Friday, September 28, 2012

What is Vitamin D and What are the Benefits?

What is Vitamin D and what are the Benefits?

Author:Mehboob Talukdar

Vitamin D is a steroid vitamin that encourages the absorption and metabolism of calcium and phosphorous. If you are exposed to normal levels of sunlight then you will not need vitamin D Supplements as sunlight promoted vitamin D synthesis in the skin. A human requires 10 to 15 minutes in the sun at least twice a week on the face, back, hands or arms without sunscreen with a greater than 3 UV index to get adequate amounts of vitamin D.

[caption id="attachment_955" align="aligncenter" width="500"]What is Vitamin D and What are the Benefits? What is Vitamin D and What are the Benefits?[/caption]

Vitamin D has a number of important functions. One of them being it helps to regulate the amount of calcium and phosphate in the body. These are the nutrients that are needed to keep teeth and bones healthy. When a person is suffering from a vitamin D deficiency it can lead to bone deformities such as rickets in children and osteomalacia in adults which causes bone pain and tenderness. Our main source of vitamin D is the sunlight on our skin. Vitamin D is made by our body under the skin in reaction to summer sunlight. Good food sources for vitamin D are:

  • oily fish, such as salmon and sardines

  • eggs

  • fortified fat spreads

  • fortified breakfast cereals

  • powdered milk

We need vitamin D for a number of reasons. It is an immune system regulator and is an important way to arm the immune system against ailments like the common cold. It may also reduce the risks of developing multiple sclerosis and according to Dennis Bourdette, the chairman of the Department of Neurology and director of Multiple Sclerosis and Neuroimmunology Centre at Oregon Health and Science University, multiple sclerosis is much less common the nearer you get to the tropics where there is a lot more sunlight.

Vitamin D may also play a role in helping the brain to keep working later on in life and could also be linked to maintaining a healthy body weight. Researchers at Harvard Medical School found that vitamin D can help to reduce the severity and frequency of asthma symptoms and also reduce the number of hospitalisations due to asthma.

Other benefits of vitamin D are the reduction in the risk of developing rheumatoid arthritis in women, protection against damage from low levels of radiation, lower risks of developing cancer and it can also help with the recovery process from tuberculosis.

If you find that your body is not producing enough vitamin D because you do not have sufficient sunlight exposure you will need to take supplements or change your diet so you can obtain if from food. Elderly people as well as people with darker skin should take extra vitamin D to maintain good health.

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About the Author

Victoria Pharmacy provides a variety of vitamins which include Vitamin D, tablets, Weight Loss Supplement, slimming pills, Minerals and Antioxidants.

What is a Wet and Dry Vacuum Cleaner?

What is a Wet and Dry Vacuum Cleaner?

Author:James Anderson

Maintaining a clean and tidy home is relentless; just when you think that you've finished, it's time to start all over again, so any tool or piece of equipment that is able to help speed up the whole process, or at least make it a lot easier to bear, is a welcome addition to any home. That's why a wet and dry vacuum cleaner is ideal.

[caption id="attachment_951" align="aligncenter" width="450"]What is a Wet and Dry Vacuum Cleaner? What is a Wet and Dry Vacuum Cleaner?[/caption]

With the ability to clean anything from bits of food dropped on the kitchen floor, to large drink spills which would normally require the use of a whole kitchen roll, the wet and dry vacuum cleaner is equipped and able to move from a minor spill to a major accident with just the flick of a switch.

The wet and dry vacuum cleaner is dual-function, and uses its powerful suction combined with the capacity to store large quantities of waste, both wet and dry, to make even industrial cleaning tasks a breeze.  Due to its size and bulky nature, it isn't suitable for everyday household cleaning, but would mainly be used for commercial or industrial purposes.  However, many people do have one in their home for instances such as minor flooding in a bathroom or basement, to cleaning debris from a possible home improvement project; tasks that would either break, or seriously damage a normal vacuum cleaner.

Its design is fairly simple.  The main components are a hose and a selection of attachments that are supplied with the cleaner, the main body of the vacuum, and a large tub canister which would contain all of the liquid that the vacuum cleaner would suck up.  Emptying the tub should be done after each time the cleaner is used, or once the tub has filled up with liquid, whichever of the two comes first.

Wet and dry vacuum cleaners are also great when the household is home to people who have allergies. They remove dust particles and pollutants in the air, the main cause of allergies and asthma, improving the overall air quality and creating a much cleaner environment for everyone to enjoy.

If you're thinking of buying a wet and dry vacuum cleaner, then finding a good system can be quite easy, but doing adequate research whilst seeking advice from a reputable company would be advisable. Think about which attachments would best meet your needs and the functions that you would ideally like for your requirements.

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About the Author

James Anderson is the owner of Anderson Trade. Established over 20 years and successfully suppying spare parts and accessories for all major branded vacuum cleaners, past and present, and industrial and commercial machines such as industrial hoovers and floor scrubbers.

Thursday, September 27, 2012

What is Corporate Law Salt Lake City?

What is Corporate Law Salt Lake City?

Author:Rusin Medical

Corporate law Salt Lake City is one branch of law and it is practiced by corporate lawyers. To be a corporate lawyer, there are certain skills you must possess. Corporate law is very involved, and you must have the necessary knowledge to do this job. One of the major parts of corporate law Salt Lake City is research. If you are a corporate lawyer you must be able to perform in depth research. This is needed for many reasons, but it is primarily needed to understand the legalities of complicated issues. You can also expect to spend a lot of time inside the courtroom. Corporate lawyers must defend corporations, which often involves court cases that land in a courtroom. Most corporate lawyers have a degree in accounting, economics or political science. After earning that type of degree, they will attend law school to earn their degree to be an attorney. Before they can begin practicing, they must pass a state examination.

[caption id="attachment_948" align="aligncenter" width="500"]What is Corporate Law Salt Lake City? What is Corporate Law Salt Lake City?[/caption]

There are many reasons why corporations and businesses hire corporate law Salt Lake City firms. A lot of times, this is done for issues regarding trademarks or copyrights. Copyright infringement is one of the most popular tasks a corporate lawyer handles. Corporations and other businesses will also hire a corporate lawyer for almost any other business-related purpose that you can think of. Corporate lawyers often start out as business lawyers. After years of doing this they are often ready to practice in a corporate law Salt Lake City firm. Contracts are a common thing that corporate lawyers deal with. They may be hired to create legal contracts for businesses, or they might be hired to review contracts that a client is asked to sign. All lawyers that are hired must defend the client that hired them. They must look out for that client's best interest. If you have a lawyer that is not doing this, then you have the wrong lawyer. Most lawyers will even tell you that they work for whoever will pay them. Most lawyers are good at this, but some are not.

Some corporations that are really large may have in-house corporate lawyers on staff. Usually they have only one or two, but this varies depending on the size. It is very nice and convenient for corporations to have an in-house corporate lawyer because this person can answer all questions and handle all matters immediately. This makes it very easy for corporations. They can go straight to the in-house lawyer for every single thing they need done. Other corporate lawyers work for law firms. In this case, a corporation would have to schedule an appointment to meet with a lawyer. The lawyer in this case would not fully understand the operations of the corporation and it would take more time to discuss various legal matters. An in-house attorney would fully understand the corporation, its operations and how it is run. This is a very huge benefit of having an in-house corporate lawyer.     Corporate law Salt Lake City firms also handle issues that deal with shareholders, stocks and annual meetings. They are able to advise corporations about their legal rights regarding all of these matters. They will explain when shareholder meetings must occur, how to distribute financial statements and much more. This is another huge part of what corporate law is all about. Corporate lawyers are knowledgeable in all of these areas and much more. If there is a business-related question or issue that you have, a corporate law firm is the place you want to go for legal advice. They will give you legal answers and help you with any matter you need assistance with.

