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Friday, July 27, 2012

0% Gadget Loans for Holy Gardeners

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The 0% Gadget Loan is available to Holy Gardeners:   one year old employees, productive agents.   The maximum term is one year.  This is however for  a limited time only.

The maximum amount of gadget to be financed is PHP 100,000 only.

 Find out more about this from Holy Gardens Memorial Park nearest you.

Contact Number:     +63922873018l

Email and website:    www.majoremlending.blogspot.com     majorem.lending@gmail.com

Tuesday, July 24, 2012

Savings on Grocery Expenses

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Usually for most families, food expenses would account for 50% of their total household expenses;  and of that 50% could easily be from their grocery bills.  Here is a video from you tube on how you could save more money:



Money Mischief Book Summary; book written by Milton Friedman, adviser to fmr Pres. Ronald Reagan

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Here is a book summary of the book of Milton Friedman, Money Mischief.  This is compilation of stories on start of currency, gold and silver standard, history of the US Monetary system, effect of money supply on inflation.

Learn more from this....Faith and Finance book review of Money Mischief


Book Review: Money Mischief

by Tim on March 22, 2011

I love reading about economics and thought it’d be a good idea to create a separate site for Faith and Economics…but I’ve decided to keep the econ posts here at Faith and Finance under the category Faith and Economics.  It just made sense to keep it all in one place and is hopefully a little easier for the readers who want a dose of econ every once in a while.
(*This post is longer than normal because it consists of 8 separate posts from Faith and Economics.  It’s a full summary of the book Money Mischief by Milton Friedman.  Don’t worry, not all book reviews will be this extensive.)

Chapter 1: The Island of Stone Money

Milton Friedman opens his book Money Mischief with the story about the island of Yap. In summary, this island of about five thousand people used a stone for their medium of exchange and called it fei, hence the title of the first chapter The Island of Stone Money. What was so intriguing is that these giant limestone rocks weren’t passed around like today’s dollars, but were exchanged on simple acknowledgment of ownership. The stones would literally remain in the backyard of a person, but would be owned and used for bartering by its new owner, who might have lived on the other side of the island.
Even more, when Germany took over the island in 1898, they required the islanders to repair the roads and marked each stone with black paint – claiming the ‘money’ as the government’s until the roads were repaired. Without hesitation, the islanders of Yap repaired the roads and Germany erased the black paint from the stones, returning ownership and peace of mind to the natives.yap
The story sounds really pretty elementary and foolish and so out of place for our standards today. But before you think a ‘sophisticated’ bunch of people would never do such a thing, consider France in 1932. The Bank of France was afraid that the US would not stick with the gold standard of $20.67 per ounce and asked the Fed to convert a large part of its assets into gold. The U.S. Fed didn’t ship gold across the Atlantic Ocean but went to the vault and put a label on a drawer of gold that said “property of France.”
The headlines that soon followed cried about “the loss of gold” and expressed what a threat it was to the American financial system. To quote Friedman, “the so-called drain of gold by France from the United States was one of the factors that ultimately led to the banking panic of 1933.”
stone moneyWe operate in the same fashion today as the islanders of Yap did 100 years ago. Today we call our “fei” names like checking accounts, checks, stock certificates, bond notes. The actual hard asset is rarely ever exchanged, only ownership – and that often takes place electronically with the stroke of a key at a bank. We are quick to downplay the currency of a group of people like those on the island of Yap, but we assign purchasing power to our forms of currency even when it’s nothing more than a piece of paper.
_____________________________________________________________________________

Money Mischief Chapter 2 |The Mystery of Money

The very basic reason that our dollar or unit of money still works is simply because people are confident that others will accept it as a payment. Sure, the bill says “This note is legal tender for all debts public and private” but it is no more than a piece of paper that isn’t backed by any commodity.  It’s very similar to the stone currency of the Yap in that respect.
Chapter two is quite lengthy and gives great detail on the supply and demand of money.  Before Friedman discussed these two issues (supply and demand) he touched briefly on the history of linking currency to a commodity.  Every major currency before 1971 was linked directly or indirectly to a specific commodity.  After Nixon’s elimination of the gold standard, there have been NO major currencies linked to gold.

An interesting note by one of the earliest American economists, Irving Fisher, was that “Irredeemable paper money has almost invariable proved a curse to the country employing it.”  Friedman used the example of the silver Roman denarius reducing over 300 years into a copper coin with a thin wash of silver (then just a tin wash) to show how this debasement of currency ultimately led to the collapse of the empire.  It only took America less than a century to go through the same cycle with their dimes, quarters, and half dollars.  This isn’t to say that America will be destroyed just like the Roman empire.  Remember, since 1971, no major currency is using a commodity; so to single out the U.S. wouldn’t be correct.

