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Wednesday, May 26, 2010
Wednesday, May 12, 2010
Really good article comparing Quebec and Greece
Great article, wish I had written it, but thought it would be good to share. Enjoy.
The disturbing similarities between Quebec and Greece
By Licia Corbela, Canwest News Service May 11, 2010 In Greece, citizens on average, retire at age of 58.
Germans, who are helping bail out the bankrupt Greeks, work on average until the age of 65. Naturally, German citizens are wondering how this can be considered fair. Why should they work seven years longer on average so Greek citizens can live a life of leisure and be less productive?
What's more, in Germany, most working people pay taxes. In Greece, only 20 per cent pay taxes. Again, unfair. And yet equalization between "have" European Union states and "have not" European Union states continues, even though it's not making things equal -- it's rewarding laziness, leisure and possibly even criminal tax evasion. Why pay taxes if some hard-working Germans will do it for you? Thus the riots in Greece. They believe they are entitled to those entitlements.
Dysfunctional? You bet. Canadians would never stand for such a thing, right? Think again.
Equalization in Canada was established to ensure that "have-not" regions could enjoy the same programs as "have" regions and most Canadians wouldn't quibble with that. But that has not happened. In fact, the reverse has occurred. The have provinces have fewer services than the have-nots.
According to a Dec. 2009 report by the Institute of Statistics of Quebec, Quebecers' average age of retirement is 62 whereas in the rest of Canada it is almost 65. While the Quebec Pension Plan and Canada Pension Plans are identical and carry the same penalties for collecting your pension earlier than 65, those who stop working earlier are less productive and contribute less to Canadian society in terms of income and taxes.
In light of the fact that Quebec received $8.6 billion in equalization payments in 2010-11 out of a total equalization pot of $14.4 billion, it's safe to say that citizens in Canada's "have" provinces -- British Columbia, Alberta and Ontario -- are paying for Quebecers' early retirement, as theirs is the only province which has such a generous, early retirement benefit.
In other words, equalization is not very equal.
What's more, Quebecers can take advantage of $7-a-day daycare, whereas, in most other provinces, $7 wouldn't even buy you an hour of daycare.
Quebec has a generous pharmaceutical program unlike any other in the country, and Quebec university students pay considerably less for tuition within Quebec than students from elsewhere in the country.
To attend McGill University in 2010, Quebec students pay $3,475 for tuition and fees. An out-of-province student attending McGill pays $7,008, or $3,533 more than a Quebec student -- more than double. Five of the six cheapest universities in Canada are in Quebec -- but they're only the cheapest for Quebecers. Those same universities are among the most expensive in Canada for non-Quebecers.
Sherbrooke has the lowest university tuition and fees in the entire country -- but again, only for Quebecers, who pay just $2,381. To attend the same university, a non-Quebecer, from Alberta, for instance, must pay $5,914 or $3,533 more than his Quebec colleague. When that Alberta student works through the summer in Alberta to save for tuition and living expenses, the taxes he or she will pay helps subsidize the Quebec student's tuition.
Lately, Quebecers such as Conservative MP Maxime Bernier have criticized Quebec's overreliance on equalization, saying Quebecers are "spoiled children."
That's got Quebec's provincial government fighting back. In its 2010-11 budget document, the Jean Charest government is arguing that it should receive even more equalization than it's getting because Alberta's oil industry is keeping the Canadian dollar high, which in turn harms Quebec's manufacturing sector. This is not a joke.
"A rise in the world price of a barrel of oil favours provinces that have that resource," states the budget document in Section E. "However, the rise in the Canadian dollar that accompanies the rising price of oil hampers the exports of the other provinces.
"An adequate equalization program can mitigate this phenomenon by increasing the revenues of provinces that are negatively affected by the rise in the dollar, without reducing the revenues of provinces that benefit from the higher price of oil."
In other words, Quebec, which received $8.6 billion of the $14.4 billion doled out in equalization this year, is arguing that it's not enough. It wants more and it blames Alberta's oil industry for its troubles. It's a curious argument since it can be argued that Alberta's oil industry is fuelling Canada's economy and largely provided the money was sent as equalization to Quebec.
In 2007, the last year Statistics Canada figures are available for all provinces, B.C., Alberta and Ontario were the only provinces that paid more into Confederation than they received. Alberta paid a total of $37.064 billion in taxes and transfers to the federal government and the feds returned $17.567 billion in services and programs, meaning that Alberta contributed $19.5 billion net to the rest of Canada.
But Charest, who complained in Copenhagen that Alberta's oilsands industry "embarrassed" him, is making the argument that despite Alberta's largesse, it's to blame for the trouble Quebec is in.
In short, it's all Greek to Quebec -- and that's frightening.
© Copyright (c) The Vancouver Sun
Read more: http://www.vancouversun.com/business/disturbing+similarities+between+Quebec+Greece/3011792/story.html#ixzz0nixkfSjU
The disturbing similarities between Quebec and Greece
By Licia Corbela, Canwest News Service May 11, 2010 In Greece, citizens on average, retire at age of 58.
Germans, who are helping bail out the bankrupt Greeks, work on average until the age of 65. Naturally, German citizens are wondering how this can be considered fair. Why should they work seven years longer on average so Greek citizens can live a life of leisure and be less productive?
What's more, in Germany, most working people pay taxes. In Greece, only 20 per cent pay taxes. Again, unfair. And yet equalization between "have" European Union states and "have not" European Union states continues, even though it's not making things equal -- it's rewarding laziness, leisure and possibly even criminal tax evasion. Why pay taxes if some hard-working Germans will do it for you? Thus the riots in Greece. They believe they are entitled to those entitlements.
