Revised Estimates of Annual National Income, 2011-12 and Quarterly Estimates of Gross Domestic Product, 2011-12

Ministry of Statistics & Programme Implementation31-May, 2012 11:21 IST

Revised Estimates of Annual National Income, 2011-12 and Quarterly Estimates of Gross Domestic Product, 2011-12

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has released the revised estimates of national income for the financial year 2011-12 and the quarterly estimates of Gross Domestic Product (GDP) for the fourth quarter (January-March) of 2011-12, both at constant (2004-05) and current prices.

2. The CSO has also released the corresponding annual and quarterly estimates of Expenditure components of the GDP in current and constant (2004-05) prices, namely the private final consumption expenditure, government final consumption expenditure, gross fixed capital formation, change in stocks, valuables, and net exports.

I REVISED ANNUAL ESTIMATES OF NATIONAL INCOME, 2011-12

3. The advance estimates of national income for the year 2011-12 were released on 7^th February, 2012. These estimates have now been revised incorporating latest estimates of agricultural production, index of industrial production and performance of key sectors like, railways, transport other than railways, communication, banking and insurance and government expenditure.

4. The salient features of these estimates are detailed below:

(a) Estimates at constant (2004-05) prices

Gross Domestic Product

5. GDP at factor cost at constant (2004-05) prices in the year 2011-12 is now estimated at Rs. 52,02,514crore (as against Rs. 52,22,027 crore estimated earlier on 7^th February, 2012), showing a growth rate of 6.5 per cent (as against 6.9 per cent in the Advance Estimates) over the Quick Estimates of GDP for the year 2010-11 of Rs. 48, 85,954 crore, released on 31^th January 2012. The downward revision in the GDP growth rate is mainly on account of lower performance in ‘manufacturing’ and ‘trade, hotels, transport and communication’ than anticipated.

6. In the agriculture sector, the third advance estimates of crop production released by the Ministry of Agriculture showed an upward revision as compared to their second advance estimates in the production of rice (103.41 million Tonnes from 102.75 million Tonnes), wheat (90.23 million Tonnes from 88.31 million Tonnes) and sugarcane (351.19 million Tonnes from 347.87 million Tonnes) for the year 2011-12.Due to this upward revision in the production, ‘agriculture, forestry and fishing’ sector in 2011-12 has shown a growth rate of 2.8 per cent, as against the growth rate of 2.5 per cent in the Advance Estimates.

7. In the case of ‘mining and quarrying’, the Index of Industrial Production of Mining (IIP-Mining) registered a decline of 2.0 per cent during 2011-12, as against the decline of 2.5 per cent during April-November, 2011, which was used in the Advance Estimates.Production of coal and crude oil registered growth rates of 1.2 per cent and 1.0 per cent in 2011-12 whereas during April to December, 2011, the growth rates were (-) 2.7 per cent and 1.9 per cent.The growth of ‘mining &quarrying’ is now estimated at (-) 0.9 per cent, as against the Advance Estimate growth of (-) 2.2 per cent.

8. Similarly, the IIP of manufacturing registered a growth rate of 2.9 per cent during 2011-12, as against the growth rate of 4.1 per cent during April-November, 2011. Due to this, the growth of ‘manufacturing’ sector is now estimated at 2.5 per cent, as against the Advance Estimate growth of 3.9 per cent.

9. The key indicators of construction sector, namely, cement and consumption of finished steel registered growth of 6.7 per cent and 5.5 per cent, respectively in 2011-12 as against 5.3 per cent and 4.4 per cent, respectively during April-December 2011. Consequently, the growth of the sector is revised upwards to 5.3 per cent as against 4.8 per cent in the Advance Estimates. The key indicators of banking, namely, aggregate bank deposits and bank credits have shown higher growth of 17.4 per cent and 19.3 per cent, respectively during 2011-12 over the corresponding period in 2010-11, as compared to their growth during April-December 2011. The growth of 'financing, insurance, real estate and business services'sector is revised to 9.6 per cent as compared to 9.1 per cent made earlier in the Advance estimate.

10. The sector 'community, social and personal services' has shown a growth of 5.8 per cent in the revised estimates, as against the growth rate of 5.9 per cent in the advance estimates.

Gross National Income

11. The Gross National Income (GNI) at factor cost at 2004-05 prices is now estimated at Rs. 51,50,686crore (as compared to Rs. 51,71,538 crore estimated on 7^th February 2012), during 2011-12, as against the previous year’s Quick Estimate of Rs. 48,33,178 crore. In terms of growth rates, the gross national income is estimated to have risen by 6.6 per cent during 2011-12, in comparison to the growth rate of 7.9 per cent in 2010-11.

Per Capita Net National Income

12. The per capita net national income in real terms (at 2004-05 prices) during 2011-12 is estimated to have attained a level of Rs. 37,851 (as against Rs. 38,005 estimated on 7^th February, 2012), as compared to the Quick Estimates for the year 2010-11 of Rs. 35,993. The growth rate in per capita income is estimated at 5.2 per cent during 2011-12 as against 6.4 per cent during 2010-11.

(b) Estimates at current prices

Gross Domestic Product

13. GDP at factor cost at current prices in the year 2011-12 is estimated at Rs. 82,32,652crore, showing a growth rate of 15.0 per cent over the Quick Estimates of GDP for the year 2010-11 of Rs. 71,57,412 crore, released on 31^th January 2012.

Gross National Income

14. The GNI at factor cost at current prices is now estimated at Rs. 81,48,952crore during 2011-12, as compared to Rs. 70,78,512 crore during 2010-11, showing a rise of 15.1 per cent.

Per Capita Net National Income

15. The per capita income at current prices during 2011-12 is estimated to have attained a level of Rs. 60,603 as compared to the Quick Estimates for the year 2010-11 of Rs. 53,331, showing a rise of 13.6 per cent.

