Posts Tagged ‘cheap’

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.

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.