prancingbull.com

Earlier this week, the house approved the $700 billion bailout bill. If you assume that there are 300 million Americans, this works out to be $2,333 per person. Of course, not all 300 million Americans are taxpayers. If only half of Americans are taxpayers, this works out to almost $5,000 per person.

What else could you purchase for $700 billion?

The Seattle Mariners play in Safeco Field. It cost about $517 million to build. For $700 billion, you could build 1,354 Safeco Field’s.

The new Freedom Tower in New York City is estimated to cost $3 billion to build. You could build 233 of these for $700 billion.

A dollar bill is 6.14 inches long. 700 billion dollar bills is 4.298 trillion inches in length. This is equal to 67,834,595.95 miles. The distance to the moon is 238,900 miles. This amount is about 284 times farther than the distance from the earth to the moon.

The current price of oil is $93.88/barrel. At this price, the US could buy 7,456,327,226 barrels of oil for $700 billion. The US currently imports 10,031,000 barrels per day. For $700 billion, we could import at our current rate for 743 days without running out of money assuming that the price stays the same.

At $9 per movie ticket, the government could buy each American 259 movie tickets.

A dollar bill is .0043 inches thick. $700 billion worth of dollar bills is 3,010,000,000 inches thick. This is equivalent to 250,833,333 feet or 47,506 miles thick. The Eiffel Tower is 1,063 feet tall. You could stand 23,596 Eiffel Towers on top of each other to reach the same height of $700 billion worth of dollar bills. The highest point in the world is Mt. Everest standing at 29,029 feet tall. Even at this staggering height, you would have to stand 8,640 Mt. Everests on top of each other to be the same height as $700 billion worth of dollar bills.

There are plenty of other comparisons I could make to show enormous amount of money that the US is spending to bail out the financial industry. I can think of plenty of other things that the US could spend their money on.

Earlier (June 30th, 2008), I created a post about the average age of coin. In my initial hypothesis, I felt that quarters would have the oldest average age since they were more coveted, and pennies would have the youngest average age, since they are most likely to be thrown out or forgotten about. In that original post I had a sample size of only 69 coins. Currently I have 155 coins. Lets see how the average age has changed over this time.

Quarters
Time 1: 17 coins, average mint date of 1995.18
Time 2: 46 coins, average mint date of 1995.70

Dime
Time 1: 18 coins, average mint date of 1994.39
Time 2: 27 coins, average mint date of 1994.33

Nickel
Time 1: 9 coins, average mint date of 1987.11
Time 2: 18 coins, average mint date of 1991.44

Penny
Time 1: 25 coins, average mint date of 1992.96
Time 2: 64 coins, average mint date of 1993.39

From this data it appears that all coin denominations are either staying relatively consistent, or increasing somewhat. Maybe once my sample size becomes large enough, it will start to resemble more of my hypothesis.

The average value of each coin is 10.2 cents. The year with the most coins is 2007 with 16 of the 155  (10.3%). I am sure that this data is somewhat boring to most people, but I find it fairly interesting. Maybe a number cruncher can come up with a little more interesting data than I did.

Ever since I started trying to go cash only I have naturally started to collect more and more coin. I thought that it might be an interesting experiment to see what the average age of each type of coin I come across is. My theory is that the more a coin is worth the older the average age will be. I think that pennies will have a relatively short longevity.

So far I have collected 69 coins over the past couple of weeks. I have calculated the average mint date for these coins to be 1993.12.

Here is a breakdown of each particular coin:

• Quarter 17 coins, average mint date 1995.18
• Dime 18 coins, average mint date 1994.39
• Nickel 9 coins, average mint date 1987.11
• Penny 25 coins, average mint date 1992.96

As you can see, my hypothesis is clearly wrong. Nickels and Pennies had the oldest average age of all my coins. This could be due to the fact that my sample size is so small. I will try and periodically update my coin count so that we can see what age of coins are circulating through my possession. In the end I think that I will be proven right.

The newest in the series of the Presidential Dollar coins came out on May 15th. This president was John Quincy Adams. I have been very surprised with the lack of demand for this coin. To my knowledge Quincy Adams was not anything special, but I assumed that the collectors would have made their rounds by now. Demand for this new coin has been so slow that in the first week of it being available we have not received a single request for the roll. I am curious to see how long it will be until someone finally asks for one.

Today is May 15th, and most coin collecting enthusiasts should recognize today as the day that the latest edition of the Presidential Dollar Coin Series gets released to the public. We have actually had these coins sitting in our vault for a week or so now, but we were not allowed to give them out to the public until the 15th. Let the feeding frenzy begin! This is the sixth coin in the Presidential Series that began in 2007.

It may be interesting to note that John Quincy Adams was the son of the second President, John Adams. Quincy Adams only served one term in office, but later went to serve nine terms in the US House of Representatives. He and Andrew Johnson are the only two Presidents to have done this.

