Money as Debt

Hi

I saw the video how bank make money. It was very interest, but I have a personal opinion and that is: Not only Bank owners are greed, but that is the nature of people in real life!! (I am sorry, I might be a little rough) but you can see it daily in your real life: When a person is poor or his income is low, his attitude between people is so friendly, social, and happy to support and help others (Generous). But when the same person income is get increased or his standard of living became better, you will find him that he is not friendly like before, he became more selfish, and from being generous he convert to became a Miser!

In my personal opinion the main cancer which affects the whole universe is the greed, and most people who became greed, their main excuse will be that they want to protect their children future. But the problem is that the main consequence for people being greed is that it will demolish the social environment of the society which means that: in the future brothers will not take care of each others and everyone will care only about him self, which means create a new rough society were every body have to think about himself, and there will be no place for any weak person. The only advantage will be that the person will be more independent on himself, but the disadvantage will be that by losing the social environment the person even though he is working and living in his own country, he will feel that he is a stranger even though he might be standing in a place between his relatives!!

Qusai

My personal experience with financial crisis

 

The financial crisis affected the whole world. Millions of employees lost their jobs, and thousands of companies and organizations are closed (bankrupt).  There is more information in the website http://en.wikipedia.org/wiki/Financial_crisis#Causes_and_consequences_of_financial_crises.

Actually it is difficult to point at someone and say that: He is the one who caused the financial crisis!!

According to the website above, reasons of financial crisis are:

·         Leverage

·         Asset-liability mismatch

·         Regulatory failures

·         Fraud

·         Contagion

I think that many people would like to know in brief and in simple way how is the financial crisis occur and what is the consequence (How it will affect people).  In this blog, I would like to mention that I have been through Personal financial crisis.

When I started before seven years building my house, the budget which I have was enough to build a villa with three bedrooms, but because I realized that the area where I am going to build my house, most of people there are living in villas with double floor, I changed my mind and decided to build a villa with double floor (Even though I won’t get abused if I live in a villa with ground floor, the Greed stole my mind). I was feeling that if I am going to live in between wealth society, I should live with their standards. Even though it will cost 60% more than the budget which I have, the plan or the program which I made to myself stated that I am suppose to pay the 60% of the extra funds during the end of the project.

 I made the contract with a contractor and a consultant, and the contract stated that the villa should accomplish within thirteen months.  I paid the budget to the contractor in advance so he will be able to start building the house with no delay, and because I am working at morning and studying at evening, I was not able to follow up the project. The contractor took the advantage, and started to took the labor from my villa to other projects, but the worst was that his strategy at work, most of his work finished with bad quality, and I was not aware what is going on during that time because lack of knowledge or experience about the work quality.

When the deadline appeared for me to receive the villa’s key, I went to the site and what I found, 50% of the project only were finished. I was so angry and I went to the consultant office, and I asked him: What is going on, and why my villa is not ready?! He replied that: I have also other projects to look, and I am so busy!!! I have been in Skirmishes with him, but at the end I realize that the villa was not accomplished because the laziness of the contractor and the consultant. Furthermore, Both (The consultant and the contractor) get 90% of the budget (villa cost +fees) in advance, so why should they bother themselves?!!

I went to the Municipality to complain, but I was surprised that there wasn’t a strict rule against the consultant and the contractor in case they work wrong. Even the employee of the municipality told me (something I felt that it was ridiculous): You are the villa owner, and your responsibility to follow up and accomplish the villa. I replied him that: If follow up and accomplish the villa is my responsibility, then why do I have to pay and sign a contract with a contractor and a consultant!!!! The Municipality employee told me that: Sir if you are insist to complain, then the only place you could go is the court, but keep in your mind that, procedures there are complex and takes long time, it might be months or even years. At that moment, I felt that there should be a study to prepare a program to protect the villa owner’s right.

I started to look for another subcontract to continue the work in my villa in September 2004, but another problem appeared during that time in the UAE and other countries and it was the Inflation. All the constructions material prices rose like Ceramics, Paints, etc… During that time no body was expecting the appearance of inflation even the consultant. As a fact, the amount of money which was needed to accomplish the villa became double (100% more).

The consequences were:

·         75% of my salary was spent on building the villa, 20% for transportation and maintaining the car and the rest 5% for me and my family. Money was not enough to cover needs.

