More and more borrowers are facing the possibility or bankruptcy or foreclosure, thanks to the current state of the economy and the mass layoffs and restructuring of major companies and employers. It seems no one is exempt from feeling the fallout of our strained economic system, and perhaps you are considering bankruptcy as an option to help you regain some control of your finances. You might be better off to choose debt consolidation instead.

Debt consolidation involves taking out one big loan to pay off several or many other loans. Debt consolidation is frequently done to secure a lower interest rate on the overall debt that you owe, or to secure a fixed rate of interest that does not fluctuate with current market conditions, or sometimes for the convenience of keeping up with just one loan with one lender. Whatever reason you may have, debt consolidation is a viable alternative to bankruptcy, and carries a far lesser stigma on your credit report than a bankruptcy proceeding would.

One Loan To Pay Many Lenders

With some debt consolidations, the borrower is simply transferring a number of unsecured loans into another unsecured loan. However, most debt consolidations require that the debt being consolidated is backed up by collateral. Collateralization of the debt consolidation is usually provided by pledging your home or other valuable property as security.

Pledging collateral during debt consolidation gives you the added benefit of reducing the rate of interest that you will pay for the debt consolidation, and it is important to remember that even a half-point reduction in interest can literally save you thousands of dollars in interest charges over the life of your debt consolidation. When pledging your home as collateral for your debt consolidation, keep in mind that your new lender can force the sale or foreclose upon your home or other collateral to seek repayment if you default upon your loan consolidation agreement.

Oftentimes, borrowers find that debt consolidation can save them over the principle amount borrowed originally because debt consolidation companies can buy bad debt at a discount from other lenders. This is especially true if you are on the verge of bankruptcy and your lender fears that they may not be repaid. Be advised that consolidation in this manner can affect your ability to discharge certain debts during bankruptcy if you do end up having to file.

Rid Yourself Of Costly Credit Card Debt

Debt consolidation is particularly useful for those borrowers who have amassed substantial credit card debt. Unlike other debts, credit card debt is notorious for its high rate of interest, which makes it a leading candidate to be included in debt consolidation. Because your debt consolidation servicer will pay off the principle amount owed on your cards, you will save a ton by way of interest by including your credit card debt in with your debt consolidation. Debt consolidation will also allow you to pay off the credit card debt principle much faster.

Debt consolidation has been the saving grace for many borrowers who found themselves on the verge of bankruptcy. You can find additional savings on your debt consolidation by going with an online debt consolidation servicer. Online debt consolidation is easier, cheaper, and faster than traditional methods of consolidating debt.

Find More Debt Consolidation Articles

Secret #1: Savings with debt counseling is not a sure bet. In order to make debt counseling services or loans work for you, you have to research. To really save money on debt consolidating services or loans, always research carefully and compare programs and loans on paper. Do the math to understand exactly what you will be paying each month, how long repayment of your debts will take, and what fees or interest you will be paying on each option. Only comparing debt consolidating options in this way will tell you which option is best for you.

Secret #2: Always carefully look at the incidental costs associated with debt counseling loans or programs. Are there counseling costs or loan insurance costs? Are there administrative fees? In some cases, the hidden costs associated with debt consolidating loans and services can reduce the savings you can reap.

Secret #3: Always make sure that you understand what the consequences are of not paying on time.

When you sign up for debt counseling loans or services, make sure that you understand when you need to make payments and what the consequences of a late payment is. If you know that the monthly payment amount of a consolidated debt may be too high for you, it is important to choose another option. Consolidating debts only to still have too-large monthly payments can be disastrous to your credit rating.

Secret #4: Your creditors want, above all else, to get their money back. This means that you can often ask for some leniency with late payments or interest. This also means that if collection agencies are harassing you, you can often complain to your lender and note that you will not work with any company that uses abusive language.

Your debt consolidation company or credit counselor can help you by contacting your creditors and asking for lower interest rates or better terms.

The discipline of company finance can be split into the short term and the long run techniques of decisions. The investments of capital are the long term selections regarding the comes and the ways needed to finance them. On the other hand, the capital management for operating is taken into account as a brief term decision that deals with the short term current liabilities and asset balance. The main focus here rests on the management of inventories, money and, the lending and borrowing on a short term basis.