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What is Reiki Music?

What is Reiki Music?

Author:deepak darji

Music is recognized as one of the greatest inventions in the world. A wide range of music genres can be found in the present world and each of them has its own rhythm and purpose. This applies for the reiki music as well and many people use it to gain spiritual relaxation to their bodies. Reiki music has a history for hundreds of years and it was not recognized as front end music in the past. People played reiki music in the background to get the relaxation they deserved. Ancient people considered it as a form of healing music and as a precious gift given by the nature.

[caption id="attachment_945" align="aligncenter" width="521"]What is Reiki Music? What is Reiki Music?[/caption]

The word Reiki has been derived from the Japanese language and it has the meaning of universal healing. Our body consists of different types of energies. Reiki music will assist our body to control those energy levels and balance them for a better future. In order to do that, the practitioners in reiki music will pass on balancing energies to our bodies through their palms of the hands. People who go through this treatment will have to lie on a flat surface. The atmosphere of the place should be a relaxing one and the environment must be free of distractions and Reiki music is getting more popular.

Reiki music has been granted with the power of calming down human bodies. Therefore it is available in the form of audio CDs and video CDs in the present world. The time duration of reiki music can be customized according to the requests of the user. They can even request this healing music to a particular part of their body or to the complete body as a whole. Reiki experts are there to help the people with these treatments. If a person feels uncomfortable with human contacts, the experts will take off their hands and engage in the reiki treatments. When you get a chance to look for music on the Internet, it is better to look for ambient background music forms like the reiki music because it is one of the greatest forms of relaxation music available.

From the researches, it has been identified that the Reiki Music can implement a long lasting positive impression on a person\'s mind. Many religions do not approve other kinds of practices that will make people believe in some other things. However, Christianity has approved reiki music because Jesus Christ also used a method like this for the relaxation.

Reiki music can be considered as a great way to re-generate the lost energy in your inner soul. The results of it have been proven and many people tend to go for ambient background music treatments because of their effectiveness. This will keep you away from the stress and irritation as well. Any person can try this method and it will add a great experience to his or her life as well.

If you would like to know more about Reiki Master, you can always contact Mr. Liz Rojek from his website at

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About the Author

Author is specialize in writting informative articles. Here he writes about Reiki Music which assist your body to control our energy levels and leads to better future.

Wednesday, September 26, 2012

What is the durability of the plumbing of a building?

What is the durability of the plumbing of a building? What is the best material for hydraulic lines?


Who lives in an old apartment building knows how common are the apportionments to exchange extra pipe. Nothing more normal because the pipes have a life span which may be greater or smaller depending on the type of material and conditions of use. But how long? What materials to use? See this analysis of various types of materials, with its pros and cons.

[caption id="attachment_942" align="aligncenter" width="500"]What is the durability of the plumbing of a building? What is the durability of the plumbing of a building?[/caption]

The durability of pipes in use in buildings depends on a number of factors, whose estimation is difficult to be done accurately. Among these factors are:

• Nature of material of pipe and fittings - PVC, PPT, copper, galvanized steel or cast iron,
• Type of joint - solder, with thread sealant, heat fusion, fusion adhesive solvent, elastic rubber ring,
• Exposure conditions - embedded in masonry, mortar underlayment within the slab, installation with and without apparent incidence of solar radiation, subjection to thermal shock, entry drives and accommodations structural, cyclical swings subjection to internal pressure,
• Chemical nature and temperature of the fluid transported by the pipeline - chlorinated drinking water, hot water, wastewater, stormwater and other.

The drinking water provided by the urban network in certain locations may have dissolved mineral salts that show aggressive to certain materials pipes, contributing to the reduction of life. This is the case for high concentrations of carbonates and bicarbonates of calcium and magnesium, and also occur when chlorides, oxygen and chlorine free, present in small concentrations.

These components are shown aggressive over time, for example, carbon steel galvanized pipes. Two tubes of this material, of the same brand and same manufacturing batch, durability may have lead to different saline water with different natures, for example, 18 years of life in the mountain region of Rio de Janeiro and only 8 years in Curitiba and metropolitan area.

However, there is galvanized carbon steel pipes whose use in Curitiba is already 25 years old and still perform well. This was the case of Residential Condominium Iguacu, object of a technical report of my own, Eng Sergio Frederick Gnipper whose pipes of cold water, originally galvanized steel, were in satisfactory use for almost 40 years and only recently have shown obsolescence, requiring complete replacement.

The explanation for this particular case is in good quality and thickness of the protective layer of zinc applied hot (so-called galvanic) in these pipes, and the natural formation of an outer layer of protective and insulating zinc oxide, whitish appearance, which isolated the external surfaces of the pipe from direct contact with the masonry mortar or plaster of aggressive chemical nature.

One factor that dramatically accelerates the degradation of carbon steel pipes and galvanized malleable iron galvanized connections is called 'galvanic couple' or 'galvanic cell'. When these materials are placed in direct contact with another metal tube of very diverse in nature electrochemical presence of water (such as copper, for example), there arises a weak electric current of low voltage in the region of contact of dissimilar metals, as occurs with a cell or battery electric. This process causes chemical reactions of degradation of less noble metal, causing premature corrosion and accelerated the galvanized pipe.

When possible, a resource to prevent galvanic corrosion in metallic tubes is bringing an insulating layer of nonconductive material between different metals. This is the case of a strip of flexible rubber placed on the support of a copper tube support in galvanized carbon steel.

Due to the extreme variability of materials and exposure conditions, it is also difficult to assess the economic period of useful life of the pipes of a building, the words, the maximum time recommended for use in staying in the building. This is because, from a certain age at operation, uncomfortable with spending leaks and repairs off a pass pipe be significant, offsetting being replaced by a new one. Under conditions very favorable exposure over the lifetime is estimated as follows economic periods for different pipe materials:

• About 20 to 25 years for PVC pipes (reaching up to 45 years);
• About 12 to 18 years for galvanized steel pipe with fittings of malleable iron galvanized (but currently only about 8 to 10 years in certain locations);
• Over 80 years for copper pipes with copper connections / bronze when exposed to water not aggressive.

Pipes with materials more recent production technology, such as CPVC (chlorinated polyvinyl chloride), crosslinked polyethylene (PEX) and random polypropylene (RPP) have not yet reached age sufficient for use in the economic evaluation of the shelf life, per hour for them estimating durability similar to that of PVC.

In old buildings can be exchanged with all the advantages plumbing?

Generally widespread replacement of pipes of a building is more difficult passages embedded in masonry and within channels and recesses of floors in buildings equipped with recessed slabs, construction technology peculiar constructions performed until the mid 70s.
That's because this substitution, in most cases, involves breaking tiles, ceramic floor tiles and hydraulic, whose replacement is very difficult to do satisfactorily, given the scarcity of identical parts in so-called 'tiles museums.' Moreover, the cost of implementation is high and therefore generally run embedded in walls and floors of bathrooms, kitchens and laundries.

There are more favorable situations, where much of the horizontal lodges inside false ceilings of gypsum, which is easy access for replacement and repair is fast and inexpensive. Another favorable situation is one in which vertical tubes run inside ducts appropriate, technically known as shafts, simply remove the lid to have full access to the pipeline.

