Money!

Now last week we talked a lot about GDP and different types of ways to measure a country's standard of living. Until the last day, which was Friday, we started to talk a little about money. Money seems like an interesting topic because we use it in our every day lives, and use it for many things.

You may ask what is money? Money is the means of exchange. With money someone can trade their own goods for what they want. It seems like money is simple and we know the basics of what it is and does, but it hasn't always been so easy to understand.

It seems simple now that money is the medium of exchange, because everyone wants money and will trade with you for a certain price. Back in the olden days money wasn't exchanged for trade, but other goods and services were. That wasn't very efficient because you would have to find exactly the right person who wanted what you were trading and had what you wanted. Since we just trade with money now, it makes it easy for everyone to trade and to keep on trading since money never expires. Money also has a set value, therefore when a good or service is priced you are able to tell how good that product is for the price it is at. There is no confusion or having to argue over the price, once the price is set that's what it is and if you want it badly you will pay for it.

There are also different types of currencies so money can be used in different countries. Each country has their own currency, which makes them unique in a way. Even though there are different currencies money still has the same type of value. Now sure each currency is worth more or less than another, but it still has the same value when you want to buy, sell, or trade something.

Everyone wants money and wants a lot of it, there's people that work long and hard for their money but there are also people who scam there way to get to the top and be rich. People do illegal things to gain the amount of money they want. For example like Connie mentioned in her presentation last week people can get scammed or be the ones who are the scammers by a ponzie scheme, or deal drugs, and even counterfeit bills. With the new Canadian bills we have it is hard for people to counterfeit them now. If you see in the picture below there are many things that prevent this from happening. 

There are pros and cons to money as you can see but in the end everyone does need money to have a well-balanced life and to keep the economy running. As long as people learn to earn money the proper way and not cheat the system then everything will be balanced in a way.


https://www.youtube.com/watch?v=3PP2j60LvjU

Works Cited

"Functions of Money." Functions of Money. N.p., n.d. Web. 22 Feb. 2015. 

"What Is Money?" Economics and Liberty. N.p., 28 Oct. 2010. Web. 22 Feb. 2015.

Largest Ponzi Sceme in Canadian History

Good afternoon Miss Teetaert and fellow classmates. As we know, after exams we have began to learn about the topic of GDP. Gross Domestic Product. As we know, the formula by which to measure GDP is GDP=C+I+G+(X-M). I know that we all know what each letter stands for but for reviewing purposes we'll go over what each letter stands for. C for consumption. I for investment. G for government. X for exports, and M for imports. The topic that I'd like to talk about today would have affected the GDP because individuals had more money to spend, for a time, which increased consumption and also related to investments. 

The topic that I'd like to cover is what is being considered to be the largest ponzi scheme in Canadian history. A trial that has concluded yesterday after 6 long years of being in the criminal justice system. However, before we dive into the topic, I'd like to cover what a ponzi scheme really is, as maybe some of you may not know (I personally didn't know exactly what it was before this post). Below is a video that briefly and effectively describes what a ponzi scheme is.

Now that we have that background information, we'll talk about the topic further. This past Saturday, February 14th, one of the longest trials in Calgary history came to an end. An 11-member jury found Milowe Brost and Gary Sorenson (Calgary businessmen) guilty on 2 counts of fraud, and 2 counts of theft. They are facing up to 14 years in jail.

Milowe Brost, 61 & Gary Sorenson, 71

After five months of trial and three days of deliberation, the two men arrested in 2009 were found guilty for their crimes. Police said investors around the world lost between $100 million and $400 million in the scheme. The Crown says many lost their life savings, retirement plans, even equity in their homes. Some even took their own lives because of the massive financial burden the Ponzi scheme left behind.

The price of crude was climbing toward $100 a barrel in Alberta in the early 2000s and Albertans had more spare cash than ever. The deal they were offered was too good to pass up. They were promised a 34 per cent annual return on an investment of $99,000 which was supposed to grow to $1,035,000 within eight years.

Their scheme took place from 1999 to 2008 and involved companies named Syndicated Gold Depository SA, Base Metals Corporation LLC, Bahama Resource Alliance Ltd., Merendon Mining Corporation Ltd. and Strategic Metals Corp. Investors were told that the business involved selling gold for refining and that the deal was “low risk.” However, it was quite the opposite. The companies were really just fronts to funnel cash to the two men.

Most of the $300-million has never been found and it probably won’t be, because it’s hidden offshore, paid out to early investors or spent by the pair on lavish lifestyles, including a massive ranch in Honduras, a luxury bass-fishing lodge and flights on private jets. Financial records were moved to Belize, and both men claim they are now broke, in Canada at least.

This, overall would affect Canada's GDP negatively since the people affected lost a lot of money, money that they would have otherwise spent (consumption).

