Archive - March 17, 2011

1
What Long-Term Effects Can We Expect From the Japan Earthquake?
2
Here’s What You Need To Know About the Future of the Dollar
3
Should You Purchase Long Term Care Insurance?

What Long-Term Effects Can We Expect From the Japan Earthquake?

Our thoughts and prayers are with the people of Japan as they continue dealing with the earthquake and tsunami after effects.

The  Tōhoku earthquake and tsunami caused significant destruction in Northern Japan while the on-going nuclear crisis threatens wide environmental contamination. Because the news situation is fluid, we’ve restricted our comments to longer-term observations and how it may affect the global economy.

1. U.S. Treasury yields increase

Because of the 2008 financial crisis, treasury yields are historically low. With Japan being pushed in to the global debt market to refinance rebuilding, upward pressure on treasury yields will increase.

2. Reduced

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Here’s What You Need To Know About the Future of the Dollar

There has been a lot of talk in the news & media about the potential of dollar devaluation.

Arguments in favor of devaluation:

  • Economics professor Barry Eichengreen said it would be devalued 20% over the next ten years
  • China’s Yuan is undervalued by 40% and needs to go up to ease their inflation problem
  • The goal of the Federal Reserve is to devalue the dollar to stimulate a new bubble to get out of the housing slump
  • The U.S Treasury debt is so huge that devaluation is needed to make it easier to pay off the debt

Arguments against devaluation:

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Should You Purchase Long Term Care Insurance?

Long term care costs are expensive and rising every year.  For many, a two or three year stay in a skilled nursing facility could cost several hundred thousand dollars and potentially wipe out a retirement nest egg.

Consider the following statistics provided by the US Department of Health and Human Services regarding the cost of long term care services (in 2009):

  • For a home health aid, the average cost is $21/hour
  • The average daily cost for adult daycare services is $67
  • The cost of a semi-private room in a nursing facility averages $198 per day.
  • The cost of a private
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