There is the CPI… and then there is the MIT’s billion price project which, as the name implies, tracks the prices of a billion products in real time. And according to the latter, annual inflation has hit a multi year high of about 4%.

The BPC study found that the United States is likely to hit the debt limit sometime between August 2 and August 9. “It’s a 44 percent overnight cut in federal spending” if Congress hits the debt limit, [BPC’s Jay] Powell said. The BPC study projects there will be $172 billion in federal revenues in August and $307 billion in authorized expenditures. That means there’s enough money to pay for, say, interest on the debt ($29 billion), Social Security ($49.2 billion), Medicare and Medicaid ($50 billion), active duty troop pay ($2.9 billion), veterans affairs programs ($2.9 billion).

That leaves you with about $39 billion to fund (or not fund) the following:

Defense vendors ($31.7 billion)

IRS refunds ($3.9 billion)

Food stamps and welfare ($9.3 billion)

Unemployment insurance benefits ($12.8 billion)

Department of Education ($20.2 billion)

Housing and Urban Development ($6.7 billion)

Other spending, such as Departments of Justice, Labor, Commerce, EPA, HHS ($73.6 billion)

The decision to prioritize payments would fall on the Treasury department, and Powell points out it would be chaotic picking and choosing who gets paid (in full or partially) and who doesn’t…

No doubt picking and choosing who gets paid and who doesn’t would be chaotic. And, lots of programs would not get their funding and that would lead to plenty of screaming. Nonetheless, it should be clear from this exactly how much we are spending in excess of government revenues. And, that could and should lead to a sober assessment of what government can and cannot do.

BEST QUOTE -Tyler Durden, Zero Hedge

“At a time where the government has demonstrated a complete lack of will over $38 billion, we are left in the hands of Ben to determine short term rates, influence the curve, and Timmy to determine what maturity profile that ‘best meets our needs’. The actions of either of these two unelected individuals could dwarf the $38 billion as every 1% of increased borrowing costs would cost $143 billion. Since the government could barely deal with $38 billion, how will they deal with increased borrowing costs? Does even congress know just how trivial their cuts look relative to the potential increases in debt cost?”

More and more women are taking steps towards achieving financial independence and security. It’s about being in control and having the freedom to choose how to live your life. According to recent surveys, when it comes to personal finances, men and women truly are from different planets.

Survey results reveal that men and women have similar life priorities and financial goals – but the means by which they achieve these goals differ greatly. Asked about achieving financial goals, men and women show a significant divergence in their money styles. More women describe themselves as “bargain hunters”, while more men describe themselves as “risk-takers”. These results suggest that women set out to reach financial goals through practical methodologies.

Financial concerns also vary between the sexes. Women face unique challenges that translate into different financial needs:

• Women retire earlier but live longer, and so they face the risk of outliving their retirement savings.
• Around 50% of women aged 65 and above will require some form of long-term care, so it’s important to be prepared.
• On average, women earn 25% less than men do.
• Since women take about 11 years away from work (more than men do) to care for children or elderly parents, they end up saving less.
• Approximately 90% of women will be solely responsible for financial decision-making at some point in their lives.
• Women prefer to build a long-term relationship with an adviser whom they can trust and with whom they feel secure.

Fortunately, there are ways women can become financially successful, and at the same time be happier and less stressed. Start by getting professional advice to help you build a personalized financial plan. A financial plan provides a strategic road map that helps you to pinpoint and achieve short-term and long-term financial goals and priorities.

It does not matter what state your finances are in today, or how old you are. If you start planning now by setting some goals and working towards them, you can begin to make a significant difference in your lifestyle – and the better off you will be.

In order to offer guidance and assist women in better understanding the world of finance, we arrange regular seminars and networking events.

Contact Stefanie Richert and Tatiana Valenzuela to discuss your finances today 03 5724 5100

Viewpoint: We should stop running away from radiationBy Wade Allison University of Oxford

More than 10,000 people have died in the Japanese tsunami and the survivors are cold and hungry. But the media concentrate on nuclear radiation from which no-one has died – and is unlikely to.

Modern reactors are better designed than those at Fukushima – tomorrow’s may be better still

Nuclear radiation at very high levels is dangerous, but the scale of concern that it evokes is misplaced. Nuclear technology cures countless cancer patients every day – and a radiation dose given for radiotherapy in hospital is no different in principle to a similar dose received in the environment.

What of Three Mile Island? There were no known deaths there.

