this and much more, the dollar has lost almost half its value in the last decade alone, further fuelling speculation amongst creditor nations that the United States Government isn’t doing all it can in supporting the US dollar, partly because a weaker dollar would mean that the United States will not have to fork out as much money to pay back their creditors. The drawback to this is, these countries, realizing this, would revert their reserves to other more stable currencies like the Euro to minimize their loses. If this continue on the value of US investments will begin to erode, further invigorating inflation and the collapse of the US dollar.

The introduction of the Euro could also mean the probable replacement of the dollar as the preferred major international reserve currency, as is seen in the current oil trading markets which are proposing the use of the Euro instead of the dollar to aid trade. One of the largest investors of the US dollar is Japan, which means that in the case of an economic surge, the country, in its interest, could sells off its US holdings, increasing the national prime lending rate and strengthening the yen against the dollar.

treasury buildingGiven all these, many financial experts say that the US dollar will not continue to collapse because it is backed by the US government, making it the world’s safest reserve currency. Thanks to the emerging of more and more sophisticated financial markets today, the US dollar has also become a universal medium of exchange, and a transition to another currency seems all too bleak. Another reason why the US dollar will probably remain its hold globally is because it is currently the only currency accepted in any oil contracts, a source of energy that the entire world is so dependable on.

In short, it is not in the best interest of the international communities to allow the US dollar to collapse, as so much has been vested in it, and for credible reasons. This alone would ensure the strength and prosperity of the dollar bill in the many years to come.

The United States Mint

Sunday, October 26th, 2008

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The United States Mint was established on April 2, 1792, by the Unites States Congress through the Coinageunited states mint Act of 1792. The United States Mint building is said to be the first structure built under the Unites States Constitution and continues to hold this location in Philadelphia, which was also the capital of the republic back then. This historical building was also appropriately called “Ye Olde Mint”. The United States Mint comes under the jurisdiction of the Department of the Treasury and is fully backed by the Treasurer of the United States.

The first director of the United States Mint was David Rittenhouse, a well renowned American astronomer, inventor, clockmaker, mathematician, surveyor, scientific instrument craftsman, and public official. Henry Voigt, who is credited with some of the first designs on the United States coinage, was employed by the Treasury to be the Mint’s first Superintendent and Chief Coiner. One of the most critical positions at the Mint is that of the Chief Engraver, which was held by such acclaimed men, among others being Frank Gasparro, William Barber, Charles E. Barber, James B. Longacre, Christian Gobrecht, and Anthony C. Paquet. The current director of the Mint is Edmund C. Moy.

The main objective of the United States Mint is to supply sufficient amounts of coinage for ease of trade and commerce in the United States. The Mint currently churns out an average of fifteen billion coins annually. Its other responsibilities include dispensing United States coinage to the Federal Reserve banks and its subsequent divisions, maintaining the physical charge and securing the country’s one hundred billion dollars worth of gold and silver holdings, the minting of proof, uncirculated, commemorative coins, and medals to be sold to public, producing and selling all United States platinum, gold, and silver bullion coins, and last but not least administering its other minting locations in Washington, D.C.; Philadelphia, Pennsylvania; West Point, New York; Denver, Colorado; San Francisco, California; and Fort Knox, Kentucky, where the United States Bullion Depository is currently situated. Both the Denver and Philadelphia Mints is known to produce up to 65 million to 80 million coins per-day!

united states mintThere were several other Mints that was set up in the mid-nineteenth century by the Treasury Department which are no longer operational today. These Mints were located in Charlotte, North Carolina; Dahlonega, Georgia; New Orleans, Louisiana; and Carson City, Nevada, respectively. Some say that apart from the end of the Civil War, these Mints ceased its operations because of the drying up of precious metals like gold and silver, around these areas. Another prominent Mint was set up in Manila, Philippines, in 1920. This is the only US mint established outside of the Continental United States which was in charge of minting coins for the colony, and all coins struck at this mint would bear the M mintmark, for Manila. The Manila Mint closed down in 1941, during the initial stages of the second World War.

Today, the United States Mint receives more than one billion dollars in revenues, each year, and as a self-financed organization, its net profits are handed over to the General Fund of the Treasury. The Mint prides itself in propagating world-class business practices in producing, selling, and protecting the coinage and assets of the United States of America.

The Bureau of Engraving and Printing

Saturday, October 25th, 2008

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The Bureau of Engraving and Printing is currently the largest and only producer of all legal tender United bureau engraving printingStates currency today. It prints billions of Federal Reserve Notes every year and delivers them to the designated Federal Reserve Banks, to be issued and circulated accordingly. These Federal Reserve Notes are produced at two of its current facilities located in Washington D.C., and Fort Worth, Texas. Tours are offered to the public at these buildings and it showcases the various steps of United States currency production. The tour usually begins with the process of sorting out the large sheets of blank currency papers, closely followed by the intricate methods of getting the dyes ready, to the actual printing procedures itself, and ending with the ready to be spent dollar bills.

