Former U.S. Secretary of Defense Robert Gates Closes 2012 Southeastern University Forum
March 11th, 2012 | Posted by Global InvestorsRarely do citizens have the opportunity to interact with some of the most influential and knowledgeable world leaders of the past half-century.
But those who attended Southeastern University’s National Leadership Forum got their chance Friday, as former U.S. Secretary of Defense Robert Gates was on campus as the final speaker of the servant leadership focused event.
Gates, who served under eight U.S. Presidents and also was director of the Central Intelligence Agency, first addressed The Forum audience about his keys to effective leadership. His listed nine qualities, including vision, transparency, integrity, courage, and self-confidence. He also emphasized the importance of leaders encouraging… View full post on Live News from PR-USA.net
U.S. Government Debt, Income, and Expenses as Percentage of GDP
October 19th, 2011 | Posted by Global InvestorsThere was plenty of discussion on simplifying the US budget to household-sized numbers, and I have nothing to add, because I have zero interest in being an economist. 
Here’s one more attempt at sharing some digestible information. An interesting site called Department of Numbers has collated numbers from government sources like the Treasury and put them together nicely into a series of charts. Here are two I wanted to point out and also save as a historical snapshot of “what things in 2011 looked like”.
US Government Debt as Percentage of GDP
US Government Income and Expenses as Percentage of GDP
From the top chart, you can see that we are close to a 100% debt-to-GDP ratio. The last time it was this high was World War II. Even in recent “good times” – or at least better times than now – the percentage hasn’t really gone down much. That’s what I mean by “kicking the can down the road”. In the bottom chart, you can see the large gap between government revenue generated (taxes) and expenditures.
I’ll go back to saving 50%+ of my income now, hopefully investing it wisely, and not reading scary bedtime stories like Boomerang!
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U.S. Government Debt, Income, and Expenses as Percentage of GDP from My Money Blog.
© MyMoneyBlog.com, 2011.
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U.S. Savings Bonds Have Outperformed Stocks Since 1998?
August 31st, 2011 | Posted by Global InvestorsA reader recently told me that he was no longer investing in the stock market after seeing the chart below from the Savings Bond Advisor. It shows the total portfolio value after investing equal monthly amounts in either the S&P 500 stock market index or Series I US Savings Bonds. The time period is from September 1998 (when “I Bonds” started being sold) through August 1, 2011. My comments follow.
The past returns of savings bonds are indeed pretty good, but not likely to be repeated. Series I Savings Bonds (I Bonds) were the new thing in 1998, and the government offered some really enticing interest rates on them. I Bonds have a fixed component that lasts for the duration of that specific bond and an variable component that adjusts with inflation every 6 months. From 1998 to May 2001, the fixed component was always between 3% to 3.60% above inflation (source). However, since May 2008, the fixed rate has been between 0% and 0.7%. For the past year, the fixed rate has been a big fat zero. I would love to have a savings bond paying 3% plus inflation (currently 2.30%), as some current bondholders have, but I don’t expect that to ever happen again.
Now, that doesn’t mean that they aren’t still a competitive investment, especially for the short term. Since interest rates are so low, I still buy savings bonds even at a 0% fixed rate as part of my emergency fund cash reserves.
Savings Bonds are being slowly killed by the government. Even though savings bonds have historically encouraged people of all income levels to save, it appears that the US Treasury is slowly killing the savings bond. As recently as 2008, you could buy $30,000 worth of each type of savings bonds a year, per person. For a while, we were able to even use credit cards to buy them without a fee. Today, you can only buy $5,000 of paper I-bonds and $5,000 of electronic I-bonds a year, and even paper savings bonds are being phased out in 2012. (You can still overpay your taxes and buy paper bonds with a tax refund in 2012.) There was even a NY Times article last week entitled Save the Savings Bond. Basically, even if you wanted to create your retirement portfolio with savings bonds, you can’t.
