Oil Prices going up

Oil prices have recently risen to its highest so far this year. As Ben Bernanke announced his optimism for the economy, energy prices have risen. This article explains briefly why this happens and applies what we have learned in class. During a recession people try to cut back on spending in case of unemployment. The demand has gone down for gas as people try to save on what they can. America has predicted we are now slowly beginning to get out of the recession as Bernanke and other economists announced. But we are now facing the problem of the value of the dollar. The Fed continues to print money making a decline in international value of the dollar. This is a problem when trading with countries in East Asia for oil. They would rather receive euros than dollars because they are worth more. Another reason for the price of gas to rise is because of inflation, because the dollar has lost its value they must raise prices (which in a sense is not changing gas prices). Overall this article explains the positive outlooks for oil as they compared this year's prices compared to the prices in the summer of 2008. Crude levels for this past week have risen by 600,000 to 375.3 million according to the Energy Department's Energy Information Administration. The demand for gas fell one percent for April and refineries increased capacity by more than three percent. Oil has been traded for 50 dollars a barrel which is much cheaper than in July which was $147. However, in February it was only 35%. Let's hope we will never have to see the higher prices that we saw in the Summer of 2008.

Japanese Getting Maried in US?

This article explains what we have been learning in class in our international trade unit. Japanese have found it is cheaper for them to get married in the US. At first it sounded a little ridiculous when I came upon this article, wouldn't it cost them more? According to this article, traditional Japanese weddings cost at the minimum $100,000 dollars. For the Japanese the bond of marriage is a big celebration which requires family, friends, business associates to be invited along with many dresses and outfits to buy. Japanese have found an alternative that would both save money and give them a spectacular wedding ceremony. The number one place Japanese come to get married in the US is in Hawaii. What better place than the wonderful tropical islands? The second place is New York city. Why you might ask? According to this article it gives a "Sex in the City" atmosphere that has attracted Japan. Reverend Dick Leonard says he does on average 120 to 160 weddings a year in New York. Leonard informs us that it started with only a couple weddings a year. He recently discovered his church, Unitarian Church of All Souls, has been written up in the traveler guides in Japan. Most Japanese are not christian but church weddings have become very popular because it saves them a lot more money than doing it in Japan. Leonard humorously describes how they have difficulty in pronouncing their vows. For Japanese it is cheaper for them to have a wedding in the US than to have it in their homeland and therefore have turned to the US as a solution. Have the Japaneses' wedding traditions changed just to save money? In this situation (as we have learned) the supply for yen goes up and the demand for dollars goes up (appreciating our dollar).

Finding Solutions in Economy

The Fed has recently announced economy will turn around by the end of this year but very slowly. But for some this won't be fast enough. The current unemployment rate is 8.5% and as a result many people have lost their jobs. As we have learned this is called cyclical unemployment (unemployment due to a recession in the economy). With companies closing down and going bankrupt people are struggling to pay off their mortgages, taxes and other expenses. In this article they talk about a man name Dorie Clark who has been laid off factory worker. He has a six year old son to support from his ex-wife. The only problem is he is 65, and there aren't many opportunities for him. What do people like Clark do in this situation? Clark decided to become an Officer. He enrolled in the University of Missouri law enforcement. According to the article he is the oldest person ever enrolled into the law enforcement program at Missouri. He knew it would be a challenge but also knew he had almost no other choice. Clark has had many jobs some in which include a teacher, truck driver, private investigator and security guard. "Age will be a factor but his experience and his ability to talk to people will help. A lot of times you can talk people out of things," said Instructor Ken Hawkins. The requirements he had to obtain for the program was adjusted by age, giving Clark a significant advantage. While most (ages 20-30) were running a two miles in 16 minutes, Clark only had to do it in 19 minutes giving him an advantage. He graduated in April and is on the prowl for a job in these rough times. Hopefully for Clark (and others in similar devastating situations) can find a job between now and when we see complete recovery in the economy.

