The Ten Trillion Dollar Milestone


A milestone on the road to economic ruin was reached last week. Total Foreign Exchange Reserves topped $10 trillion. That means central banks have created the equivalent of $10 trillion of fiat money that they have used to buy the currencies of other countries.

That figure does not include the money central banks have created and used to buy assets denominated in their own currencies, such as the $2 trillion the Fed created during the first two rounds of Quantitative Easing.

Out of the $10 trillion, $8 trillion has been created since the turn of the century and $1.6 trillion during the past 12 months alone. China has ?printed? the most, the equivalent of $3.2 trillion or nearly a third of the total. That is 50% more than QE 1 and QE 2 combined.

Japan ranks second to China, holding 10% of all Foreign Exchange Reserves.

Both China and Japan created money and bought foreign currencies in order to suppress the value of their own currencies and thereby improve the competitiveness of their exporters. That was the primary motivation of all the countries that built up FX Reserves.

Roughly 70% of all Reserves are US dollars.

In other words, the equivalent of $7 trillion was created and employed to push up the value of the dollar relative to where it would have been had central banks not intervened.

This interference with the free market has come at enormous cost to the United States, which, in large part due to this intervention, has suffered a cumulative trade deficit of $6.9 trillion since 2000, with a corresponding increase in national indebtedness.

Moreover, as central banks acquired the $7 trillion, they pumped it into US dollar-denominated debt such as government bonds, debt issued by Fannie Mae and Freddie Mac, corporate bonds and asset-backed securities.

That capital inflow pushed up US asset prices and mollified the American public even as the country?s manufacturing base was being decimated and as most of its manufacturing jobs were being relocated abroad.

It is mindboggling that US policymakers would have promoted free trade while simultaneously tolerating blatant currency manipulation on a trillion dollar scale.

Our New Depression is the direct result of an insane experiment in fiat money, floating exchange rates and unimpeded cross-border capital flows. It has been a terrible mistake from which the United States may not recover.

Regards,

Richard Duncan
for The Daily Reckoning

P.S. To read more details, please note that Foreign Exchange Reserves and their impact on the US economy are discussed in detail in The Corruption of Capitalism, Chapter 8, The North American Debt Crisis.

The Ten Trillion Dollar Milestone originally appeared in the Daily Reckoning. The Daily Reckoning provides 400,000+ readers economic news, market analysis, and contrarian investment ideas. Follow the Daily Reckoning on Facebook.

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American Airlines Just Made The Biggest Plane Purchase Of All Time: Here's What You Need To Know (AMR, BA)


American Airlines

American Airlines announced Wednesday it plans to purchase 460 "narrowbody" jets, splitting the order between Boeing and Airbus.

A deal that could total more than $16.2 billion, it's the largest aircraft order in aviation history.

Single-aisle jets, narrowbody designs arrange two to six passengers abreast along a single, center aisle.

Limited to continental flights the jets are commonly known as regional airliners.

According to USA Today the deal was being closely watched to see if American would shift away from its Boeing only strategy and welcome Airbus back into its fleet for the first time since 1987.

The deal breaks down as follows:.

  • From Boeing AA will acquire 200 additional 737s with options for another 100
  • American can convert the order into 737-700s, 737-800s, and 737-900ERs
  • From Airbus AA will acquire 260 new A320s and will have 365 options and buying rights for more aircraft
  • American can convert the order to planes withing the A320 family, like the A319 and A321
  • Counting options and future purchase rights the order could total 900 planes

Bloomberg reports Boeing's proposal includes upgrading its 737s with new engines to counter Airbus's improved A320neo.

About the planes

The world's best selling jet aircraft of all time, the Boeing 737 is a twin-engine jet that will seat 85 to 215 passengers. The 737-700 was the first of Boeing's Next Generation series launched in 1993.

Introduced in 1994, the 737-800 is the stretched version of the 700, seats 162 passengers in a two-class layout, and is the direct competitor of the A320. The 737-900 is the most powerful model to date and competes with the Airbus A321.

The Airbus A320 is manufactured in Toulouse, France and Hamburg, Germany, holds 220 passengers and has a range of between 1,700 to 6,500 nautical miles depending on model.

The A319 is a shortened version of the A320 with extended range. Going the other direction the A321 is the stretch version of the A320 and the largest of the A320 family.

