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What's PlayingBazaarsNov. 21
St. Stanislaus School benefit, 9 to 4 in Kolbe Hall, Adams. Bake sale, snack bar, games, Chinese auctions, money raffle, crafts, and pierogi.
Blackinton Union Church, 1373 Massachusetts Ave., North Adams; 10 to 2. Crafts table, bake sale, Chinese auction, the Christmas table, and kid's grab bag. Lunch $4, $2 kids.
First Congregational Church, North Adams, 9-2.
Nov. 28
Becket Federated Church, Route 8, holiday bazaar from 9-3. Lunch, crafts, baked goods, holiday and other items. Information: Mary Peltier, Parish House, 413-623-5217.
Dec. 5
Holiday Fair at First Congregational Church, 25 Park Place, Lee, from 10 to 3; handcrafted items, raffles, children's shop, bake sale, cut Christmas trees and lunch from 11 to 1. Includes angel-themed goods from SERRV. Information, 413-243-1033 or www.ucc-lee.org.
Dec. 12-13
North Adams Country Club, crafts 9-4; food from That's a Wrap from 11-2. Information: Sheryl Morehouse at 413-822-3329.
Planning a bazaar this season? Submit information to info@iberkshires.com to have it listed here. |
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The Independent Investor: Are Your Ready For This — Zero Down, Zero Interest?By Bill Schmick
iBerkshires Columnist
09:45PM / Thursday, December 18, 2008
 | | Bill Schmick |
If that sounds like a dream, wake up America because something of the sort will most likely be needed to get us buying and borrowing again.
I expect by June, we will see a government-sponsored initiative that will guarantee new consumer loans issued by now government-controlled banks for all sorts of things from mortgages to car loans to credit cards. Interest rates might not go as low as zero, but I expect most consumers will be able to borrow at rates never before seen in this country.
As a prelude to this "economic recovery at any cost" scenario, expect further rate cuts, similar to this week's reduction in the Fed Funds Rate (the rate businesses loan to each other) to 0 to .25 percent. If you wonder how low the discount rate (the one that impacts the prime rate) can go, zero would be a good number. And don't think it can't happen.
After Japan's real estate and stock market bubble burst in 1989, the Japanese economy hit the skids and stayed that way for 10 years. Finally the country's central bank, unable to jump start the economy in any other way, lowered interest rates to zero in 1999 and kept them there until 2006. Unfortunately, even free money did little to stimulate growth among Japanese consumers.
However, some U.S. economists (including Ben Bernanke, Federal Reserve chairman), believe they have learned lessons from the Japanese mistakes. They believe that zero interest rates in combination with other policies (like the various initiatives already under way by the government) have the best chance of reversing the economy's downward spiral. The odds rise even further if you throw a massive stimulus effort (the promised $1 trillion Obama Plan) into the mix.
The real beauty of this zero-to-low interest program would be that we don't necessarily have to buy anything for it to work. All we need do is re-finance our mortgages, home equity loans, car loans and credit card debt. If you are paying 10 percent on $225,000 worth of combined debt over 30 years and that rate drops in half or more, you suddenly have $1,000 plus per month of extra cash. Consumers would then start spending again (and hopefully saving).
That works for me, you might say, but what about the debt in this country? We still have to pay off 30-plus years of accumulated individual consumer debt, the Social Security shortfall, the deficit not to mention the trillions and trillions the government has spent this year alone to keep us out of a global depression.
How are we going to get out from under? One word: inflate. Consider this: Every country that has found itself in a situation where it could not possibly pay its debt resorted to inflation. From ancient Rome to the Weimar Republic to the United States in the 1970s, governments resorted to printing money in order to reduce the value of their debt burden.
As you read this, make no mistake - the printing presses in this country are working overtime. The Federal Reserve has been selling billions and billions of Treasury bills, notes and bonds in order to raise enough cash to bailout the banking system. In a new twist, the Fed has just announced plans to buy truckfulls of Treasury notes even as it issues more paper. The only way that can be accomplished is by printing more and more money — mountains of money.
Inflation is a two-edged sword. Everything we purchase becomes more expensive but at the same time it makes the value of your home and other real assets, like gold, go up and up and up. Not a bad way to stop the freefall in housing prices if you catch my drift. It also allows you to pay off expensive debt (like credit cards) with cheaper and cheaper dollars.
So hang on, dear reader, "help is on the way" as our president-elect has promised. That help, however, may have hidden costs. Down the road, the solutions to our present difficulties may turn out to carry within it, a whole new set of problems.
And keep reading because in the foreseeable future, there's never going to be a dull moment in this country or in this column.
Bill Schmick is a licensed investment adviser representative and portfolio strategist as well as a registered financial planner with Berkshire-based Dion Money Management, which manages more than $500 million for middle-class Americans from coast to coast. Direct your inquires to Bill at 1-877-850-7942, Ext. 146, (toll-free) or e-mail him at wschmick@dionmm.com. You can also visit www.afewdollarsmore.com for more of Bill's insight. |
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