Standard and Times

Poor retails sales will slow US economic recovery

Retail spending has decreased for a second consecutive month which will mean the unemployment rate will remain high, which in turn will harm economic growth. Officials from the Federal Reserve acknowledged the situation and said that they were taking steps to ensure that the US economy would continue to recover in the future. Americans are likely to continue spending more cautiously at a time when consumer spending is vital to economic growth, especially as it accounts for over two thirds of economic activity. Many economists have expressed serious concerns over the continued high unemployment rates, the struggling housing industry and the turbulent stock markets.

The poor retail sales values for June come at a time when businesses are working at a reduced pace. The Commerce Department has reported a 0.1 percent rise in business inventories in May but with sales declining by 0.9 percent, which was the first such fall since the end of the first quarter of 2009.

According to a meeting on June 22-23, Feds are likely to cut their growth forecasts for the last two quarters of 2010 from around 3.45 percent to 3.25 percent, in light of the current economic conditions. Many policymakers were cautious about the global financial situation, which involves a major debt crisis taking place in Europe and a volatile Wall St and were keen to look for new options to improve the US economy and improve credit score of the middle class to encourage spending. These options may include renewing mortgage security programs, reducing the government’s debt or lowering the rate in which Feds are paid emergency loans by the banks. Last year, businesses initiated the first stages of the economic recovery as they expanded their stocks after the recession. From now on, the key to a full recovery will be to create environmental conditions in which businesses can begin to prosper – this could include creating a new programme which would involve increasing lending to consumers and businesses, in order to help drive spending and secure economic growth.

The main disadvantages of using a credit card

This article discusses the problems some credit card holders face when they are buying items and services. Not saying that everybody who uses credit cards will incur debt problems, because if you are responsible a credit card is a good thing that will benefit your credit rating. However, there are a few things to consider before getting another line of credit.

One of the major disadvantages of credit cards is that their interest rates are often very high. They can range from 15 percent to as much as 40 percent, which means borrowing money through a credit card has sometimes been very expensive. When paying for items or services, it is often cheaper to use a debit card. Credit cards often involve a price which is around 3 percent more which can turn out to be a lot of money in the long term.

It can be also be quite expensive to withdraw money, as there is usually a 2 to 3 percent fee involved. A debit card is cheaper to use from taking out money from your account. When you are travelling abroad you are charged a fee for converting your currency (Dynamic Currency Conversion). Retailers often incur a handling fee which adds further to the costs.

You must use your credit card regularly; otherwise you may be subject to a fee of up to £30 a year if you haven’t used it for 6 to 12 months. This is what is known as an inactivity fee. Some cards are also beginning to introduce annual fees so if you credit card company is one of them then you could always consider switching to one which doesn’t incur these fees.

The PPI (Payment Protection Insurance) is supposed to protect customers by paying their bills when they are ill or have been involved in an accident. However, many insurance claims are often rejected and the insurance is much overpriced.

Regulating Our Finance

Recently the world experienced one of the hardest financial complications in the modern money history. The world economic crysis left thousands of unemployed people, marked countries with decreased production and exportation rates, decreased the value of stocks and led a significant decrease in the standard of living. To avoid such complications and to stay untouched by the economic crysis in future, people and small business owners should succeed in maintainig stable financial strategies and complete certain financial goals.

In order for households to reduce the risk of being financially unstable, it is crucial for the members of the family to understand that they should all shrink their personal expenses and attempt to Improve Credit Score. Money flows easily when stable earning rates are established in the household, people are not reluctant to spend on more expensive goods, foods and services but to cope the crysis many of them have to realise that cutting a small percentage of their everyday budget might save their household from misery later when the times become unstable and uncertain economically. This is the reason why households will have to gradually start thinking reasonably and cut the buying of goods that will not contribute to the well being of the family.

Another problem arises with the small business owners. They have to realise that cutting the labour will not generally contribute to the situation -by taking this desparate step to save their firms, owners forget to seek for alternatives -like cutting expenses from the use of different materials for production, reducing the expenses for electricity or even decreasing the working time. By getting rid of workers, they increase the unemplyment rates, negaively influence the workers left in their firms and theoretically leaving ex employees to starve. Taking the cutting of the expenses into account and seeking alternatives to achieve that, small business owners might reduce the expenses in their companies and maintain stable production rates.

Falkland Oil & Gas experiences major losses after being forced to abandon dry well

Shares in FOG (Falkland Oil & Gas companies) have plummeted to less than half their original value after the company was forced to plug a well that they had found contained no oil. Shares initially rose to a high of 244 pence in June as it was hoped that the oil explorer had revealed a new oil field. Shares recently fell to a low of 101.5 pence on Monday, which is an enormous setback for FOG, who had estimated that the Falkland Islands area contained up to three billion barrels of oil reserves.

Yesterday the chief executive of FOG, Tim Bushell tried to de-emphasize the failure by insisting that the company is to continue on its quest to explore new oil reserves in the area. The well was the first to be drilled in the basin and Bushell hopes that further drilling will eventually lead to the discovery of sufficient oil reserves. Rockhopper Exploration, FOG’s rival company experienced booming shares after it discovered oil roughly 220 kilometres to the north of the islands at the beginning of May. Their share values jumped over 150 percent in 24 hours after the first significant oil strike to occur around the Falklands area, which is still being tested for viability.

Meanwhile, as the possibility of large volumes of commercially viable oil in the Falklands attracts attention, it is also possible that disputes over the United Kingdom’s sovereignty in the Falkland Islands may be raised by the Argentine media in the future. Relations between the United Kingdom and Argentina continue to be turbulent due to this ongoing dispute.