·         I lived the case of austerity (poverty) for the whole three years! No shopping, No movie theater, Never go to a restaurant, etc… No fun (Hard time)

·         I faced difficulties and embarrassments. Several times Internet and Mobile phone services were disconnected from telecommunication (Etisalat) because I was not able to pay bills on time.

 

Someone who will read this blog might want to ask me that: Why did you make it so difficult for your self?! Why you did not take a loan from a bank and make your life easy rather than struggling and suffering for the whole three years?!! My answer will be that: I went to a bank and asked for a loan, he accepted my request. He brought the documents which I am suppose to sign, but before I sign I told him that I want to know what is the bank interest will be. I sat with the bank employee and calculate how much I have to pay back to the Bank, and at the end I was shocked because the total interest rate will be 44%, which means that I have to take a 100 from a bank and pay back to him 144. I felt that the bank is taking advantage of people’s needs, so I made the decision to not take loan from the Bank, because I felt that the bank do not deserve the money which I am going to pay back him with the interest.

 

 

 

 

When Women Work

While I was reading about the unemployment in the website http://news.bbc.co.uk/2/hi/business/7732223.stm, I was imagining that unemployment for men won’t occurred if women stayed at home, take care of children, and living the simple life.

Organizations, governments, and societies encouraged women to work out home. There were many excuses which gave permission for women to work like:

·         Participate men in development.

·         Support the family financially, if the family have fund or finance problem.

·         Create an educated society.

·         Teach and support children for education.

All points which mentioned above became reality, almost everywhere. The societies are getting more educated, furthermore families are getting to use living wealth because of more income which gain by women work.  On the other hand, there are some problems appeared after women started work out like:

·         Lack of a sense of family atmosphere

·         Children do not spend enough time with their mothers, husbands do not communicate well with wives, etc….

·         Outlook is material and emotions are almost non existent.

·         Lack of enthusiasm for early marriage.

·         Delayed age of marriage leads to the spread of vice.

Reality sometimes tastes bitter, but it is a fact.

In my opinion, I personally agree that women should participate in development, but the priority should be for the family, because family is like a car petrol station. When a car stop in a petrol station it defuel, and start its new journey. For a man, the family is like a station where he could relax, discuss and take advice from his relatives and family members to make a decision and start his missions.

 

People realize the importance of the economics

The financial crises around the world make the people realize the importance of the economic subject, and that people should know at least main information or knowledge about the economics topics.

In (DMC) Dubai Men’s College, students learn Macroeconomics which is authored by N. Gregory Mankiw. When I received this book, I saw that the book contains 583 pages (I wish if the main information is going to be limit in one or two pages only), and to learn and know about the Macroeconomics, it is impossible to learn the main subject or topics in a short time. For me, I spend a full semester learning this subject, and it was impossible to learn the main or the most important topics in short time, but for you fellows who are reading my blog, I hope it is possible!!!!

I put most of the main topics below (I know that there are also many other important topics which is not mentioned), but I think after reading topics below, people will be able to learn and now the basic or the most important topics of Macroeconomics (Economy).

 

Inflation: an increase in the overall level of prices in the economy.

 

GDP: measures what has been produced in one year and therefore can be used to calculate the rate of growth of the economy.

Nominal GDP: The production of goods and services valued by current prices

Real GDP: The production of goods and services valued by constant prices

 

Four main components of GDP:

1.       Consumption (C).

2.       Government spending (G).

3.       Investment (I).

4.       Net Export (NX).

PPP: Purchasing Power Parity.

CPI: the measure of the overall cost of the goods and services.

Inflation rate in year 2 = CPI in year 2 – CPI in year 1/ CPI in year 1 * 100

 

BOP: Balance Of Payments,

Current account: consists of the trade in goods and services.

Capital account: records of flow of two types of investments which are Foreign Direct Investment (FDI), and portfolio investment.

 

Government budget deficit: it is when the government’s spending is higher than government income.

Trade deficit: occurred when a country export more than import.

 

Monetary Policy: how is the government usually through the central bank, controls the money supply.

Three functions of money:

1.       Medium of exchange

2.       Unit of account

3.       Reserve of value

Reserve requirements: the percentage of deposits that banks have to keep and not loan out.