China investments in US housing

I researched this article.  Of late there has been plenty of hostility toward the 8 largest democracies (G-8) and their acts of globalization around the world.  Specific to America, are the trade and investment negotiations we've established with China, and how our policies or starting to look more communist as many of our privatized industries are becoming global.  It seems, in this situation, that we are at the will of the Chinese in the housing market.  Current investment opportunities in China's real estate are becoming hard to come by as there prices remain high and the US dollar remains weak.  Like wise the real estate in America is some of the best, specifically New York and Washington as according to Association of Foreign investors in Real Estate (AFIRE).  So as more and more housing packages are swept up by the Chinese for rent and selling, the more so we become reliant on China as the foreign revenue stream increases.  Seeing as how 22% of US foreing debt belongs to China many think these acts will only up that value.  Many joke that this rise in globalization is making us seem less capitalist because all of our industries are becoming less privatized.  Fortunately US actions disapprove this with such actions as their 278 billion dollar investment into housing recovery.  We mentioned in class the downfalls of protectionism and it is too bad for such a dilemma because with so much foreign trade it would make sense that America place more tariffs to help out their struggling industries.  Though some acts of globalization our good, don't get me wrong.  But those include outsourcing for cheaper assistance or when it's more efficient not sacrificing US independence by letting China into our housing market so much.  I for see some sort of stable trade agreement in the future that will decrease our indebtedness to China and highlight the qualities of globalization like getting a Big Mac in Hong Kong.       

Japan Feels the Sting of the Economy

Japan has recently announced their unemployment rate has risen to 4.8% which has been their highest in years. They have been cutting jobs to save money and have recently hit a seven-year low on the number of people having jobs. Japan is suffering due to the domino effect. Japan does not have many natural resources, so for decades they have relied on their brains to create a successful economy. They are very advanced in their technology and without that who knows where they would be now. Being able to trade for natural resources is key for them. Things have been looking good for them as they announced in March they have hit a growth of 1.6% in production which they haven't seen for six months. However, they predict recovery will not begin until 2010. Japan's car companies have not been very successful. Nissan and Toyota sales have fallen by 28.6% this year. Japan might have to wait until the world economy resolves itself before they can begin to see results. Right now a way they have tried to resolve their situation is by lowering consumer prices to encourage buyers to purchase more. But, will this affect them in the long run? "Deflation will be damaging to the economy. Companies will have a difficulty increasing profits, and their effective burden from borrowing money will increase," says Analyst Takeshi Minami (chief economist of Norinchukin Research Institute).

Obama focuses on reducing oil consumption

I researched this article.  President Obama's commitment to the reduction of oil dependence in the near future by referring to other technologies could dramatically help our economy.  His attention has been drawn to solar and wind power as the electrical impact on the situation.  This, along with his push for less driving and hybrid cars could cause lower prices in heating oil used in homes across America.  By capping carbon emissions and lessening America's need for fossil fuel we will be potentially paying much less.  It is thought by diminishing our dependence others will follow suit, decreasing world demand for oil, and increasing its supply relative to demand, therefor lowering the equilibrium price for oil.  This is much needed for currently in our economy crude oil prices have inflated because of demand-pull inflation where too many people need something we have less and less of.  Like we have discussed in class, our expectation on what will happen to the price of oil will greatly effect the way we act now because we act in a way that is most beneficial to us.  By believing in the strength of these policies our demand for oil will decrease and worldwide prices will fall.  This situation is a great example of the importance in understanding the difference between short run and long term results.  If the American people act more efficiently in the short run by reducing their carbon footprint prices will fall in the long run.  In the future I see these policies implementing a stronger dollar because America is starting to go green and seek out alternate energy sources such as clean coal, and by doing so our oil prices will drop.

Chicago's sales tax becoming noticeable burden

  I researched this article. It is well known in the midwest region of the United States that Chicago IL is one of the highest taxed cities in the area.  This is quite an understatement for Todd Stroger head of the Cook County board, approved another one percent increase in Chicago sales taxes making it's final value a staggering 10.25%.  This will possibly be followed up with a parking tax.  This contractionary policy is supposed to help the area recover from a 234 million dollar deficit with expected revenues as high as 400 million dollars!  This is a great example of why economic recession can be so difficult because in the effort to decrease the deficit by raising taxes, the demand for goods in downtown Chicago will decrease heavily.

 My brother lives in Linkin Park, about a block from Michigan avenue, and has recently turned to online shopping for all his purchases because Chicago tax is so outrageous.  It is a strange coarse of action because a majority of Chicago's revenue comes from out-of-town visitors who are looking to experience the Magic Mile.  This amount of tourism can decrease drastically with the recent tax change, offsetting the possible decreased recessionary gap.  This is worrisome because by Illinois raising taxes the act might sweep across the nation so other markets can compete.  As we've seen in class from the Laffer curve is that increasing taxes will give you increased revenue, only to a certain maximum.  Not only is it unfair to the Illinois people but even Chicago Chamber of Commerce head, Jerry Roper, states, "the people of our region should be outraged".  I see this tax decreasing in the future because like Art said after a while the constant increasing of taxes will become pointless.