The deal on the books and the stock price

Boeing is also looking to match Airbus's financing options, with both companies leasing about half the jets to American, keeping the planes off the airlines balance sheet.

AMR rose 2 cents to $4.93 in NYSE trading yesterday. Boeing gained 98 cents, 1.4 percent, to $70.53. Airbus parent European Aeronautic Defence & Space Co. added 72 cents, 3 percent, to €24.65.

Today's deal comes on the heels of two straight years of losses for American with the company hoping to increases its fleet's fuel efficiency and customer amenities.

The current average age of Delta's fleet is 16 years, tied for the oldest with Delta.

SEE ALSO: 7 awesome aircraft of the future >

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Moral Hazard, Government Style In Estonia

The investors purchased their shares in a competitive bid. But they were subsequently met with repeated financial, regulatory and legislative interference from the Estonian government that made their investment much less attractive.

Source: http://blogs.forbes.com/greatspeculations/2011/07/19/moral-hazard-government-style-in-estonia/

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Vendor Integration Services: The More the Merrier

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For financial institutions (FIs), consumer data from outside vendors is important during the decisioning, origination, and fraud prevention processes. Oftentimes, FIs are restricted to what vendors can be used and what data can be collected. This is the result of a number of factors including systems that only support certain data formats and vendors that require data exclusivity. With modern systems and data collectors however, institutions have the advantage of using vendor integration services (VIS). Modern VIS systems give FIs the ability to use data from multiple vendors regardless of format.

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A New Focus In Stewardship

God is doing something in the realm of stewardship right now. Patrick Johnson of National Christian Foundation has seen it first-hand. Pastors are seeing the need for stewardship training, and many people are hungry for it.

There are two key areas that have helped to open pastors? eyes.

One is that budgets have been flat or down for most churches lately. ?That?s been a good wake-up call.? Leaders want to address the issue, get leaner, and get rid of church debt as a result. ?It?s like when we get overweight and it finally starts to bug us enough to do something about it,? he said.

The other is a shift from focusing on what you?re taking in to where it?s going. There?s a more external focus. ?Bigger barns are not where it?s at anymore.? He knows of some churches that are working toward a 50-50 model that involves giving away half of what comes in.

Focusing on the Gospel

Not focusing on building buildings or raising funds frees us to focus on the biblical meaning of stewardship. Yes, giving is a factor, but maybe not in the way so many think about it.

Patrick encourages church leaders that the tithe is just the starting point of generosity. He says that most people could tithe in our culture. If their boss came in and cut their income by 10%, most people wouldn?t go bankrupt! ?I think we need to go way past the tithe.?

Two of the most famous passages on giving (2 Corinthians 8 and 9) don?t talk about the tithe. ?They compare giving to Christ?s sacrificial gift. They compare giving to churches that were in poverty but give out of their own need.?

A church can have a history of giving without being generous. ?Generous churches are led by generous people,? he said. ?Start living it out. You can?t take people where you haven?t been.?

Above all, Patrick reminds us to focus on the gospel. It?s motivating to be led by a generous pastor who focuses on the gospel.

?Somebody said, ?If you stare at Jesus long enough, you?ll become a giver; if you give long enough, you?ll become more like Christ,?? he said. ?I believe that if you stare at the cross long enough, you?ll be a giver.?

Dave Ramsey has created a program called Momentum to help churches teach their congregations what it means to live out biblical generosity. Momentum is all about bringing people back to God?s view of money management and cultivating a culture of lasting generosity. Discover today how Momentum can help your congregation.

More About Patrick Johnson

How generous is your church? It?s not an easy question to answer, but Patrick Johnson, Senior Vice President at National Christian Foundation, has helped churches all over the country do it with something they call the Generosity Diagnostic. You can learn more about it at nationalchristian.com. Patrick also shares a helpful look at five attributes of a generous church in this video.

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Source: http://www.daveramsey.com/article/a-new-focus-in-stewardship/lifeandmoney_church

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WATCH: Bicycle-Kick Volleyball Is The Craziest Game You?ve Ever Seen


The game is called sepak takraw, and it’s played in Southeast Asia.

It's more legitimate than it appears at first glance. The game in this video is obviously sponsored, and the sport even has an international governing body.

It’s a mix of equal parts volleyball, soccer, and Cirque du Soleil

Enjoy.

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When Stewardship Isn't A Priority

Nearly a decade ago, Patrick Johnson was serving as the treasurer at his church when he felt God distinctly tell him: I want you to preach on money. ?I?d never preached on money before, that?s for sure.?

