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February 2008

The value of the dollar in comparison to other countries around the world is falling. Meanwhile, my net worth is increasing, so naturally I began thinking. Is it possible that although I’m earning income, saving, and investing, I’m not actually gaining ground from a global perspective? Furthermore, does a global perspective matter to me? I haven’t been outside the country in years.

From January 31, 2007 to January 31, 2008, my net worth increased from $75,121 to $125,770, an increase of of 67%. During that time, the dollar has decreased in value compared to other currencies and commodities. I ran some calculations.

I would have done better if I had been earning my salary in euros. With a strict currency conversion using rates from OANDA, my net worth was valued at EUR 57,964 at the beginning of the period and EUR 85,083 at the end. My former 67% increase in dollars translates to a less impressive 47%.

What about gold? I’ve heard people claim that the economy would be better if we never left the “gold standard.” I’m not quite sure it would make a difference. All value is arbitrary, whether it’s a metal or paper. Anyhow, converting my net worth in dollars to ounces of gold would result in a starting point of 114.61 ounces ending with 135.92 ounces. Thanks to the dollar’s decline and gold’s rise, my value in gold increased only 18% in the last year.

Does any of this matter? I don’t use either euros or gold for the exchange of goods and services. Yet, I still can’t overcome the feeling that I’m not getting ahead as much as the USD numbers claim.

New Day, New Low for Dollar [AP]


Haven’t you heard? This week is America Saves Week. From February 24 through March 2, a coalition of non-profit, corporate, and government groups are pushing a media campaign to encourage savings in various forms, from increasing money deposited into bank accounts to finding bargains and saving money on purchases. It’s a noble goal.

Building wealth starts when you set a goal and make a plan to reach that goal. Whatever goal you choose — whether it’s buying a car, buying a house, or getting out from under your debts — learn about proven savings strategies and get simple tips on the best ways to save.

The organization is targeting certain minorities or special interest groups with special sub-campaigns, too, such as Black America Saves, Hispanic America Saves, Military Saves, and Youth Saves.

For the rest of us, the main America Saves website offers suggestions for increasing savings and decreasing expenses.

Get Out of Debt

The first step in getting out of debt is to stop borrowing. To do that, you have to stop spending more than you earn. So, make a budget and cut out any expenses you can. It may help to cut up your credit cards or lock them away in a safe place… If your debts are too large, you may want to consider bankruptcy. Bankruptcy can give you a fresh start, but it is a serious step that can make it harder to get credit for years after you declare bankruptcy.

Savings and Investments

* Cut spending painlessly by finding small savings that add up to big savings over time, like The ECRD Factor.
* Comparison shop for necessary purchases.
* Restrain spending for birthdays and holidays.
* Automate your savings.
* Put your loose change into a high-yield savings account.
* Take advantage of employer-matching retirement plans if available.
* Build an emergency fund.

My bonus was deposited into my bank account this morning. I plan on celebrating America Saves Week by putting a large portion of the newly-found cash towards paying down my student loan.


A few weeks ago, I mentioned that 100,000 unique visitors browsed Consumerism Commentary during the month of January, the highest monthly count in this website’s history, 106,492 to be exact. There’s a good chance that February’s count will double that. I hope some of this month’s new readers plan to stick around for a while.

The following blogs and websites sent the most visitors here during the month of February. This doesn’t count visitors coming from search engines, RSS readers, or social media websites like StumbleUpon and Digg.

# Lifehacker
# Get Rich Slowly
# The Consumerist
# The Simple Dollar
# CBS 8 San Diego
# MoneyBlogNetwork
# KSPR (CBS Affiliate)
# AllFinancialMatters
# Fabulous Financials
# Free Money Finance

Here are the top 10 visited articles from the past month, including the last few days of January. This only counts web visitors to each page; I don’t have any way of knowing how many people have read these articles via RSS. Only articles published within the last month are included.

# Economic Stimulus Tax Rebate Calculator
# How Will the Economic Stimulus Tax Rebate Affect 2008 Tax Returns?
# Tax Rebate Calculator Updated and Blog Roundup
# The New Emergency Fund: Five Components of an Emergency Plan
# Living Paycheck to Paycheck (On Purpose)
# How to Save a Million Dollars at Any Age: 25 Years Old
# How to Save a Million Dollars at Any Age: 35 Years Old
# Smart Women Marry for Money, and Here’s Why
# How to Save a Million Dollars at Any Age: 45 Years Old
# Personal Balance Sheet, January 2008 ($125,770, +2.3%)


This doesn’t sound like good news.

[FDIC] is planning to beef up its staff — including temporarily hiring up to 25 retired FDIC employees who worked in the agency’s more than 200-person division that handles failed banks — to handle an anticipated increase in bank failures.

If you keep funds in some of the smaller online banks, you might want to reconsider your saving strategy. While the FDIC insures deposit accounts up to $100,000 per depositor, you might be exposed to delays when withdrawing your money if your bank disappears. Last year, NetBank failed and its accounts were absorbed by ING Direct. Individuals and companies had trouble getting money out. This could become more common in the next year or so.

To help stave off bank failure, the government is bailing out American banks. However, it is not the United States government; foreign investors are investing heavily in domestic banks through sovereign wealth funds, which basically means that banks in this country are increasingly owned by overseas governments.

Singapore recently paid $4.4 billion for an ownership stake in Merrill Lynch. The Chinese bought a $5 billion piece of Morgan Stanley… Middle Eastern and East-Asian “sovereign wealth funds” are in the process of owning a larger and larger portion of the global banking system.

The foreign governments aren’t investing enough to gain control of the companies or seats on the Board of Directors, but there is some chatter about requiring more disclosure from soverign wealth funds.

Bank profits plunge 84 percent in 4Q [AP]
Foreign investments are just bailouts [Marketplace]
Foreign investments in US banks draw scrutiny [Boston Globe]


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