Dysfunctional? You bet. Canadians would never stand for such a thing, right? Think again.
Equalization in Canada was established to ensure that "have-not" regions could enjoy the same programs as "have" regions and most Canadians wouldn't quibble with that. But that has not happened. In fact, the reverse has occurred. The have provinces have fewer services than the have-nots.
According to a Dec. 2009 report by the Institute of Statistics of Quebec, Quebecers' average age of retirement is 62 whereas in the rest of Canada it is almost 65. While the Quebec Pension Plan and Canada Pension Plans are identical and carry the same penalties for collecting your pension earlier than 65, those who stop working earlier are less productive and contribute less to Canadian society in terms of income and taxes.
In light of the fact that Quebec received $8.6 billion in equalization payments in 2010-11 out of a total equalization pot of $14.4 billion, it's safe to say that citizens in Canada's "have" provinces -- British Columbia, Alberta and Ontario -- are paying for Quebecers' early retirement, as theirs is the only province which has such a generous, early retirement benefit.
In other words, equalization is not very equal.
What's more, Quebecers can take advantage of $7-a-day daycare, whereas, in most other provinces, $7 wouldn't even buy you an hour of daycare.
Quebec has a generous pharmaceutical program unlike any other in the country, and Quebec university students pay considerably less for tuition within Quebec than students from elsewhere in the country.
To attend McGill University in 2010, Quebec students pay $3,475 for tuition and fees. An out-of-province student attending McGill pays $7,008, or $3,533 more than a Quebec student -- more than double. Five of the six cheapest universities in Canada are in Quebec -- but they're only the cheapest for Quebecers. Those same universities are among the most expensive in Canada for non-Quebecers.
Sherbrooke has the lowest university tuition and fees in the entire country -- but again, only for Quebecers, who pay just $2,381. To attend the same university, a non-Quebecer, from Alberta, for instance, must pay $5,914 or $3,533 more than his Quebec colleague. When that Alberta student works through the summer in Alberta to save for tuition and living expenses, the taxes he or she will pay helps subsidize the Quebec student's tuition.
Lately, Quebecers such as Conservative MP Maxime Bernier have criticized Quebec's overreliance on equalization, saying Quebecers are "spoiled children."
That's got Quebec's provincial government fighting back. In its 2010-11 budget document, the Jean Charest government is arguing that it should receive even more equalization than it's getting because Alberta's oil industry is keeping the Canadian dollar high, which in turn harms Quebec's manufacturing sector. This is not a joke.
"A rise in the world price of a barrel of oil favours provinces that have that resource," states the budget document in Section E. "However, the rise in the Canadian dollar that accompanies the rising price of oil hampers the exports of the other provinces.
"An adequate equalization program can mitigate this phenomenon by increasing the revenues of provinces that are negatively affected by the rise in the dollar, without reducing the revenues of provinces that benefit from the higher price of oil."
In other words, Quebec, which received $8.6 billion of the $14.4 billion doled out in equalization this year, is arguing that it's not enough. It wants more and it blames Alberta's oil industry for its troubles. It's a curious argument since it can be argued that Alberta's oil industry is fuelling Canada's economy and largely provided the money was sent as equalization to Quebec.
In 2007, the last year Statistics Canada figures are available for all provinces, B.C., Alberta and Ontario were the only provinces that paid more into Confederation than they received. Alberta paid a total of $37.064 billion in taxes and transfers to the federal government and the feds returned $17.567 billion in services and programs, meaning that Alberta contributed $19.5 billion net to the rest of Canada.
But Charest, who complained in Copenhagen that Alberta's oilsands industry "embarrassed" him, is making the argument that despite Alberta's largesse, it's to blame for the trouble Quebec is in.
In short, it's all Greek to Quebec -- and that's frightening.
© Copyright (c) The Vancouver Sun
Read more: http://www.vancouversun.com/business/disturbing+similarities+between+Quebec+Greece/3011792/story.html#ixzz0nixkfSjU
Friday, March 19, 2010
Credit Debt Swap
I ran across this article from a very good source (Newsweek) not some conspiratorial group. It put very well the concept of the Credit Debt Swap and how this is similar to the MBS which caused so much difficulty in the last economic woe.
By Daniel Gross | Newsweek Web Exclusive
Mar 17, 2010 | Updated: 5:43 p.m. ET Mar 17, 2010
Does it make sense to buy insurance against, say, a nuclear attack on Washington—if all the insurance providers' headquarters are inside the Beltway? Of course not. So why do investors buy insurance on U.S. government debt?
As many of us learned painfully during the economic meltdown, credit-default swaps are a form of insurance on financial instruments. They're contracts that pay off in the event that an entity fails to make good on its debt. You could, for example, pay a $2 premium to insure $100 in debt of, say, Lehman Bros. If Lehman goes Chapter 11, the party that sold the insurance pays $100 (or the difference between $100 and the amount Lehman can actually pay its creditors). Selling credit-default swaps is a fantastic business so long as the insured instruments or companies don't fail. That's what got AIG into so much trouble. It sold cheap protection on huge amounts of subprime mortgage bonds and collateralized debt obligations but never put money aside to make good on potential claims—leaving taxpayers on the hook to pay them off.
This brings us to the odd business of credit-default swaps on countries. In the sovereign credit-default swap market, investors can purchase (and trade) protection against the default of debt issued by governments, such as, say, Greece. In the wake of Greece's recent woes, there have been accusations that trading in CDS helped aggravate the crisis. Of course, Greece, it turns out, was never in real danger of defaulting on its debt—the notion that Europe's financial powers would have stood by while a euro-using country simply reneged on government debt was far-fetched.