The Supply of Money

As Friedman put it, the principle of monetary supply is simple – it’s complexity comes in practice.  The simplicity behind the principle is because it depends on whatever the Federal Reserve decides it is to be.  The complexity is seen in the multiple factors that are considered when making the decision – like personal beliefs, political agendas, economic developments, and endless other factors.
The real question should be on how centrally focused the decision-making process is for the money supply.  The 19 members of the Open Market Committee of the Federal Reserve System have the arbitrary power to determine the supply of money.  Though their power has been beneficial in some ways, Friedman views the Federal Reserve System as having caused the sharp depression of 1920-21, lengthening the 1929-33 great depression, and accelerating inflation in the 1970s.

The Demand for Money


The demand for money affects the real quantity of money, which is defined as the amount of goods and services that the ‘nominal’ quantity of money will purchase.  (Nominal money meaning the number of dollars.)  Put simply, nominal quantity money is a dollar.  The real quantity of money is how much of a good that dollar can buy.  It is the real quantity of money that matters when asking the question of how much money people will hold onto – not nominal.

Two Major Forces That Determine Cash Holdings

1.     Usefulness – The simplicity of using money as an asset to exchange goods is one reason a person would want to store it.
2.     Cost – Holding money means you are choosing cash over an alternative investment.  The interest on your holdings may not be as great as a return in, say, real estate or securities, so the difference is the cost.
These forces cause a change in demand for money – but the change each force brings is different.   The changes in usefulness are gradual and happen slowly.  The changes in the second force (cost – including interest rates) are also gradual, but can be sharp which is often the result of the supply of money.
This chapter was very detailed and took some time to understand. My summary doesn’t touch all of his points, but is a general look at most of his main ideas.
___________________________________________________________

Chapter 3: The Crime of 1873

The crime of 1873 is referring to the Coinage Act of 1873, which put America on a gold standard.  You see, from 1792 to 1873, America was on a bimetallism system where gold and silver were backing our dollar. As I read this chapter, I honestly hadn’t realized that America was on a bimetallism system and how the shift to one commodity (gold) had such a big impact on our nation.  This is what chapter three is all about.

So Was It a Crime?

The ‘crime of 1873’ is a term coined by those supporting silver as the commodity of choice.  Their close ties with silver made the act something that would be of no benefit to those in the silver industry – a ‘crime’ in their opinion.  While it wasn’t an actual crime, the silver industry wasn’t on the winning side of the coin…literally (economic humor…) and gold became the country’s standard.
Friedman makes some very interesting points about the effect that the coinage act had on the economy.  In short, he proposed that America made a mistake in 1873 to choose the gold standard rather than maintaining bimetallism standard.  At any rate, the world was moving to gold and by the mid 1900’s all major currencies were on the gold standard.  What’s interesting to note is that since America got off of the gold standard in the 70’s, no major currency has been on the gold standard (or any commodity standard for that matter).
I’m curious to continue reading to see how this shift affected the economy as Friedman highlights in the remaining chapters.
___________________________________________________________

Chapter 4 – Counterfactual Exercise

Though very short, chapter four of Money Mischief was very technical and was basically all assumption of what the world would have looked like if the Coinage Act of 1873 had allowed for silver to remain a part of the monetary system.
Freidman presents a few hypothetical situations about estimates of establishing a standard of silver over gold and even maintaining a bimetallism system that was in place before 1873. The problem he came across was with estimating things like the demand for nonmonetary use of gold and the amount of gold that would have been demanded if the US had gone to a pure silver standard. He finishes the chapter rather abruptly with an unsatisfied conclusion that there is a wide margin of error and that we will never really know what exactly would have happened. I think this chapter was pulled from another source of his – maybe a research project on the topic – because it is very technical and difficult to read.

