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A record $21.6 billion drop in borrowing by Americans added to evidence that consumer spending will be slow to recover as banks and credit-card companies tighten lending standards and households pay down debt.
Consumer credit fell by 10 percent at an annual rate in July to $2.5 trillion, according to a Federal Reserve report released yesterday in Washington. The drop was more than five times larger than economists forecast. Credit fell for a sixth month, the longest series of declines since 1991.
"The consumer is hunkered down in the process of repairing his finances," said Ryan Sweet, a senior economist at Moody's Economy.com in West Chester, Pennsylvania. "Consumers remain very cautious and won't be leading us out of this recession."
Consumer credit fell by 10 percent at an annual rate in July to $2.5 trillion, according to a Federal Reserve report released yesterday in Washington. The drop was more than five times larger than economists forecast. Credit fell for a sixth month, the longest series of declines since 1991.
"The consumer is hunkered down in the process of repairing his finances," said Ryan Sweet, a senior economist at Moody's Economy.com in West Chester, Pennsylvania. "Consumers remain very cautious and won't be leading us out of this recession."
- Bloomberg
Taxpayers face losses on a significant portion of the $81 billion in government aid provided to the auto industry, an oversight panel said in a report to be released Wednesday.
The Congressional Oversight Panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Program. But it said most of the $23 billion initially provided to General Motors Corp. and Chrysler LLC late last year is unlikely to be repaid.
The prospect of recovering the government's assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels, the report said. The government owns 10% of Chrysler and 61% of GM. The two companies are currently private but are expected to issue stock, in GM's case by next year.
The shares "will have to appreciate sharply" for taxpayers to get their money back, the report said.
The Congressional Oversight Panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Program. But it said most of the $23 billion initially provided to General Motors Corp. and Chrysler LLC late last year is unlikely to be repaid.
The prospect of recovering the government's assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels, the report said. The government owns 10% of Chrysler and 61% of GM. The two companies are currently private but are expected to issue stock, in GM's case by next year.
The shares "will have to appreciate sharply" for taxpayers to get their money back, the report said.
- USA Today
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Seven Secrets from the Smartest Businessman I Know
By Dr. Steve Sjuggerud Wednesday, September 9, 2009 Seven Secrets from the Smartest Businessman I Know -
Why I'm Keeping My Portfolio in Maximum Defense Mode
By Tom Dyson Tuesday, September 8, 2009 Why I'm Keeping My Portfolio in Maximum Defense Mode -
If The Stock Market Falls, Will Precious Metals Stocks Fall Too?
By Chris Weber Saturday, September 5, 2009 If The Stock Market Falls, Will Precious Metals Stocks Fall Too? -
Gold to Stay Above $1,000 This Time Around
By Dr. Steve Sjuggerud Friday, September 4, 2009 Gold to Stay Above $1,000 This Time Around -
Know This and You'll Never Have to Worry About the Market's Next Move
By Dan Ferris Thursday, September 3, 2009 Know This and You'll Never Have to Worry About the Market's Next Move
The First Step You Should Take to Diversify Assets Overseas
By David EifrigThursday, September 10, 2009
Last month, I attended a private offshore meeting with 300 or so enemies of the U.S. government.
The meeting took place at a beachside resort on the outskirts of one the world's premier banking havens.
It's believed billions in laundered drug, arms, and hush money are parked in this country... a country that has been invaded several times by U.S. troops in the last 100 years – the last time in 1989.
The meeting, hosted by a publishing company called International Living, was titled "Live and Invest in Panama." Scattered throughout the room were people of all ages and walks of life. I fully expect a few to be sued someday by Uncle Sam.
Why are they on the U.S. government's "hit list"?
Simply because they refuse to surrender their lives and assets to be taxed by the mushrooming U.S. government. I know it sounds paranoid or even crazy to say this, but the U.S. government truly "looks down" on anyone that investigates strategies to minimize their taxes.
Actually, I hope you're also an "enemy" of our tax-and-spend leaders. Much of the money we pay goes to fund enormous social programs that encourage citizens to be lazy, overseas wars that don't make the country any safer, and other things that would horrify America's founders... so I hope you are taking steps to safeguard your wealth from it all.
