There is an article in the New York Times today called The Economy’s Green Shoots; Real or Imagined. Green shoots was a term Ben Bernanke used on his 60 Minutes interview when describing his perceived growth in the economy.
In the article, opinions by a few economists are given, both supporting and disagreeing with Bernanke's statement, including Charles Lewis, a former investment banker. Here’s an excerpt from the article written by Lewis:
I kid you not. This is the headline of an article in the New York Times web edition this morning. Add that with a similar story on China in this week’s edition of the Economist, and you start to get a sense of the amount of power and clout China now wields on the geopolitical stage.
Of course, much of this is political and economic posturing ahead of the G20 meeting. Yet it’s undeniable that China is beginning to flex its financial muscles. “China has the world’s largest foreign exchange reserves, valued at nearly $2 trillion, with more than half of those holdings estimated to be made up of United States Treasuries and other dollar-denominated bonds”.
I know these are very unsettling times, and many people are quite anxious as they listen to media reports and watch stock indexes tumble. I believe governmental stimulus will help investors, but it is not surprising for the market to retreat during the plan’s initial implementation. Furthermore, both measures of money supply (M1 and M2) have surged since late August. Money supply growth and a fiscal stimulus package are a powerful boost to the economy that, in my opinion, will push the economy out of recession.
Another day, another 300 points or so the stock market drops. As we listen to hourly reports about the growing global financial crisis and read the daily columns about the huge debts we face as a nation, it’s challenging to stay calm in the midst of all this anxiety provoking news. One strategy to cope in times of high anxiety is to avoid listening to the news and not watching the stock market ticker on an hourly basis. But there are other self-care strategies that can help us stay centered, lower our stress and improve our outlook, even in tough times.
The first strategy is to remember to breathe. Breathing equals life and it’s one of the words that define the Latin word - Spiritus. We breathe all the time, of course, but probably not as fully or consciously as we should. Take a few minutes every day to sit in a quiet, comfortable place, close your eyes and take several long, deep breaths way down in your belly. Yawn, sigh, or let out any other sounds you’ve been holding inside. A session of mindful breathing will slow down your heart rate, increase the oxygen to every cell in your body and improve your mood. It’s a simple but powerful tool. And it feels so good you could easily make it a habit!
As the global economy continues to implode and the stock market reaches new lows, lots of baby boomers are wondering about their retirement plans. If you watch the talking heads on Sunday morning TV shows, which I admit I do regularly, you’ve seen a zillion commercials on preparing for retirement. Most commercials show the happy couple sailing off into the sunset, not a care in the world because they followed this plan or that plan. It seems like well meaning retirement advice they’re dispensing. But BEWARE, there are a lot of illusions, delusions and downright lies about retirement that can be dangerous to your retirement well-being.
As long as you have enough money saved up, your retirement will take care of itself. This is the biggest and most dangerous lie about retirement. Of course you need enough money saved up to have a secure retirement, but this is only one aspect of many that need to be considered for a thriving not just surviving retirement. Focusing only on the tangible financial aspects of retirement and ignoring the other, less tangible, “must haves” is a prescription for disaster.
With the stock market sinking daily, it’s hard for many investors to stomach the thought of putting money back into the market. That’s totally understandable. As a short-term strategy, many people are keeping their cash in money market accounts or short term savings accounts. If that helps you sleep at night, then that’s what you need to do. But eventually, things will stabilize, markets will go back up, and you’ll need to start planning for your prime years. With average life expectancy at 90, earning less than 2% on your investments over the long term is a riskier strategy than you might imagine.
Most people, even with the best of intentions, usually spend pretty close to what they were spending prior to retirement. Many of my clients that have officially stopped working for money actually are surprised to discover that they are spending more than when they were working full-time. This is why planning for the prime years of your life, formerly known as the golden years, (prime just sounds better), is so essential to future financial security.
Last night I had the wonderful opportunity to be on KGO radio in San Francisco for an hour with Joanne Greene, as part of the book tour for Your Money or Your Life, of which I was a contributor to. The topic du jour of course was money. We discussed money and spirituality as well as your relationship with money and then moved to discussing the current economic meltdown. That’s when things got interesting.
As soon as we started talking about the stimulus plan, specifically the mortgage proposal President Obama spoke about last week , that’s when I heard the anger so many people are feeling right now come roaring out of the gate. With right wing talk radio fanning the flames of anger and stoking the fear so many people feel, we’re going backwards, not forwards in solving the serious problems our country is facing. Joanne’s show is progressive and she is one smart cookie. Yet even with her listeners that I sense tend to be more moderate and left of center, the vibe of anger and blaming other people for getting us into this mess was present.