 

Fiscal policy: how the government manages its spending and  it tax collecting.

Contractionary: government spending is reduced either through higher taxation revenue or reduced government spending or a combination of the two. This might lead to a lower budget deficit or a larger surplus than the government had, or a surplus if the government previously had a balanced budget.

Expansionary: net increases in the government spending through a rise in government spending or a fall in taxation revenue or a combination of the two. This might lead to a larger budget deficit or a smaller budget surplus than the government previously had, or a deficit if the government previously had a balanced budget.

 

Crowding out:  a decrease in investment that results from government borrowing.

 

Unemployment rate=Number of employed people/ number of people in the labor force

 

Deadweight loss: is the decrease in total surplus that results from a tax.

 

Tax incidence: The manner in which the burden of a tax is shared among participants in a market (Buyers and Sellers).

 

 

 

 

Affects of working extra hours in reality

While I have been studied in DMC, I heard several times from teachers, read in news papers, and listened on the radio that, one of the ways to increase the power of the economy is to increase the product and services by making the employee work for extra hours, instead from 8am to 2pm, 8am to 5pm, because extra hours of staying at work means producing extra product. But from what I am watching, I realized that extra hours of staying at work doesn’t mean extra product, it means just spend more hours at office, and there isn’t actually extra product, it even seems that the product is less!!!!

In my opinion is that, there might be reasons. Employees feel working extra hours means that:

·         stay more away from home, and that’s annoy everybody

·         living the duty late and stock later evening in traffic jam

·         loosing the excitement of work

·         many employees will escape from work (By official excuses)

·         tension and arguments might increase between employees because the pressure of several hours at work

·         the quality of service is going to decrease, especially customer services and salesmen, because spending more time at work will make employees bored, not motivated, and not well come customers (Not looking for customers satisfaction)

At the moment I am in one of the car show room, and I can see that employees are throwing the work on each other, some of them went to smoke and talk outside the showroom, others went to talk with attractive pretty women ignoring many customers around, and the person (Salesman) who I am waiting for went to have a lunch break from 01:00pm to 04:00pm!!!!

I am against encourage the people to get lazy, I am with increasing the product, but what I want to say that people have a limit to withstand, and if anything is going to run overload on them, then people reaction will be negative. People have their feeling, their own life, and they want to spend some time for their own life like, set with their children, go to visit their parents and relatives, spend sometime in their personal business, and entertainment. If people will have a time to spend on what mentioned above, I am sure that their focus and performance at work during the duty time will better, further more, I believe that their product level will be stable, it might be increased, but it won’t be decreased.

 

World War 2

Reasons:

Impose conditions on the surrender of militant forces retreating in the First World War, particularly Germany.

The rise of fascism in Italy, Nazism in Germany

Hitler built German army forces fast after he seized power in 1933 and re delivery of the Rhine basin in 1936.

Germany announced the annexation of Austria in September 1938.

Germany completed the occupation of Czechoslovakia in March 1939 after granting their parts under the Convention Munich in 1938.

Germany demanded the restoration of Danzj Hitler and the Polish Corridor.

Hitler signed a non-aggression pact the Soviet Union in August 1939.

Hitler attacked Poland in September 1, 1939 and occupied it in full.

 

Events:

France announced England and most countries of the Commonwealth war on Germany in 3/9/1939.

 

German forces occupied Denmark, Norway and the Netherlands in May 1940.

France surrendered on June 22 after being attacked by German forces storm.

 

British battle began when the Germans tried to force Britain to undergo operations through an intensive air bombardment; however, the British didn’t give up.

Germany invaded Hungary, Bulgaria and Yugoslavia in April 1941.

Hitler invaded Russia in June 23, 1941.

Japan attacked Pearl Harbor port, the Philippines and Malaysia in December 7, 1941.
The United States and its allies, most of Russia except for war on Japan in turn declared Germany and its allies except Finland war on the United States.

Troops arrived to Stalingrad axis and the Caucasus.

 

Italy surrendered in September 1943 after the Allied invasion of Sicily, southern Italy.

America won freedom in battles against Japan in the Coral Sea and Medway also recovered the Philippines in 1945.

Russia in 1943 has counter-attacked along the Front for the expulsion of the German armies reached Poland in 1944 and managed to expel the Axis forces from the Balkans.