So why bother with credit-default swaps on nations? CDS are a way of hedging existing positions: The value of CDS rise when the value of the bonds they insure fall. They can also be a cheap way of expressing a pessimistic view on countries' financial prospects without going to the trouble of selling short the bonds issued by the national government. Many people buying CDS for a country don't expect to collect the insurance, they expect to sell the insurance policy to somebody else. For investors, sovereign default swaps are not buy-and-hold insurance policies. They are a form of casino chip.
But in the long run, CDS only make sense as an asset class if they pay out in the event of default. This is why it's so curious that there is a market—albeit a small one—for credit default swaps on U.S. government debt. After all, if the U.S. government were to default, who would be able to pay the claims?
According to the Bureau of Public Debt, there is $8.15 trillion in U.S. government debt owned by the public. In addition, now that the United States has taken control of the failed mortgage giants Fannie Mae and Freddie Mac, the government is formally standing behind the debts of those two entities, which surpass $5 trillion. Now, let's imagine a world in which the U.S. government, lacking the will to tax or cut spending, can't scrape up the cash to stay current on interest payments and can't roll over debt as it matures. That would trigger a huge decline in the value of treasuries and mortgage-backed securities. The balance sheet of every U.S. financial institution—JPMorgan, Goldman, Citi, your neighborhood bank, the Federal Reserve, money-market funds—would be decimated. There wouldn't be a single solvent bank, insurer, or company in the United States. The large multinational banks, which have significant U.S. operations and plenty of this stuff on their books, would likewise be wiped out. Oh, and foreign holders of U.S. debt—see this list topped by China and Japan—would be toast, too.
In this dystopia, who, precisely, would be able to make good on the insurance sold on U.S. government debt? The last time we had a set of events that were supposed to trigger large-scale payment of credit-default swaps, the system basically shut down. All the investors who bought insurance on financial instruments from AIG got paid off in full only because the U.S. government bailed the company out. Who would bail out the Treasury Department and the Federal Reserve?
By definition, you can't collect an insurance payment on an entity that's too big too fail. That may help explain why the sovereign CDS market on U.S. debt is comparatively small. According to the Depository Trust and Clearing Company, there are about 415 contracts outstanding on about $2.25 billion in U.S. debt. That's tiny in comparison to the amount of total U.S. debt and in comparison to the market as a whole. According to DTCC, CDS on U.S. government debt are the 98th-largest position in the market today, between CDS on CenturyTel and Wal-Mart. By comparisons, investors have bought insurance worth $25 billion on Italy's debt, $15.6 billion on Spain's debt, and $6.4 billion on Bank of America's. (Here's more data and pricing on CDS form Markit.)
In 2008, we learned—or should have learned—that when a systemic crisis hits, hedges and insurance are worthless when the party on the other side of the table can't make good on its financial commitments. We learned—or should have learned—that much of the innovation that was touted as a new mode of investment, and as a spur to greater transparency, liquidity, and efficiency, turned out to be just another form of reckless gambling.
Daniel Gross is NEWSWEEK's economics editor and the author of Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation and Pop!: Why Bubbles Are Great For The Economy .
© 2010
By Daniel Gross | Newsweek Web Exclusive
Mar 17, 2010 | Updated: 5:43 p.m. ET Mar 17, 2010
Does it make sense to buy insurance against, say, a nuclear attack on Washington—if all the insurance providers' headquarters are inside the Beltway? Of course not. So why do investors buy insurance on U.S. government debt?
As many of us learned painfully during the economic meltdown, credit-default swaps are a form of insurance on financial instruments. They're contracts that pay off in the event that an entity fails to make good on its debt. You could, for example, pay a $2 premium to insure $100 in debt of, say, Lehman Bros. If Lehman goes Chapter 11, the party that sold the insurance pays $100 (or the difference between $100 and the amount Lehman can actually pay its creditors). Selling credit-default swaps is a fantastic business so long as the insured instruments or companies don't fail. That's what got AIG into so much trouble. It sold cheap protection on huge amounts of subprime mortgage bonds and collateralized debt obligations but never put money aside to make good on potential claims—leaving taxpayers on the hook to pay them off.
This brings us to the odd business of credit-default swaps on countries. In the sovereign credit-default swap market, investors can purchase (and trade) protection against the default of debt issued by governments, such as, say, Greece. In the wake of Greece's recent woes, there have been accusations that trading in CDS helped aggravate the crisis. Of course, Greece, it turns out, was never in real danger of defaulting on its debt—the notion that Europe's financial powers would have stood by while a euro-using country simply reneged on government debt was far-fetched.
So why bother with credit-default swaps on nations? CDS are a way of hedging existing positions: The value of CDS rise when the value of the bonds they insure fall. They can also be a cheap way of expressing a pessimistic view on countries' financial prospects without going to the trouble of selling short the bonds issued by the national government. Many people buying CDS for a country don't expect to collect the insurance, they expect to sell the insurance policy to somebody else. For investors, sovereign default swaps are not buy-and-hold insurance policies. They are a form of casino chip.
But in the long run, CDS only make sense as an asset class if they pay out in the event of default. This is why it's so curious that there is a market—albeit a small one—for credit default swaps on U.S. government debt. After all, if the U.S. government were to default, who would be able to pay the claims?
