Models, China, and the Struggling Dollar

This article from SPIEGEL ONLINE says a lot about the dollar's state. I won't even elaborate anymore.

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SPIEGEL ONLINE - November 13, 2007, 02:18 PM URL: http://www.spiegel.de/international/world/0,1518,517060,00.html

WEST WING

A Pearl Harbor without War
By Gabor Steingart in Washington, D.C.

The dollar crisis has politicians alarmed worldwide. The US currency has lost 24 percent of its value since the introduction of the euro, and now there is even a chance that China could abandon its policy of pegging its currency to the dollar -- a problem the United States should take very seriously.

Patricia Bündchen, the twin sister and manager of the world's top model, announced that Gisele now prefers to be paid in euros rather than dollars. Almost simultaneously, the Chinese central bank predicted that the dollar is likely to lose its status as the world's leading currency.

One could easily overlook a supermodel's currency preferences, but China is a different story. It's the beast breathing down America's neck.

The most important country in the world for the United States isn't Great Britain, Germany, Saudi Arabia, Russia or Iraq. China holds that dubious distinction, because it is also the country the US can least do without. Without its willingness to buy an almost unlimited supply of US treasury bonds, there would be no American spending miracle. Without a spending miracle there would be no economic growth. In other words, without China the US superpower would lose a significant share of its economic clout.

Great Christmas Shopping Tips

'Tis the season to be jolly... and shop for gifts.

It's fun to shop, but I must admit, Christmas shopping can be really stressful.

Here are my tips for stress-free shopping.

1. Set your budget. Before I actually make my Christmas list, I first decide on how much money I can afford letting go.

2. Make your gift list. Almost all of us do this, I think. My list would be separated into four categories. (a) Family - mom, dad, sister, brothers; (b) extended family - lolo, lola, cousins, titos, titas; (c) Best friends - friends I often see; (d) Acquaintances - officemates, etc.

3. Set an amount per gift. Beside every name or group in this list, I put the estimate amount of my gifts. Then after that, I add everything and see if the total amount fits my set budget (see No. 1).

4. Assign possible gift options. Before I hit the stores, I put possible gift items that I can get for each person which will be within the amount that I have set (see No. 3).

5. Buy in bulk. Bulk items are cheaper. 'Nuff said.

6. Personalize. I get creative when giving gifts for let's say, officemates. I would sometimes make desserts and ribbon them. Or buy bulk cookies, candies or something. Repack them and put colorful ribbons.

7. Schedule your shopping. This saves you both money and time. Set a shopping day. Find out sale schedules and bazaar schedules that interests you. Also, being early eases some of the stress.

8. Hunt for the best deals.

9. Give. Always give something for the less-fortunate. It feels great for both you and them.

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Here are Christmas shopping tips I got from the Philippine Daily Inquirer, Take Charge of Your Money.

The Rule of 72: What is it?

I learned this when I was 25 years old.

This rule was never taught in elementary, or even highschool math. Yet, this very useful tool is so easy to understand.

Simply put, the Rule of 72 should determine how long it would take for an investment to double its amount given a fixed annual interest .

For example, Php 100 invested at 10% would take 7.2 years to become Php200. Easy, right?

Here's the Formula: No. of years = rate / 72.

So now, how do we use this rule?

Here, look. Let's say you put that extra hundred in your pocket in a regular savings account. If you let it sit there and forget about it, will take you approximately 72 years for your hundred to turn into Php200! (I'm assuming savings gives us 1% rate of return.) That's a long, long, long, time.

But here's what I learned in Investopedia.com. Apparently, the Rule of 72 is only fairly accurate for low rates of return. As the rate gets higher, the rule gets less precise.

But then again, we can always use the future value formula if we want accuracy.