II ANNUAL ESTIMATES OF EXPENDITURES ON GDP, 2011-12

16. Along with the Revised Estimates of GDP by economic activity, the CSO is also releasing the estimates of expenditures of the GDP at current and constant (2004-05) prices. These estimates have been compiled using the data on indicators available from the same sources as those used for compiling GDP estimates by economic activity, detailed data available on merchandise trade in respect of imports and exports, balance of payments, and monthly accounts of central government. As various components of expenditure on gross domestic product, namely, consumption expenditure and capital formation, are normally measured at market prices, the discussion in the following paragraphs is in terms of market prices only.

Private Final Consumption Expenditure

17. Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs. 49,61,587crore in 2011-12 as against Rs. 43,38,392crore in 2010-11. At constant (2004-05) prices, the PFCE is estimated at Rs. 32,41,479crore in 2011-12 as against Rs. 30,72,115crore in 2010-11. In terms of GDP at market prices, the rates of PFCE at current and constant (2004-05) prices during 2011-12 are estimated at 56.0 per cent and 57.9 per cent, respectively, as against the corresponding rates of 56.5 per cent and 58.7 per cent, respectively in 2010-11.

Government Final Consumption Expenditure

18. Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs. 10,35,808crore in 2011-12 as against Rs. 9,10,719crore in 2010-11. At constant (2004-05) prices, the GFCE is estimated at Rs. 6,27,620crore in 2011-12 as against Rs. 5,97,154crore in 2010-11. In terms of GDP at market prices, the rates of GFCE at current and constant (2004-05) prices during 2011-12 are estimated at 11.7 per cent and 11.2 per cent, respectively, as against the corresponding rates of 11.9 per cent and 11.4 per cent, respectively in 2010-11.

Gross Capital Formation

19. Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs. 26,14,634crore in 2011-12 as against Rs. 23,31,382crore in 2010-11. At constant (2004-05) prices, the GFCF is estimated at Rs. 17,92,521crore in 2011-12 as against Rs. 16,99,387crore in 2010-11. In terms of GDP at market prices, the rates of GFCF at current and constant (2004-05) prices during 2011-12 are estimated at 29.5 per cent and 32.0 per cent, respectively, as against the corresponding rates of 30.4 per cent and 32.5 per cent, respectively in 2010-11. The rates of Change in Stocks and Valuables at current prices during 2011-12 are estimated at 3.2 per cent and 2.8 per cent, respectively.

20. The discrepancies at current and constant (2004-05) prices during 2011-12 are estimated at 2.0 per cent and 0.3 per cent, respectively of the GDP at market prices, as against the corresponding rate of (-) 0.1 per cent and (-)2.5 per cent respectively in 2010-11.

21. Estimates of gross/net national income and per capita income, along with GDP at factor cost by kind of economic activity and the Expenditures on GDP for the years 2009-10, 2010-11 and 2011-12 at constant (2004-05) and current prices are given in Statements 1 to 6.

III QUARTERLY ESTIMATES OF GDP FOR Q4 (JANUARY-MARCH), 2011-12

(a) Estimates at constant (2004-05) prices

22. The four quarters of a financial year are denoted by Q1, Q2, Q3 and Q4. GDP at factor cost at constant (2004-05) prices in Q4 of 2011-12 is estimated at Rs. 13,95,071crore, as against Rs. 13,24,484crore in Q4 of 2010-11, showing a growth rate of 5.3 per cent.

23. Growth rates in various sectors are as follows: ‘agriculture, forestry and fishing’ (1.7 per cent), ‘mining and quarrying’ (4.3 per cent), ‘manufacturing’ (-0.3 per cent), ‘electricity, gas and water supply’ (4.9 per cent) ‘construction’ (4.8 per cent), 'trade, hotels, transport and communication' (7.0 per cent), 'financing, insurance, real estate and business services' (10.0 per cent), and 'community, social and personal services' (7.1 per cent).

24. According to the latest estimates available on the IIP, the index of mining, manufacturing and electricity registered growth rates of (-) 0.4 per cent, 0.1 per cent and 4.5 per cent respectively, in Q4 of 2011-12, as compared to the growth rates of 1.1per cent, 8.9per cent and 8.1per cent respectively in these sectors in Q4, 2010-11.

25. Among the services sectors, the key indicators of railways, namely, the net tonne kilometers and passenger kilometers have shown growth rates of 7.0 per cent and 7.9 per cent, respectively in Q4 of 2011-12, as against the growth rates of 4.1 per cent and 6.0 per cent, in the corresponding period of previous year. In the transport and communication sectors, the sale of commercial vehicles, cargo handled at major ports, cargo handled by the civil aviation and passengers handled by the civil aviation registered growth rates of 16 per cent, (-) 7.5 per cent, (-) 13.3 per cent and 2.3 per cent, respectively in Q4 of 2011-12 over Q4 of 2010-11.

26. The PFCE and GFCF at constant (2004-05) market prices in Q4 of 2011-12 are estimated at Rs. 7,98,493crore and Rs. 4,71,969crore, respectively. The rates of PFCE and GFCF as percentage of GDP at market prices in Q4 of 2011-12 were 52.2 per cent and 30.9 per cent, respectively, as against the corresponding rates of 51.9 per cent and 31.4 per cent, respectively in Q4 of 2010-11.

(b) Estimates at current prices

27. GDP at factor cost at current prices in Q4 of 2011-12 is estimated at Rs. 22,32,131crore, as against Rs. 19,92,149crorein Q4 of 2010-11, showing a growth of 12.0 per cent.

28. The PFCE and GFCF at current market prices in Q4 of 2011-12 are estimated at Rs. 12,84,516crore and Rs.7,00,853crore, respectively. The rates of PFCE and GFCF at current prices as percentage of GDP at market prices in Q4 of 2011-12 are estimated at 52.5 per cent and 28.6 per cent, respectively, as against the corresponding rates of 51.7 per cent and 29.4 per cent, respectively in Q4 of 2010-11.

29. Estimates of GDP at factor cost by kind of economic activity and the Expenditures on GDP for the four quarters of 2009-10, 2010-11 and 2011-12 at constant (2004-05) and current prices, are given in Statements 7 to 10.