You can not just replace the pipe obsolete, damaged or corroded by another of the same or different material, considered more durable. It is crucial to understand the causes of degradation and especially whether the new replacement pipe material have adequate durability under local conditions. This one only accredited professional and expert can determine, from the elaboration of a specific technical advice or a full technical report.

You must also comply with the technical characteristics of the installation and peculiar to each type of piping material such as maximum hydraulic pressure that will be placed and the hydraulic resistance of each material to the liquid flow.
For example, to replace an old galvanized steel pipe with a new copper, it is possible that many passages can run with diameters smaller than the original pipe, with equivalent performance, and sensible economy. This is because the plastic tubes and copper pipes offer less resistance to flow than the steel pipes.

For this it is necessary to elaborate a simplified design reform of hydraulic building because it involves calculations technical expertise that only a trained professional is able to do, with legal guarantee its liability CREA, according to current legislation, through issuing an ART - Technical Responsibility.

Therefore, the decision of replacing a hydraulic pipe obsolete should be taken only with the advice of a professional. This is because other factors must be evaluated at this time in favor of the building, as the possibility of changing the system discharge toilets.

Replacing the old flush valves for sanitary bowls with dump boxes embedded or coupled, which require tubes with diameters much smaller than the existing one can obtain economy running of pipes and further reduction in the monthly consumption of water in building up to 40 which will help amortize the costs over time.

Also in this opportunity should be evaluated technical and economic feasibility of installing individual meters of potable water consumption for the apartments (individual water meters), for the assessment of internal monthly expenses of the condominium with water in proportion to consumption effectively checked each unit condominium.

What kind of material should be used for the replacement pipe of the building?

The building does not require the same type of material for all hydraulic and sanitary. The choice, in addition to life expectancy, must take into account the purpose of the pipe, the nature, pressure and temperature of the liquid drained (hot water, sewer, ...), the best type of joint (thread, solder ring rubber, ...) and exposure conditions (apparent pipe, embedded, ....), among other factors.

The metal tubes historically were first produced on an industrial scale and, therefore, have performance well known. There are more employees in the building installations carbon steel pipe with threaded connections of malleable cast iron, both usually hot dip galvanized (galvanized), and copper pipes soldered connections with copper and / or threaded bronze / brass. Were recently introduced in the market semi-flexible tubes of aluminum coated internally and externally consists of a plastic layer.

The metal tubes generally have the following advantages:
• High resistance to internal pressure;
• Low thermal expansion feature;
• Dimensional stability;
• High heat resistance;
• High mechanical strength;
• Highly resistant to the effects of mechanical and thermal fatigue;
• Resistant to prolonged exposure to ultraviolet radiation and the ravages of time;
• Eliminate low smoke and toxic gases when under combustion;
• Increased reliability performance information under prolonged use;
• Are non-combustible at temperatures typically reached in fires in buildings.

However, metal tubes have the following disadvantages or inconveniences:
• High thermal conductivity;
• Greater weight comparison;
• Less easy handling,
• Greater difficulty implementing threaded or welded joints;
• Increased hydraulic resistance to flow;
• Low flexibility and elasticity;
• Less safe in the joints;
• High acoustic transmission (noise);
• Higher relative cost of acquisition;
• susceptibility to corrosion;
• Easier to accumulation of corrosion deposits, suspensions and precipitation;
• Possible contamination of water by corrosion debris and lead present in welds;
• Greater ease of transmission of the effects of water hammer.

The metal tubes are especially suitable for use in functions which are subjected to high pressures, such as the network pipe of fire hydrants and discharge piping, leading drinking water from the hydraulic pump to the reservoir tank of the high building. They are also used in high buildings to take drinking water from the reservoir to the high pressure reducing valves.

Copper pipes are especially suited for driving in hot water because of its chemical stability and dimensional. Galvanized pipe and fittings are very susceptible to corrosion when the water temperature inside exceeds 50 ° C. Already have brown PVC pipes sharp drop in pressure resistance and lead to huge thermal expansion hot water, and in consequence contraindicated in these cases.

Copper tubes also have an advantage over steel pipes in the building networks for distribution of fuel gas, since the welded joints permit higher sealing while avoiding the hazardous spills, and are not subject to chemical attack constituent material of mortar in the presence of moisture, where embedded in slabs of subfloors. This gives very high copper tube life, despite its cost is nearly twice the cost of steel and up to four times the cost of plastic tubes.

Moreover, the plastic pipes comprise a variety of components manufactured from synthetic organic polymers, obtained mainly from petrochemical derivatives.

The most commonly used plastic materials are PVC (or polyvinyl chloride), the PPR (polypropylene or random), CPVC (chlorinated polyvinyl chloride or) and PEX (cross linked polyethylene or crosslinked). Plastic tubes generally have the following advantages:

• High resistance to corrosion or oxidation;
• Good durability when sheltered from the ravages of time;
• Low thermal and electrical conductivity;
• Low weight comparison;
• Ease of handling;
• Fast and easy implementation of the joints (joints require hot termofusor);
• Low flow resistance;
• Little accumulation of debris;
• Good flexibility and elasticity;
• Increased security in the performance of gaskets (exempt employment torch);
• Low acoustic transmission;
• Low relative cost of acquisition.

However, plastic tubes also have the following disadvantages or inconveniences:
• Low resistance to heat;
• Low mechanical strength;
• Low resistance to the effects of mechanical and thermal fatigue;
• degradation due to prolonged exposure to ultraviolet radiation;
• High thermal expansion unit;
• Elimination of smoke and toxic gases when under combustion;
• Poor performance information under prolonged use (not more than 40 years of use in the domestic market).

PVC pipes have been widely used in building distribution networks for drinking water, and building facilities for sewage and rainwater collection. In contrast, CPVC pipe and PPR are specially designed for conducting hot water.

Dedetizadora e Desentupidora Ribeira

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Dedetizadora e Desentupidora Ribeira

What is Corporate Social Responsibility (CSR)?

What is Corporate social responsibility (CSR)?


Corporate Social Responsibility (CSR) has become an important aspect of businesses all across the globe. As globalization spreads its reach and businesses serve as global provider, these businesses have recognized the significance and benefits of CSR and have started incorporating it in their practices.

[caption id="attachment_938" align="aligncenter" width="450"]What is Corporate Social Responsibility (CSR)? What is Corporate Social Responsibility (CSR)?[/caption]

What is Corporate Social Responsibility ?

Corporate Social Responsibility is a form of corporate self regulation amalgamated in a business infrastructure model. The CSR policy of any business works as a self regulating system which helps the business to ensure that it complies the global norms and ethical standards. The aim of CSR is to be accountable for the company's activities and promote an optimistic and constructive ideology through its actions on environment, communities, consumers and stakeholders.

Why is it important?

CSR helps a business to run in such a way that it leaves a positive impact on the environment and society. In other words, CSR implies a commitment by a business to integrate such responsible policies in its practices that benefit the society also and reporting the progress made towards executing these practices. Countries like India also are becoming aware of this phenomenon and Corporate social responsibility in India is also witnessing a boom. Some of the main advantages of CSR can be explained as follows:

Stakeholders' interest

Outside stakeholders have been taking a keen interest in the the social aspect of the company and its accomplishments on the social level. The way your business treats the workforce and the impact of the products and services on the society is a matter of interest for the stakeholders.