And Chernobyl? The latest UN report published on 28 February confirms the known death toll – 28 fatalities among emergency workers, plus 15 fatal cases of child thyroid cancer – which would have been avoided if iodine tablets had been taken (as they have now in Japan). And in each case the numbers are minute compared with the 3,800 at Bhopal in 1984, who died as a result of a leak of chemicals from the Union Carbide pesticide plant.

Becquerels and Sieverts

• A becquerel (Bq), named after French physicist Henri Becquerel, is a measure of radioactivity
• A quantity of radioactive material has an activity of 1Bq if one nucleus decays per second – and 1kBq if 1,000 nuclei decay per second
• A sievert (Sv) is a measure of radiation absorbed by a person, named after Swedish medical physicist Rolf Sievert
• A milli-sievert (mSv) is a 1,000th of a Sievert

So what of the radioactivity released at Fukushima? How does it compare with that at Chernobyl? Let’s look at the measured count rates. The highest rate reported, at 1900 on 22 March, for any Japanese prefecture was 12 kBq per sq m (for the radioactive isotope of caesium, caesium-137).

A map of Chernobyl in the UN report shows regions shaded according to rate, up to 3,700 kBq per sq m – areas with less than 37 kBq per sq m are not shaded at all. In round terms, this suggests that the radioactive fallout at Fukushima is less than 1% of that at Chernobyl.

The other important radioisotope in fallout is iodine, which can cause child thyroid cancer.

This is only produced when the reactor is on and quickly decays once the reactor shuts down (it has a half life of eight days). The old fuel rods in storage at Fukushima, though radioactive, contain no iodine.

But at Chernobyl the full inventory of iodine and caesium was released in the initial explosion, so that at Fukushima any release of iodine should be much less than 1% of that at Chernobyl – with an effect reduced still further by iodine tablets.

Unfortunately, public authorities react by providing over-cautious guidance – and this simply escalates public concern.

Over-reaction

On the 16th anniversary of Chernobyl, the Swedish radiation authorities, writing in the Stockholm daily Dagens Nyheter, admitted over-reacting by setting the safety level too low and condemning 78% of all reindeer meat unnecessarily, and at great cost.

Bottled water was handed out in Tokyo this week to mothers of young babies

Unfortunately, the Japanese seem to be repeating the mistake. On 23 March they advised that children should not drink tap water in Tokyo, where an activity of 200 Bq per litre had been measured the day before. Let’s put this in perspective. The natural radioactivity in every human body is 50 Bq per litre – 200 Bq per litre is really not going to do much harm.

In the Cold War era most people were led to believe that nuclear radiation presents a quite exceptional danger understood only by “eggheads” working in secret military establishments.

To cope with the friendly fire of such nuclear propaganda on the home front, ever tighter radiation regulations were enacted in order to keep all contact with radiation As Low As Reasonably Achievable (ALARA), as the principle became known.

This attempt at reassurance is the basis of international radiation safety regulations today, which suggest an upper limit for the general public of 1 mSv per year above natural levels.

This very low figure is not a danger level, rather it’s a small addition to the levels found in nature – a British person is exposed to 2.7 mSv per year, on average. My book Radiation and Reason argues that a responsible danger level based on current science would be 100 mSv per month, with a lifelong limit of 5,000 mSv, not 1 mSv per year.

New attitude

People worry about radiation because they cannot feel it. However, nature has a solution – in recent years it has been found that living cells replace and mend themselves in various ways to recover from a dose of radiation.

These clever mechanisms kick in within hours and rarely fail, except when they are overloaded – as at Chernobyl, where most of the emergency workers who received a dose greater than 4,000 mSv over a few hours died within weeks.

However, patients receiving a course of radiotherapy usually get a dose of more than 20,000 mSv to vital healthy tissue close to the treated tumour. This tissue survives only because the treatment is spread over many days giving healthy cells time for repair or replacement.

In this way, many patients get to enjoy further rewarding years of life, even after many vital organs have received the equivalent of more than 20,000 years’ dose at the above internationally recommended annual limit – which makes this limit unreasonable.

A sea-change is needed in our attitude to radiation, starting with education and public information.

Then fresh safety standards should be drawn up, based not on how radiation can be excluded from our lives, but on how much we can receive without harm – mindful of the other dangers that beset us, such as climate change and loss of electric power. Perhaps a new acronym is needed to guide radiation safety – how about As High As Relatively Safe (AHARS)?

Modern reactors are better designed than those at Fukushima – tomorrow’s may be better still, but we should not wait. Radioactive waste is nasty but the quantity is small, especially if re-processed. Anyway, it is not the intractable problem that many suppose.