Supply bottlenecks: In India, they're no small potatoes

By Manoj Kumar

JALANDHAR (Reuters) - Buried in recent monthly data for wholesale prices in India, the wild gyrations of a humble vegetable tell the tale of an economy trapped in inflation by its own rigidities.

Back in December, after a bumper harvest of potatoes, furious farmers dumped tonnes of their crop on roads in protest over a crash in prices: four months later, the annual wholesale inflation rate of the potato is galloping at 53 percent.

In street markets and on the handcarts of vegetable hawkers, the rise has been even steeper, a shock for millions of Indians who lay their tables each day with curries made of onions, tomatoes, lentils and "aloo", or potatoes.

"We used to buy whatever vegetables we liked, but now we always have to check the prices," says Maninder Kaur, shopping with her family at a market in Jalandhar, in Punjab, where a kilogramme (2.2 lb) of potatoes that cost 4-5 rupees (8-10 U.S. cents) at the beginning of the year is now up to four times more expensive.

Meanwhile, onions are selling for about a fifth of the price they were at the end of last year and the price of tomatoes rose 33 percent in April alone.

Such erratic prices for perishable goods are routine in India, partly because the majority of farms depend on the variable monsoon for rains.

However, they are also due to inadequate cold storage facilities and transport bottlenecks - that together cause up to 40 percent of the country's food harvests to rot before they get to market - and a primitive distribution network in which many layers of middlemen take cuts, forcing prices higher.

"The storage and the distribution networks are not getting better, so whenever there is even a small supply shock or a small demand shock prices are going haywire," said Samiran Chakraborty, chief economist at Standard Chartered in Mumbai.

"It has become structural in nature, and this is precisely why everybody is calling for supply-side reforms."

Inflation was stuck close to a double-digit clip last year, forcing the central bank to keep monetary policy tight despite a slowdown in India's stellar economic growth.

Although headline inflation has eased to about 7 percent, the Reserve Bank of India rarely misses an opportunity to remind the government that interest rates have limited impact and only policies to tackle structural shackles on the flow of goods will knock inflation on the head.

Graphic on potato inflation: http://link.reuters.com/tug38s

MANY MIDDLEMEN

There was a brief chance last December to sort out the distribution system, which for agricultural goods is deeply fragmented by a decades-old marketing act that prevents large retailing companies from buying produce directly from farmers.

But, hemmed in by coalition allies with an aversion to free market reform, the government was forced into a U-turn on plans to open up the retail sector to global chains like Wal-Mart (NYS:WMT - News) and Carrefour (PAR:CA.PA - News).

"The current marketing system has been in existence for more than 60 years, neither benefitting the farmer nor the consumer," said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a Delhi-based think tank.

"We need competition and an alternative business model ... where retailers can buy directly from the farmers and eliminate the middlemen," he said.

Take the "aloo", which is passed from farmer to middleman after middleman and then to the final vendor like a hot potato, climbing in price at every stage.

In Punjab, a potato-growing state, big trading firms bought more than 80 percent of the crop from farmers at the end of last year for 3,500-4,000 rupees a tonne and put their purchases in storage.

Then, in the new year, as supplies tightened, they drip-fed wholesale markets, auctioning their stock off at 7,000-8,000 rupees per tonne, a mark-up of more than 60 percent after their transport and storage costs.

At this point "commission agents" make a 5 percent charge, and the government levies 4 percent in auction tax. The auction buyers sell for a 20-30 percent profit to intermediate wholesalers, who take a similar cut and pass the potatoes on to final vendors in the streets and neighbourhood shops.

At the end of the chain, potatoes that were sold at the farm gate for 3-4 rupees per kg reach the market at 15-20 rupees.

The story is the same for many farm products. Neeraj Kumar, a commission agent in Jalandhar town, says garlic bought some 2,500 km (1,500 miles) away in Assam at 3-4 rupees/kg can soar to 30 rupees within hours of being unloaded.

On the potato fields outside Jalandhar, the mood is despondent. Farmers are bitter that they were forced to sell their produce to traders at rock-bottom prices.

"Last year when we stocked potatoes in cold stores, there were no buyers, forcing us to leave the harvest in fields. This time, we sold it early to traders, but now the prices have gone up three-fold," says farmer Avtar Singh. "It is my fate. We do not know when prices are going to go up or fall."

13 Illegal and legal interview questions

1. Age Inappropriate:

• How old are you?
• What year were you born?
• When did you graduate from high school?

Appropriate:

• Before hiring, asking if you are over the minimum age for the hours or working conditions.
• After hiring, verifying same with a birth certificate or other ID, and asking age on insurance forms.

2.Citizenship Inappropriate:

• Are you a citizen of the US?
• Are your parents or spouse citizens of the US?
• On what dates did you , your parents or your spouse acquire US Citizenship?
• Are you, your parents or your spouse naturalized or native-born US citizens?

Appropriate:

• If you are not a US citizen, do you have the legal right to remain permanently in the US?
• What is your visa status (if no to the previous question).
• Are you able to provide proof of employment eligibility upon hire?

3.Criminal Record Inappropriate:

• Have you ever been arrested?
• Have you ever spent a night in jail?

Appropriate:

• Have you ever been convicted of a crime?

4.Disability Inappropriate:

• Do you have any disabilities?
• What’s your medical history?
• How does your condition affect your abilities?

Appropriate:

• Can you perform the specific duties of the job.
• After hiring, ask about medical history on insurance forms.

5.Family Inappropriate:

• Questions concerning spouse, or spouse’s employment, salary, arrangements, or dependents.
• What kind of child care arrangements have you made?
• How will your spouse feel about the amount of time you will be traveling if you get this job?

Appropriate:

• Can you work overtime?
• Is there any reason you can’t start at 7:30am?
• Whether an applicant can meet specified work schedules or has activities or commitments that may prevent him or her from meeting attendance requirements.

6.Marital Status Inappropriate:

• Are you married, divorced, separated, engaged, widowed, etc?
• Is this your maiden or married name?
• What is the name of your relative/spouse/children?
• Do you live with your parents?

Appropriate:

• After hiring, marital status on tax and insurance forms.