Apart from currency production, the Bureau of Engraving and Printing also plays an important role in advising other Federal managed agencies on document security matters. It also processes claims for the redemption of all United States currency that have been mutilated. It prides itself in its continuous effort in the research and development area which focuses on the continued use of state-of-the-art automation and counterfeit prevention technologies for use in the production of United States currency, further guaranteeing its integrity.

The Bureau of Engraving and Printing began its operation in the United States Treasury building back in 1862, resulting from a legislation which was enacted to help fund the Civil War. This legislation authorized the Secretary of the Treasury to issue paper currency in lieu of coins, largely because of the slowly diminishing funds that was desperately needed to sponsor the war. Before long, in 1877, the Bureau of Engraving and Printing was entrusted with the sole responsibility of producing all United States paper currency.

Prior to this, a private firm produced Demand Notes in sheets of four, and these sheets were then sent to the Treasury Department where dozens of clerks signed the notes, with another multitude of workers cutting the sheets and trimming it down by hand. This process eventually became mechanized and was moved down to the building’s basement, giving birth to the Bureau, an important umbrella of the Treasury which proved to be efficient as well as practical.

Before it was officially recognized in congress and was given specific allocations of operating funds through various legislations, the Bureau of Engraving and Printing, in prior to the year 1875, was more commonly known as First Division of National Currency Bureau. Other of its failed labels include, Printing Bureau, Small Notes Bureau, Currency Department, and Small Notes Room.

Apart from printing currency, the Bureau of Engraving and Printing is also given the task to produce revenue stamps, treasury securities, military commissions, award certificates, invitations and admission cards, different types of identification cards, passports, forms, and other special security documents for a variety of Government agencies. This additional responsibilities which was taken on by the Bureau beginning 1894, established it as the nation’s pioneer security documents printer which responds in like to the United States Government, both in times of peace and war.

Currency Tracking Websites

Thursday, October 16th, 2008

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Ever wondered where the money in your pockets have been, or where it goes to after you’ve spent it. Wonderaustralian currency no more as currency tracking websites, like our very own TrackDollarBills, have been emerging at a steady rate all over the internet. Currency bill tracking is a phenomenon which is catching on fast and its expected to grow rapidly in the coming years. As so, dozens of currency tracking sites have been set up all around the world to help facilitate this popular hobby. Generally, what a currency tracking website does is aid in the process of tracking the movements of banknotes as it travels from hand to hand, state to state, region to region, and country to country. Of course, extensive website user participation is vital. This, not only has made the concept a possibility, but its now become such an interesting activity to pursue, making it a fun and exciting way to past time.

Basically, users will begin the tour of mapping out the voyage of the bill in interest by registering it on their respective currency tracking sites. They do this by registering the serial numbers of the banknotes that they wish to track, and the route or journey of the bill will be displayed in the form of graphs, statistics, and various other reports. These information will then be notified to all subsequent or past users, each time the same serial number is entered again on the system. The sites primarily provides users with information like the time between each entry of a duplicate dollar bill, the distance the bill travelled, as well as any comments or remarks that a user may want to include regarding that specific note.

Depending on the laws of the countries issuing the currencies, some of these tracking sites actually encourages its users to slightly mark the notes they wish to track, before spending it. This practice, of course, has created many controversies and unwanted attention from the authorities, as its considered as tempering or defacing the currency.

Apart from TrackDollarBills, some of the other international leading websites for currency bill tracking are EuroBillTracker, EuroTracer, and MyEuroBill, all of which tracks the Euro currency. Others include WheresWilly and CanadianMoneyTracker for the Canadian Dollar, MoneyTracker for the Australian Dollar, CashFollow for the Swiss Franc, SEK-Tracker and Sedlarna for the Swedish Kronor, FindLizzy and CashPath for the Pound Sterling, WheresMyBucks for the South African Rand, WheresRenminbi for the Chinese Yuan, TrackGandhi for the Indian Rupee, and WhereIsYusof for the Singapore Dollar.

south africa currencyMost of these sites are administered by specific groups or non-profit organizations, and its day to day operations are supported primarily by volunteers and users who help populate the sites with content, either through the forums, chats, blogs, email support, and various other tasks. These currency tracking sites are usually free to use but some sites do charge a fee for extra features.

To date, these currency tracking sites would have registered and tracked down billions of dollars worth of currency and over a million users, worldwide. The establishment of these currency tracking websites have also inspired other sites that tracks exclusive objects such as used books and even statistical patterns of human travel!

EuroBillTracker – The leading Euro Bank Note Tracking Website

Friday, October 10th, 2008

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eurobilltrackerThe EuroBillTracker website has been tracking Euro banknotes circulating the globe since early 2002. Said to be inspired by the Where’s George website of the United States, the site was created by Philippe Girolami and managed by an international non-profit team. The growth of the site is credited to active users who take care of the forums, translate the site, provide email support, and handle various other tasks. This free to use website is developed with the sole purpose of tracking Euro banknotes as it travels around the globe.