Company finance is additionally related to the sphere of investment banking. Here, the role of the investment banker is that the analysis of the varied comes coming to the bank and making proper investment decisions relating to them.

The Capital Structure:
A proper finance structure is needed for achieving the set goals of corporate finance. The management has got to therefore style a proper structure that has an optimal mix of the various finance options that are available.

Generally, the sources of finance can comprise of a combine of equity as well as debt. If a project is financed through debt, it ends up in inflicting a liability to the concerned company. Hence in such cases, the flow of money has varied implications no matter the success of the project. The financing done by equity carries a lower risk relating to the commitments of the flow of cash, however the result of this is the dilution of the earnings and the ownership. The cost involved in equity finance is additionally higher within the case of debt finance. Hence, it’s understood that the finance done through equity, offsets the reduction in the danger of cash flow. The management should hence have a combine of both the options.

The Decisions of Capital Investments:
The decisions of capital investments are the long term selections of company finance that are related to the capital structure and therefore the fastened assets. These decisions are based of many criteria that are inter-related. The management of company finance attempts to maximise the firm’s worth by making investments within the projects that have a positive yield. The finance options for such comes must be done in a correct manner.

Find More Financing Articles

The key point is that mass production is the cornerstone of all modern economic paradigms.

First it was food that was mass produced. So the first economic paradigm was the Agricultural Revolution.

For the first time in history, many people had enough to eat. They stopped worrying about food, did not farm their own crops nor raise and slaughter their own livestock. The mass production of food marks a turning point in history. It gave people something they never had as hunter-gatherers: free time. The ability to move about and travel, even live in new places. Leave the farms and come to what were becoming the first cities.

Owning land became the key to wealth, since land used to grow food was the key to the Agricultural Economy. Land Barons were born. The landed gentry was created. Kings gave land as the highest boon for services rendered. Kings were kings because they owned all the land which is why they could give some of it away. Private property was born. My land was fenced off from your land. New nations opened up huge tracts of land because they knew that making that land productive was the key to prosperity. We managed muscles because farming was a hard, back-breaking job, even for the oxen and horses.

Next came the Industrial Economy. I believe it started with the printing press in the mid-15th century. I also believe it created a period of transition that has occurred with each new economic paradigm.

The Incunabula

The incunabula was a period in which the church still controlled the written word and, until the printing press was invented, ‘books’ were in limited supply. The idea of providing the masses with ideas was heretical. So the church decided that it would use the printing press for God’s work and take the illuminated manuscripts from the Scriptoriums in the monasteries, where all bibles were created and print out the words and send these first ‘forms’ back to the Scriptoriums for illumination. So the monks took the forms and added colorful pictures of devils and angels, ivy and floral scroll work, visual ‘job aids’ for learning about right and wrong and what happened to you if your strayed from the path of righteousness.

The pictures were important because most people alive then could not read. These first printing press books are called incunabula. They represent a paradigm shift that ultimately effected everything – your work, your play, your family, your thoughts, your life.

Once the Industrial Economy really started to steam ahead, again it was all about mass production, only this time it was the mass production of things. We managed hands.

The first things to become ‘industrialized’ were farming tools – cotton gin, land tillers, tractors, and more. Other things began to become mass produced as well. Cars. Trains. Ships. Stuff people needed and bought out of the Sears catalog. Typewriters, a personal printing press when you added carbon copies (the origin of cc). And so much more stuff that we not only became consumers of food but consumers in general.

The capitalist world was all about moving capital around to further the production of things (including the industrialized production of food) in order to create wealth. The wealth of nations, as recorded by

Adam Smith, was built upon a culture and political system that supported mass production and mass consumption of things.

Owning the means of production was the key to wealth. The great wealthy dynasties of the industrialized world were created at this point in time. If you look at America, you see people with names like Ford, Dupont, Getty, Rockefeller, Kennedy ad infinitum owning the means of production and becoming the industrialist kings of this era.

It also meant we needed to make sure the culture of mass consumers was healthy and working. According to John Taylor Gatto, public schools were created for this very purpose. We did not want a critically thinking, independent population focused on anything other than acquiring things. Work to spend. Spend more and work harder. Make the rich richer while you enrich your life with things. Towards the end of this economic paradigm, we invented the credit card, one of the greatest boons to mass consumption imaginable.