CSR puts emphasis on economic, social and environmental sustainability so that your business continues to meet the needs of the present without affecting the resources for future generations. Sustaining economic  prosperity with taking care of the employees and environments is one of the driving forces while making the blueprint of any policy.

Social accountability

Accountability makes a business reliable. Communication of environmental and social impacts of your business activities on the society at large can be referred as social accountability. Usually the public relations department of a business look after it. Sometimes businesses take the help of PR agencies to manage their public relations as it's a very important element of CSR.

Risk management

The reputation which you had built over an entire decade can be brought to ruins within seconds by any malpractices like environmental accidents, corruption scandals etc. within your business. They will tarnish your image in split seconds. The philosophy of ‘doing the right thing' within the work culture can be successfully incorporated by implementing CSR.

Customer loyalty

The ‘jam packed' market today demands individuality if you want your business to stand out amongst your competitors. Building customer loyalty based on unique ethical principles can definitely be achieved using CSR implemented policies. In countries like India where there is a neck to neck battle in the market, businesses are using Corporate social responsibility in India to its best to become the leader in their domain.

Human resources

Last but not the least, CSR policies can help your business when you recruit human resources. You can ask the candidate about the company's CSR policy. The perception of your business is bound to improve when the staffs are involved with payroll giving, fund-raising activities etc. this will only happen when your business implements CSR policies.

[caption id="attachment_939" align="aligncenter" width="500"]What is Corporate social responsibility (CSR)? What is Corporate social responsibility (CSR)?[/caption]

CSR policy can certainly help your business reach new heights in times to come because with limited resources to use, sustainability is the the mantra to win in the long run. And CSR gives your business that outlook that can help you bloom with the perfect balance of economic profit and social responsibilities.

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About the Author

Sandra is a PR consultant and she also likes writing, reading, movies, hiking.

Sunday, September 23, 2012

What is a Bond?

What is a Bond?

By Preston G Pysh

Bonds are used widely in the investing world, but those that are new to investing may not be very familiar with all of the commonly used terms. People commonly refer to "stocks and bonds", and it is important to understand that they are two completely different things. A bond is basically an agreement made between an investor and a company in which the investor loans money to the company based on a certain interest rate. Businesses will borrow money from their investors for a variety of different reasons. One of the main reasons to borrow money from an investor is to expand their business.

[caption id="attachment_935" align="aligncenter" width="600"]What is a Bond? What is a Bond?[/caption]

Companies can issue a bond with a predetermined interest rate and basically sell them to potential investors. Investors buy bonds expecting to get back their original investment, along with the interest that was predetermined. All bonds will have a maturity date, which is the date that the bond will be paid out to the investor.

The interest rate that is paid to bondholders will vary from one company to the next. The interest rate is determined based on a few factors. The main factor that is considered when determining the interest rate is the stability of the company. If a business is very stable, and unlikely to default on their debts, then it will usually offer a lower percentage rate. This is because the bond is far less risky. Businesses that are not as stable will pay a higher percentage rate in order to attract investors. This makes for a much more risky bond, but can have a higher payout in the end if they follow through with their end of the deal.

If you are a new investor, it may be wise to stick with the more reliable companies even though they may offer you a lower percentage rate. At least you will be able to rest assured in knowing that you will likely see your money again, along with the interest. If you are a seasoned investor, then you might be more willing to venture out with the riskier bonds in hopes to have a higher pay out in the end. The choice is ultimately yours, but you should definitely make wise choices when it comes to investing your hard earned dollars.

Why Consider Bonds?

Most people that invest are pretty familiar with the stock market, and consider it to be one of the best ways to invest money. With that being said, why would anyone choose to invest in a bond? The return on investment of a stock is generally much higher, but there are some advantages to choosing bonds.

First of all, bonds are far less risky than the stock market. This is because bonds are almost always paid out, unless a business ends up going bankrupt first. Next, bonds can offer a steady cash flow. Most bondholders will have the option to get a monthly or quarterly payout on the interest earned from their bond. This is great for those who need some additional steady income.

Although this article is a short reference, the following website provides some great video content on what a bond is.

Also, if you already have some experience with bonds, I would highly recommend conducting more research with video lessons that teach you how to invest in bonds like Warren Buffett

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What is Benjamin Graham's "Mr Market"?

What is Benjamin Graham's "Mr Market"?

By Preston G Pysh

Benjamin Graham explored the concept of the stock market and an investor's analysis decision through the use of an imaginary investor named Mr. Market. The basic principle underlying the theory is that a rational investor would base his opinion on the fundamental value associated with the stock rather than the view of fellow investors or the signals sent by the stock market. The view is based on the principle that an investor must act rationally at all times and the decision made must be based on the intrinsic value associated with the stock rather than the market fluctuations which might sometimes send out the wrong signals.

[caption id="attachment_931" align="aligncenter" width="500"]What Is Benjamin Graham's "Mr Market"? What is Benjamin Graham's "Mr Market"?[/caption]

So what exactly is the Mr. Market parable proposed by Benjamin Graham? The story goes something like this: you must assume that you own a small number of shares in a private business that resulted in a total cost of $1000. A close associate of yours, namely Mr. Market is quite interested in your stock holdings and on a daily basis he expresses his opinion regarding the value of the shares. He is more than willing to buy the shares on some occasions and on other he is willing to sell his share to you at a quoted price. The price estimated by Mr. Market is sometimes a reflection of the true value of shares based on business developments and future prospects. Conversely, sometimes his estimates are not justified and seem a bit over exaggerated. You are not under any obligation to listen to Mr. Market and his advice. He does not mind providing advice on a regular basis irrespective of your opinion and attitude.

So what exactly should a prudent investor do in the case of Mr. Market and his price estimates? Should a person be influenced by the price quotations and buy or sell the stock based on Mr. Market's estimates? Well this is only beneficial for an investor when Mr. Market quotes a price that is very high and therefore an investor sells the stock with the aim of making a huge profit. An investor is also likely to follow Mr. Market's advice when the price quoted is very low and therefore buying shares at a low price would result in a foreseeable profit when these are sold at a higher market price. However, these two extreme scenarios are the only occasion when an investor would be compelled to buy or sell stock. In all other circumstances a person is likely base his judgments on true facts and figures derived from a company's financial position and future outlook.

The Mr. Market in reality is none other than the stock market that daily shows a change in price of shares. An investor that owns stock in a listed stock exchange is likely to be faced with the dilemma of changing prices almost on a daily basis. Either the price can be used to make a profit such as selling when price is too high and buying when price is too low, or the market price can be left alone. An investor must realize the importance of his own judgment in making investor decisions. The signals emitted by the market might sometimes be misleading and this could indeed result in a loss to the investor.

How can the market price be misleading? Well the stock price is dependent on a number of factors and amongst them the greatest one is speculation. Speculation of investors can result in an extremely high price for example if the company is likely to acquire another company, the hype in the market could create a rise in stock price. However, this price is not an indication of future prospects of the company or the ability to generate profit. An investor that sells now simply due to high price might at present face a profit but in the long term could be at a loss as the opportunity cost of selling is the long stream of dividends that follow the investment in the future.

Conversely, a person may simply sell the stock if the prices has gone down in the view the decreasing prices have a signaling effect that things within the company are getting worse. However this is reality might not be true. The price could simply be decreasing because no dividends have been declared for the given year as the company is now implementing a reinvesting policy. Thus the decrease in price might send a wrong signal to the investor who could sell the shares and lose out on dividends and capital gains in the future.

