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ari has been a member since November 16th 2010, and has created 59 posts from scratch.

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The Dollar’s Stil a Mainstay of World Currency

AMA4-10-14The venerable American dollar has taken a beating of sorts in recent months, facing fluctuating values in world markets and incursions from digital alternatives like the Bitcoin. But even with its ups and downs, the dollar’s still king in a world hungry for currency that’s stable, solid and backed by a secure government.

As a recent Flightfox report on the bustling black money markets in Argentina reveals, for much of the world, the greenback is still the go-to currency in uncertain times.

AS Flightfox reports, Buenos Aires is home to one of the world’s largest – and most open – black markets for currency in the world, and people flock from everywhere to change out Argentina’s severely devalued – and largely unstable—peso for American dollars at rates far above the government’s exchange rate.

The reason? In 2002 Argentine fell into a severe debt crisis, and the resulting government defaults caused mistrust of the government and its financial institutions. That mistrust caused a run on the country’s banks, and the government imposed limits on how much account holders could withdraw at any one time. At the same time, it restricted the acquisition of foreign currencies, most notably the dollar.

And so, in a quest for a stable, trustworthy currency that’s immune to the country’s political ups and downs, Argentineans rich and poor flock to the black markets to acquire dollars and hold them as security against another financial crisis.

Where do the dollars come from? Tourists, of course. But other transactions such as investments bring dollars into the Argentinean economy to proved a stable, if largely illegal, financial foundation for many citizens.

It’s a scenario played out in various forms in numerous other countries around the world, but particularly in Latin America where government and financial instability create periodic monetary crises.

That’s why the Bitcoin, the stateless, paperless digital currency, enjoys such popularity in those same countries. Decentralized and anonymous, the Bitcoin also offers residents of those politically unstable countries an alternative to the ups and downs of their “official” monies.

But for sheer staying power, not much beats the dollar. Backed by a demonstrably stable government and functioning economy and tradable virtually everywhere in the world, US money represents a solid and secure base for transactions of all kinds. That’s one reason why, as Jason Hartman says, investing in US property creates a long-term foundation for building wealth. (Top image:Flickr/imagesofmoney)

McClure, Grace. “The How And Why of Argentina’s Currency Black Market.” Flightfox. Flightfox,com. 25 Oct 2013.

Read more from the American Monetary Association:

The Hierarchy of Human Needs Guides Consumer Behavior

AMA 81:  Investing tips and Tricks With Matt Schifrin

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AMA 82 – Gold Prices with Dent Research editor Rodney Johnson

Rodney Johnson is President and Editor of Dent Research. He joins the show to explain why gold will fall below $800.

 

Johnson then discusses whether the US economy is slowing. He also shares how investors can build streams of income instead of relying on equity markets.

 

Visit Dent Research at www.dentresearch.com.

 

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market.  

 

Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy.  

 

He holds degrees from Georgetown University and Southern Methodist University.

Check out this episode!

The Hierarchy of Human Needs Guides Consumer Behavior

AMA4-11-14“You can’t always get what you want,” sang the Rolling Stones. But, as the next line goes, you might find you get what you need. What people really need has been debated by experts in economics, psychology, and many other fields. But it turns out that a theory from the 1940s offers a paradigm of our essential needs that’s still guiding advertisers, retailers and investors today.

Psychologist Abraham Maslow published his groundbreaking “Hierarchy of Human Needs” back in 1943, and it’s been used in all kinds of settings to provide insights into human behavior and why people make the decisions they make. Here’s how it works: Maslow divided the “needs” that drive people into categories, from the most essential, physical elements to more abstract, emotional or spiritual ones. According to this theory, people have to satisfy those basic needs first before moving up the pyramid to meet the less immediate ones.

At the most fundamental level are essential needs of the body like food, water and sleep. Next come needs of safety and security, such as a safe place to live, employment and health. After those needs are met, an individual can turn to satisfying needs of love and belonging, such as friendship and romance. And once those are taken care of, people can strive for esteem (achievement, respect, confidence). Finally, at the top of the pyramid, comes self-actualization, when an individual is able to focus on spirituality, creativity and contributing to others.

What’s important is that these basic human needs are sequential. If your main worry is getting enough food to eat or finding a secure job, you probably won’t be too worried about winning an achievement award or helping the planet. But if you have a stable home and income, with the respect and love of family and friends, you can devote more of your time to volunteer work or art lessons.

The hierarchy helps explain motivations in the housing marketplace, and can provide a framework for getting priorities straight. As Jason Hartman says everybody needs a place to live. And for income property investors, housing falls for most people into the second level of Maslow’s hierarchy: security and safety – a pretty fundamental one that most everyone needs to satisfy in one way or another.

It’s what contributes to demand for housing in some areas and not in others, and why some neighborhoods just don’t attract renters. Commodities like Housing can be other things too – big flashy properties are probably meeting an “esteem” need more than one of safety and security. And recognizing those distinctions can be useful for investors as well.

Maslow’s paradigm isn’t perfect, and it’s by necessity very general. But for everybody involved in income property investing – buyers, sellers and renters alike – that hierarchy can be a handy tool for explaining – and targeting – decisions about housing, food and clothing, those basic human needs. (Top image:Flickr/Purpleslog)

Read more from The American Monetary Association:

Taxc ID Theft: Tis the Season

Who’s Really Paying for Bank Settlements?

The American Monetary Association Team

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AMA 81 – Investing Tips and Tricks with Matt Schifrin

Matt Schifrin is the Vice President at Forbes Publishing and Managing Editor of Investing for Forbes Media. He joins the show to give us his tips for investing in 2014.

 

Schifrin shares one investment to avoid at all costs and the best ways to get rich. He explains why Wells Fargo is so great and whether Apple investors should reinvest their dividends.

 

Find out more about Matt Schifrin at www.mattschifrin.com. Read Schifrin’s work at blogs.forbes.com

 

Check out this episode!

AMA 80 – “Second Chances” with Chuck Gallagher

Chuck Gallagher is the Chief Operating Officer at American Funeral Financial and Founder and CEO at Ethics Resource Group. He’s the author of “SECOND CHANCES: Transforming Adversity into Opportunity.”

 

Chuck is a Prostate Cancer Survivor. He discusses the emotional journey from diagnosis to treatment and what happens after the treatment is over and how the side effects changed his life.

 

The topic then shifts to politics as Chuck discusses whether the government shutdown was ethical.

 

Find out more about Chuck Gallagher at www.chuckgallagher.com.

Check out this episode!