Since we had, in the countries that had embraced and were in the lead in these economic paradigms, all the food we could want (can you spell obesity?) and all the things we ever hoped for, we were ready to move on into the next economic paradigm.

And the Knowledge Economy was born. Peter Drucker in the late 20th century, was prescient enough to see what was coming next and named the people who labored in this new economic paradigm Knowledge Workers. What they mass produced was Knowledge. New ideas. Innovations. Know-how. They spent their days thinking, writing, communicating, meeting, disseminating, rethinking, researching, creating, innovating, designing, reading, listening to the ideas of others, sharing, collaborating. We are managing minds.

The Knowledge Economy is so new that I think we are in that incunabula period of changeover, when we know that there has been a sea change, and most of us are just not sure what it is.

I say most of us. Not, for example, Bill Gates. The mass production of software is knowledgework. The people who make it are not producing food or cars or toasters (unless they are flying across your PC and I assume you are reading this on your PC). They write code. The meet and talk about features and functions. They compile code. They debug code (or let you play with it and debug it for them). Bill Gates is the richest man (so far) in the new Knowledge Economy because he either smart enough or knew in his gut that they key to wealth in this economic paradigm was the mass production of knowledge and the tools that enabled as many people as possible to produce knowledge for a living.

Several years ago I gave a presentation to the annual gathering of CIO’s at Boeing in Southern California. As the top CIO was leading me into the conference room she told me that the building itself has an interesting history. Originally an orchard grove for oranges, the building was first used as a giant manufacturing facility for the production of airplanes. When the demand for planes was reduced, the building was divided into floors, offices and cubicles and people spent their workdays in front of computers producing, refining, defining, revising, discussing, an communicating ideas. Ideas for new planes. Ideas for improving production of planes. Ideas about related projects that had something to do with planes. One piece of land, three economic paradigms.

The point is all they did all day was produce ideas, work with ideas, think about ideas, write and talk about ideas. There were still a small group of people who ultimately made those ideas into things – planes. But they were followed by the people who had more ideas about how to market it, sell it, teach people to fly it and so on and so on. So the Knowledge Economy is all about the mass production of ideas. Success in the Knowledge Economy is the ability to sift through all those ideas to come up with the ones that can be produced and sold. Turning ideas into money.

Now I wonder myself why is this any different that the previous Industrial Economy? Someone had the idea for the Ford. Someone had the idea for the mass production line. Someone even had the idea of the color choices of the Model T – black. Why were things and the mass production of things the underpinning of the Industrial Economy? Because it only took a few ideas to make a lot of things. And once we all had, in the advanced and advancing industrialized countries, all the things we needed, ideas became the currency of choice. Ideas for new ways of doing things. Ideas about ways to employ new technologies which were new ideas in their own right. Ideas about how to ‘converge’ the things that were created as a result of the new ideas. Ideas about how to change the old analog world into a digital world.

Here’s another example of ideas becoming wealth in the Knowledge Economy. Steve Jobs and iTunes. Technology changes everything and digital technology changes everything faster. So someone(s) had the idea for the iPod and someone(s) else has the idea that music consumers really wanted to have the choice to only buy the music they wanted. This was a whole new idea from the old model. The old model, from the Industrial Economy, forced music consumers to buy the thing, the CD, with lots of tunes they did not want and only a few they really wanted.

The new digital model was one tune at a time. No CD. Download it directly. Pay as you go. Music on demand. A 1:1 relationship between the consumer and the producer. Only on a scale that was mass. So an entire industry was reshaped by an idea. It’s happening to television, photography, medicine, and other industries that are artifacts of the Industrial Economy.

So if you want to be wealthy in the Knowledge Economy you need to be able to produce great ideas, or have people working for you who can produce great ideas. Then be able to make them real products or services, or have people who can help you make them into products or deliver them as services. Then market and sell them. And, according to Thomas L. Friedman, since the world is now flat and becoming flatter, and ideas know no boundaries, need no passport, travel in the air without wings, and can just pop into anyones brain anytime and anywhere, being able to compete in this new Knowledge Economy is not easy. The brains of creative people are the key in this new paradigm. And the brains that take what they imagine and turn it into some thing or some service (or some experience as the Disney Imagineers do with Disneyland and Disneyworld) are the wealthy. They own the mass production of ideas.