In late 1944 after France was liberated by Allied forces landed in Normandy, western France and other forces in the south of France.

In May 7, 1945 Germany surrendered unconditionally.

Russia declared war on Japan and invaded Manchuria

 

6 August 1945 in the United States dropped the first atomic bomb on Hiroshima followed by another bomb in Nagasaki on August 9.

Japan announced in recognition of 14 August 1945 signed the terms of delivery in September 2, 1945.

The situation turned in the North Africa after the Allied victory and then landing of the U.S. in Algeria.

Result: 15million died

World War One in brief

 

Period: (1914-1918).

Main reason: Assassination of fancies Ferdinand in Sarajevo in 28 June 1914 by a Serbian, which created wars between Religious and ethnic communities.

Participants in the War: Allied Forces            and Axis forces.

Allied Forces: England, France, Russia, Serbia, Montenegro, Japan, and USA.

Axis forces: Austrian Empire, Ottoman Empire, and Germany.

Events:

·         Germany invades Belgium, defeated Russia in Trench warfare, Tandberg and Mazur lakes. Russian counter attack failed in 1916.

·         Bulgaria joined Germany in October 1915 and plunged Serbia and Montenegro in the same year.

 

·         Italy joined the Allies in May 1915 did not mention the role in the fighting until its defeat in Kaboreto 1917 and then won the Vittorio Ffineto in 1918.

 

 

·         The United States severed relations with Germany and declared by the war in April 6, 1917 after German troops dumping of the ship to Ozitania and thus broke the neutrality of the United States then threatened to ignite a war submarines in 1916.

 

·         U.S. campaign reached to France but was not involved in the fighting, until June 1918

 

·         Arab revolt against the Ottoman Empire which caused the fall of Baghdad and Jerusalem in 1917.

 

·         Germany and its allies signed alone peace with Russia

 

·         The Austrian Empire and Turkey and Bulgaria signed extradition. Germany signed a Nov. 11 truce in 1918 after the revolution broke out in Germany.

 

Weapons used:

-Guns and submarines.
- Primitive aircraft used in espionage operations and fighting.
- Balloon unencumbered land for observations.
- Tanks.
- Gas to force the troops out of the trenches or suffocation.

 

   

The consequences of war:

- Change the borders of Europe and Asia
- The disappearance of 4 Empires (German – Austria – Russian – Ottoman).
- Establishment of the League of Nations and its objectives which were to prevent war.
- The development of the art of fighting
- The number of casualties at 10 million from the two sides was civilian casualties.
- The number of injured at 20 million injured on both sides.
- The war had cost about 281,887 million dollars.

 

Economists on time

People heard and know about economic systems like communism and capitalism, what are these systems advantages and disadvantages, but people in general do not know that much about economists (People who established, built and created economic systems).

Economics systems did not built within a few days. It took centuries, and Successive generations.

Tables below show some of most famous economists during BC, and 21 centuries according to the web site http://en.wikipedia.org/wiki/Economist .

 

Economists during BC

Economists	Time BC
Aristotle	(382-322 BC)
Xenophon	(431-355 BC)
Chanakya	(350-283 BC)

 

Economists during the last 21 centuries

Economists	Time
Richard Cantillon	(1680-1734)
David Hume	(1711-1776)
Thomas Malthus	(1766-1834)
David Ricardo	(1772-1823)
Adam Smith	(1723-1790)
John Stuart Mill	(1806-1873)
Jean Baptiste Say	(1767-1832)
Karl Marx	(1818-1883)
Frederic Bastiat	(1801-1850)
William Stanley Jevons	(1835-1882)
Eugen von Bohm Bawerk	(1851-1914)
Carl Menger	(1840-1921)
John Maynard Ketnes	(1883-1946)
Irving Fisher	(1867-1947)
Wilhelm Ropke	(1899-1966)
James Tobin	(1918-2002)
Friedrich Hayek	(1899-1992)
Milton Friedman	(1912-2006)

 

Most economists names which mentioned in these tables took high positions in politics, finance, and win Nobel Price.