Investing solely in inflation-linked bonds is actually recommended by some financial authors. The thing is, the government has so much debt that it greatly prefers US Treasury bonds which can be sold by the billions. Printing a $50 savings bonds is not even a drop in the bucket, it’s closer to a H2O molecule in the bucket. What you can invest in is Treasury Inflation Protected Securities (TIPS), which like I Bonds are backed by the government and pay an interest rate linked to inflation. Economics professor Kolitkoff in the book Spend ‘Til The End recommends your entire portfolio to be TIPS. The problem? You’re gonna have to save a lot. TIPS yields are very low, currently offering yields of negative 0.7% above inflation (!) for a 5-year bond to a meager 1.1% above inflation for a 30-year bond. If you’re okay with saving 50% of your income every year for 30 years, then this plan might work for you.
There is no easy answer as to the best place to invest right now. I am sticking with a diversified low-cost portfolio with both stocks and bonds (including a nice chunk of TIPS inside, which has done quite well recently), and you can see with this chart that it has also done pretty well the last decade.
Related posts:
U.S. Savings Bonds Have Outperformed Stocks Since 1998? from My Money Blog.
© MyMoneyBlog.com, 2011.
View full post on My Money Blog
News Corporation hit by Investor Lawsuit in the U.S. over alleged Securities Laws Violations
July 25th, 2011 | Posted by Global InvestorsAn investor of News Corporation (NASDAQ: NWSA) filed a lawsuit over alleged securities laws violations. Deadline: September 16, 2011. NASDAQ: NWSA stockholders should contact the Shareholders Foundation by email at mail@shareholdersfoundation.com View full post on Live News from PR-USA.net
Stuxnet Attack: Did U.S. Play A Role In Cyber Virus On Iran’s Nuclear Facilities? (VIDEO)
May 29th, 2011 | Posted by Global InvestorsU.S. Deputy Defense Secretary William Lynn created a stir when he dodged a reporter’s questions about whether the U.S. was involved in the Stuxnet cyber attack on Iran’s nuclear program.
Warning: Video contains explicit language
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Gay Marriage Debate Continues Across The U.S.
May 29th, 2011 | Posted by Global InvestorsPROVIDENCE, R.I. — A flurry of activity in efforts to legally recognize gay relationships or ban same-sex marriage is reminding advocates that even though polls indicate growing acceptance, the debate is far from settled.
Rhode Island is pondering a proposal to allow civil unions, a compromise that arose after it became clear there weren’t enough votes to aim for marriage. Minnesota lawmakers voted to put a constitutional marriage ban on the ballot, and the mayor of New York spoke out strongly in favor of same-sex marriage as talks continue in his state.
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Arizona Medical Marijuana Law: State Sues U.S. Justice Department
May 28th, 2011 | Posted by Global InvestorsPHOENIX — Arizona officials are taking the state’s own medical marijuana law to court.
Attorney General Tom Horne late Friday sued the U.S. Justice Department and other defendants on behalf of the state and Gov. Jan Brewer.
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Hackers Breached Security Networks Of U.S. Military Contractors, Says Source
May 27th, 2011 | Posted by Global Investors
By Jim Finkle and Andrea Shalal-Esa
BOSTON/WASHINGTON (Reuters) – Unknown hackers have broken into the security networks of Lockheed Martin Corp and several other U.S. military contractors, a source with direct knowledge of the attacks told Reuters.
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Hackers Breached Security Networks Of U.S. Military Contractors, Says Source
May 27th, 2011 | Posted by Global Investors
By Jim Finkle and Andrea Shalal-Esa
BOSTON/WASHINGTON (Reuters) – Unknown hackers have broken into the security networks of Lockheed Martin Corp and several other U.S. military contractors, a source with direct knowledge of the attacks told Reuters.
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Joplin, Missouri Tornado Single Deadliest In U.S. Since 1950 (VIDEO)
May 25th, 2011 | Posted by Global InvestorsJOPLIN, Mo. (AP) — Emergency crews drilled through concrete at a ruined Home Depot, making peepholes in the rubble in hopes of finding lost shoppers and employees. A dog clambered through the shattered remains of a house, sniffing for any sign of the woman and infant who lived there.
Across devastated Joplin, searchers moved from one enormous debris pile to another Tuesday, racing to respond to any report of a possible survivor.
The human toll rose to at least 122 dead and 750 people hurt. But just nine had been pulled alive from the aftermath. Searchers fought the clock because anybody still alive after the deadliest single tornado in 60 years was losing precious strength two days after the disaster. And another round of storms was closing in.
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