The Mr. Market analysis theme is simple and effective. The market price results in fluctuations and an investor must not solely base his decision on the price fluctuations. A prudent investor must consider other facts before buying or selling stock and this includes the current operating position of the company and the future developments. An investor must ascertain the dividend income in the future as opposed to capital gains at present and then undertake a decision.

This does not mean that the market price is irrelevant. The market fluctuations must not be ignored by an investor as they provide a signal of the value of the investment. However the true significance of market price lies in the opportunity that it provides by depicting a price too high or too low, The market price is of great importance and profitability when it depicts an extremely high price as huge capital gains could be made from sales whereas an extremely low price could result in stock purchasing so that they could be sold at a higher price in future.

Benjamin Graham's Mr. Market has received wide appreciation from investors who have now come to realize that the market price is not always justified. An investor must not ignore the market price but consider it in conjunction with several other factors such as dividend yield, future stream of dividends, current operating position of the company and future profitability.

If you'd like to learn more about Mr. Market, be sure to follow this link. The link takes you to a 10 minute video that thoroughly describes Benjamin Graham's fictional character along with more information on how to invest like Warren Buffett.

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What is the FED (United States Federal Reserve)?

What is the FED (United States Federal Reserve)?

By Preston G Pysh

The Federal Reserve most popularly known as the FED is entrusted with the task of overlooking the United States economy. It is the national bank of USA and is recognized as one of the most dominant institutions across the globe. The FED is entrusted with the task of setting the monetary and fiscal policy of the world's super power, America, which impacts not only the local citizen but the global population. The FED was created in 1913 by the United States congress. Before the formation of FED, the USA had no formal institution that was entrusted the task of setting and regulating the monetary policy. The resultant impact was that the markets were volatile and the banking system was not regarded as robust by the public at large. FED was created with the aim of formation of an institution that was solely responsible for regulating the banking system of USA. The FED is an independent organization and does not require the president to ratify its decisions. Nonetheless, the congress is entrusted with the task of overseeing the workings of the organization on a periodic basis.

[caption id="attachment_929" align="aligncenter" width="512"]What is the FED (United States Federal Reserve)? What is the FED (United States Federal Reserve)?[/caption]

Boards of Governors of the FED are based in Washington and are responsible for heading the organization. The BOD is headed by seven presidential members all of whom must serve a fourteen year period. The presidential members must be approved by the senate and can be required to serve another terms based on circumstances. The board is headed by a chairman (currently Ben Bernanke) who is initially appointed by the president of USA while the senate must approve the member. The chairman is required to serve a four year period and is assisted by a vice chairman.

The BOD is responsible for overseeing the work of twelve regional branches of the FED which are situated in the chief cities of USA. The Reserve Bank is entrusted with the basic workings of the FED and operates as the major system within the workings of the central bank. The banks are responsible for generating their own revenue from various sources. These include the services that they provide to other banks, the interest income from government securities, income from any foreign reserves and interest income on debt of depository organizations. The income generated from various sources is used to finance the daily working capital cycle whereas excess income is transmitted back to the U.S treasury. Lastly, all national banks operating within USA are referred as member banks and are a division of the FED. A couple of state-chartered banks are also referred as member banks.

Federal Open Market Committee (FOMC) is a part of the FED and is responsible for deriving the policy implemented by the FED. The chair of FOMC and the BOD are the same whereas the voting members consist of presidential candidates from BOD, four Reserve Bank presidents and Federal Reserve Bank president. These members are required to serve on a rotation basis pertaining to a one year time period. Reserve Bank presidents are required to participate in the policy making process irrespective of the fact that they are granted the voting rights or not. The FOMC has the final say in a number of significant matters including the monetary policy and specifically the interest rate.

The underlying theme of FED is to ensure economic growth, employment, low levels of inflation, stability of purchasing power parity and reasonable interest rates over a long term period. Simply put, the FED is responsible for ensuring stability and sustainable economic growth. The duties of FED are therefore widespread and are concerned with ensuring the smooth running of the economy.

The FED provides a number of services to banks in a similar manner as a bank might provide a service to a citizen. This is done so that the national payment process is efficient and secure. For example, transfer of money from one bank to another might be aided by the FED. The most important duty of the FED concerns serving the government of USA. The government of USA is the higher spending customer of FED. The FED is responsible for maintaining the checking account of the US treasury whereby the inflows and outflows of cash are regulated by the FED. Any inflows that arise due to tax revenues and outflows pertaining to government spending are passed through this account and the FED is responsible for handling them. The FED is also responsible for dealing with government securities whereby selling and buying transactions pertaining to bonds and treasury bills is conducted by the FED.

The FED is also responsible for issuance of currency in form of paper and coins. Although the US treasury is responsible for the production of cash, the FED is the institution that is responsible for allocating it to financial organizations. The FED duties also extend to checking the bills for damage and ensuring that bills that show signs of wear and tear are taken out of the cash cycle.

Another duty of the FED is to regulate and supervise the other banks operating within the USA economy. The other banks include the member banks, international banks, foreign transactions of these banks and banks that are USA based but operating abroad. The FED ensures that the banking policies are in line with customer's best interest and many laws and regulations have been enacted that ensure that the banking activities are bona fide to the public. The responsibilities of the Federal Reserve Bank extend to the investors as well whereby they are responsible for setting the limits on the debt that an investor can take. 
Last but not the least the FED is responsible for setting the monetary policy of the economy. This is one of the most important duties of the FED whereby the FED ensures that the interest rates and money supply result in positive economic growth and development. The three basic tools used by the FED include the open market operations, discount rate and reserve requirements; all of which are adjusted to reflect the current monetary policy devised.

If you would like to learn more about the Federal Reserve (FED), be sure to click on this link because it provides a great video lesson on how the FED works and how investors can use it to their advantage.

Also, if you would like to read a great resource on investing, be sure to check out this Warren Buffett book. It discusses subjects like interest rates and how the FED controls them.

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What is a Capital Expenditure?

What is a Capital Expenditure and How Can It Be Used for Investing?

By Preston G Pysh

Capital Expenditure is basically defined as the funds that are used by a business in order to make upgrades to their physical assets. This may include their actual real estate property, building or office equipment. Generally, these expenditures are made in an effort to improve or expand business operations. It is also referred to as CAPEX. Sometimes, Capital Expenditures can be as small as making a small building repair, and they can be as large as building a whole new office building or factory.

[caption id="attachment_926" align="aligncenter" width="500"]What is a Capital Expenditure? What is a Capital Expenditure?[/caption]

The capital expenditure of a business will vary greatly from one business to the next. The companies that have the largest amount of capital expenditure include the oil industry, telecommunications industry and the utility industry.

When a business is handling their accounting, expenses should be classified as capital expenditures if they involve newly acquired capital assets or investments that improve current capital assets. Expenditures are always capitalized, which means that the company will spread the overall cost of it across the life of the asset.

Some shareholders prefer businesses to use their money for projects that will show an immediate return on investment, while others are more focused on the long term growth and development of the business. Since shareholders can have such a different outlook on their investments, it is sometimes quite difficult to please them all.

The best way to ensure that shareholders are satisfied is for a business to maximize the value of their shareholders. To do this, a business should undertake projects that allow them to have a positive net present value. The net present value, or NPV, is the present value of cash flow that is to be expected once the project is complete.

