Quick Note - Sorry for the delay in posting, I had to go out of town on business, and have not been able to get to the computer…This post was written a week ago, but it is an August recap.
Economy Update
Here is a quick, easy to read update on the US Economy based on some of the Economic numbers recently released…
US Economy
US GDP grew at 1.9% annual relate (relatively small)
US Housing continued to drop…it is now at its lowest level since the early 1960’s
Unemployment continued to increase, up to 6.1% unemployed, this is the highest level since September of 2003.
Inflation continued to rise. The June increase comes in at 3.2% annualized rate. This is mostly a result of high energy and commodity prices.
The US Dollar however has gained value relative to Europe and Japan. The dollar is up against the Euro, Great Britain’s Pound, and Japan’s Yen by 8%, 9%, and 5% respectively.
The Blog for Men US Economy Grade for August: C
The blogformen gives the US Economy in August a C. We figure for August, the economy is the kid in class that is trying hard, studying, but just not able to get over the hump.
Sources: Federal Reserve Bank of Dallas
Flickr Credits: Gaetan Lee
What is the Federal Reserve?
The Federal Reserve is the central banking system of the United States of America. The president appoints 9 members to the “Board of Governors”, with one Chairman of the Board (Currently Ben Bernanke, formerly Alan Greenspan.) There are 12 Federal Reserve Banks scattered across the U.S. that are basically tools for the Federal Reserve to control the U.S. financial universe. The Federal Reserve is an independent institution within the U.S. Government, and it does not operate in order to make a profit, however it does make enough money to cover its operating expenses.
What does the Federal Reserve do?
The Federal Reserve is tasked with the job of regulating the monetary policy of the United States, in a way that encourages low unemployment and sound economic growth. Hmmm…sounds easy enough
What is “The Interest Rate”?
The “interest rate” which we hear so much about is actually the federal funds rate. This rate is the rate at which banks loan money to other banks (very short-term, usually overnight.) The fed funds rate is not actually SET by the Federal Reserve, rather it is a “market” rate. Meaning, the price for money (rate) is determined just like anything else, supply and demand. When the Federal Reserve announces the fed funds rate, what they are announcing is their TARGET. The Federal Reserve then influences this rate by buying or selling Treasury Securities in the open market (just like you or I could).
(Quick Lesson on how this works: By buying Treasury securities the fed is taking investments out of the open market and putting cash into it. This cash will eventually find its way into a bank. Since the banks have more cash they will all be more willing to lend cash to one another…greater supply, less demand, the price of money (interest rate) will drop. Obviously the opposite is true if the Federal Reserve decides to sell Treasuries)
What does this mean to me?
In very simple terms, the federal funds rate more or less directly effects the interest rates you see in your day-to-day lives. If the fed funds rate drops significantly, you will see that you can get a pretty good rate on a mortgage or a car loan…but on the flipside you aren’t going to get much of an interest rate on your savings account.
A couple interesting facts on the Federal Reserve:
- The Federal Reserve Bank in NY holds more gold than anywhere else in the United States. Even more than Ft. Knox
- Any earnings the Federal Reserve makes beyond its expenses, are turned over to the Treasury
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Flickr Credits: epicharmus
Tyler Durden: “We’re consumers. We are by-products of a lifestyle obsession. Murder, crime, poverty, these things don’t concern me. What concerns me are celebrity magazines, television with 500 channels, some guy’s name on my underwear. Rogaine, Viagra, Olestra.”
Narrator: “Martha Stewart. ”
Tyler Durden: “F*ck Martha Stewart. Martha’s polishing the brass on the Titanic. It’s all going down, man. So f*ck off with your sofa units and Strinne green stripe patterns. ”
The movie fight club is filled with memorable quotes like this one…But embedded in the movie are also some great lessons that can be applied to everyday life.
1. Listen to people…Don’t just wait for your turn to talk
There is a scene in fight club where Edward Norton’s character talks about the reason he goes to group sessions for people with cancer and other illnesses. He says that “When people think you’re dying, they really, really listen to you, instead of just (waiting for their turn to speak)” The sentence is finished by another character in the film. What this shows you though is that people DO realize that you are not paying attention when they are talking to you. Shut off the cell phone or blackberry, do not glance around the room for someone more interesting. Stand there, make eye contact, and really listen to what someone is saying.