Some might ask whether I would accept it if it were buried 100 metres under my own house? My answer would be: “Yes, why not?” More generally, we should stop running away from radiation.

Wade Allison is a nuclear and medical physicist at the University of Oxford, the author of Radiation and Reason (2009) and Fundamental Physics for Probing and Imaging (2006).

The UKPA reports, Pension fund deficit ‘widens 50%’:

The funding shortfall faced by the UK’s biggest pension schemes has widened by 50% during the past four years, research has suggested. 

The deficit of the UK’s 200 largest defined benefit schemes, including final salary pensions, remained broadly stable during November, rising by only £2 billion to £71 billion, according to consultancy firm Aon Hewitt. 

The group said if the recent pattern continued into December, 2010 would have been one of the most stable years for pension scheme funding since 2006. 

But despite the recent stability, the group said the funding shortfall faced by the 200 largest schemes had still soared by 50% during the past four years, rising from an average of £55 billion during 2006 to one of £87 billion this year. 

Sarah Abraham, consultant and actuary at Aon Hewitt, said: “In the aftermath of the financial crisis, pension deficits crept up to record highs. In mid-June 2010, the deficit reached its highest level of £112 billion. 

“In recent months, deficits have started to reduce, although this trend appears to have stalled. Stability is a good thing for any company trying to get a handle on the size of its pension scheme obligations, however, many employers will have been relying on further market recovery to recoup some of the losses incurred in recent years.” 

But the group said the Government’s proposals to change the measure of inflation that pensions must be increased in line with each year from the Retail Prices Index to the Consumer Prices Index, which tends to be lower, would have a big impact on the deficits. It estimates that the move could reduce the shortfall the 200 biggest defined benefit schemes face by around £35 billion – effectively halving the current deficit. 

Ms Abraham said: “Depending on regulation and how it is approached by companies and trustees, and as a result of the shift from RPI to CPI, we predict a decrease of up to £35 billion to the Aon Hewitt 200 deficit. 

“This is large enough to make a dent in the deficit of the Aon Hewitt 200, but is nowhere near enough to wipe out the aggregate deficit and send it into surplus.” 

Defined-benefit pensions have become increasingly expensive to offer in recent years in the face of investment volatility and increased life expectancy.

Commenting on the shift from RPI to CPI, Louisa Peacock of the Telegraph reports, Pensions RPI link could be revoked to save £100bn:

A Government consultation is today expected to unveil how companies that have the Retail Prices Index (RPI) measure of inflation “hard wired” into their schemes can benefit from linking payments to the Consumer Prices Index (CPI), which excludes housing costs.

The Government first announced the switch from RPI to CPI in the June Budget, which pensions experts said could reduce the estimated £239bn pensions black hole by about £100bn.

However, industry figures warned in July that companies with schemes that had RPI expressly listed as the statutory payment could not take advantage of the new rules unless the law changed. This is because it would be a worsening of benefits.

Speaking at the National Association of Pension Funds (NAPF) conference yesterday, employment minister Steve Webb said today’s consultation would look at how to “make it easier” for all companies to take advantage of the switch.

Communications giant BT revealed last month that linking pension increases to CPI reduced its mammoth pension fund deficit from £7.9bn to £5.2bn.

But NAPF research, published today, found 61pc of companies have RPI stated in their pension schemes, meaning the majority of companies would be unable to switch to CPI unless the Government overruled the current legislation.

Almost half (48pc) would make use of a new legal power to switch to CPI, while just 21pc would not – preferring to maintain generous benefits for current and future staff, the study of 162 employers found.

Joanne Segars, NAPF chief executive, said: “The question of whether a pension can move to CPI is making it very difficult for pension funds to plan ahead. The Government has significantly underestimated the complexity of letting schemes switch their inflation measure. A seemingly simple change has become much trickier.”

However, Ms Segars said allowing companies to switch to CPI does not necessarily mean they would. “There are implications for current and future pensioners,” she said. “Trustees and employers know that any switch must be handled carefully.”

Nick Griggs, an employment partner at Barnett Waddingham, said: “[The consultation] is welcome news for a significant number of employers. Whilst it is going to be hard to implement it will hopefully remove the drafting lottery that could have existed depending on whether RPI was hard coded into the rules or not.

“Whilst members will rightly find it difficult to accept a reduction in their benefits this must be considered in the context of the ever increasing cost of final salary benefits that employers have had to bear in recent years.”

The CBI urged the Government in July to bring in a piece of “overriding legislation” so that all companies could benefit from the switch, expected in April 2011.

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