Economc Literacy

Take for a moment and consider, that often it is stated we live in a Democracy. Well there are voting booths in most nations even North Korea, but in fact most people live in Capitalist economies. That said: the reality is that ones ability to actualize and freedom is tied directly to finances. I have often wondered if education curriculum should include economics in the grade schools. I guess right up there with woodworking class or home economics we should have a course on APR interest, mortgage amorotization, and simple ledger acounting. I say this because many people are ignorant about economics, not stupid mind you; but ignorant. In fact it is astonishing to see an Engineer as an example matriculated from University demonstrate an ability at mathematics and an appaling ignorance of economics. I think the instruction material online at Quickbooks on how a ledger entry system operates and the principles should be required curriculum.

Women often earn less and also are steered away from learning economics. The emphasis on learning money principles should be really emphasized with women in grade school as the ignorance is felt by dependent children.

I think there is many areas to point fingers or play the blame game for the current economic mess. That said I think that thee United States will be the first economy to come out of this deflationary trend as the actions to date are decisive and we probably have the highest amount of economic literate professionals on average across the developed nations.

The Chicago Fed I credit with looking forward and contemplating deflation. In addition as we see the response was decisive, if you fight a fire you do not dole out water, you put as much water on the inferno as soon as possible. As the following story illustrates, Feb. 17 (Bloomberg) -- Jean-Claude Trichet’s decision this month to keep interest rates unchanged will push Europe’s economy deeper into a recession, the region’s bond prices show. While I refuse to kiss anybodies ass I can at least point out that the decision of US ZIRP was not indecisive.

We already hear discussions of US bank nationalization or second steps, as some major economies have not taken the first steps. No, not happy with the condition we find ourselves in, but at least glad that a decision was made to address the circumstances.

The idea that you can liquidate an economy on 13 dollars a week is ludicrous, only PMI and refinancing can put $100 to $300 per month into consumers pockets and reduce the M1, M2, and M3 obligations. Deflation is of course too many debts chasing too few dollars.

The first step, preventing systemic default.

The second step, stimulate suppky side spending.

The third step, reduce obligatory debt in M3.

As tough as this is to accept, it could be worse. The plan could be to do nothing or in the case of the Euro the decision to do something need ratification.