According to the Bureau of Public Debt, there is $8.15 trillion in U.S. government debt owned by the public. In addition, now that the United States has taken control of the failed mortgage giants Fannie Mae and Freddie Mac, the government is formally standing behind the debts of those two entities, which surpass $5 trillion. Now, let's imagine a world in which the U.S. government, lacking the will to tax or cut spending, can't scrape up the cash to stay current on interest payments and can't roll over debt as it matures. That would trigger a huge decline in the value of treasuries and mortgage-backed securities. The balance sheet of every U.S. financial institution—JPMorgan, Goldman, Citi, your neighborhood bank, the Federal Reserve, money-market funds—would be decimated. There wouldn't be a single solvent bank, insurer, or company in the United States. The large multinational banks, which have significant U.S. operations and plenty of this stuff on their books, would likewise be wiped out. Oh, and foreign holders of U.S. debt—see this list topped by China and Japan—would be toast, too.
In this dystopia, who, precisely, would be able to make good on the insurance sold on U.S. government debt? The last time we had a set of events that were supposed to trigger large-scale payment of credit-default swaps, the system basically shut down. All the investors who bought insurance on financial instruments from AIG got paid off in full only because the U.S. government bailed the company out. Who would bail out the Treasury Department and the Federal Reserve?
By definition, you can't collect an insurance payment on an entity that's too big too fail. That may help explain why the sovereign CDS market on U.S. debt is comparatively small. According to the Depository Trust and Clearing Company, there are about 415 contracts outstanding on about $2.25 billion in U.S. debt. That's tiny in comparison to the amount of total U.S. debt and in comparison to the market as a whole. According to DTCC, CDS on U.S. government debt are the 98th-largest position in the market today, between CDS on CenturyTel and Wal-Mart. By comparisons, investors have bought insurance worth $25 billion on Italy's debt, $15.6 billion on Spain's debt, and $6.4 billion on Bank of America's. (Here's more data and pricing on CDS form Markit.)
In 2008, we learned—or should have learned—that when a systemic crisis hits, hedges and insurance are worthless when the party on the other side of the table can't make good on its financial commitments. We learned—or should have learned—that much of the innovation that was touted as a new mode of investment, and as a spur to greater transparency, liquidity, and efficiency, turned out to be just another form of reckless gambling.
Daniel Gross is NEWSWEEK's economics editor and the author of Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation and Pop!: Why Bubbles Are Great For The Economy .
© 2010
Wednesday, February 10, 2010
A man after my own heart
Monday, I was listening to John Gormley Live in Saskatchewan and heart their guest David Trahair, an accountant who published a book called "Enough Bull". I have the link for the radio interview, but they have segmented this by hours (4th hour), and I thought that was a bit long of a segment to hear. The link I have listed is a video link from the same author. Basically, he thinks far too much time is wasted on setting up early retirement plans while ignoring paying down debt. Totally backward. Any rate, I though this guy was excellent and worthy of a listen. Brad
Friday, February 5, 2010
Every little thing is goin’ to be alright:
As parents, you wonder if you are properly impacting your children. It is the secret dread of parents, and although there are lots of chances where you see things that prove you are doing OK, it is the events which oppose your values expressed in your children that come to the front. In fact, these small events usually get talked about (sometimes loudly). These events are the subject of a child’s punishment, or special attention. These events worry a parent into sleepless nights.
Such has been one of my worries. I have over the last few years, due to a variety of circumstances, embraced simplicity and am trying to push excessive materialism out of my world. I am examining much of my world to find what is important and what is of limited value. What I found in this experiment was a value on things that were often free and/or of limited real cost. Value is a characteristic we add to an object.
Right now I am wearing one gold ring. The gold ring was the symbol of my marriage to my lovely wife. I have not weighted it, but since the value of gold has gone up, I imagine the value of that ring has also gone up. However, the real value of that ring is the representation of the marriage which is 18 years old this Spring. That is true regardless whether the price of gold goes up or down.
Of course, this emphasis against materialism is not always easy and I worried about how my children would respond. My daughters responded in kind. They caught our vision right away. The younger boys, to be honest were too young to think things were too different. My eldest son was my major concern. This week, we took a walk around town together to visit. My wife had bought me a new coat, and following the Biblical mandate, I was taking my old coat to a mission in hopes that they could give it to someone in need (John 3:11). I mentioned to him my concern. He and I were almost going in opposite directions. I was trying to de-accumulate while he was accumulating. Again, I am 39, he’s 15, so it’s not a shocker that “cool” plays a larger role in his world, and dressing the part of High School was vital to his existence. Our conversation was not harsh, just observational. It came and it went. I didn’t notice any real impact. My eldest has learned the “poker face”.
This week, I finished a book I was writing and sent it off for peer review, and am working through picking out a publisher. It is on a new design of how to flesh out the church. A significant portion of what I wrote centered on the fact that we have so neglected “the least of these” (Matthew 25). So, as I was putting some material together I found it was amazingly cost efficient to send a poor family in Asia a gift that would change their world. A pair of chickens (hen and rooster) would be as little as $11. This pair can produce up to 40 dozen eggs a year. If they let the eggs grow into chicks they can have a flock that can keep a family well fed for years. Eggs can also be traded. They are good currency to buy other stuff. Also, since an average family lives on $200/year, a couple chickens is generally a luxury that most people really can’t afford. They would have to starve themselves to save enough to buy the chickens
Goats, are another wonderful gift. $60 and you can have a goat sent. They will breed the goats. They normally have 2 babies (kids) a year, but they also produce milk which can be made into cheese. It’s a wonderful gift.
Or you can “have a cow, man!” $375 and you will change their world for years. Lots of milk, they can be bred for a full “cattle industry”, it’s a wonder.
If you remember the old Veggie-tale song “everybody’s got a water buffalo”, it sounded silly at the time, but a water buffalo is quoting from Gospel for Asia’s web site:
A gift of a water buffalo to a poor South Asian family is good news indeed! Transportation, plough animal, cart hauler, milk giver and more-all in one sturdy creature that is often considered a "member of the family."