2. We are victims of consumerism
Tyler Durden (Brad Pitt’s character) states…”The things you own end up owning you. Right. We are consumers. We’re the bi-products of a lifestyle obsession” We do not NEED all the things we think we need, and NEWSFLASH! when we get the things we think we need…they probably aren’t making us any happier.
3. Do something for someone else
There is a scene in the movie where Tyler Durden takes a young store clerk behind the store and puts a gun to his head. He scares the shit out of the young guy, then he asks him what he wants to do with his life. He ends up saying that he would like to be a veterinarian. Tyler then tells him he is keeping his license and he is going to check in on the young man, if he isn’t on his way to becoming a veteranarean in a few weeks…Tyler will kill him. A bit drastic agreed, but as Tyler Durden explains…”Tomorrow will be the most beautiful day of Raymond K. Hessel’s life. His breakfast will taste better than any meal you and I have ever tasted. ” You can bet that Raymond also probably enrolled in school…We should try to have an impact on someone else’s life. Maybe a big life altering impact (but perhaps a little more subtle than a gun.)
4. Steer clear of major corporations
The small gang made up of the “fight club” has a major problem with corporations. A good deal of their energy is spent trying to bring down these massively powerful corporations. While this approach they take is rather primitive, it does reinforce a good point. Corporations are becoming too powerful. Everywhere you look you see nothing but chain restaurants, chain gas stations, and chain retial stores. Forget the few dollars you will save at the chain…Give the mom and pop shop a try. Chances are, you will get better tasting food, better quality products, and better service.
5. Seize the Day
“This is your life and it’s ending one minute at a time.” This quote is a somewhat negative way to look at life, but the idea behind it is to live for the moment. Don’t put off till tomorrow, what you could do today.
6. Do that thing that you have always wanted to do
Tyler Durden is threatening a driving crash and he asks the people in their car what it is they will regret they hadn’t done before they died…two of the men have immediate answers “paint a self-portrait”, “build a house”. Figure out the answer to this question, then go do it.
7. Accept things outside of your control
“I say never be complete, I say stop being perfect, I say let… lets evolve, let the chips fall where they may.” We do not have to do/have everything. Accept your life. Be proud of it.
8. Challenge the status quo
The question is raised…Why do they have oxygen masks on a plane? The response…”Oxygen gets you high. In a catastrophic emergency, you’re taking giant panicked breaths. Suddenly you become euphoric, docile. You accept your fate. It’s all right here. Emergency water landing - 600 miles an hour. Blank faces, calm as Hindu cows.” This is obviously not the rationale that is given, or even what would be accepted. But…when you think about it…it seems like it could be possible. Approach all situations creatively, the solution may not be what is obvious and apparent.
9. Persistence is key
Tyler tells Edward Norton’s character, “All right, if the applicant is young, tell him he’s too young. Old, too old. Fat, too fat. If the applicant then waits for three days without food, shelter, or encouragement he may then enter and begin his training.” Sometimes we are tested by people or situations. Be persistent, don’t let “quitter” define you.
10. Not everyone is a winner
The current generation that is being raised is a generation where every kid on the team is the “MVP”, everyone is picked for every team, everyone is special. The real world is not like this. There are winners and losers, and the people that learn from their losses are the ones who end up winners. Much of what happens in life is a result of the hard work you put in, and the “luck” that you create.
11. Live your LIFE!
“If you are reading this then this warning is for you. Every word you read of this useless fine print is another second off your life. Don’t you have other things to do? Is your life so empty that you honestly can’t think of a better way to spend these moments? Or are you so impressed with authority that you give respect and credence to all that claim it? Do you read everything you’re supposed to read? Do you think every thing you’re supposed to think? Buy what you’re told to want? Get out of your apartment. Meet a member of the opposite sex. Stop the excessive shopping and masturbation. Quit your job. Start a fight. Prove you’re alive. If you don’t claim your humanity you will become a statistic. You have been warned”
Photo Credits: deep-focus.com
P.S. I have entered this post in a contest for “best title” being run at problogger.com
If you have a couple minutes head to his site to check out some other good blogs. Thanks for reading.