I understand that sometimes investments don't work out, but I feel awful for the people who fell victim to these horrible people. Some people no longer have pensions, others no longer have family members. I just don't think that 14 years maximum jail time is enough. chances are they'll get paroled and promptly follow their massive amounts of money out of Canada.

Works Cited

“How A Ponzi Scheme Works” Youtube. 2 May 2012. Epipheo. <https://www.youtube.com/watch?v=VXRkfqw67GE> 16 Feb. 2015.

Grant, Meghan. Milowe Brost and Gary Sorenson. photographs. n.d.  Ponzi scheme trial: Milowe Brostand Gary Sorenson found guilty. CBC. 16 Feb. 2015.

Graveland, Bill. “Jury finds Calgary men guilty in multi-million dollar ponzi scheme”. The Globe and Mail. 14 Feb. 2015.  The Canadian Press. <http://www.theglobeandmail.com/news/alberta/jury-finds-calgary-men-guilty-in-multi-million-dollar-ponzi-scheme/article23004620/> . 16 Feb. 2015

McKenna, Barrie. “Largest Ponzi scheme in Canadian history exploited boom time Alberta”. The Globe and Mail. 15 Feb. 2015. The Globe and Mail. <http://www.theglobeandmail.com/report-on-business/largest-ponzi-scheme-in-canadian-history-exploited-boom-time-alberta/article23010870/> 16 Feb. 2015.

Throwing money cartoon. Cartoon. n.d. throwing money cartoon Cartoons. Cartoon a Day. 16 Feb. 2015.

GDP

GDP

Last week, in the class, we learned about economics indicators: GDP. GDP stands for Gross Domestic Product, and is the primary indicator to be used to gauge the health of a country’s economy. It shows the employment and unemployment, inflation, and level of economic activity. Every country in the world uses the GDP to measure their health of the country, indication of standard of living, and the value of goods and services produced in given amounts of time, which is usually presented on percent basis. Even if the country is high on GDP, that does not mean that GDP per capita is also high. GDP per capita is also important because it shows the average output per person in a nation. The growth in the GDP per capita tends to mean the increase in productivity. 

GDP can be measured using the formula: GDP= C+I+G+(X-M). C stands for consumption which is the value of goods and services bought by people. Consumption is usually the biggest term for GDP. I stand for investment, value of machinery, plants, and buildings that are bought for production purposes. G stand for government, purchasing of goods and services by government. X stand for exports, goods and services sold to foreigners. Lastly, M stand for imports, goods and services purchased abroad.

How it relates to the world

United States of America had significant impact by a recession. A recession is the slowdown in overall economic activity. Recessions always bring unemployment. Survey by the Fed showed that unemployment nearly doubled from 5% to 9.5% from 2007 to 2010. This forced many individuals to use their savings, credit cards or get a personal loan, which will direct to increase in debt. This incident had greatly affected the consumption which is the part of GDP. During the time, keeping the job was considered lucky as long as they were willing to take a cut in pay. As the cycle of GDP decreased or cut off, the property value also declined eventually lead to average American Family's net worth declined from $126,400 in 2007 to $77,300 in 2010.
http://www.investopedia.com/financial-edge/1212/will-your-net-worth-be-affected-by-a-recession.aspx

Video

https://www.youtube.com/watch?v=h-nTxfNM5qs

Work Cited

"Will Your Net Worth Be Affected By a Recession." investopedia <http://www.investopedia.com/financial-edge/1212/will-your-net-worth-be-affected-by-a-recession.aspx> Sun. 08 Feb. 2015.
"Per Capita GDP." investopedia  <http://www.investopedia.com/terms/p/per-capita-gdp.asp> Sun. 08 Feb. 2015.
"Exports." economicswebsinstitute  <http://www.economicswebinstitute.org/glossary/exports.htm> Sun. 08 Feb. 2015.
"Imports." economicswebsinstitute  <http://www.economicswebinstitute.org/glossary/imports.htm> Sun. 08 Feb. 2015.
"Investment." economicswebsinstitute  <http://www.economicswebinstitute.org/glossary/invest.htm> Sun. 08 Feb. 2015.
"Consumption." economicswebsinstitute  <http://www.economicswebinstitute.org/glossary/cons.htm> Sun. 08 Feb. 2015.
"World GDP Ranking 2014 | Data and Charts." knoema <http://knoema.com/nwnfkne/world-gdp-ranking-2014-data-and-charts> Sun. 08 Feb. 2015.
"Economic Indicators: Gross Domestic Product (GDP)." investopedia <http://www.investopedia.com/university/releases/gdp.asp> Sun. 08 Feb. 2015.
"Why is GDP and why is it so important?." investopedia  <http://www.investopedia.com/ask/answers/199.asp> Sun. 08 Feb. 2015.
"Economics Made Easy - Lesson 6: GDP".Youtube. Youtube, n.d. Web. <https://www.youtube.com/watch?v=h-nTxfNM5qs> Sun. 08 Feb. 2015.