The good news is that the business itself is not the one that is responsible for deciding whether or not to pursue short term or long term goals. The firm can select projects that will help to maximize its NPV, and then the shareholders are able to borrow and lend accordingly. This ensures that shareholder values are maximized to their potential, and also helps to make sure that the shareholders are satisfied with their investments in the company.

Capital expenditures for a business can be found in several different places. The balance sheet that provides the company's assets, equities and liabilities will have the capital expenditures listed in the PPE section. This is also known as the "Property, Plant and Equipment" section. On the income statement, which is essentially a statement that shows profits and losses, the capital expenditures can also be found. You will also see them on the company's cash flow statement and equity statement.

Whether you are a business owner or an investor, it is important that you understand expenditures and how they work. It is a critical part of business accounting and it is also very important for shareholders of a particular business. To ensure that you are making informed business and investing decisions, always stay on top of the capital expenditures.

If you would like to learn more about capital expenditures, be sure to click on this link because it provides a great video lesson on how Warren Buffett uses this expenditure to determine the owner's earnings of a business. The owner's earnings is probably one of the most important calculations an investor can make. The site that displays this video specializes in teaching students how to invest like Warren Buffett.

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What is an Income Statement?

What is an Income Statement and How Can Stock Investors Use It to Their Advantage?

By Preston G Pysh

There are three main financial statements that are important for investors to be familiar with. These include the balance sheet, cash flow statement and the income statement. The income statement is basically the statement that measures the financial performance of the company. It is assessed by taking factors including the revenue and expense into consideration. It will also give a measure of the profit and loss that was incurred by the company. They are usually created quarterly or annually. Some businesses refer to the statement as a profit and loss statement.

[caption id="attachment_922" align="aligncenter" width="500"]What is an Income Statement? What is an Income Statement?[/caption]

An income statement has two main parts. These are known as the operating section and the non-operating section. Investors can usually get more from the operating section. This gives them information about the revenue and expenses that come from the regular business operation. The non-operating section will include information about the revenue and expenses that come from activities that are not directly related to the regular business operation.

Income statements can either be single-step or multi-step. A single-step statement basically shows the sales minus the cost of the materials and production. This results in the gross income. These are generally very easy to read and understand. Multi-step statements are a bit more involved. Multi-step income statements will include the following information:

Net Sales - the income a business brings in as a direct result of selling goods and services.

Cost of Sales - the expenses incurred for the materials used to create goods to be sold.

Gross Profit - the profit margin after that is calculated after all business expenses are covered.

SG&A (Selling, General & Administrative Expenses) - the expenses for operating the business.

Operating Income - the difference between the company's gross profit and the SG&A amount.

Interest Expense - the cost of interest paid out to investors of the company.

Pretax Income - the amount of income generated before any taxes are paid.

Income Taxes - the amount of tax that is paid by the company.

Net Income - the amount of money a business profits after everything is paid, also known as the bottom line.

These are all aspects of an income statement. When you take a look at an income statement for a business, you can determine the company's profitability. This is something that should be considered when you are determining whether or not you want to invest in a business. Choosing a business that is not very profitable to invest in is not a very wise investment move. You should not only look at the most recent statements, but you should also take a look at the previous income statements. This will allow you to see the trends for the business you are considering.

Investors that have a full understanding of an income statement can really have a big advantage in the investment world. Most wise investors take the time to analyze the components of the statements before they decide to invest. Businesses that have a good profit margin are generally wise investment options because they manage their business well.

If you would like to learn more about income statements, follow this link because it takes you to a video on how a small business is valued with an abbreviated income statement.

Also, if you're interested in learning more about using financial statements for investing, I highly recommend this Warren Buffett Book. The link takes you to Amazon where the book can be found. This book is a great read and it teaches the reader how to invest like Warren Buffett using financial statements.

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Friday, September 21, 2012

What is an Out of Place Artifact?

What is an Out of Place Artifact?

By Mark W. Medley

One day during a routine dig at the ancient Indian burial site, an archaeologist called Goddard, discovered one of the most famous out of place artifacts currently known, "a silver Norwegian coin," dating back to the reign of Olaf Kyrre, who ruled Norway between 1067- 1093 AD.

[caption id="attachment_919" align="aligncenter" width="500"]What is an Out of Place Artifact? What is an Out of Place Artifact?[/caption]

This to many people may not sound strange or improbable, but the Indian settlement was in the USA, and is the only Norse pre-Columbian artifact found in the USA. Raising more questions, than answers, especially about speculation that Norsemen traded with Indians, long before Columbus "discovered: the Americas in 1492.

Out of place artifacts also have been found in the Dead Sea. When ancient Roman trading ships were discovered on the bottom of the sea, their cargos still intact, Chinese-style vases were seen amongst the perfectly preserved cargos. Raising the question, whether ancient Rome traded with Imperial China.

Many of today's great thinkers, who are trying to bridge a link between our past, and present often search for out of place artifacts,- as a way to re-evaluate our traditional view of history.

Other less orthodox thinkers see out of place artifacts as proof that we really do not know that much about our past, and consider some OPP-Art discoveries, like the "Baghdad Battery," as proof ancient civilizations were more advanced than we thought.

The "Goddard Coin," may not be absolute proof that Norsemen discovered the Americas before Columbus, but we can only imagine what the next mystery that challenges our orthodox view of history is- once another out of place artifact is discovered.

Download a set of complimentary ebooks by the author.

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Summary : Sometimes historians and archaeologists find some strange, often unexplainable things. Many of these ancient discoveries are termed "An out of place artifact," and one OPP-Art may say Columbus was not the first European to discover the Americas.

What is Deflation?

What is Deflation?

By Mark W. Medley

Currently we are still at the crossroads of beating the current economic recession, and one effect of this has been "deflation" in some sectors of our economies. What is deflation, and what are its actual effects?

[caption id="attachment_916" align="aligncenter" width="500"]What is Deflation? What is Deflation?[/caption]

Our economies are all different, despite the fact that most Countries do follow the free market economic modal to some degree. After 2008, interest rates were lowered to encourage savers to spend, as the great recession kicked in, and one effect of this has been deflation in some sectors of all our economies.

Deflation in academic terms is the effect of goods and services decreasing in price, usually in a recession, but in the business world common when some new products naturally decrease in price over time eg. computers, and electronics.

When we think of deflation in modern terms, we think of Japan. As Japan in the early 1990's faced a sharp recession, and the nations banks offered zero percent interest rates. This encouraged savers to spend, whilst the struggling economy saw the basic price of many goods and services tumble- leaving cash rich consumers with more money power, but creditors with less wealth.

One example of deflation in many economies has been the erosion of property values, which have left many banks in a paradox. Several of these banking institutions have creditors who now owe more, than what their property was 'worth," when they first took out a loan on the property- the liquidity trap.

This negative effect of deflation is seen as one reason, Governments fear deflation as much as inflation, as it does lower prices and living costs, but at the same time punishes creditors who bought on the old price- who are still repaying the debt.

Deflation also effects a nations monetary policy, which cannot be stabilized, because of the liquidity trap. It also transfers the wealth from the borrowers and holders of deflated assets to those who have capital and currency assets. One reason in 2010, whilst many people are struggling with debts, the wealthiest proportion of people in several economies have grown richer.

Another negative cause of deflation is that it punishes those stuck in the liquidity trap, and forms a trickle up, rather than a trickle down effect on the wealth inside an economy. It leads to problems in the money supply, and also social problems inside more liberal economies. Greece today is one example of how, deflation on some prices eg. Businesses, and property- has started an "us and them" attitude towards the increasingly wealthy elite.