7.Military Inappropriate:

• What type or condition is your military discharge?
• Can you supply your discharge papers?
• What is your experience in other than US armed forces?

Appropriate:

• Describe the relevant work experience as it relates to this position that you acquired from a US armed forces.
• 8.National Origin Inappropriate

• What is your nationality?
• Where were you born?
• Where are your parents from?
• What’s your heritage?
• What is your mother tongue?
• How did you acquire the ability to speak, read or write a foreign language?
• How did you acquire familiarity with a foreign country?
• What language is spoken in your home?

Appropriate:

• Verifying legal U.S. residence or work visa status.
• What languages do you speak, read or write fluently?

9.Parental Status Inappropriate:

• How many kids do you have?
• Do you plan to have children?
• How old are your children?
• Are you pregnant?

Appropriate:

• After hiring, asking for dependent information on tax and insurance forms.

10.Race or Skin Color Inappropriate:

• What race are you?
• Are you a member of a minority group?

Appropriate:

• None

11.Religion or Creed Inappropriate:

• What is your religious affiliation?
• Which religious holidays will you be taking off from work?
• Do you attend church regularly?

Appropriate:

• Can you work on Saturdays?

12.Residence Inappropriate:

• Do you own or rent your home?
• Do you live in town?
• With whom do you live?

Appropriate:

• Inquiries about the address to facilitate contact with the applicant.
• Will you be able to start work at 8:00am?

13.Sex Inappropriate:

• Do you wish to be addressed as Mr., Mrs., Miss, or Ms.?
• What are your plans to have children in the future?

Appropriate: None

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Economic Alert: If You’re Not Worried Yet…You Should Be

For the past four years I have been covering the progression of the global economic crisis with an emphasis on the debilitating effects it has had on the American financial system.  Only once before have I ever issued an economic alert, and this was at the onset of the very first credit downgrade in U.S. history by S&P.  I do not take the word “alert” lightly.  Since 2008 we have seen a cycle of events that have severely weakened our country’s foundation, but each event has then been followed by a lull, sometimes 4 to 6 months at a stretch, which seems to disarm the public, drawing them back into apathy and complacency.  The calm moments before each passing storm give Americans a false sense of hope that our capsized fiscal vessel will somehow right itself if we just hold on a little longer...

I don’t have to tell most people within the Liberty Movement that this is not going to happen.  Unfortunately, there are many out there who do not share our awareness of the situation.   Debt implosions and currency devaluation NEVER simply “fade away”; they are always followed by extreme social and political strife that tends to sully the doorsteps of almost every individual and family.  The notion that we can coast through such a tempest unscathed is an insane idea, filled with a dangerous potential for sour regrets.

There are some people who also believe that the private Federal Reserve with the Treasury in tow has the ability to prolong the worst symptoms of the collapse indefinitely, or at least, until they have long since kicked the bucket and don’t have to worry about it anymore (the ‘pay-it forward to our grandkids’ crowd) .  I can say with 100% certainty that most of us will live to see the climax of the breakdown, and that this breakdown is about to enter a more precarious state before the end of this year.  You can only stretch a sun-boiled rubber band so far before it snaps completely, and America’s financial elasticity has long been melted away.

A pummeling hailstorm of news items and international developments have made the first half of 2012 almost impossible to track and analyze.  The frequency at which negative information has surfaced is almost dizzying.  However, a pattern and a recognizable motion are beginning to take shape, and, I believe, a loose timeline is beginning to form. 

At the end of January, I covered the incredible nosedive of the Baltic Dry Index (a measure of global shipping rates that signals a fall in global demand) to historic lows.  I pointed out the tendency of stocks and the general economy to crash around 8 months (sometimes a little longer) after the BDI makes such a dramatic downturn.  Mainstream analysts, of course, attributed the fall to an “overproduction of ships”, which is the same exact excuse they used when the BDI collapsed back in 2008 just before the derivatives bubble burst.  It would seem that the cable TV talking heads were wrong yet again, as the international market facade quickly evaporates right in line with the BDI’s almost prophetic knack for calling an economic derailment in advance.

Here are some of the most important reasons why every American should be prepared for much harder days, especially before the end of 2012:

The European Union Is Officially Dead In The Water

Stick a fork in er’, the EU is done!  We are talking about full scale dismantlement, likely followed by a reformation of core nations and multiple collapse scenarios of peripheral countries.  The writing is all over the wall in the wake of the latest election results in Greece and France, where, as alternative researchers have been predicting for some time, the battle between the government spending crowd and proponents of austerity has reached a fever pitch. 

The Greeks and the French are royally pissed over draconian cuts in public programs and the destruction of pensions which have been a mainstay of their economies for quite some time.  They are also furious over being sold off like collateral to the IMF and World Bank.  Rightly so.  Like the American taxpayer, the taxpayers of floundering EU nations are wrongly being held responsible for the financial mismanagement and fraud of their governments and global banks which have remained untouched and unpunished for their trespasses.  The problem is, the voters of both countries are signing on to the socialist/quasi-communist bandwagon in response.  In Greece, the Left Coalition Party, a splinter group of the traditional communist party, has now taken a primary position of power:

http://www.reuters.com/article/2012/05/07/us-greece-idUSBRE8440DG20120507

In France, voters have elected socialist Francois Hollande (a Bilderberg attendee), whose latest promise is to spend France into recovery through his “pro-growth agenda”:

http://news.yahoo.com/blogs/ticket/french-president-elect-hollande-won-t-difficult-obama-195617064.html

I have no doubt that the elections of the EU are as manipulated by elitists as they are here in the U.S., and I’m sure false paradigms abound.  Have Europeans forgotten that it was overt government spending that set them on the path to calamity in the first place?  Or, are they like Americans; just desperate for any change in the ranks of leadership?  One would think that they would take note of the problems here in our country and realize that electing a socialist to replace another socialist is no way out of economic hardship.

