Senior Moment© 2005
A Publication of http://www.senior2senior.org

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Vol 1 #9 July 31, 2005
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This is a one hundred percent opt-in newsletter with a two hundred percent anti-spam policy. You or someone using your name and email address signed up to receive this newsletter. We publish twice monthly and welcome all opinions, critiques, and topical articles.

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Content:

1. Publisher’s Comments
2. Articles

1.  Publisher’s Comments

The past issues of Senior Moment© are now at:

http://www.senior2senior.org/archive.html

How about that for a location for past issues? <g> Simply click on the one(s) you missed and, bingo, you are there.

(Note: I tested and retested the links and they worked. However, if one or more do not work for you, please email me at: tom@senior2senior.org and tell me which one(s) did not work.)
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This newsletter is growing by baby steps but I am not complaining. It takes awhile for word to spread given there is so much junk out there. Welcome to all the “newbies” and ask you to please pass our address along to whomever you believe would be interested in this type of information.

By the way, they don’t have to be senior citizens. They can, and probably should, be the sons and daughters of senior citizens since this is the age group most directly responsible for the care of their elder parents and loved ones.
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I expanded on the Reverse Mortgage chapter of the manual. Go to:

http://www.senior2senior.org/reversemortgages.html

and read an article I submitted for publication through various Internet publication channels. It is more in depth than the manual.
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I try to be very careful about sites I include in this newsletter. This site:

http://www.preventionforever.com

is by an MD who happens to be an alternative medicine favoring doctor. He is a crusty ole boy who is now in jail. In the United States, if the powers cannot silence you one way, they use another.

No, I’m not paranoid. I experienced it first hand. That, however, is grist for another mill.
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This issue’s article is taken from: MoneyNews from NewsMax.com (July 26, 2005). I include it as a piece of advice you may wish to investigate especially as it pertains to your particular financial situation.
Anyone, no matter where you live in the world, who believes all the bull Greenspan is spewing is full of, well, the same bull. Inflation is a reality and will continue to be a reality for the foreseeable future. The entire world is on a debt based currency.

It is my opinion you should perform your own inflation check. List the ten - twelve items you use the most with two columns after the item. It would look like this:

Item            July 31, 2004             July 31, 2005

Milk               1.89 per gal.            2.19 per gal
Etc.
Etc.

Compare the two columns and tell me if the same item last year isn’t less expensive. You bet it is because your money was worth more last year. Without a short course in economics, suffice it to say, this simple check list will tell you how inflation applies to you.

It hasn’t failed me yet. Reading the gobbly gook in the below article only tells me the big boys know we are in for a shocker but are only delaying the inevitable. Greenspan reminds me of what my cats do in the litter box after they visit.
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I am still contemplating a senior cook off competition for next May to be held here in Reno. I’ve downloaded rules and procedures from other cook offs so I would have an idea of how others do it so it would be fair for everyone.

If you have any thoughts in this area, please pass them along.
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2.  Article

Greenspan's Conundrum Continues
 
During the last few weeks, yields on the benchmark 10-year U.S. Treasury note have risen from 3.92%. And last week's 2.1% revaluation of the Chinese currency served as a sharp reminder that the dollar could be losing its status as the world's reserve currency.
 
In the melee following Beijing's announcement, yields rose to 4.28% on the view that Asian central banks will need to hold fewer dollars in their coffers. As a result, they will probably have to buy up Treasury debt to recycle those dollars.

Bond prices and yields are important to households because they govern the price of mortgages. For years, the consumer has been treated to ultra-low interest rates, which has spurred consumption of autos, appliances and, not least, housing. 

The booming real estate market and subsequent equity withdrawal has played no small part in cultivating a U.S. economy whose strength has gained significant momentum over the last three years.

Since the Federal Reserve started to lift interest rates a little over a year ago, a strange thing has happened - long-term rates have actually declined.

When this happens it's usually because investors foresee a recession looming large on the horizon.

However, some months ago the effect was officially named: the Greenspan Conundrum.
So when Chairman Greenspan sat down last week for his twice-yearly heart to heart with the Finance Committee on Capitol Hill, traders listened intently.

Mr. Greenspan reiterated that the Fed is still intent on lifting rates at their customary "measured pace."

But he also said that due to the global savings glut, bond prices are not behaving as they are expected to - and that means they no longer serve as a reliable predictor of recession.

A third factor emerged during last week's trading to underscore the outlook for bonds.
Minutes from the June Federal Open Market Committee (FOMC) meeting, at which rates rose once again to 3.25%, pointed to fresh fears about inflation.

More recently, the National Association of Business Economists (NABE) warned that forward-looking evidence from an inflation survey by its members was running at a nine-year high. 

The FOMC minutes told us exactly what we already know - that the United States is in a rising rate environment. However, fresh clues revealed that the committee remains concerned about labor market inflation pressures, and they also appear to be concerned that slack within the economy will inevitably disappear.

And when it does, the FOMC fears that an unexpected and unwelcome shift in inflation may occur - and that it may be difficult to reverse. Hence they claim that the need to continue with their "measured pace" approach is firmly in place.

Bond traders have recently convinced themselves that the low inflation data we keep seeing month after month is likely to remain intact and therefore the Fed can stop in its tracks.

Well, the Chinese revaluation, Fed minutes and Greenspan comments are likely to loom large in coming weeks as the bond market continues to digest this new information.

The conundrum goes on.

Until next issue,

Tom Koziol

Write to:

Senior Outreach Ministries
P.O. Box 1234
Reno, NV 89504