How much would it take for everyone to have a water buffalo? $475. Maybe Phil Vischer was on to something.
So, I was talking to my children about this and the idea came up that we could pull our change together. Years ago, my family kept a jar out and we threw extra change into it and that became part of our vacation fund. Why not have a fund for “the least of our brethern”? I had a couple dollars in change, so I dumped it into the cup. One of my little boys threw in a “toonie”, which was a lot of money from the little guy. A couple other children threw in some change. We scouted around the house and got $3.50 in returned bottles. I was hoping we might have enough to buy a pair of chickens at the end of the week. We’d do it just before Sabbath, and we have a good deed done to start the day of rest.
My eldest son, grabbed his wallet and dumped a large wad of money in there. My wife and I stood silent. I am not talking a $10 or a $20, but well over $100, and then my second oldest daughter dumped another large sum of money she made. I was so moved I didn’t know what to say.
Later that day, I was alone with my son, and asked him…”what was up with that?” He said, in his usual, casual way, he’d figured he’d bought enough cool clothes and stuff for himself, he figured he could he could give some money to people who needed this just to have enough food to eat.
He’s done many things that have brought me joy, but I have to admit, I don’t think I have ever been so impressed with him as I was that moment. For just a second, I could see that maybe we were getting through. Perhaps, everything will be alright.
What will we do with the money? Right now, we have a decision to make. We might buy a cow (that would change a family and perhaps a village forever), or we might buy something like 30 pairs of chickens and impact 30 families for years, maybe forever. I think we will also spring for a water purifier (they are only $30) and that would turn poisoned water into drinkable water. For us, they are simple gestures, but for the “least of our brethern”, it will change the world.
Such has been one of my worries. I have over the last few years, due to a variety of circumstances, embraced simplicity and am trying to push excessive materialism out of my world. I am examining much of my world to find what is important and what is of limited value. What I found in this experiment was a value on things that were often free and/or of limited real cost. Value is a characteristic we add to an object.
Right now I am wearing one gold ring. The gold ring was the symbol of my marriage to my lovely wife. I have not weighted it, but since the value of gold has gone up, I imagine the value of that ring has also gone up. However, the real value of that ring is the representation of the marriage which is 18 years old this Spring. That is true regardless whether the price of gold goes up or down.
Of course, this emphasis against materialism is not always easy and I worried about how my children would respond. My daughters responded in kind. They caught our vision right away. The younger boys, to be honest were too young to think things were too different. My eldest son was my major concern. This week, we took a walk around town together to visit. My wife had bought me a new coat, and following the Biblical mandate, I was taking my old coat to a mission in hopes that they could give it to someone in need (John 3:11). I mentioned to him my concern. He and I were almost going in opposite directions. I was trying to de-accumulate while he was accumulating. Again, I am 39, he’s 15, so it’s not a shocker that “cool” plays a larger role in his world, and dressing the part of High School was vital to his existence. Our conversation was not harsh, just observational. It came and it went. I didn’t notice any real impact. My eldest has learned the “poker face”.
This week, I finished a book I was writing and sent it off for peer review, and am working through picking out a publisher. It is on a new design of how to flesh out the church. A significant portion of what I wrote centered on the fact that we have so neglected “the least of these” (Matthew 25). So, as I was putting some material together I found it was amazingly cost efficient to send a poor family in Asia a gift that would change their world. A pair of chickens (hen and rooster) would be as little as $11. This pair can produce up to 40 dozen eggs a year. If they let the eggs grow into chicks they can have a flock that can keep a family well fed for years. Eggs can also be traded. They are good currency to buy other stuff. Also, since an average family lives on $200/year, a couple chickens is generally a luxury that most people really can’t afford. They would have to starve themselves to save enough to buy the chickens
Goats, are another wonderful gift. $60 and you can have a goat sent. They will breed the goats. They normally have 2 babies (kids) a year, but they also produce milk which can be made into cheese. It’s a wonderful gift.
Or you can “have a cow, man!” $375 and you will change their world for years. Lots of milk, they can be bred for a full “cattle industry”, it’s a wonder.
If you remember the old Veggie-tale song “everybody’s got a water buffalo”, it sounded silly at the time, but a water buffalo is quoting from Gospel for Asia’s web site:
A gift of a water buffalo to a poor South Asian family is good news indeed! Transportation, plough animal, cart hauler, milk giver and more-all in one sturdy creature that is often considered a "member of the family."
How much would it take for everyone to have a water buffalo? $475. Maybe Phil Vischer was on to something.
So, I was talking to my children about this and the idea came up that we could pull our change together. Years ago, my family kept a jar out and we threw extra change into it and that became part of our vacation fund. Why not have a fund for “the least of our brethern”? I had a couple dollars in change, so I dumped it into the cup. One of my little boys threw in a “toonie”, which was a lot of money from the little guy. A couple other children threw in some change. We scouted around the house and got $3.50 in returned bottles. I was hoping we might have enough to buy a pair of chickens at the end of the week. We’d do it just before Sabbath, and we have a good deed done to start the day of rest.
My eldest son, grabbed his wallet and dumped a large wad of money in there. My wife and I stood silent. I am not talking a $10 or a $20, but well over $100, and then my second oldest daughter dumped another large sum of money she made. I was so moved I didn’t know what to say.
Later that day, I was alone with my son, and asked him…”what was up with that?” He said, in his usual, casual way, he’d figured he’d bought enough cool clothes and stuff for himself, he figured he could he could give some money to people who needed this just to have enough food to eat.
He’s done many things that have brought me joy, but I have to admit, I don’t think I have ever been so impressed with him as I was that moment. For just a second, I could see that maybe we were getting through. Perhaps, everything will be alright.