Syndicated columnist Mark Shields and the National Review’s Ramesh Ponnuru, sitting in for David Brooks, discuss the week’s top news including a weaker-than expected March jobs report, American economic attitudes, Mitt Romney’s polling problems, Rick Santorum’s standing in the GOP and presidential pressure on the Supreme Court.
Video Rating: 4 / 5

More US Economy Articles

“Keizai Group” believes that QE3 would be the wrong prescription for the flagging US economic recovery.

An equity research at “Keizai Group” said, “All QE3 can do is make borrowing cheaper and, frankly, that’s not going to help the millions of unemployed Americans who need to work.”

The firm believes that the Fed will hold off announcing a full-bore round of QE but suggests that President Obama’s address on Labor Day may allude to a new round of fiscal stimulus designed to create jobs working on infrastructure projects like roads and bridges instead.

“The rationale for QE3 is flawed since it can’t make companies hire workers; all it does is end up in equities and commodities which only benefits Wall Street,” said an “Keizai Group” research analyst.

“Printing money is not a panacea for the ailing U.S. economy. The unemployment/slow growth quandary is due to structural problems and to policy uncertainty, not to the lack of monetary stimulus. High marginal tax rates, especially on capital, uncertainty about pension and health care costs, and the lack of rules in the formation of monetary and fiscal policy have disrupted the normal course of commerce.”

The US Labor Department released data last week which showed that the US economy created zero new jobs in the month of August against consensus expectations for a 68,000 gain. The number prompted fresh fears that the US economy is more likely to re-enter a recession.

In addition to the unexpectedly weak August jobs numbers, the figures for the previous two months have been revised down to show weaker jobs growth.

The Labor Department now says that in July 85,000 jobs were created, down from 117,000 in the earlier estimate, while the number of jobs added in June was revised downwards from 46,000 to 20,000. Employment numbers were the weakest since September 2010, according to the Associated Press.

Economists have said that temporary factors have, in part, forced some employers to pull back. High gas prices have cut into consumer spending. And supply-chain disruptions stemming from the Japan crisis slowed U.S. manufacturing production.

The economy typically needs to add 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.

The economy and job market are remarkably weak two years after the recession officially ended. Unemployment has topped 8 percent for 29 months, the longest streak since the 1930s.

“Keizai Group” believes that neither the Federal government nor the Federal Reserve is likely to allow this to happen. “Something will be done; they can’t help themselves,” remarked the analyst.

When dealing with any type of service, there is the issue that it is not something people can see, touch or hear.

So, when considering marketing tactics, companies have to attempt to make their service somewhat tangible. For example, people in the spa/hair salon industry use referrals, testimonials, and maybe they have their degrees from cosmetology school hanging around their station. These are all ways in which people in the service industry attempt to ease people’s minds, since they cannot really “try-out” the service before it is already consumed.

Another issue with services can be consistency. Since people are at the root of the service industry and everyone does and says things a little bit differently, there is room for inconsistency.

To combat this, companies try to create some things that are uniform. For example, people who work in fast-food usually wear a uniform. This makes it seem like everything is consistent.

Thirdly, there is the issue that the service quality is automatically linked the customer/consumer and it cannot be separated. For example, a doctor can tell the patient he/she needs to lose weight and exercise more to lower cholesterol levels, but if the patient does not do those things, then the quality of care is compromised.

The last issue is the fact that the inventory is perishable. Going back to the hair salon for example, if a hairstylist does not have someone coming in for an appointment then the stylist will just have nothing to do until the next appointment. Unlike tangible products that can be put on sale if they are not selling at an exact time, services expire whether or not someone has used them.

Companies have a lot to think about when they enter into any industry in the United States today because there are so many issues that come with being a service-based economy. Even if your company sells tangible goods there is still a service component to it that needs to be addressed. It will be interesting to see the new things companies come up with in terms of customer service, since we are entering a new age where the customer rules, yet companies also want to make a profit, so seeing how companies find that balance will be interesting.

Despite all that capital and the bailout of our financial system by TARP, bank lending has continued to languish.