On May 19th, 1828, Quincy Adams set forth a Coinage Legislation that provided the following according to the US Mint:

• directs the location of the United States Mint to remain in Philadelphia indefinitely;
• establishes a standard weight for the Mint’s use;
• makes provisions for payment for the testing of silver bullion brought to the Mint for coinage;
• authorizes employment of clerks at the Mint; and
• authorizes the Director of the Mint to assay bullion not intended for coinage and to issue certificates of fineness at the owners’ expense.

You can read the Act in its’ original form here.

Believe it or not, the US Mint has a presidential dollar coin screensaver. You can download this here. The download comes in .zip format from the US Mint website so you know that it is safe.

I recently decided that I need to adjust my money management strategy. As you may have read in my previous post, I was attempting to find a new institution that had more convenient access. Turns out though my bank has partnered with some other banks ton increase its’ ATM network. That works out nicely for me, because with my new strategy I will be using the ATM a little more often.

So here is my new money management plan:

• Each Monday I will take $120 out of the ATM (equates to $500/month).
• I will use only that money for my weekly expenditures.
• The left over money will be put back in on Monday, and an additional $120 will be taken out.
• All coin will be collected in a coin jar to be counted at a later date.

This new strategy should allow me to better manage my money, since I will be able to physically see what I have spent and what I have left. I have always found it a lot harder to spend with cash than with my debit or credit cards. I am going to make a few exceptions for things that I don’t spend cash on:

• Rent
• Cell Phone
• Utilities
• Gas
• Gym Dues
• Car Insurance

These items will either be paid by check or automatic transfer. This should theoretically work out for me. I will keep my current status posted each week. I plan on documenting what I spent each week and whether or not I met my goal.

I have always been an active saver, but it is always good to save a little extra. Each month I transfer $416 to my Roth IRA in order to maximize my yearly contribution. I haven’t been at my job long enough to qualify for their 401k program, but once I do I will switch my contributions to them in order to maximize my employer’s matching policy. I also transfer $50 per week into an online savings account. This allows me to save the money before I even see it. That way I am not tempted to spend it. So far it has worked well. I am just afraid that I am spending more than I have left over, which is why I have switched to this savings strategy.

I’d be interested to hear how anyone else who has tried this strategy has fared. All comments welcomed.

Living in a state that borders Canada, it is not uncommon to see many Canadian license plates as you drive around. Lately though, it seems like I have seen an increasing amount of Canadian license plates. Last week I was shopping at a local outlet mall and I noticed that about every other car had a Canadian license plate.

There are a couple of factors that contribute to the increase in Canadian visitors to our state.

1. Their dollar has reached parity with ours, and we sell many things for cheaper prices than they would find in their homeland.
2. Our state has much lower sales taxes, thus lowering the purchase price.
3. Not all American brands are sold in Canada.

I am not the only person who has noticed this. In a recent article in the Bellingham Herald by Dave Gallagher (Bellingham is about 20 miles from the Canadian border), they state that “we have the Canadians to thank for strong retail sales numbers during the holiday shopping season.” In college I worked at a restaurant that was near the mall (2004-2007), and observed each weekend the large number of Canadians that would come in to eat after they were done shopping for the day. In December of 2006, the exchange rate hovered around $1.15 CAD per $1 USD. Back then there were a lot of Canadian shoppers. Today the two currencies are as close to equal as you could possibly get. Today’s prices are about a 13% decrease from what they were a year and a half ago for them.

The closer a town is to the border, the greater the increase in total sales were. “While the state average increase (in sales) was just 2.7 percent, Bellingham was up 7.4 percent. The border towns of Blaine (up 12 percent), Lynden (up 12.8 percent) and Sumas (up 18.2 percent) saw a big boost in sales during the holiday season.” For those not familiar with the area of Northwest Washington, the towns of Blaine, Lynden and Sumas are not very large at all, and are definitely not considered “shopping destinations.” I feel that a major reason that sales in those towns rose so much was because Canadians were driving across the border to fill up on the cheaper gas. According to the article, “The price of gas in Canada is around $1.19 a liter, or $4.50 a gallon.” While Whatcom county typically has the highest gas prices in the state, these prices are at least $.50/gallon cheaper than our neighbors to the north pay.

Any theories on how low the dollar will go against the Canadian dollar this year? My guess is $1 USD = $.85 CAD. This is not based on any intense calculation of any sort. This is just a hunch.

Here is a thumbnail of what Whatcom county looks like so that you can see the relationship between these border towns and Canada. This image was obtained from dickmartin.com.

Gas prices continue to rise across the country. Here in Seattle, a gallon of regular costs $3.51 at the local Shell station. Seems crazy to think that about a year ago the price was about a dollar less. We have a few factors that are contributing to this rapid increase in price.

First of all is the obvious. Refining capacities can only go so high, and the demand for oil continues to rise each day. Using the classic model of supply and demand it is very easy to see why prices have risen. If we put more fuel efficient cars out on the roads we would theoretically demand less gas because we would be using less of it. I think that when people have vehicles that get better mileage they will drive more. They will use the better mileage as an excuse to drive more and make more unnecessary trips, causing them to demand exactly the same amount of fuel.