What will we do with the money? Right now, we have a decision to make. We might buy a cow (that would change a family and perhaps a village forever), or we might buy something like 30 pairs of chickens and impact 30 families for years, maybe forever. I think we will also spring for a water purifier (they are only $30) and that would turn poisoned water into drinkable water. For us, they are simple gestures, but for the “least of our brethern”, it will change the world.
Wednesday, January 6, 2010
A Childrren's book worth the read
A children’s book that may surprise you:
As I have mentioned before. I have 7 children, and in fact, as of just a couple days ago I now have 8. It’s amazing. Our newest addition is Josiah Ephraim. His name means “the Lord is my help” and Ephraim means “double blessing”. Certainly, he is that, as all the children are. Yet, that is not what I wanted to write about. I wanted to recommend a children’s book. My little boys (Noah, Shamus and Shimone and even Shemiel) love listening to me read stories. I have a bit of the actor flare, and they gather around like I was the best television show going. Years ago, my daughters started to read Barbara Parks book “Junie B. Jones” I overheard one on a book on tape and thought the concept was cute. Last week I started to read one of these books a day to the boys. They loved it.
Yesterday, I read Junie B. Jones is a Party Animal. Which is the 10th in that series. I would encourage anyone to read it. It will take about ½ an hour read at roughly Junie B.‘s communication speed. I was hoping I could find a book review that captures what I read, but I am afraid that seems to be difficult. Too many people talk about Barbara Park’s writing style (which is very creative) or general information about the story, but so far almost no one seems to center on the point.
In summary: Junie B. has a friend named Lucille. She lives with her wealthy Nanna. Lucille is self center, and not always a lot of fun, but she is one of Junie B.’s best friends. Junie B convinces Lucille that if she invites her and another friend over for a slumber party they could all help beg the rich Nanna for a poodle for Lucille. Lucille finds this will work.
The house and home is amazing, from “castle-like gate” to crystal and china, and flowers and silk. However, Junie realizes that the “shows” of wealth are in a world that is almost unliveable for her. She breaks a crystal glass, and stains the linen. She doesn’t understand that the amazing stuffed animals are just for looks. You can’t sit on a bed with a silk bedspread.
There are many things to make Lucille a “princess”, but this world makes Junie B. miserable. In the end, she goes and has breakfast of blueberry pancakes with her own Nanna’s house (who isn’t a “Richie Nanna”, and who was described by Junie B. earlier as a “dud”).
Junie B wants a plastic cup, and perhaps a plastic cereal bowl, but it’s not available. Lucille thrills at the wealth and has lived to survive in that environment. Junie B. (the character that we love and embrace) find herself standing away from the table alone eating a banana because that is all that she finds “safe”.
Silly children’s story, a bit like Aesop’s fable about the city mouse and country mouse. Yet, the truth is embedded there. If we choose to amass the images of wealth, we may have conversation pieces. We may have the admiration of some. We may even feel a bit better about our “comfort” with these images of wealth, but what do we really have?
Let’s pretend, I have an original Van Gogh oil painting in my house. It’s hung in the living room and a conversation piece for people. Can the children play in that room? Of course not! They might damage the painting. Do I have to get an incredible security system and extra insurance to protect my fine work of art? Absolutely! I may have to repaint or redesign the living room for my fabulous work of art, and if that happens I should do the same for the rest of the house. It doesn’t take too long before one can see that I am no longer the Master who owns a fine work of art. In fact, I am a servant to a painting from a dead guy. It’s worse then that, the painting (like almost all Van Gogh’s) had almost no value while he was alive. Van Gogh lived in poverty. Sometimes his friends might buy a painting just to make sure he had some money to live on. I didn’t even say whether the “van Gogh” was a painting that was “nice or good”. The value was perceived from others. Amazing… just pause to think. The painting (which could be in fact ugly) has taken me as it’s slave and forced me to live to serve it, and I willingly ran to embrace it.
It’s even scarier then that. This is true of art. It is true of almost all collections. We amass for comfort. We amass for the admiration of others. We buy Curio cabinets to show off our collections. We protect, and encase these dear precious things.
This last month, I heard of a man I knew who has lost his family (and why did they leave?) for many reasons, but one of the items that came out was there really was no room for his wife and his children and his DVD collection.
Jesus (Yeshua) said:
“Lay not up for yourselves treasures upon the earth, where moth and rust consume, and where thieves break through and steal: but lay up for yourselves treasures in heaven, where neither moth nor rust doth consume, and where thieves do not break through nor steal:for where thy treasure is, there will thy heart be also.”
John the Baptist took the idea further:
“And he answered and said unto them, He that hath two coats, let him impart to him that hath none; and he that hath food, let him do likewise.”
The idea is foreign to our world, but we might just find that it is necessary for the salvation of our very soul. Not your normal wealth concept, I know, but I think it might be one that was worthy to share.
As I have mentioned before. I have 7 children, and in fact, as of just a couple days ago I now have 8. It’s amazing. Our newest addition is Josiah Ephraim. His name means “the Lord is my help” and Ephraim means “double blessing”. Certainly, he is that, as all the children are. Yet, that is not what I wanted to write about. I wanted to recommend a children’s book. My little boys (Noah, Shamus and Shimone and even Shemiel) love listening to me read stories. I have a bit of the actor flare, and they gather around like I was the best television show going. Years ago, my daughters started to read Barbara Parks book “Junie B. Jones” I overheard one on a book on tape and thought the concept was cute. Last week I started to read one of these books a day to the boys. They loved it.