Chapter 5 – William Jennings Bryan and the Cyanide Process

The election of 1896 was a really heated time as Democratic nominee William Jennings Bryan went head to head against William McKinley. The platform that Bryan ran on was based on the adoption of a bimetallic monetary system with fixed prices for gold and silver of 16 oz. silver to 1 oz. of gold.
With the resumption of a commodity (gold) based currency by the US and most of Europe in 1879, the world faced serious deflation throughout the 1880s and 90s. This economic occurrence spurred the free-silver movement, which pushed for the resumption of silver as currency as well (back to bimetallism). The free-silver movement hoped to combat the deflationary period and provide upward movement and growth through healthy inflation.
An interesting turn of events happened as Scottish chemists in the 1887 developed a way to extract gold from low-grade ore through a cyanide process. This influx in the amount of gold worldwide caused inflation naturally and solved the problem the free-silver crowd was trying to fix. The only problem was that silver didn’t cause the fix – the increased gold did. This is one of the primary reasons Bryan lost the election.
It’s really fascinating how the development of a process by Scottish chemists allowed for increased gold mined from South Africa and increased inflation world wide, impacting the election for US president. That just goes to show how connected the world is economically.
___________________________________________________________

Chapter 6 – Bimetallism Revisited

Bimetallism is simply using two commodities (usually gold and silver) both as money.  In practice, one will be worth more in the market in comparison to the exchange rate at the mint.  This means that if mint claimed a silver to gold standard of 16:1 (as it was from 1837 to the Civil War) and the market’s ratio was 15.5:1, you’d see that silver was used in the market rather than taking it to the mint because they could get more ‘bang’ for their buck.
This chapter goes into great detail of the differing views of bimetallism held by economists throughout the years.  Interestingly, it leads into the case of England adopting a gold standard over bimetallism in 1816 and the reasons it did.  One of the reasons was that gold was harder to counterfeit than silver.  The other reason was that gold was much more convenient as silver coins would be too heavy to carry around.  Friedman was taken back by the fact that England was so quick to make the decision for gold on the grounds of relatively small issues rather than economic policy.  The decision of Britain to go on a gold standard was instrumental in the decision of Germany and then the United states.
Funny how an economic decision as big as this one could have so much weighing on a factor like carrying it around.  I suppose that’s an argument for paper money…but we can address that later.
___________________________________________________________

Chapter 7 FDR, Silver, and China

Friedman discusses the U.S. silver purchase program in this chapter and relates how it affected the economy of China. I will admit that I hadn’t read much of anything about the silver purchase program before this chapter, so this information was new to me.
The silver purchase program was intended to raise the price of silver and encourage the use of silver among other nations. Supported greatly by the farm lobby, the thought was that the measure would produce inflation and raise the price of farm products. The farmers were suffering because of the severe price decrease during the Great Depression. Friedman notes that FDR supported the silver purchase because it would assure the support of congressmen for the passing of the New Deal legislation.
The Silver Purchase Act passed in 1934 and allowed for the government to nationalize all private silver holdings. The U.S. government increased their holding of silver to equal 25% of its monetary reserves.

Effects of The Silver Purchase Program on China

As the only major country still on silver, China was essentially forced off the silver standard in 1934. As is the case with many economic decisions, the intentions of an action don’t always match up with the actual consequences that result. China had a large stock of silver since it used it to back its money. Because of the sharp decrease in exports due to an increase in currencies, the Chinese entered a ‘severe’ phase of its own internal depression. This caused China to resort to a paper standard in 1934 and declared its dismissal of the silver standard on November 3, 1935.
It’s interesting to read how Friedman says that China would have eventually left the silver standard anyways due to the invasion of Japan in 1937. Government expenses would have soared (as they did) and China would have been forced off of the silver standard just a few years later.
I’d recommend this chapter to anyone who is looking for great detail on the effects the silver purchase program had on the economies of the U.S. and China.
___________________________________________________________

Chapter 8: The Cause and Cure of Inflation

I was really excited to read this chapter and thoroughly enjoyed it – even though it was a little long.  The reason for its length was because of the detail that Friedman went into as he covered a good amount of history regarding inflation.  I suppose there could easily be entire books written on the subject of inflation and the theories to correct it, but these 40 pages were a great introduction into the topic of inflation.
Friedman outlines the historical causes of inflation and explains why inflation exists.  The reasons for its existence 100 years ago are different than why it exists today, generally speaking.  This is because most major currencies were still on a specie (commodity backed) currency, and new technological advances and debasement were the primary causes of inflation.  When methods of finding gold and silver became more advanced, the amount of the commodity increased, generally at a faster rate than output increases.  As for debasement, this involves exchanging the precious metal in a currency with a base metal so that you can essentially stretch the currency further (printing more).  Both cause inflation – but nothing like hyperinflation, which is generally a product of war or revolution.
What is Inflation Not Caused By?
Friedman takes the time to point out that inflation isn’t created by:
- Greedy Businessmen
- Trade Unions
- Reckless Consumers
- International Trade Differences
- Low Productivity
- or Bad Weather
The reason why these factors aren’t connected to inflation is because none of them control the very thing that causes inflation…the printing presses.