Former officials like Nicolas Sarkozy may have claimed to be distanced from the socialist ideal, but, as with all globalist puppets, their actions did not match their rhetoric, and they have always supported policies of centralization and big government.  The French and the Greeks have essentially replaced closet collectivists with outspoken collectivists, and will see NO relief from the crisis in the Euro-zone as a result of the political reordering.  In fact, the stage has now been set for a volatile chain of dominos.  Germany, which is the only economy left holding the EU together, has been unyielding on austerity cuts.  A conflict between France and Germany is now inevitable.  Neither will compromise their position, and I can see no other eventual result than a reexamination and perhaps abandonment of the EU charter. 

How does this affect America?  Being that international banks and corporations have forced our countries into interdependency through the engineered chicanery of globalization, any collapse in Europe is going to strike hard around the world, but the worst will hit the U.S. and China.  Which is probably why China is disengaging trade away from the U.S. and the EU and focusing on other developing nations:

http://www.reuters.com/article/2012/05/08/us-china-economy-trade-idUSBRE84702N20120508

If you thought the Greek rollercoaster was a pain in the neck for investment markets, just wait until the whole of the EU is in a shambles! 

Spain is next in line, with a 25% official unemployment rate and a massive black market economy forming.  As I have been saying for years now, when governments disrupt the financial survival of the people, they WILL form their own alternatives, including black markets and barter markets.  It is about survival.  The Spanish government does not care much for these alternatives, though, and has now banned cash transaction over 2500 euros in a futile attempt to squeeze taxes out of the populace through digitally tracked payment methods:

http://thedailybell.com/3814/Spain-Bans-Cash

Another major concern for Americans is the fact that Europeans are inching towards an abandonment of the dollar.  Francois Hollande has openly called for an end to the dollar’s world reserve status, and with a majority backing of the French people, he could easily make this happen, at least where France is concerned.  All it takes is for a few key countries to publically and completely drop the Greenback and the dollar’s reputation as a safe haven investment will be quashed.  This could very well happen before 2012 is over.

QE3 Is The End

Here is the bottom line; U.S. growth is a theater of shadows.  There has been no progress, no recovery, only the misrepresentation of statistics.  Millions of Americans have fallen off unemployment rolls because they have been jobless for too long, which lowers the unemployment rate, but does not change the fact that they are still without work.  Durable goods orders are dropping like an avalanche.  U.S. credit has been lowered yet again by rating agency Egan-Jones.  With China making bilateral trade deals in numerous countries on the condition that the dollar be dropped as the primary purchasing mechanism, and with the EU turning to economic mulch, the currency’s safety is nonexistent.  Traditional investors who cling to the idea that a falling Euro spells dollar strength will be sorely disappointed when the currency is suddenly being rejected in international currency markets.

The Federal Reserve has already stated that any signs of “relapse” into recession (the recession that we never left) will be met with all options on the table, including QE3:

http://www.reuters.com/article/2012/04/12/us-usa-fed-idUSBRE83B1KD20120412

I believe that QE3 will probably be announced this year (due in large part to trauma from Europe), and, that this will trigger a mass movement by foreign nations to drop the dollar as the world reserve.  QE3 will be the straw that broke the camel.  How exactly this will play out socially and politically, I do not know (I could take a good guess though).  But, the technical results are predictable.  The Fed will respond to the lack of treasury purchases by ramping up fiat printing in order to cover the ever increasing costs of the government machine.  The Greenback will immediately lose a large portion of its value, at least in terms of imported goods, causing inflation in prices.  Oil and energy prices will skyrocket if OPEC follows suit (which they will, though the Saudis may still honor dollars for a time).  Doing any traditional business will become nearly impossible, and price inflation will dominate the lives and the minds of average unprepared citizens.            

The amount of time that it will take for these difficulties to unfold is also not clear.  We are operating in uncharted territory, and dealing with a collapse scenario on a truly planetary scale.  My best advice is to assume that the avalanche will move fast.

While markets in our country have seen only mild disruptions so far this year, their solidity is predicated on a host of props and costume pieces, any one of which could pull the rug out from under America’s suspension of disbelief if it strays but a little from the illusion.  As long as the dollar holds, stocks can be infused with bailout juice through major banks.  So can major companies and even desperate state governments on the verge of bankruptcy.  The Dow will remain relatively friendly, and day traders and the public will remain happy.  As soon as the dollar comes into question, all bets are off…

Does This Mean Doom, Or Just Another Bad Day?

The real beginning of today’s collapse is tied to the events of 2008.  The pace of it has been deceptive, but also, in a way, it is a gift.  Over the past four years, I have personally seen the awakening of thousands of people that may have never had the chance if the system had gone into full spectrum breakdown right away.  The question now is, how much longer can the U.S. wobble along on one wheel?  In my view, and from the evidence I see in markets at the moment, not much longer. 

It is hard to set aside any expectations that the next leg down will be easy to digest for the populace.  The reality of our predicament is starting to hit home.  All the tax return checks have been spent.  The credit cards have been maxed.  The new cars have been sold off and traded in for ghetto-mobiles.  The good jobs have been replaced with Taco Bell slavery.  A trip to see The Avengers is now the family vacation.  And, the distractions of reality TV just aren’t buttering our bread anymore.  It’s the little things at first that really signal the financial mood of a society, as well as reveal the more vital and looming issues just over the horizon.

All indicators suggest that this year will be unlike any other before.  In 2008, we saw the first trigger events for the collapse.  In 2008/2009, we saw the creation of the bailout culture, setting the stage for inflation and dollar disintegration.  In 2010, we saw the first bilateral trade deal cutting out the dollar between China and Russia, which is now the template for trade deals all over the globe.  In 2011, we saw the first downgrade of the U.S. credit rating and the crisis in the EU become epidemic.  In 2012, I see not just another difficulty to add to the mountain, but a culmination of all these detriments to produce something entirely new; a vast and subversive realignment forcing many of us to take a more aggressive stance in the fight for an economically and socially free America.

Financial disasters have always been a convenient catalyst for a host of even more frightening obstacles, including civil unrest, and blatant totalitarianism.  This is the cusp.  It is one of those moments that people of later generations read about in awe, and sometimes horror.  The “doom” is not in the event, but in the response.  What we make of the days approaching determines the darkness that they cast upon the future.  It is a test.  It is not something to be dreaded.  It is something to be seized upon, and dealt with, as great men and women before us have done.  At the very least, we know that it is coming.  That, in itself, could well seal our success…

Hot Careers That Are Hiring Now

Find out which careers are currently experiencing strong hiring rates. Then see how you can prepare to get in on the action.