His pastor thought it was a great idea, so in preparation, Patrick read a book called The Treasure Principle. It gave him a whole new perspective on the connection between generosity, grace and one?s spiritual life as a Christian.

Soon, it went from preaching a sermon to realizing that it was his calling in life to teach people what biblical stewardship looks like. God opened the door for him to travel the country with Ron Blue and the Christian Financial Planning Network, and he was then invited to come on board at an organization called Generous Giving.

The organization asked him to develop a strategy to get the church involved in generosity in a whole new way, and he recalls saying, ?That couldn?t be too hard??

?Those were my famous last words,? he laughed.

Patrick has always believed that if we are going to see a revolution of generosity in this nation, we need the church involved.

So, he left his job and came on board with Generous Giving. For the first two years, he simply traveled the country visiting innovative churches and seeing what they were doing in the area of stewardship, connecting churches to each other where he saw needs.

Two years later, he continued networking by forming a Generous Church Leader community as part of the National Christian Foundation.

It came about as an answer to his question: What?s the best way to influence the church? Leadership. ?The culture of the church reflects the life of the leaders,? he said. ?I reach out to the pastor, key staff, and key lay leaders. Once those three align, good things happen in the church.?

Why The Issue Gets Ignored

Stewardship and generosity are not interchangeable, but true, biblical stewardship inevitably leads to generosity. Yet, many church leaders don?t give either issue much attention.

From Patrick?s experience, there are typically three reasons that pastors don?t make stewardship training a priority:

1. Fear: Patrick doesn?t find that many of the pastors he works with are greedy. They?re good men with a heart for the kingdom who aren?t out to get rich. Yet, so many of them are fearful of being perceived like the prosperity preachers on TV. They don?t want to be misunderstood. They think, If we address this issue of money, people are going to doubt our motives. ?But that?s ridiculous if you think about it,? Patrick said. ?Most pastors I know sacrificed a lot of time, talent and treasure to get their church going in the first place.?

2. They just don?t think about it: ?I found out that there are a lot of generous pastors?who are far more generous than I am?but it?s very few pastors? passion.? They are usually more focused on things like evangelism and discipleship. ?They don?t wake up thinking about it all the time, so they don?t think to preach about it.?

3. They don?t see the need: Patrick has noticed that many pastors simply don?t have eyes to see the need for stewardship training. So many times at events he has watched them make the connection between stewardship, generosity and discipleship for the first time. ?When these three things come together, they see this is not about raising more money for the church? this is about the life of the disciple. This is about the kingdom of God. Once you see it for the first time, then you see it all in Scripture. You see it everywhere.?

Patrick sees great value in having a pastor and ministry focused on stewardship?but under one condition: that it?s not ?silo-ed.?

?I think a trap that a lot of churches fall into is that they hire a stewardship pastor to come in and do some great things, but if it?s not integrated across the church, it becomes silo-ed, and my experience has been that even at large churches you?re only reaching a small group of people. ?

Yet, many churches are making biblical stewardship a part of their DNA. Pastors and leaders are awakening to the need and watching amazing things happen as they financially disciple the congregation. Dave Ramsey has created a program called Momentum to lock arms with churches that want to do just that. Momentum is all about bringing people back to God?s view of money management and cultivating a culture of lasting generosity. Discover today how Momentum can help your congregation.

More About Patrick Johnson

How generous is your church? It?s not an easy question to answer, but Patrick Johnson, Senior Vice President at National Christian Foundation, has helped churches all over the country do it with something they call the Generosity Diagnostic. You can learn more about it at nationalchristian.com. Patrick also shares a helpful look at five attributes of a generous church in this video.

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Source: http://www.daveramsey.com/article/when-stewardship-isnt-a-priority/lifeandmoney_church

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Understanding Debt Relief

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Orlando, Fl -- Let's face it, debt repayments are a major component of every household budget, whether it be for the repayment of a mortgage loan, car loan, or credit cards. Every month consumers are faced with the reality that they owe someone (or someplace) money, and they factor those payments into their budget. The majority of these debts carry very long repayment timelines and often consumers can find themselves at a point in their life where their income is not sufficient to maintain the repayment terms of their debts (for the purposes of this article we are referring specifically to unsecured debts- credit cards, signature loans, store cards, gas cards, etc.).

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