Depending on your financial status, there are those who welcome deflation, and others who are adversely affected by the instability it causes. Whilst many things get cheaper, so does the wealth gap in many countries, which creates economic instability, and a stagnant economy. One reason most economist agree combating deflation is as important as its ugly sister, inflation.

Discover how to survive and thrive in a changing economy

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What is an Austerity Package?

What is an Austerity Package?

By Mark W. Medley

To a majority of Europeans and in the future Japanese, a new buzzword has dominated the national news- austerity. Austerity measures are now a vital fact of life as many governments start tackling their national debts. What is an austerity package?

[caption id="attachment_912" align="aligncenter" width="500"]What is an Austerity Package? What is an Austerity Package?[/caption]

In economic terms, when any kind if government, whether it is a local, regional or national has to reduce its spending and perhaps raise its fees and taxes to pay back creditors. This is an austerity package.

Depending on the nature of the economy, and amount of debts the government has accumulated, each austerity package differs. However, the effects of cuts, does trickle down to the economy, and creates adverse effects.

Sharp austerity measures made by the current Greek government have led to violence on the streets, and bitterness within Greek society. In Ireland and Spain it has led to some demonstrations, but a silent acknowledgment that these measures had to be implemented.

The Five basic Ingredients of an Austerity Package can be:

1. Pay Cuts

Generally the civil service is first to be hit with an austerity package. Usually salaries are either cut or frozen, whilst departments cut or merged. In some cases staff are laid-off, or their working hours reduced. Recently in Greece, public servants and politicians has to accept a 10-15% cut in salaries. The new UK government has also cut pay to ministers by 5%, and stopped most civil servant bonuses.

2. Reduced Subsidies

Some countries subsidize transport, petrol costs and even new business start-ups. In the European Union most new business start-ups are subsidized, as well as some public transport, and sectors involved in agriculture. If these are cut or a subsidy is phased out, the effect could range from higher priced food to less new businesses.

3. Increased Taxes

In times of austerity, some taxes will have to naturally rise, whether it's a 'wealth tax" or an increased luxury goods tax. Some taxes are placed on alcohol sales or cigarettes, which often raise in price during times of austerity, even local rates on your home or business could rise.

4. Social Security

California recently announced it would evaluate its existing social security system, in order to save billions the state owes due to its massive deficit. Greece, the UK and Spain also are currently re-evaluating their current welfare systems.

In 2005, Germany cut its once generous social security system, creating a "means tested" work fare system- based in part on a community work model. The age of eligibility for a state pension has increased in many countries, whilst student and poverty- based programs are often cut.

5. The Sale of State Assets

Germany's example of sharp austerity measures in the mid-2000s, led to the sale of state buildings, and new rent-lease agreements with the new owners. This led to a reduction in state ownership, whilst releasing immediate funds to the government. Schools sometimes were sold, whilst services privatized or simply shelved.

6. Lay-offs

State Governments often trim or even close down departments to save money. In many of California's schools, teachers have been replaced by television sets, and schools once opened only four days a week. Theatres may close, whilst public transport is cut. State lay-offs add to unemployment queues,- which is one reason many economists argue that in a deep recession, the state should employ more people rather than cut jobs.

The effects of any austerity budget, depends on how far people are ready to accept it. In many societies- cutting state funded social safety nets are unpopular, and could have a destabilizing effect on society.

Much depends on how the government stimulates the economy, whilst implementing austerity measures, in the hope that a new economy will offset the consequences of any cut backs- either way 2010 is the year of austerity for many.

Discover how to survive and thrive in a changing economy

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What is a Distro?

What is a Distro?

By Mark W. Medley

Unlikely young entrepreneurs have created a new successful business modal, despite rising odds against the success of opening an untried business in 2010. A business that has low overheads, needs little financing and catches the feel good mood of the most price wary consumer- a Distro.

[caption id="attachment_910" align="aligncenter" width="500"]What is a Distro? What is a Distro?[/caption]

A "Distro," attracts customers from all walks of life- especially fashion conscious customers under 24, who are more likely to be unemployed or short of available cash in our current recession. Following a simple, low cost business plan, which relies on good will rather than mass marketing.

Imagine a cafe owner facing the prospect of closing down their business because of a decline in customers, add a recently graduated designer, and an IT student looking for extra cash. All are facing a grim future unless something changes, and the change could be a Distro.

A cafe owner allows an unemployed designer to utilize a space in his cafe, and she sells her own designer T-Shirts and jeans- all created at home. In turn the cafe, and her designs are promoted on the web by an IT student on eBay, and social networking websites. As the cafe  re-invents itself to attract an increasing trade of customers, with free wi-fi, "trendy" music and a chill out atmosphere, to become a distro.

"Distros" are springing out everywhere, particularly in urban areas, where you can shop, meet friends, surf the net and even get your own designer t-shirts created. An idea brought on by the need to survive and thrive in an unsure economy, through cooperation, and creativeness.

Another important reason distros are doing well, is the simple fact they do not have huge set-up costs, which often lead to a loan. No real investment is needed- except the re-design or improvisation of the cafe, second hand machinery to create the clothes, and an old laptop linked to the net.

Despite the fact many retailers are still closing, distros are saving creative designers from an unemployment office, cafes from closing, and students from dropping out of college. All negative factors when governments are looking for new ways to trim costs, and would rather people initiative self-help schemes to help kick start their economies.

A distro could be a new innovative business of the future, as shopping turns into a more personal experience, benefiting people instead of brands, and at the same time creating new entrepreneurs- who are creating new sustainable businesses rather than facing the prospect of long term unemployment.

Discover how to Adjust to Change in an economic crisis, as we approach a new decade of global uncertainty.

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What is a Double Dipped Recession?

What is a Double Dipped Recession?

By Mark W. Medley

There are rumors and bigger rumors, but 2010 for many people involved in economics has been the year more experts are openly discussing the possibility of a double-dip recession. What is a double dip recession?

[caption id="attachment_907" align="aligncenter" width="500"]What is a Double Dipped Recession? What is a Double Dipped Recession?[/caption]

Economists tend to call recessions by their shapes. There are V, W, L and U shaped recessions- a double-dip recession is a W shape. Those who are familiar with reading charts may understand its significance, but to the layman still puzzled by the terminology.

A double-dipped recession is:

An economy falls into recession, emerges from it for a short period of time then falls back into a recession again, forming a W shape on a chart- rather like a store that has less customers, then some return but a few months later, until the store starts seeing less customers again.

Double- dipped recessions are different as most economic recoveries traditionally are V-shaped- when economic growth falls, but then recovers sharply after a brief period of stagnation.

According to official statistics most countries are starting to recover, and are forming a V-shaped recession.

Past examples of a double-dipped recession

One example of a double-dipped recession was in the early 1980's in the United States. For a period of three months from April to June 1980, the economy shrank by an estimated 8% of GDP. Then it leveled out between January to March 1981, and later grow by an estimated 8.4%.

The Federal Reserve feared renewed inflation, raised interest rates, leading to a dip back into recession, then the economy grew again- partly because of supply-side economics but also increasing Government borrowing adding to the nation's deficit.

2010- A different type of W-shaped recession

However the early 1980's is different to most economies today. There was no mass banking crisis or mortgage crisis as in 2008, nor has the economy of the World been as global.

The double-dip recession many speak of today, could be much deeper than in the 1980's, and there are several significant reasons:

  • Traditionally during a recession governments stimulate the economy, then after a period, the private sector take over. This has still not happened in many countries, where economic growth is still largely stimulated by government investment.