Banks have cited poor borrower demand as the cause, but the fact is that banks are terrified to lend. They have been to the brink of extinction and have been forced to submit to government control in order to avail themselves of the capital needed to survive. They fear that even the strictest of lending criteria may not keep them from falling further into the financial abyss as asset values (loan collateral) continue to fall; they also dread the prospect of ever having to seek additional capital from the government. In addition, the Obama administration’s willingness to change the rules of the game and to abrogate the rule of law in order to further its political agenda has compounded those fears and has contributed to an environment too uncertain and risky to justify new investments.

As experts extend their expected time frames for economic recovery, the banks know that conditions are unlikely to improve in the short-to-medium term, and could indeed be exacerbated by the president’s continued priority to implement the most liberal agenda in our nation’s history. The stimulus plan executed last February has thus far proved to be a bust and a growing consensus believes his current “cap and trade” and “healthcare reform” initiatives could have catastrophic effects on the economy and our exploding government deficit. Furthermore, the president’s stated intention to raise taxes on investment capital and small businesses is providing a backdrop of negative energy that could hold both the economy and the stock market hostage for many years to come.

Aggravating an already bad situation is the possibility of replacing Mr. Bernanke when his term expires early next year. The real concern would be if the president replaces him with an individual more sympathetic to his own thinking. That would not only taint the historically arms-length relationship that has existed between the executive branch and the Fed chief, but it could also suck out all the positive energy currently being provided by the Fed. The prospect of replacing Mr. Bernanke is especially ironic because it would appear that replacing Obamanomics with more traditional policies might be just what our economy needs now. Have you noticed that the market seems to rally lately at the slightest hint that the president’s policy initiatives may not pass muster with Congress?

I am hopeful that Congress, especially blue dog democrats, will press the Obama administration to abandon its politics for the sake of our economy and that it will do so before our nation’s yin and yang becomes Cheech and Chong, and sends our economy and our future irretrievably up in smoke!

This is a moot question and there is no firm answer to this at this point of time. China has gradually started reducing its exposure to the US dollar and it may just be paring its risk, given the uncertainty of the US economic conditions or it may be strategically embattled in dethroning the US dollar as the world reserve currency.

China reduced its US Treasuries holdings substantially in June this year in the face of falling returns on the instruments. Further, China seems to be investing in government paper of Europe, Korea and Japan. As per a US government report, China reduced its holding of long term US Treasuries by $ 21.2 billion in June to $ 839.7 billion. China reportedly has purchased over $ 20 billion more of Japanese debt than it has sold. China has also reportedly doubled its debt exposure in Korea. China’s move to increase its exposure in Asia appears to be aimed towards creating a more diversified investment portfolio given the uncertainty in both the US and Euro zone economies.

China’s move coincides with its other strategic move to remove the peg between the Yuan and the dollar in June this year. The Chinese currency has appreciated by 0.5% since then. At the same time, the Chinese central bank has allowed foreign central banks to increase their investments in the Chinese inter bond market. The three actions when read together, suggest that China is trying to offer its currency as an alternative to the US dollar as an investment option and a reserve currency. However, the Chinese move of selling US Treasuries may simply be its strategy to book profits due to an appreciation in the investments, with the US buying its own treasuries to keep interest rates low.

With China holding the largest dollar reserves, any move by the nation to dilute its holdings could have an impact on the demand for the dollar and its exchange rate. This is a double edged sword for China as a loss in the dollar’s value also results in the loss in the dollar holdings for China. As China has massive reserves of dollars, it cannot afford to let the dollar fall drastically or else it will experience erosion in the value of its dollar holdings.

While one can speculate on what China will do with its dollar holdings and how that can impact the long term value of the dollar, as of now, the dollar continues to be the dominant reserve currency as well the choice as the hedge currency. Any weakness in economic data is likely to make investors take cover in the safety of the US dollar and such a move will lead the dollar to appreciate. With the latest US housing data suggesting that the US economy is on a weak wicket, the US dollar immediately moved up and demonstrated its strength as the currency of choice in times of economic uncertainty. Existing home sales in the US fell 27.7% in July, suggesting the US economy was losing steam again. This led investors pulling out of risky securities including stock markets across the globe and running to the safe haven of the US dollar, which displayed the tendency to appreciate.

Thus, in the immediate future the US dollar continues to be king, with its long term trend depending upon a variety of factors like the performance of the US economy and moves by nations like China in relation to their massive dollar holdings amongst other factors.