For more informtion about economists, this is the web site

http://en.wikipedia.org/wiki/List_of_economists

My condition in this semester and how I catch up

 

When I started this semester every thing was fine, until the last week of Ramadan because during the last week I affected by poisoned food, so I was sick for three days. When I started to get better, I faced some personal problems, so I was bothered to give a time to solve it instead of attending classes, I went to Mr. Tony Degazon (The Supervisor) and explained to him my condition and he understand it. So when I returned back, there was a lot of work I have to catch up, and I started to work and finished some of the assignments and projects. Some body advised me that it is better for me to withdraw, but because I am aware that if I might withdraw now, then the next semester there might be no vacancy for me to join the DMC, so I preferred to continue. While I was working to catch up with the class, another interrupt I faced, and this time was my father health: He is getting old, and from time to another he is getting sick.

 There were many challenges I have been faced to carry on my education and I defeated them. The first challenge was that the place where I work required a lot of effort, and when I finish my work I go directly to my room and sleep because of being tired, so my first challenge was: Am I going to work hard and study at DMC? Thanks God that I achieved the high Diploma and also I got promotion at my work. The second challenge was that my work is 150km away from the college, and to reach the college I have to drive 150km for depart and for arrive, so am I going to drive 300km daily by my own self? And the answer is that: Yes, I drove for the whole 4 years, and defeated this challenge too.  The third challenge was that during the last years the wireless service of the internet was not available in Etisalat, and because I do not go to home, I drive directly back to work area, there is no internet service their, and to finish the assignments I have to use the internet and, the internet was available in the DMC, so the challenge was that: Am I going to stay in DMC for a long time daily to finish the assignments, and then drive back to work? The answer is: Yes, and many times I spent in DMC working until 4 am, and then drive back to work!!!! , so I also defeated this challenge. But when the problem belongs to my father’s health. I felt that I have to give up, withdraw, and take care of my father. I went to talk to Mr.Mark Curcher (The section leader), he also advised me to withdraw, I told him that: I will see on next week. I talked to my brother Hassan Makki, and when he knew that I am going to withdraw he told me that: No, you have to continue, and about our father I will take care of him as much as possible. I went to talk to my father and I told him that: I am going to withdraw, and take care of you. My father replied that: Don’t ever think about withdraw, and study and work as much as possible, and don’t worry about me, I will take care of my self, I will keep working, so keep work and study.

 

These words from my father and brother encouraged me to carry on my education. I started to continue working on assignments, I showed to my teachers that I am not interested to withdraw, and I am going to work hard as I used before, and I need their cooperation. I appreciate that teachers cooperated with me enough. They understand that I am also an employee like them, and have responsibilities like them. Now, I finished all the assignments required from Mr. Baber (International Business subject), and for Mr.Tony (A History of the Arab Peoples) and looking for new assignments for them. About Mr.Mark Curcher, he realized that I am doing my best to catch up with the class, and I am looking to get high marks for my assignments or any works belong to my studies.

I will keep working hard as much as possible not only to pass the course, but to get high grades too.

13 Nov 08 lesson

I was in the class listening to Mr. Mark Curcher, he was discussing about a very interest topic and it was about tax and how it affects in people life. He said that in UK, 30% of the salary already government take from the salary as a government tax, further more fro each product sold in the market, the buyer or the consumer have to pay tax plus the price of the product. Tax will go to government spend, education, health, military, and for social support.

One point did Mr. Mark mentioned, and it was about the money which is government paid to the unemployment people monthly. He mentioned that some of the unemployment people do not deserve it, because they are not serious in looking for a job, and paying them money monthly by the government will make them lazy, and will encourage them to stay at home and not look for work.

Mr. Mark opinion was that UK government instead of, taking money from people in the shape of tax and gives it to this kind of unemployment people, it is better to spend more in health and education.

My personal opinion will be that, I agree with Mr. Mark that paying money for some unemployment people will make them lazy, and encourage them not to look for a job. I think that one of the solution will be is that UK government should not pay for the unemployment person unless, he shows to the UK government that he already sent his CV to several companies by Emil and his looking for the job seriously.

In UAE, Thanks God people here are blessed because of Oil, people here do not have to pay tax for the government, which helps them to save more money, which give them the opportunity to invest or start a business to make for themselves more income.  Where as, in UK it’s very difficult to start a business and make your own income, because people their have to pay tax, and not much left from them to save or invest.

In conclusion, whether governments depend on natural resources or take tax from people, governments look for better future to its people, and their structure like education, health, and job.