Yesterday, I read Junie B. Jones is a Party Animal. Which is the 10th in that series. I would encourage anyone to read it. It will take about ½ an hour read at roughly Junie B.‘s communication speed. I was hoping I could find a book review that captures what I read, but I am afraid that seems to be difficult. Too many people talk about Barbara Park’s writing style (which is very creative) or general information about the story, but so far almost no one seems to center on the point.
In summary: Junie B. has a friend named Lucille. She lives with her wealthy Nanna. Lucille is self center, and not always a lot of fun, but she is one of Junie B.’s best friends. Junie B convinces Lucille that if she invites her and another friend over for a slumber party they could all help beg the rich Nanna for a poodle for Lucille. Lucille finds this will work.
The house and home is amazing, from “castle-like gate” to crystal and china, and flowers and silk. However, Junie realizes that the “shows” of wealth are in a world that is almost unliveable for her. She breaks a crystal glass, and stains the linen. She doesn’t understand that the amazing stuffed animals are just for looks. You can’t sit on a bed with a silk bedspread.
There are many things to make Lucille a “princess”, but this world makes Junie B. miserable. In the end, she goes and has breakfast of blueberry pancakes with her own Nanna’s house (who isn’t a “Richie Nanna”, and who was described by Junie B. earlier as a “dud”).
Junie B wants a plastic cup, and perhaps a plastic cereal bowl, but it’s not available. Lucille thrills at the wealth and has lived to survive in that environment. Junie B. (the character that we love and embrace) find herself standing away from the table alone eating a banana because that is all that she finds “safe”.
Silly children’s story, a bit like Aesop’s fable about the city mouse and country mouse. Yet, the truth is embedded there. If we choose to amass the images of wealth, we may have conversation pieces. We may have the admiration of some. We may even feel a bit better about our “comfort” with these images of wealth, but what do we really have?
Let’s pretend, I have an original Van Gogh oil painting in my house. It’s hung in the living room and a conversation piece for people. Can the children play in that room? Of course not! They might damage the painting. Do I have to get an incredible security system and extra insurance to protect my fine work of art? Absolutely! I may have to repaint or redesign the living room for my fabulous work of art, and if that happens I should do the same for the rest of the house. It doesn’t take too long before one can see that I am no longer the Master who owns a fine work of art. In fact, I am a servant to a painting from a dead guy. It’s worse then that, the painting (like almost all Van Gogh’s) had almost no value while he was alive. Van Gogh lived in poverty. Sometimes his friends might buy a painting just to make sure he had some money to live on. I didn’t even say whether the “van Gogh” was a painting that was “nice or good”. The value was perceived from others. Amazing… just pause to think. The painting (which could be in fact ugly) has taken me as it’s slave and forced me to live to serve it, and I willingly ran to embrace it.
It’s even scarier then that. This is true of art. It is true of almost all collections. We amass for comfort. We amass for the admiration of others. We buy Curio cabinets to show off our collections. We protect, and encase these dear precious things.
This last month, I heard of a man I knew who has lost his family (and why did they leave?) for many reasons, but one of the items that came out was there really was no room for his wife and his children and his DVD collection.
Jesus (Yeshua) said:
“Lay not up for yourselves treasures upon the earth, where moth and rust consume, and where thieves break through and steal: but lay up for yourselves treasures in heaven, where neither moth nor rust doth consume, and where thieves do not break through nor steal:for where thy treasure is, there will thy heart be also.”
John the Baptist took the idea further:
“And he answered and said unto them, He that hath two coats, let him impart to him that hath none; and he that hath food, let him do likewise.”
The idea is foreign to our world, but we might just find that it is necessary for the salvation of our very soul. Not your normal wealth concept, I know, but I think it might be one that was worthy to share.
Monday, November 30, 2009
So, does money have any real value?
I was in a bit of a difficult conversation yesterday. We had some friends in the area and they had heard an interview with someone who was saying that the US economy was doomed. I get about 2 of these though e-mails a day. I am sure you have seen these as well, but I usually can just avoid the whole conversation (an e-mail doesn’t automatically require a reply). But this question was coming from friends, and I had to admit some of the most difficult realities for a financial planners. Money: national currency is a representative economy. It is backed by the faith of the government that prints the currency, and as time has gone by, the governments have not proved as strong as people suspect.
I have never been a precious metal trader. I have only owned precious metals as a bit jewellery, but today we are talking more then ever before about gold (and silver). This is outside my field.
The US dollar was tied to hard metals up until 1974. This meant that the US government actually had metal (either gold or silver) to cover the value of the money they were printing. This would be a classic representative economy. The printed dollar represented the metal behind it. In 1974, this standard was removed. Today’s US (and other national currencies) dollar is back only be the faith of the government. This allows the government to print as much money as is necessary.
However, for 35 years, this has been the case. Why is there so much talk about precious metals today? First, the value of both of these metal have grow substantially. The second reason, is that metals are not subject to inflation and/or exchange rate problems. It become a true international currency. This second reason is really “The” reason for most watchers. The US has significantly increased it’s national debt in the bail out of so many companies. The value of the US dollar doesn’t have the same strength as before as people are starting to not hold it as the “great international currency”. In my present home of Canada, we have certainly see the Canadian dollar function very well in light of this US weakness.