Basically, what the site does is extract various disseminated information by generating graphs and statistics, ultimately notifying its users as the Euro currency makes its way around the world. It also literally tracks Euro banknotes by informing a user who originally enters a banknote information into the system and subsequent users with the same banknote information, by email, on its whereabouts, at any given time. It also statistically ranks various other related details such as the most number of notes entered by a user, best countries in term of frequency of tracking, as well as which countries are the notes most settled in.

Typically, a user enters information of their Euro banknotes on the site and if a note is already registered, the user is notified immediately on its historic whereabouts, and anytime that particular note is entered again on the system, an email notification will be sent to whoever that has entered the information of that particular note - past, present and future. Currently, more than 46000 notes are registered, on an average, at the website every day, and since its launch, a little more than 50 million notes have been tracked.

Due to its popularity, a community of trackers, from the higher volume tracking countries, was started up to help support the site, especially in the Benelux countries, Finland, and Slovenia. Ironically, the number of users from the more populated nations such as France, Spain, and Ireland have been low.

This community has also been organizing annual pan-European meetings since 2004, and in August 2008, a conference was held in Ljubljana, to discuss its bright future. Due to its success, it is now consented that a new pan-European meeting be held every six months. Apart from these yearly international engagements, local national gatherings at various levels have also been organized in support of its effort.

Currently, the website is said to be administered by a non-profit organization called The European Society for EuroBillTrackers, which has its headquarters in Belgium. This outfit was said to have stemmed from a principal disagreement with the founders and webmasters of the site, causing a split of the EuroBillTracker website late in 2007, but was later integrated back into a single site in January 2008.

To date, the number of users registered on the site have exceeded over 130000, and the total value of all Euro banknotes entered so far is well over the billion mark, a very encouraging statistic indeed. Here’s to wishing the same success for our site here at TrackDollarBills :)

Dollarization

Wednesday, September 24th, 2008

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dollarizationDollarization, in a nutshell, transpires when a nation uses foreign currency to substitute theirs. Although the terminology may have different interpretations, officially what happens is a country ceases the use of their own domestic currency and opts for a much stabile foreign currency, usually to help aid their already ailing economies. Although similar in effect, dollarization is another slow but sure-fix alternative to pegging or maintaining a floating currency, which are all efficient methods in endowing a much steady and secure economic and investment environment.

So far, currencies that have been officially used for dollarization are the United States dollar, the Euro, the Australian dollar, the Russian ruble, the Swiss franc, the Indian rupee, the New Zealand dollar, and the Turkish new lira.

Today, more countries in the world have dollarized their currencies to the US dollar as compared to any other foreign money. Amongst some of the countries that have adopted the US dollar as legal tender are British Virgin Islands, East Timor, Marshall Islands, Ecuador, Federated States of Micronesia, El Salvador, Turks and Caicos Islands, Palau, and Panama. These countries may have opted for dollarization due to its emerging and transitional economies, or could also have had owing issues with rising inflation.

Dollarization wasn’t always an approachable option though, as it was previously believed to be not viable on a political stand point. However this changed in 1999, when it began gaining a reputation as an implementable strategy by a number of countries in dire need of an economic surge. This was probably because it was thought to be the most instrumental strategy in lowering inflation and promoting better financial strength.

Many of these countries may have also already been using US dollar informally in prior to fully engaging in dollarization, probably in private or public transactions, banks accounts or even contracts. The full switch to foreign legal tender would mean that individuals and institutions were beginning to desperately protect their interests against an imminent and fore-seeable devaluation of their local exchange rate. Dollarizing their economies would also mean that their financial markets become more credible, ending any further damaging financial speculations and further stifling capital markets. The fact that the disparities in exchange rate is no longer a threat is also a driving factor behind the reduction of interests on foreign lending.

Apart from many of its advantages, dollarization also has its short-comings. One of the main disadvantages of dollarization is a nation virtually gives up its right to directly control its own economy or administer any monetary policies, and its ability to manage exchange rates. This is primarily because with dollarization the country no longer prints its own currency.

Another drawback to dollarization is the practicing country will no longer be able to collect any profits from the issuing of currency. This happens when the cost of producing the currency is lower than the actual currency itself. The US Federal Reserve collects all profits in this instance. Apart from the negative impact this has on GDP, the country in its entirety also suffers a significant loss of income.

Dollarization also robs a nation of its sense of individualism, due to the autonomous financial and economic policy that’s conditioned with it. Whatever the pros and cons of dollarization may be, experts say that it is only to be used as an extreme alternative, as most countries that have adopted it finds it a process that is almost impossible to reverse, without causing long lasting financial repercussions that is.