Month / July 2014

by Hoosier Econ

Indianapolis Colts Training Camp

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Anderson Herald Bulletin reported some economic numbers related to the Indianapolis Colts training camp. An event like this is hard to gauge on economic impact but they did have some financials:

Since the Colts training camp returned to Anderson in 2010, city officials and business leaders have said the estimated economic impact each year from the event is between $5 million and $6.5 million.

The camp does cost the city money:

Winkler said the city has also paid the NFL more than $559,740 between 2010 and 2014 to provide security at the camp. He said each year the city enters a contract with the NFL and Anderson University with each agreeing to pay a portion of the costs associated with the event.

At least $200,000 of the funds used to pay the NFL was in forgiven loan payments of $50,000 each, by the city, on behalf of Anderson University, Winkler said. The school had borrowed money from the city to pay for expenses related to the camp, he said.

The Colts also do not pay the city any money to hold the camp in Anderson.

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by Hoosier Econ

U.S. Military Veteran Tells of How Bad Communism Is

The other day I was engaged in some conversation with a man about the social affects of what Communism brought to countries. We started discussing the old Soviet Union. In short, Soviet Union historically engaged in disinformation. One example was the government told Russian’s that America would stage “traffic jams” or “large gatherings” if saw the events on tv. He decided to share this story with me of what he experienced in dealing with people from the old Soviet Union. I am paraphrasing the story.

I was stationed in North Carolina in 1975. The U.S. decided to bring over some Russian troops to train with us for a short time. One weekend we had some down time so my Colonel decided we should take the Russian guys out to party. We took them to a dance hall and partied for a little bit. The Russians came up to us and stated we had staged the scene and it was all propaganda. My Colonel took the guys outside to his car, reached into his glove box and slammed a map of North Carolina on his car hood. He demanded that the Russians point to any city on the map and he will take them there and show that many other bars exist with people gathering. The Russians chose a city hundreds of miles away. So we started that way and stopping at several bars along the way. The Russians were completely blown away in what they saw and they also got pretty drunk.

by Hoosier Econ

Graph of the Day: Next Market Crash

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John Maxfield  from theThe Motley Fool penned an article in the USA Today that shows an enticing graph of potentially the next big crash in the markets.

Austrians economic disciples have been screaming the last decade about the Federal Reserve’s printing or now digitizing of money to the banks through borrowing. On top of that, the federal government has needed massive amounts of money to fund welfare/social programs that are by law “mandatory”.

Maxfield and Austrians part ways with his explanation in the article. There really is no more denying inflation is happening. Pricing is exploding across many sectors.

Personally, I have followed the Feds printing and done well. But the money supply is drying up and a downturn is very real down the road

by Hoosier Econ

United States Government YTD Interest on Debt Payments

The U.S Federal Government makes monthly payments on “interest on debt” to its lenders that they borrowed money from. The payments do not include paying down the principle.

For the month of June 2014, $97,565,768,696 was paid out with YTD total now at $354,863,250,628. There are still 3 fiscal months left for 2014 of the U.S. government.

Source – United States Treasury Department

by Hoosier Econ

Coolest Summer On Record In The US

Good graph….

Real Science

The frequency of 90 degree days in the US has been plummeting for 80 years, and 2014 has had the lowest frequency of 90 degree days through July 23 on record. The only other year which came close was 1992, and that was due to dust in the atmosphere from Mt Pinatubo.

ScreenHunter_1349 Jul. 26 16.57

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by Hoosier Econ

Indiana’s Neighbor Illinois Needs To Mow Their Lawn

Standard & Poor’s Ratings Services again has threatened the state of Illinois to get their financial mess in order or else it will downgrade their bond ratings. Once you are downgraded, your borrowing rates go up making it more expensive to borrow. That means more of their yearly budget will be diverted to paying off interest and debt.

The credit rating agency affirmed the state’s worst-in-the-nation A- bond rating, but its outlook, which had been raised to “developing” earlier this year after enactment of pension reforms, went back to negative.
That means that the state’s credit rating could be downgraded within the next two years unless its finances improve, S&P said. A lower credit rating translates into higher borrowing costs.

Illinois biggest issue is their health pension system which is not sound financially. The Illinois Supreme Court recently had this to say:

“The Illinois Supreme Court was clear in its opinion that the health insurance subsidies paid by the state for retiree health care are a benefit derived from membership in a state pension plan and therefore subject to the Illinois Constitution,” S&P said.

S&P has stated that if the state comes to together for serious reform, then it would most likely revisit upgrading their status. Illinois has a big backlog of bills that already need paid and their most recent budget enacted will produce more deficits. They have used many gimmicks to reassure vendors/creditors in collecting tax revenue while doing bad borrowing schemes in the form of borrowing against future sales tax revenue.

I do not see Illinois changing its bad habits anytime soon.

by Hoosier Econ

Is Mexico Going To Silver?