Of course, the final nuts and bolts question, is “what should one do?” Should we all run out and buy gold or silver? Gold is about 1200/oz. Silver is 18.25/oz. If someone wants to buy gold, the Canadian bank “Bank of Nova Scotia” has made this very easy. You can order it on line from 8am to 5pm EST on any weekday. Most of your other banks also offer it but they generally do a manual system. (meaning- you walk into the branch and they fill out some forms and you drop by in a few days to pick up the metal). 1oz silver bars at BNS are running about $23.51 silver coins (minted by the Canadian gov’t) are running a bit more. Some have preferred a gold and silver note, although this is a lot easier if you want to trade gold and silver, in the event of an economic meltdown the note is likely to be to cumbersome to work with. Another problem with the metals is how do you trade with them? If you showed up at a grocery store with a sack of gold, who would accept it? What rate would you get? Would would even be able to tell you it’s real?
Back as a financial planner, a man came into our branch with a silver brick and set it on the desk of my receptionist. We all stared at it. He asked “so, how much is it worth?” We all stared. We had no idea. Was it really silver? It looked heavy. It was grey and shiny. He told us he paid $1000 for the brick back a decade ago when he thought the world economy would collapse. It didn’t collapse, so he decided to bring it back. We sent the brick away to Toronto to our precious metals depository and they assessed the value as $1000.53 (or something like that). Not his best economic decision.
Let’s pretend you had the gold bars…where would you put it to keep it safe until you needed it? That’s difficult. For the present, a safe deposit box would make sense, but again, if we were in an economic meltdown and the banks closed, you would find it difficult to get back into a branch to get the gold. Do you keep it in your house? You could, but gold could be subject to loss of theft. I have had 2 total loss house-fires. We never did find any “jewellery” in the ash heap.
I guess when you come down to it, although we all want to do the best to plan for the future, planning for a complete economic meltdown would be very difficult. One financial planner and I were talking about this idea a few months back and he mentioned that when Hurricane Katrina hit, we actually found an economy where the dollar didn’t matter much at all. Batteries were the best thing to have or fresh drinking water. There was no one (as far as I know) trying to trade silver or gold. My friend, said for him “chickens” would be the best item to have around, and I tend to agree.
So, will there come a time when we can not rely on the government?…I think so. The Bible predicts a time when there would be one government and this government would be hostile to believers. In fact, it says no one could buy or trade without a mark of the “Beast”. I am confident that will someday become a reality, but for most of us, until we start to see those “end of the age signs” we might do well to not bring a bag of gold or silver to Walmart. Have a good day, Brad
I have never been a precious metal trader. I have only owned precious metals as a bit jewellery, but today we are talking more then ever before about gold (and silver). This is outside my field.
The US dollar was tied to hard metals up until 1974. This meant that the US government actually had metal (either gold or silver) to cover the value of the money they were printing. This would be a classic representative economy. The printed dollar represented the metal behind it. In 1974, this standard was removed. Today’s US (and other national currencies) dollar is back only be the faith of the government. This allows the government to print as much money as is necessary.
However, for 35 years, this has been the case. Why is there so much talk about precious metals today? First, the value of both of these metal have grow substantially. The second reason, is that metals are not subject to inflation and/or exchange rate problems. It become a true international currency. This second reason is really “The” reason for most watchers. The US has significantly increased it’s national debt in the bail out of so many companies. The value of the US dollar doesn’t have the same strength as before as people are starting to not hold it as the “great international currency”. In my present home of Canada, we have certainly see the Canadian dollar function very well in light of this US weakness.
Of course, the final nuts and bolts question, is “what should one do?” Should we all run out and buy gold or silver? Gold is about 1200/oz. Silver is 18.25/oz. If someone wants to buy gold, the Canadian bank “Bank of Nova Scotia” has made this very easy. You can order it on line from 8am to 5pm EST on any weekday. Most of your other banks also offer it but they generally do a manual system. (meaning- you walk into the branch and they fill out some forms and you drop by in a few days to pick up the metal). 1oz silver bars at BNS are running about $23.51 silver coins (minted by the Canadian gov’t) are running a bit more. Some have preferred a gold and silver note, although this is a lot easier if you want to trade gold and silver, in the event of an economic meltdown the note is likely to be to cumbersome to work with. Another problem with the metals is how do you trade with them? If you showed up at a grocery store with a sack of gold, who would accept it? What rate would you get? Would would even be able to tell you it’s real?
Back as a financial planner, a man came into our branch with a silver brick and set it on the desk of my receptionist. We all stared at it. He asked “so, how much is it worth?” We all stared. We had no idea. Was it really silver? It looked heavy. It was grey and shiny. He told us he paid $1000 for the brick back a decade ago when he thought the world economy would collapse. It didn’t collapse, so he decided to bring it back. We sent the brick away to Toronto to our precious metals depository and they assessed the value as $1000.53 (or something like that). Not his best economic decision.
Let’s pretend you had the gold bars…where would you put it to keep it safe until you needed it? That’s difficult. For the present, a safe deposit box would make sense, but again, if we were in an economic meltdown and the banks closed, you would find it difficult to get back into a branch to get the gold. Do you keep it in your house? You could, but gold could be subject to loss of theft. I have had 2 total loss house-fires. We never did find any “jewellery” in the ash heap.
I guess when you come down to it, although we all want to do the best to plan for the future, planning for a complete economic meltdown would be very difficult. One financial planner and I were talking about this idea a few months back and he mentioned that when Hurricane Katrina hit, we actually found an economy where the dollar didn’t matter much at all. Batteries were the best thing to have or fresh drinking water. There was no one (as far as I know) trying to trade silver or gold. My friend, said for him “chickens” would be the best item to have around, and I tend to agree.
So, will there come a time when we can not rely on the government?…I think so. The Bible predicts a time when there would be one government and this government would be hostile to believers. In fact, it says no one could buy or trade without a mark of the “Beast”. I am confident that will someday become a reality, but for most of us, until we start to see those “end of the age signs” we might do well to not bring a bag of gold or silver to Walmart. Have a good day, Brad
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