By Leslie Barrie

Want to change careers? Perhaps you're looking to return to the work force after a break. Either way, we have good news: There are a variety of hot careers that are hiring now.

"I'm seeing many people getting more opportunities and even multiple job offers," says Cynthia Shapiro, a career expert and author of "What Does Somebody Have to Do to Get a Job Around Here!"

In fact, employers expect to hire over 10 percent more new graduates from the graduating class of 2012 than they did from the class of 2011, according to the National Association of College and Employers' (NACE) "Job Outlook 2012 Spring Update."

And the increase in jobs isn't just isolated to a single location or industry. "It's happening all across America, in a wide variety of industries," adds Shapiro.

Here's a sampling of five hot careers that are hiring now. Keep reading to learn more about why - and how you can get prepped to pursue one.

Career #1 - Medical Assistant

Got organizational skills, an attention to detail, and an interest in the medical field? If so, a career in medical assisting could be a good fit.

Medical assistants often help a doctor's office run smoothly, and could do everything from filing patients' paperwork and scheduling appointments to measuring vital signs and sterilizing medical instruments, according to the U.S. Department of Labor.

Hot Factors: From 2010 to 2020, employment of medical assistants is projected to grow by 31 percent, faster than the average for all occupations, says the Department of Labor. Job demand could stem from physicians wanting to hire more medical assistants to complete routine administrative and clinical duties, adds the Department.

Click to Find the Right Medical Assisting Program.

"Medical assistants can do some of the work a doctor can do at a lower cost - and that saves companies and medical offices money," says Hallie Crawford, an Atlanta-based career coach and founder of Create Your Career Path, a career coaching firm.

Education Options: Although medical assistants can learn on the job, some employers may prefer candidates with formal education, says the Department. Such programs could include a certificate or associate's degree in medical assisting.

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Career # 2 - Paralegal

Don't want to go through law school but still fascinated by the legal system? Good news, you don't have to spend the time and money on law school to get into the legal field.

Paralegals lawyers prepare for hearings, trials, and corporate meetings, according to the U.S. Department of Labor. They might even get to research case law and write legal documents and arguments.

Hot Factors: The paralegal field could see its employment grow by 18 percent from 2010 to 2020, says the Department of Labor. Following cutbacks during the recent recession, some law firms are rebuilding their support staff by hiring paralegals, adds the Department.

Click to Find the Right Paralegal Studies Program.

"Paralegals can do things a lawyer can do for a lower cost, so it's necessary to have them readily available," says Crawford.

Education Options: An associate's degree in paralegal studies is one common route to preparing for a paralegal career, according to the Department. If you already have a bachelor's degree, look into earning a certificate in paralegal studies.

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Career #3 - Accountant

Are you good with numbers and don't mind balancing your checkbook? As an accountant, you could put your math skills to good use by helping others with their finances.

Working with companies, individual clients, or even the government, an accountant could help clients prepare, analyze, and verify the accuracy of their financial documents, according to the U.S. Department of Labor. Some accountants might even offer budget analysis and financial and investment planning.

Hot Factors: "Accountants are always in need, because the public will always need help with finances - not to mention, someone has to handle our taxes," says Shapiro.

Click to Find the Right Accounting Program.

The Department of Labor projects that job growth for accountants will hit 16 percent from 2010 to 2020. In addition, there appears to be an increased focus on accounting in response to corporate scandals and current financial crises, says the Department.

Education Options: Look into earning a bachelor's degree in accounting or a related field. According to the Department, most accountants have this credential.

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Career # 4 - Public Relations Specialist

If you enjoy reaching out to others and communication is one of your stronger skills, consider pursuing an in-demand career in public relations.

Working with clients - that could range from businesses, nonprofits associations, universities, or hospitals - public relations specialists can help their clients build and maintain positive relationships with the public, according to the U.S. Department of Labor. Responsibilities might include writing press releases, speaking to media contacts, and planning PR programs.

Hot Factors: Employment for public relations specialists is projected to grow 23 percent from 2010 to 2020, says the Department of Labor. Growth could be driven by the need for organizations to maintain their public image in this Internet age and with the growth of social media, adds the Department.

Click to Find the Right Communications Program.

"Companies need well-qualified people that understand social media," says Shapiro. "Some companies are hiring in-house positions, while others are hiring outside companies to manage their communications."

Education Options: A bachelor's degree in a communications-related field like public relations, journalism, or communications is generally required to prepare to pursue a career as a public relations specialist, according to the Department.

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Career # 5 - Computer Software Developer

If you have a knack for understanding the "ins and outs" of computers - and the programs that run on them - a career in software development could be a good fit for you.

With the opportunity to create different types of software, from video games to word processors, software developers could be in charge of a software program's whole development process, according to the U.S. Department of Labor. They're also the ones to fix or improve the computer program if an error occurs.

Hot Factors: The Department of Labor projects 30 percent job growth for software developers from 2010 to 2020.

Click to Find the Right Computer Science Program.

"Job demand for computer software engineers is on the rise because our economy relies so much on the software these engineers develop and maintain," says Crawford.

Education Options: Look into earning a bachelor's degree in computer science or software engineering. According to the Department, this is the typical credential of software developers.

Question the Euro Crisis

After more than 18 months, a dozen and a half summits, multiple rounds of austerity, a trillion dollars of liquidity, and now elections in Greece and France that threaten to overturn the fragile policy consensus in Europe, the Euro-crisis rumbles on. How it could end, badly, with a bank run through the European bond market or the collapse of confidence around Greece, Spain or Italy, is well understood. What is less well understood is how to resolve it.

Eurobonds, fiscal treaties, more austerity, declarations of commitment and credibility all vie for prominence alongside an increasingly restive populace for whom more of the same bitter medicine is no longer an attractive option — for the simple reason that it isn't working. Countries undergoing austerity programs have more debt today than they did in 2009, for little visible benefit. So, as Lenin once put it, what is to be done?

