On African Immigration

Tyler Cowen has an excellent article posted about African immigration. I have not done the research to confirm this is true or not but my personnel experiences would suggest he is correct. In college and in my master program, African immigrants were always the top performers. Cowen writes:

One of the most striking facts about immigration to the U.S., unbeknownst even to many immigration advocates, is the superior education of Africans coming to this country. If we consider adults age 25 or older, born in Africa and living in the U.S., 41.7 of them have a bachelor’s degree or more, according to 2009 data. For contrast, the native-born population has a bachelor’s degree or more at the much lower rate of only 28.1 percent in these estimates, and foreign-born adults as a whole have a college degree at the rate of 26.8 percent, both well below the African rate.
How about high school degrees? About one-third of immigrants overall lack this credential, but only 11.7 percent of African-born migrants don’t have a high school degree. That’s remarkably close to the rate for native-born Americans, estimated at 11.4 percent.

26 Billion Dollars

Well, 25.9 billion to be exact. That is the amount of money the fed pays on excess reserves to banks. I made a short comment on excess reserves here. The full release is below:

The Federal Reserve Board on Wednesday announced preliminary results indicating that the Reserve Banks provided for payments of approximately $80.2 billion of their estimated 2017 net income to the U.S. Treasury. The 2017 audited Reserve Bank financial statements are expected to be published in March and may include adjustments to these preliminary unaudited results.
The Federal Reserve Banks’ 2017 estimated net income of $80.7 billion represents a decrease of $11.7 billion from 2016, primarily attributable to an increase of $13.8 billion in interest expense associated with reserve balances held by depository institutions that was partially offset by an increase of $2.5 billion in interest income on securities acquired through open market operations. Net income for 2017 was derived primarily from $113.6 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities) and foreign currency gains of $1.9 billion that result from the daily revaluation of foreign currency denominated investments at current exchange rates. The Federal Reserve Banks had interest expense of $25.9 billion primarily associated with reserve balances held by depository institutions, and incurred interest expense of $3.4 billion on securities sold under agreement to repurchase.
Operating expenses of the Reserve Banks, net of amounts reimbursed by the U.S. Treasury and other entities for services the Reserve Banks provided as fiscal agents, totaled $4.1 billion in 2017. In addition, the Reserve Banks were assessed $724 million for the costs related to producing, issuing, and retiring currency, $740 million for Board expenditures, and $573 million to fund the operations of the Consumer Financial Protection Bureau. Additional earnings were derived from income from services of $442 million. Statutory dividends totaled $784 million in 2017.

Bitcoin Miami Conference

The bitcoin Miami conference is not accepting bitcoins because of manual inputting of data in the ticketing platform. What does that mean? No one knows. What could possibly be said at this conference that people are willing to pay a 1,000 USD dollars?

Here is the message:
Spend a 1000$ USD to come hear us tell you how bitcoin is the future of money. No, sorry… we don’t accept bitcoin as money.

 

China’s Bluff

Bloomberg is reporting that China is considering slowing or halting purchases of US treasuries. This caused a mini massacre in the US bond market. At least every few years we see this headline going back a decade. What are the results? See for yourself:

As some in politics would say ” A big fat nothing burger”. This is why I do not take these warning serious. Until I see action, I will not take these china officials serious. Why does China keep saying this but never act? The US bond market is the safest place to be right now. Safer than China. It is the most attractive bond market when compared to its counterparts in the western world.
One day there will be a massive explosion in the US bond market.
The key is this: One day.
I do not see this occurring in the near future. During turmoil investors flood into the US dollar and US bond market. They believe it is a safe heaven from financial chaos. They are wrong. Until the time comes this thinking changes it will go on like this. I do not see any evidence that this is changing.

 

Credit Card Debt Climbs

An article posted today at USA today says there is a new warning sign. Credit Card debt is hitting record highs. The time to worry is when credit beings to slow down. The time to worry when credit growth beings to become stagnant.

A time will come when their will be a warning sign. It will be the exact opposite of what USA today thinks.

When to Start Thinking About Retirement

The answer is RIGHT NOW. Pick a retirement age. Lets say 65. Lets say you plan on living until 95. If you start saving at the age of 30 to reach a million by 65 you must save $33,333 per year. This is assuming your investments will keep up with inflation each year. How much money are you saving per year? Devise a plan now. Do not put it off. The future will be here before you know it.