  • The scale of government debt in 2010 is much higher than in 1980. In fact some experts state that the US alone owes over 93% of its GDP or a staggering 13 trillion dollars.

  • Many businesses in the private sector are still struggling, some larger Corporations are heavily indebted after government bailouts. These businesses have to expand and invest in order to offset any drop in governmental assistance to the economy.

If the United States and some other countries like Japan, the UK and most nations in Southern Europe fall back into recession. Their Governments cannot borrow to stimulate their economies again. Private investors and companies have to fuel a recovery, rather than a Government.

This could mean a W-shaped recession could be much deeper than in the early nineteen eighties, and would have to be stimulated by the private sector. One reason most economists are looking at the growth and investment in the economy by this sector.

If the growth in private business and investment is less than, the investment needed to pull out of a stagnating economy. We could see the start of a double-dip or W-shaped recession. A recession some say could be deeper, and more prolonged than in many previous economic downturns.

Discover how to Adjust to Change and develop your own future.

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Thursday, September 20, 2012

What is a Budget Deficit?

What is a Budget Deficit?

By Mark W. Medley

2010 is the year of the budget deficit, in Europe, the USA and other recession hit Countries around the World. But what actually is a budget deficit?

[caption id="attachment_903" align="aligncenter" width="500"]What is a Budget Deficit? What is a Budget Deficit?[/caption]

When we spend more than we earn, we create a debt. Sometimes this debt can be small, as it actually is based on our assets- a house, land, or future earnings. Other times it can actually surpass the value of our assets, and force us into liquidation or voluntary bankruptcy.

This works the same way with Countries. For instance when a nation spends more than it earns, it creates a deficit. This deficit is actually debt, which often is financed through loans from International Banks or by issuing bonds. In worse case scenarios the IMF will jump in and loan to countries with high deficits.

In some cases Countries may have a high deficit but have assets that can be used to borrow on in order to develop. This is often the easiest way to pay for development, especially in resource-rich nations. Economists usually see this as a convenient way to finance development.

Nations with high deficits are comparable to individuals with high debts. They lack funds, because more of what they earn is used to pay off these debts. So they have to cut back, re-mortgage state assets or even sell off their natural resources. So comparable to individuals who have high debts- the spare television might be sold on eBay and living expenses are cutback.

Often we see charts showing a national deficit as a percentage. This percentage is calculated on the GDP (Gross National Product) of a Country, which is perceived to be based on what the nation produces. This sounds quite straightforward, but sometimes the actual GDP is based on the "market value" of what's produced in a country- which could be as diverse as the food it produces, to the gross value of civil law suit settlements.

If the perceived percentage is positive, then the Country in question is still producing more than it owes. But if the percentage is negative, it is currently producing less than it owes. In 2010 Ireland, the UK, Romania, Greece and Malta have the highest deficits in Europe. In the Americas, the USA has the highest deficit, whilst in Asia, Japan.

In most countries with a high deficit, the economy usually changes, as a Government at some point will need to face how to deal with this deficit. This is one reason 2010 can be called the "Year of the Deficit," as so many Countries face the prospect of rising debts in an ongoing recession.

Confused, fearful or simply looking for a better future? Learn how to survive and thrive in an economic crisis. build a future for you and your family

Do you like what Mark writes? He can write an article for you email Mark

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What is Biflation?

What is Biflation?

By Mark W. Medley

Many senior economists are starting to agree that the current economic conditions some countries face, differ to the traditional boom to bust to boom cycles- we had in the past. Biflation is the new buzzword for many of our 21st century economies. What does biflation mean?

[caption id="attachment_900" align="aligncenter" width="500"]What is Biflation? What is Biflation?[/caption]

Biflation simply means the value of the things we own and produce are devalued, whilst the cost of the things we need are continuing to rise. Add in the mixture of rising energy prices in energy poor countries, and depleted confidence in nuclear energy. Then many countries could be in a biflation cycle.

In many parts of the world, housing has declined in value, whilst owing to a dependency on imported energy-the cost of food, and buying this energy has risen. There are also other factors that can create biflation.

Quantative easing (printing money) devalues a currency, and it also compounds a nations debt. Nations that are dependent on importing food and/or oil pay more, whilst the value of their currency naturally declines with these rising debts.

A higher debt creates the need for any government to raise funds to pay off their creditors. This usually is passed onto the taxpayer, in the form of increased taxation and reduced services. Once this cycle kicks in, unless salaries rise with these costs. People have less to spend on consumer goods, and the local economy could see a fall in the cost of housing.

In the much of the world, the majority of people working are seeing a decline in real salaries, as basic costs like electricity, fuel and food continue to rise. Cutting into the spending and borrowing power of many consumers who fueled the pre- crisis 2008 bubble economy.

This natural cycle of biflation (mixflation) creates a climate of reduced earnings, higher basic living costs and low wage employment growth. In a sense, many experts claim Greece, Ireland, Portugal and the United States of 2011-2012 mirrors this modal.

Many of these same economists, cite energy costs determining the immediate future of any nation in a biflation cycle. Rising energy prices naturally create rising power, and transport costs, leading to higher food costs. chocolate, soya beans and wheat prices already are at their highest since before the 2008 crisis began.

If this momentum continues to develop through this decade, the nations that export these valuable resources grow wealthier, whilst countries dependent on importing such resources like coal, oil, and even food continue to grow poorer.

Biflation, is a dangerous cycle which could be termed the "long road down" if it remains unbroken. Yet, solutions have to be found to stem this vicious trend, or biflation could become the buzzword of this decade.

Discover how you can survive and thrive during a period of economic change

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What is a Solar Tower?

What is a Solar Tower?

By Mark W. Medley

Energy is becoming the most important resources of this decade, and our societies are growing more anxious about what form of energy, replaces our fast depleting sources of fossil fuels. One solution could be a Solar Tower.

[caption id="attachment_896" align="aligncenter" width="500"]What is a Solar Tower? What is a Solar Tower?[/caption]

Over half a millennium ago, Leonardo Di Vinci, worked with a feather, ink and parchment, dreaming of the future. Around 500 years later, one of his unique designs was of a "SolarTower."

The first solar tower was built in the late 17th century in Spain, and lately has become a viable alternative energy source. Already France, Israel and Spain benefit from the use of this pre-industrial revolution technology, which generates solar electricity, as well as enables crops to be grown around it.

How Does a Solar Tower Work?

A solar tower is placed on a reinforced concrete base in areas prone to high levels of sunlight. On the top of the tower, solar panels move to catch the sunlight, which is in turn used to generate electricity for the homes, and industries in the area near the tower.

Beneath the tower, the excess heat the tower loses can be sealed in plastic covers, where crops are grown such as tomatoes, and lettuces. Thus creating a dual purpose for the tower, and the community it serves.

The most famous solar electricity tower is located in Seville, in Southern Spain. And generates enough power to offer electricity to 200.000 homes in the area, at a much lower cost than traditional electricity.

The Future?

The scarcity of traditional fossil fuels, plus the current distrust of nuclear power could mean that more solar towers are built, and can offer electricity to communities around the world.

The initial cost is the only expense, aside from maintaining the tower, whilst valuable crops can be grown to generate an income for the community. A win-win sustainable situation.

Leonardo Di Vinci's dream has turned into a reality for several communities, and perhaps as technology advances, a Solar tower could become one of the many solutions to a probable future energy crisis.

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