The second main reason that gas prices have risen is because the dollar has decreased in value in comparison to other world currencies. Think about it for a minute. Most of the gas that we consume we import from other countries. When we buy foreign oil, we must convert our currency into theirs to make the transaction. If we assume that the price of oil remains constant in a foreign currency, and our currency is losing strength to the foreign one, it is easy to see why the price of oil would greatly increase for us.

Imagine that in 2007 $1 was worth $5 in a foreign currency. If a barrel of oil cost $100 in the foreign currency, it would cost us $20 USD to buy the barrel. Suddenly in 2008 our $1 is only worth $4 in the foreign currency. That same barrel of oil still costs $100 though. Because of the change in the exchange rate, it now costs us $25 to buy that same barrel although the price in the foreign country has remained the same.

It is interesting to see how supply and demand are not the only controlling factors on the price of gas in the United States.

It has yet to be released to the public, but was anyone aware that there was a new $5 bill in the works. Technically we should have, because the Federal Reserve first announced the new bill to the public on September 20th, 2007. I actually just found out today from a fellow co-worker. Apparently this bill has been in the works for a long time though. According to the press release by the Fed, “because the $5 bill is heavily used in vending and transit farecard machines, the U.S. government began informing the manufacturers and end-users of those machines about the upcoming new $5 bill more than a year ago, to provide ample time to adjust them to accept the new design.”

If anyone has seen the new bill, they will see right away that it is a fairly large change from the past bill. It even seems to have a bit more going on in it than the new $50, $20, or $10 do. The main reason for the redesign of the $5 was because counterfeiters were bleaching the $5 bill, and then reprinting it to look like the $100 bill. Because the security thread and the watermarks were in roughly the same spot and looked similar at a quick glance, it was easy for counterfeiters to accomplish this.

Here is a great site that gives you a more in depth look at what the new $5 bill will look like, as well as some of the security features that go along with it.

Here is a quick rundown of some of the new security features of the new bill. All of the images were taken from the above mentioned site.

This picture shows some of the new watermarks on the new $5. Notice the number 5 rather than a watermark of the President.

The new security thread will be located on the right hand side of Lincoln’s portrait, instead of on the left hand side where it previously was before.

Notice that on this new bill there is no oval outline of Lincoln like before.

Here we have what the Fed calls the “symbols of freedom.” These refer to the stars and the eagle which will be adorning the background of the bill.

Here is how the new serial number will look. As you can see, it is roughly the same, but will be aligned on the bill slightly differently.

Microprinting on the bill will make it harder for scanners to accurately recreate the design of the bill.

Here are the federal reserve indicators. The G refers to the fed that the bill was issued from.

Here is a unique a potentially controversial new feature for the $5 that other newer bills do not have. The exceptionally large purple five on the back corner of the bill was created for the visually impaired so that they can more accurately see what the value of the bill is. Personally, I think it looks a bit odd and out of place, but I can definitely see how it would help out someone with poor vision.

The $100 bill is slated to be the next US bill to have a redesign.

Don’t go throwing out your old $5 bills just quite yet! There is also no need to bring them into your local bank to exchange them out for new ones. They will still work just as good as they did before.

Here is a little known fact that comes from the previous web site. Did you know that “every U.S. banknote issued since 1861 is still redeemable today at full face value and will continue to be legal currency.” So go ahead and toss those fives back under your mattress. You can pull them back out in 2050 and they will be just as good as they are today!

Not all companies that trade on the NYSE or NASDAQ are American companies. Some are actually headquartered in a foreign country. Consider the company Cemex (CX) for example. Their company is headquartered out of Mexico. A good portion of their business will be conducted in Mexico, and therefore their payments will be made to them in pesos, the Mexican currency. When they do business outside of Mexico, they will likely be paid in the other country’s currency, which will later have to be converted to pesos.

The main issue with currency risk occurs when a company has to create financial reports for their shareholders. When a foreign company like Cemex creates a financial report for US investors, they list all of their earnings and expenses in US funds, although they are really in Mexican funds. Americans can made better comparisons from one company to the other when everything is in the same currency. The main issue here is that the exchange rate is not always going to be the same. This will create some discrepancies in the financial report that the company gives.

Imagine that in FY 2006, Cemex had total net income of $10 billion pesos. At the time that they reported, the exchange rate was 10 pesos per dollar. This means that on the Annual report to US shareholders, Cemex would report a net income of $1 billion dollars. Now, imagine that in FY 2007, Cemex has a total net income of $11 billion pesos (a 10% increase), but the exchange rate at the end of FY 2007 is 12 pesos per dollar. For FY 2007, Cemex would report a total net income of $.916 billion (a 8.4% decrease). To the Mexican investor Cemex had a great year, but to the American investor the year was a disappointment.

Not everyone invests in foreign companies, but if you are looking into one you should definitely take this into consideration. You could be in for a bit of a surprise if you don’t.