If all of the president's initiatives pass, our deficits over the next 10 years will tally $9 trillion. It's unimaginable that the U.S. can pay off its debts in our lifetimes... But here's the catch – it's going to try... Or rather pretend to try. And the only way to do that is to tax the bejeezus out of anyone with a few assets to his name.
As I write, the U.S. government and several states are contemplating a wealth tax. Yep, people with more than a certain amount of assets could face a tax on their hard-earned stash (and that's above and beyond anything you paid in income tax accumulating that "wealth"). In California, a petition is circulating that would hike taxes to 74% and claim 55% of your assets if you move out of the state. Once the feds get a notion to do this... watch out!
Look, this is not a problem just for the wealthy. This is a problem for anyone with a lifetime of savings. So here's what you need to understand: income tax and reportable assets.
If you hold assets offshore, some are reportable to the government and some are not. If you make income while overseas, it is all reportable, although some of it is exempt (the first $87,600 a year plus a $14,000 housing allowance).
What you might not realize is there are ways to legally avoid both reporting assets and paying income taxes while your assets are overseas.
The simplest way to start building your retirement lifeboat is to open a foreign bank account. If you open a foreign financial account with less than $10,000, you do not have to report the assets. This comes under the Foreign Bank and Financial Account Reporting (FBAR) regulations. The IRS states you only have to report a foreign bank account if you have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
If you keep more than $10,000 in total overseas, you must report it or risk fines and jail time (50% of your assets and up to five years in prison, if a judge decides the oversight was willful).
Your account doesn't have to be anywhere exotic or hard to visit. You can open one in Canada. Add a little bit at a time, but keep it at less than $10,000. Different banks have different rules under Canadian law. Find one that lets U.S. citizens open one in Canada (you may have to do it in person). I'd start with TD Canada Trust, which is part of a giant Canadian banking firm.
Be careful about interest-earning accounts, too. Let's say you put $9,990 in an account in January and you earn enough interest to take you over $10,000 by year-end. Well, guess what? Now, you must report the assets and the income.
One more secret: Nothing prevents your spouse and other family members from doing the same. A family of six could keep about $59,000 in accounts overseas and not need to report it. Again, this is all legal and a great way to diversify your portfolio around the world.
Please realize... this idea is 100% legal and safe. If you're considering creating a lifeboat overseas filled with assets for your retirement, at a very minimum, open an account in nearby Canada to get started protecting and diversifying your wealth. And do it soon. Already there's talk of Canadian banks not allowing U.S. citizens to open accounts.
The U.S. is already in debt to the tune of $140,000 a person... and there's no telling for sure what the government will do in order to pay it back.
Here's to our health, wealth, and a great retirement,
Doc Eifrig
P.S. In the most recent issue of Retirement Millionaire, we covered four wealth "protection" strategies everyone in America should know about immediately. To learn more about Retirement Millionaire... and how to access this issue – click here.
The meeting took place at a beachside resort on the outskirts of one the world's premier banking havens.
It's believed billions in laundered drug, arms, and hush money are parked in this country... a country that has been invaded several times by U.S. troops in the last 100 years – the last time in 1989.
The meeting, hosted by a publishing company called International Living, was titled "Live and Invest in Panama." Scattered throughout the room were people of all ages and walks of life. I fully expect a few to be sued someday by Uncle Sam.
Why are they on the U.S. government's "hit list"?
Simply because they refuse to surrender their lives and assets to be taxed by the mushrooming U.S. government. I know it sounds paranoid or even crazy to say this, but the U.S. government truly "looks down" on anyone that investigates strategies to minimize their taxes.
Actually, I hope you're also an "enemy" of our tax-and-spend leaders. Much of the money we pay goes to fund enormous social programs that encourage citizens to be lazy, overseas wars that don't make the country any safer, and other things that would horrify America's founders... so I hope you are taking steps to safeguard your wealth from it all.
If all of the president's initiatives pass, our deficits over the next 10 years will tally $9 trillion. It's unimaginable that the U.S. can pay off its debts in our lifetimes... But here's the catch – it's going to try... Or rather pretend to try. And the only way to do that is to tax the bejeezus out of anyone with a few assets to his name.
As I write, the U.S. government and several states are contemplating a wealth tax. Yep, people with more than a certain amount of assets could face a tax on their hard-earned stash (and that's above and beyond anything you paid in income tax accumulating that "wealth"). In California, a petition is circulating that would hike taxes to 74% and claim 55% of your assets if you move out of the state. Once the feds get a notion to do this... watch out!