Europe has a plethora of conflicting answers from which to choose. The problem is that European leaders don't know, like the ancients before the Oracles of Greece, which questions to ask. Five right questions need to be asked before the right answers can be found.

First, was the euro an accident waiting to happen, the victim of a mugging, or a self-inflicted wound? While this question can be applied to every country in the euro zone (Ireland was self-inflicted, Italy was a mugging) the "accident waiting to happen" design flaws of the euro have been well known since its inception. The lack of a real lender-of-last-resort central bank (an accident waiting to happen), a cross-border bank liability resolution regime (a mugging), and the possibility of bond-spread divergence (a self-inflicted wound) were known but ignored. Now that they have been exposed in the crisis, we should ask if the new mechanisms designed to overcome these issues (new fiscal rules and a bigger banking firewall) would in fact do the job. Given that rules didn't work out so well the first time, perhaps we should worry about the new emphasis on more of the same?

Second, we need to ask what is this a crisis of? If you ask financial market participants rather than academics, or academics rather than politicians, you get rather different diagnoses. Debt, growth, inflexibility, and profligate periphery governments all vie for attention, with the latter being the most popular explanation. It's a pity it is wrong. If the core problem is one of profligate periphery states who broke rules and awarded themselves pay increases that they could not afford, one needs to explain where the periphery got all the money to do this, since they certainly didn't raise it domestically. That answer to that question leads us to over-lending by core European banks that are now on life support from the ECB while being choc-full-o-crappy-assets. You can push Greece to cut public expenditure down to Neolithic levels and it will not do much at all for Société Générale's balance sheet.

A third question to be asked is whether there is anything distinctive about this crisis. There is a tendency, following the work of Reinhardt and Rogoff on debt crises, to simply say "same old story" and walk away. But maybe this time it really is different, precisely because it's happening in the core of the global economy, not in some Argentine extremity. Moreover, while all financial crises are, as Schularick and Taylor put it, "credit booms gone bust," the fact that this particular "boom gone bust" is channeled through such a peculiar set of continent-wide institutions makes its resolution anything but standard. Failure to recognize this leads to "off the shelf" thinking (a.k.a. austerity — one size fits all) that is more harmful than helpful.

A fourth question worth asking is: "Could we have done anything differently to avoid this mess?" While no one likes a Monday-morning quarterback, if it is possible that "this time it may actually be different," then how we got here may contain valuable information about how to get out. Not buying and holding Greek debt at the start of the crisis for a mere $50 billion now seems like a bad idea regardless of any concern for future moral hazard. Not allowing the ECB to do "the full Bernanke" (quantitative easing as a full-on asset swap and not just a liquidity pump) seems similarly shortsighted. Not incorporating the information present in your errors is simply going to produce more errors, yet that seems to be what the EU process generates from summit to summit: compounded errors.

Finally, it's probably worth asking if the objective, saving the Euro, is really worth it. First, what if the price of saving the Euro is the end of the wider European project? The European union is based upon trust, building confidence, sharing the wealth, and mutual support. The new institutions designed to save the Euro — even stricter fiscal rules and a financial "cordon sanitaire" around Greece — are based upon seeing every possible interaction with another state as a moral hazard problem where trust should be eliminated. Designing institutions in this way undermines the capacity to generate trust. Trust is not an optional extra. It is a necessity. Try running a banking system without it and see what happens.

Second, back in the 1990s critics of the Euro pointed to the costs of the convergence needed to make it all happen. There was a decade of anemic growth and high unemployment as multiple states simultaneously tried to get their budget deficits and debts down while maintaining very low inflation rates. The response to those critics at the time was "never mind the short term costs, wait for the long term benefits." Those benefits seemed to arrive in the 2000s, before the financial crisis hit, when inflation rates and bond yields in Europe fell together while growth picked up. But those benefits now seem to be as much a result of the mispricing of risk in the bond market, free money to the periphery and asset price bubbles, as they are of fiscal consolidation. Indeed, today the "never mind the short term costs" argument has found a new form in "We can't break it up because the costs will be catastrophic; we must suffer a decade of depression instead as the lesser of two evils," which makes saving the Euro all cost and no benefit.

The Euro was supposed to obviate the twin problems of serial devaluations and currency volatility. But on the balance sheet of misery, how much devaluation and volatility are worth the impoverishment-by-policy of millions of Europeans and the loss of a generation of growth? If this is the price to be paid for saving the Euro, surely that needs to be recognized ahead of time?

Without asking the right questions, and being honest about what questions to ask, you cannot resolve this crisis. Time is running out to ask the right questions. The elections in France and Greece offer European leaders an opportunity to ask them. If they do not, then austerity-strapped European publics will find their own questions, and the designers of the Euro will not like the answers they provide.

 

About Author:

Mark Blyth

Mark Blyth is a faculty fellow at Brown University's Watson Institute for International Studies, professor of international political economy in Brown's Political Science Department, and director of the University’s undergraduate programs in development studies and international relations.

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Schengen Work Permit

An individual from a non-European country who needs to frequently travel within the EU or reside in the EU for business purposes has various options available, depending on his requirements.
IBC Consulting specializes in offering Schengen visa, residency and work permit services from Latvia, but can offer similar services in other Schengen zone countries as well. Our service involves helping the Applicant step by step with the filling of Schengen visa application form, as well as advising the Applicant on how to properly prepare other required for Schengen visa or work permit necessary documentation.

Schengen Visa For Business Travelers To Europe

A foreigner traveling to Europe will find it extremely useful to obtain one visa, the Schengen Visa, which allows access to 25 countries in Europe.
How does the Schengen visa work?
Each participating country in Schengen continues to issue visas in the normal way but the visa issued is a Schengen visa. With a Schengen visa, you may enter one country and travel freely throughout the all countries participating the Schengen zone. Internal border controls have disappeared; there are no or few stops and checks. This means that internal air, road and train travel are handled as domestic trips.
Single, double or multi-entry Schengen visas are issued, but this will depend on the support supplied when you apply for your Schengen visa.
Countries participating in the Schengen Agreement:
Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland. A Schengen visa issued by an Embassy or Consulate of the above countries allows the holder to travel freely in all of the Schengen agreement participating countries. All these countries except Norway and Iceland are European Union members.
Note: United Kingdom and the Republic of Ireland are NOT yet participants of the Schengen Agreement. Cyprus, Bulgaria and Romania have not joined the Schengen area yet, either.