The Cause for Inflation

Put simply, inflation comes from a rapid increase in the quantity of money available.  When this increase in the quantity of money surpasses the output of a nation, inflation will exist.  The problem lies in the printing of too much money.

The Cure for Inflation

The only cure for inflation is a slower rate of increase in the quantity of money.  That’s it, as Friedman states.  It takes time (years, not months) and the side effects are inevitable.  There will be slow growth in the economy for a time and higher unemployment.  Inflation won’t even drop for a while; but with time and by reducing the quantity of money available, inflation will come under control.
___________________________________________________________

Chapter 9: Chile and Israel: Identical Policies Opposite Outcomes

Monetary Policy Chile

In the mid 1970’s, Chile overcame annual inflation of 500% by cutting government spending and employment ‘sharply’ and by removing the controls on prices, wages, imports, and exports.  This slowing down in money creation along with the other changes resulted in a dramatic lowering of inflation.  To refrain from creating more money, Chile pegged its peso to the US dollar.  Unfortunately, the “appreciation of the US dollar, the doubling of the price of oil, and the near halving of the price of copper was disastrous for the Chilean economy.

Monetary Policy in Israel

In the mid 80’s, Israel was also facing extreme inflation of 500% and decided to peg their shekel to the dollar.  They also froze wages and prices in order to bring down inflation and saw a decrease in inflation from 500% to about 20% in 1986.  The price of oil began to fall and the US dollar also depreciated in the mid 80s, causing the shekel to depreciate.  This was favorable to exports and also for imports of oil, which was much cheaper than the prior years.
Friedman ends this section with the statement “Never underestimate the role of luck in the fate of individuals or of nations.”
Do you agree with that statement?

Chapter 10: Monetary Policy in a Fiat World

The world has never seen such interesting times with respect to monetary policy as it has today.  Every major currency is on a fiat (paper standard), a standard that hasn’t been seen in all of history.
In the past, there haven’t been any documented instances of countries that have been able to maintain a fiat currency – primarily because they would create too much money and inflation would cause it to crumble.
Today, there are establishments that should keep the monetary system in check, but as long as it is run by humans, (and I don’t see that changing any time soon) the temptation to simply print more money will always be there.
Friedman doesn’t give an absolute prediction on the outcome of the world’s fiat standard, but says that it will depend ‘on our success in learning from historical episodes such as those that have been examined in this book.  Such a learning process has been under way for centuries, ever since the first appearance of systematic analyses of money and monetary institutions.
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{ 1 comment… read it below or add one }
Jeramy Loosey August 15, 2011
Right Now the financial crisis is so off the wall and many people actually do not understand exactly what is REALLY going on! It truly is remarkable the quantity of sheepel go along with the herd and also really do not think for their selves. In my opinion I invest in silver because it is REAL money and not merely a piece of paper that can get printed each time anyone bats an eye. Thanks a lot %author for the wonderful blog post, more folks really need to be schooled in finances!
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Friday, July 20, 2012

Shopfinder, Shoplinks?

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Will this be a better apps name:  shofinder, shoplink 

Fwd: The Jorge U. Saguinsin Daily is out ! Edition of Saturday, Jul. 14, 2012



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Tools, links and services we found this week



Streak - Nice set of tools to turn GMail into a simple CRM.
FanNewscast - Create content rich Facebook Fan Pages by aggregating topic specific news feeds.
iDoneThis - Simple email based tool that allows you to manage team and individual performance. Great way to add some accountability to the mix too.

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65 Key Resources for Running and Growing Your Business
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Build A Small Business Plan
For the last several hundred Saturdays I've run a blog post post called Weekend Favs. The post consists of three finds I've made during the week that I like to share.
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How to Grow Your Business By Sponsoring Existing Tribes
There's a pizza restaurant in my neighborhood that sponsors a weekly bike ride during the summer months.: from Duct Tape Marketing
How To Use Fifteen Minutes a Day to Create a Culture of Accountability
It's great to have a plan. Even better to charge out and begin to execute the plan.: from Duct Tape Marketing
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Social Media Buzz
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5 surprising things about word of mouth marketing
Social media marketing is still all the rage, but an important new book out from Ed Keller and Bray Fay reminds marketers where and how customers are actually talking about brands,services and companies.: from Church of the Customer

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Jorge U. Saguinsin
blogs:   profjorgeentrep
              nuideas
              cheapcures
Slide Presentations at Slideshare -http://www.slideshare.net/profjorge_entrep/

SPREADING THE ENTREPRENEURIAL REVOLUTION