Silver overall is a great investment to protect yourself against inflation. Just 6-7 years ago people were saying it would never go above $14/oz. Now it sits around $20/oz with many investors saying it’s severely undervalued.  Here is one piece of news pertaining to silver:

Investor and industrial consumption of silver has advanced at a healthy pace in 2014, so far. The silver price is up  5 percent as of July 15 from the beginning of the year. Globally, silver bullion coin sales are up 4.5 percent through the 1st quarter of 2014, according to precious metals consultancy Thomson Reuters.  U.S. Mint sales of American Eagle Silver Bullion coins maintained near record level sales, totaling 24.1 Moz for the first six months of 2014, just shy of the 25.0 Moz sold in the first half of 2013.

Last few months been picking up chatter about Mexico potentially backing their peso with silver. The website Economic Policy Journal ran a piece addressing the issue:

For many Americans the country of Mexico conjures up images of a third world nation. The poverty, lack of basic services, and extreme violence has left the populace so desperate that thousands of people on a daily basis head to the United States for a better life. But according to Future Money Trends, all that could change in the near future as key Mexican financial leaders and politicians have been working to institute sweeping monetary change that, if implemented, could unleash a global power shift of epic proportions.

Not a popular subject to discuss here in the U.S. is the rest of the worlds disgust with the devaluing of the American dollar through our Federal Reserve while racking up major debt. Many countries have now started trading in their own currencies:

Like recent monetary shifts in Russia, China and the middle east that aim to divest themselves of US dollar reserve trade requirements, the news of such a move in Mexico has been downplayed. And though it is being generally ignored as a serious possibility, a powerful consortium of influential people in Mexico believe it is a realistic possibility, and one that could be responsible for shifting the balance of world power.

You can read the rest of the article here.

If this ever got serious, Silver would be the major investment to be in along with Mexico markets. World Central Banks will put up a major fight in not letting this happen.

 

by Hoosier Econ

Price of Beef and Bacon Reach All-Time High

Per CNSNews.com 

The price of beef and bacon hit its all-time high in the United States in June, according to data released Tuesday by the Bureau of Labor Statistics (BLS).
In January 1980, when BLS started tracking the price of these commodities, ground chuck cost $1.82 per pound and bacon cost $1.45 per pound. By this June 2014, ground chuck cost $3.91 per pound and bacon cost $6.11 per pound.

A decade ago, in June 2004, a pound of ground chuck cost $2.49, which means that the commodity has increased by 57 percent since then. Bacon has increased by 78.7 percent from the $3.42 it cost in June 2004 to the $6.11 it costs now.

by Hoosier Econ

Indiana 2012 IRS Data by Zip Code/County

IRS released data tax filings for 2012 from across the United States and showed the breakdown by both zipcode and county for states. The IRS does produce good data reports throughout the years that shows how people move and in out of income brackets. In reality, this usually debunks a lot of political talking points like “the poor” and “income inequality”. Many data numbers the IRS have garnished from people filing taxes is the movement of incomes and tax brackets that are achieved.

I looked at the tax filings by zip code only so far. Found some interesting stats for the state of Indiana. Here is what I found for the year 2012:

– 2,992,840 returns filed

– The top 3 returns filed by zip code were 1) 46143(Greenwood) 24,340   2) 46227(Marion County/Perry Township) 26,280   3)46307(Crown Point) 30,070

– State wide returns filed by salary:

58k returns were $200k or more

261k returns were $100-$200K

240k returns were $75-$100K

373k returns were $50-$75k

1.59 million returns were $50k or less

– 49,000 farms were filed on tax returns

– Just over 1 Million of the returns showed payments from either Social Security benefits or Annuities/Pensions.

 

Like I said, many more numbers were in the data and the county breakdown I didn’t even research…..yet. But enjoy the digging in.

by Hoosier Econ

Beer Prices Hit By Inflation

Beer Inflation

You don’t have to be an economist to understand inflation is hitting at all levels over the past 7-10 years. The grocery store is a place where consumers can feel the pinch. Inflation just isn’t prices going up either. Another side of inflation is when the manufacturer reduces the size of the product and yet the price still stays the same.

In my household, we constantly analyze prices at the grocery store when we go to Walmart or Sam’s Club. Prices are going up and some product size is shrinking. The other night when I went to go pick up a case of beer at the local Meijer grocery I was a little shocked at the sticker sale price. Meijer is known as a fair priced grocery store and Indiana overall has stable pricing on various economic segments. The above picture is highest I ever seen. Beer prices overall have been going up in the last 3 years from my observation and if you Google the matter, you will see several articles over the last five years detailing rising beer costs.

Many factors go into the pricing of an item when it sells. Dollar value, taxes, regulation, demand or lack of, material cost, fuel, etc. I did a little research and saw some areas other than dollar weakness contributing to price increase such “hops” being down this year. Why I keep circling back to dollar weakness is because the craft beer sector has exploded which should affect the demand for typical beers. Countless sites have even stated Miller and Budweiser have lost sales over the last few years.

Just watch prices in your area and see the climb.