How to Obtain a Schengen Visa

The Applicant can apply for a Schengen visa:

• As a tourist, whereby the Schengen visa can be obtained from the embassy of any of the participating countries, or apply through a local tourist company. Usually, a tourist can apply for only a single entry Schengen visa.
• As a Board Member of a company registered in a Schengen member country, whereby the Applicant can obtain a Schengen visa automatically for one year, renewable every year thereafter. This would be advantageous in that the frequent business traveler will automatically receive a one year visa.

IBC Consulting can assist non-EU based individuals in obtaining a Schengen visa by appointing the Applicant as a Board Member of a Latvian company.
Multi-entry Schengen Visa holders will have the right to stay in the Schengen zone no more than 90 days within a six month period, starting from the date of the first entry to the Schengen area.
The Applicant is liable to pay Latvian tax based on his position as a Board Member of a Latvian company (salary taxes, corporate tax), and must also obtain a Latvian work permit. As a holder of a Latvian visa and work permit, the Applicant does not become a resident of Latvia, therefore, his personal worldwide income is not liable to Latvian taxation (i.e., he pays taxes in his declared country of residence).

Residency and Work Permits in Europe

Residency and work permit is available for those individuals wishing to reside in a specific Schengen zone country for more than 90 days within a 6 month period. This process involves appointing the Applicant as a Board Member of a company registered in a Schengen zone, where the Board Member applies for a residency and work permit simultaneously. Company IBC Consulting can offer this service via a Latvian registered company.
As with a multi-entry Schengen visa, the individual with a residency permit can travel and reside in any Schengen Zone country as long as they do not stay longer than 3 months within a 6 month period. The Applicant should bear in mind though, that residency permits issued in Latvia require living in Latvia for 6 months out of the year.

4 Common Sales Techniques People Fall For

"That color really brings out your eyes."

"We don't know when we'll have them in your size again."

"They only made this specific model of laptop in a limited run to test the market."

In some ways, sales representatives are the masters of consumer psychology. Tasked with turning window shoppers into paying customers, they employ a series of techniques that can persuade even the most grizzled consumer into making a purchase he or she hadn't planned on. From our vanity to our fear of missing out, sales reps have figured out how to key off on the driving forces that lead us to commit to a purchase. The scary part is, many times they're so good at persuading us to purchase that we don't even know we've been had until it's too late. For example, here are four common sales techniques that most people keep on falling for without realizing it.

Pouring on the Honey
The most commonly used technique in any sales representative's arsenal of tactics is flattery. Consumers, by nature, want to be validated for their purchases and no one is more willing to pour on the compliments than the attending salesman. They're always the first to tell you that the dress you're trying on is stunningly slimming or the car you're test-driving makes you look like an executive.

The surprising thing is that, even when customers know the flattery they're receiving is insincere, they still fall for it. Last year, a study at the Hong Kong University of Science revealed that all forms of flattery, sincere or otherwise, create a positive image of the flatterer in the mind of a customer. As a result, we unconsciously begin to trust the sales representatives more and make ourselves easier to push into making a purchase.

Perceived Scarcity
Nothing motivates a consumer to commit to a purchase like perceived scarcity. For example, I was recently in a shoe store where a customer was trying on a pair of designer high heels that were about $100 over her budget. After about 20 minutes of pacing through the store in the top-shelf shoes, the customer was still reluctant to buy them. The sales representative then told her that she should purchase the heels even if it meant returning them the next day, because they were the last pair the store would get in her size for the foreseeable future. Then a second representative came over and told the young woman that she passed over a pair of similar heels by the same designer in the past and it took her six months to locate the same shoes again.

If the young woman was thinking objectively, she might have realized that she could very well have found the same pair of shoes online for less than the store was charging. However, since she was already flirting with the purchase, the sudden manufactured fear of missing out on the shoes forever was enough to make her commit to the purchase. A study by Stanford University has shown that a fear of being "jilted" decreases our overall satisfaction with a piece of merchandise, but dramatically increases our desire to buy it. Stores know this, so they run "limited supply" sales to generate that kind of fear that drives people to buy. Even when you book a hotel online, you'll see the "only two rooms left" tag attached to some reservation links. So, the next time you're tempted to buy something stop and ask yourself if you'll really never see the product again, or if you just think you won't.

The Discounted Markup
Many times, a store will dramatically mark up the price of its merchandise just so it can offer a convincing discount when it comes time to make a sale. This occurs most commonly at car dealerships, where the sticker price on some vehicles can be more than $2,000 above the manufacturer's suggested retail price (MSRP). This way, the dealership can allow customers to talk down the price of the car to the MSRP so that they think they're getting a good deal when really they're just paying exactly what the dealership had hoped for all along.

Obligation Through Reciprocity
Our feelings of guilt and obligation can be powerful motivators when it comes to buying a product. Studies have shown that people naturally have a sense of reciprocity that leads them to believe that after something nice is done for them, they should do something nice for the benevolent party in return.

To capitalize on this, sales reps will often create a "give and take" scenario where they make you feel that they've done you a favor. For instance, if you can't find a pair of jeans in your size a sales representative will search through the stock room for multiple alternatives that you might find appealing. It's a simple gesture, but as a result, you'll feel more obligated to make a purchase from them.

The Bottom Line
If you want to control the amount of money you spend on shopping trips, you need to learn how to recognize these common sales techniques. Once you're able to see through a sales representative's pitch, it will be easier for you to make an objective decision about the worthiness of any potential purchase. As a result, you'll be able to buy less of the things you don't need and save more money on the things you do. It might not be rocket science, but it's certainly smart shopping.