Look, this is not a problem just for the wealthy. This is a problem for anyone with a lifetime of savings. So here's what you need to understand: income tax and reportable assets.
If you hold assets offshore, some are reportable to the government and some are not. If you make income while overseas, it is all reportable, although some of it is exempt (the first $87,600 a year plus a $14,000 housing allowance).
What you might not realize is there are ways to legally avoid both reporting assets and paying income taxes while your assets are overseas.
The simplest way to start building your retirement lifeboat is to open a foreign bank account. If you open a foreign financial account with less than $10,000, you do not have to report the assets. This comes under the Foreign Bank and Financial Account Reporting (FBAR) regulations. The IRS states you only have to report a foreign bank account if you have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
If you keep more than $10,000 in total overseas, you must report it or risk fines and jail time (50% of your assets and up to five years in prison, if a judge decides the oversight was willful).
Your account doesn't have to be anywhere exotic or hard to visit. You can open one in Canada. Add a little bit at a time, but keep it at less than $10,000. Different banks have different rules under Canadian law. Find one that lets U.S. citizens open one in Canada (you may have to do it in person). I'd start with TD Canada Trust, which is part of a giant Canadian banking firm.
Be careful about interest-earning accounts, too. Let's say you put $9,990 in an account in January and you earn enough interest to take you over $10,000 by year-end. Well, guess what? Now, you must report the assets and the income.
One more secret: Nothing prevents your spouse and other family members from doing the same. A family of six could keep about $59,000 in accounts overseas and not need to report it. Again, this is all legal and a great way to diversify your portfolio around the world.
Please realize... this idea is 100% legal and safe. If you're considering creating a lifeboat overseas filled with assets for your retirement, at a very minimum, open an account in nearby Canada to get started protecting and diversifying your wealth. And do it soon. Already there's talk of Canadian banks not allowing U.S. citizens to open accounts.
The U.S. is already in debt to the tune of $140,000 a person... and there's no telling for sure what the government will do in order to pay it back.
Here's to our health, wealth, and a great retirement,
Doc Eifrig
P.S. In the most recent issue of Retirement Millionaire, we covered four wealth "protection" strategies everyone in America should know about immediately. To learn more about Retirement Millionaire... and how to access this issue – click here.
THE MOST BASIC FORM OF INSURANCE IS SOARING IN PRICE
Joke in the DailyWealth office: "If things in America get really bad – as bad as the most negative analyst imagines – I'd rather own lead than gold. A gun will do you better in a crisis than money."
In the past few years, there's been a growing interest in "survivalist" thinking... like stocking up on gold, water, and canned food. Our joke goes, if things turn into a "Mad Max" situation, a gun and some bullets will do you better than gold.
Actually, the production of batteries consumes far more lead than making bullets. This makes lead highly sensitive to global economic health, just like Dr. Copper. And as we've showed over the past several months, "It's amazing what several trillion dollars will do to goose an economy."
To stave off a severe recession, the world's governments are making credit and money available through every crazy program they can think of. This has spurred huge rallies in stocks, bonds, and commodities. China is also known to be stockpiling raw materials in an effort to plan for the future.
All this buying and money printing has produced a huge rally in LD, a fund that provides investors with a "one-click" way to own lead. It has climbed 100% since March... and 44% since July. Buying survival insurance is getting expensive!
In the past few years, there's been a growing interest in "survivalist" thinking... like stocking up on gold, water, and canned food. Our joke goes, if things turn into a "Mad Max" situation, a gun and some bullets will do you better than gold.
Actually, the production of batteries consumes far more lead than making bullets. This makes lead highly sensitive to global economic health, just like Dr. Copper. And as we've showed over the past several months, "It's amazing what several trillion dollars will do to goose an economy."
To stave off a severe recession, the world's governments are making credit and money available through every crazy program they can think of. This has spurred huge rallies in stocks, bonds, and commodities. China is also known to be stockpiling raw materials in an effort to plan for the future.
All this buying and money printing has produced a huge rally in LD, a fund that provides investors with a "one-click" way to own lead. It has climbed 100% since March... and 44% since July. Buying survival insurance is getting expensive!