Wednesday, September 29, 2010

Higher-speed sales for low-speed vehicles

Why is this relevant? As companies and govt have to cut cost to save money they look everywhere for efficiency. The first time I came to the States and saw Class 8 trucks as ambulances I wondered how they could afford such expensive and gas consuming vehicles, whereas in most places in the world including Australia much cheaper lighter vehicles are used that also had lower ongoing operating costs.Just another sign that the focus is on cost reduction, same as was the focus in Australia after the crisis there in the early 90's.

Aivars Lode

Higher-speed sales for low-speed vehicles
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Cruise Cars' "All-American" low-speed electric vehicles have a 230-watt solar electric panel that helps keep their batteries charged. This is a two-seater, but the ones sold to the U.S. Navy carry four.

By Michael Pollick

Published: Tuesday, September 28, 2010 at 1:00 a.m.
Last Modified: Monday, September 27, 2010 at 6:23 p.m.

SARASOTA - As government agencies strive to meet new energy and recycling mandates on their fleets, Cruise Cars is experiencing strong orders for its new line of solar-assisted electric vehicles.

On Sunday, the company shipped 30 of its "All-American" line of low-speed vehicles to the U.S. Navy for use at a base in San Diego. They cost about $10,000 each, seat four people and have a cargo bay.

While available for private use as well as fleet use, the new All American line is specifically engineered to satisfy two new federal mandates for government vehicle fleets. One requires agencies to reduce their petroleum use by 2 percent per year from now until 2020. The other pushes the same agencies to include vehicles that contain recycled parts.

Cruise Cars, now about 6 years old, is gradually phasing out the electric vehicles it was importing from China. Instead, the company is buying existing aluminum-frame golf carts made by Club Car and others that are coming off leases from country clubs. Workers strip down the chassis and then stretch them into the larger chassis now in demand.

The roofs provide a frame for a 230-watt solar electric panel that helps keep the batteries charged.

The four-seater with the cargo bed has proven to be a hot seller, said Adam Sulimirski, Cruise Car's general manager.

The company is working on an eight-seat model that would feature twice the power output from its roof-top The panels are designed to boost the charge on the battery, but are not yet powerful enough to be relied upon for a full recharge.

"We tell a client that if you are driving five to ten miles a day, you don't have to plug the vehicle in," Sulimirski said. "That covers a lot of applications. They drive to a building, park it, drive to another building, park it."

Cruise Car, with a main office at 1712 Northgate Blvd. in Sarasota, is starting to beef up its work force to handle the increased orders.

Tuesday, September 28, 2010

Check this out analysis, that says that the USA is not printing money

See my previous BLOGS that raise that question did the USA print the money?

Aivars Lode, thanks Bill for the contribution.

The Myth and Mistake of Quantitative Easing
Last week, the Federal Reserve said that it was “prepared to
provide additional accommodation if needed to support the
economic recovery.” This was a signal about the potential for
more Quantitative Easing (QE).
The original QE took place between September 2008 and
mid-2009, when the Fed’s balance sheet ballooned from $900
billion to roughly $2.4 trillion. Now, some are calling for QE-
2, with a few market participants calling for another trillion
dollars. This would be a colossal mistake.
Quantitative Easing does not boost real economic activity
or inflation – it is not an injection of new money, like
traditional monetary easing. Quantitative Easing is a wrongheaded
approach to monetary policy that was born in the midst
of a panic. It was only necessary because strict mark-to-market
accounting rules made it difficult or impossible for private
companies to hold risky assets. Now that these fair value
accounting rules have been corrected, there is no further
justification for QE.
So far this year, the Federal Reserve has earned $68 billion
in profits from its portfolio. More than half of this should have
been earned by the private sector. These profits, which rightly
belong to the private financial system, could help explain why
the economy is having a difficult time recovering.
At its root, the Fed’s balance sheet is really no different
than any other balance sheet. It has liabilities and assets and it
can expand in one of two ways – through growth or by using
debt. In the private sector, growth equals profits or income.
For the Fed, growth means printing money. Currency is an
organic liability, created by the Fed, which is then used to
purchase assets. This is the traditional means of money
expansion – the creation (or printing) of new money.
So-called quantitative easing uses borrowed money –
which is not the creation of new money. The two largest
sources of borrowed funds for the Fed are bank reserves and
Treasury cash. Banks now earn interest on reserve balances
and hold roughly $1 trillion at the Fed. At the same time, the
Fed is borrowing $277 billion from the Treasury. It uses these
funds to buy mortgages or Treasury bonds.
So, the Fed is borrowing money from banks and the
Treasury to buy assets. All this does is shift what would have
been held in the private sector onto the Fed’s books. This is not
the creation of new money and therefore does not create
inflation or lift aggregate demand.
To understand how foolish some of this is, follow this link
to see a chart of Fed liabilities on our blog which shows that
bank reserves peaked in February 2010, at $1.2 trillion, and
have since fallen by $252 billion. Banks seem to be taking
back these funds to make loans or buy bonds. The Fed should
let this process shrink its balance sheet, but instead has
increased its Treasury borrowing by $239 in the past seven
months, in order to keep the balance sheet size the same.
In other words, the Fed is borrowing money from the
Treasury Department to buy Treasury bonds. This makes
absolutely no sense and it is a myth that somehow this is
providing a lift to economic activity. Milton Friedman is
spinning in his grave.
Quantitative easing is not the reason the economy has
returned to growth. Its efficacy is a myth and its use was a
mistake. Zero percent interest rates are enough. The Fed
grabbed power during the crisis and should give it back.
Date/Time (CST) U.S. Economic Data Consensus First Trust Actual Previous
9-28 / 9:00 am Consumer Confidence - Sep 52.3 51.8 53.5
9-30 / 7:30 am Q2 GDP Third Report +1.6% +1.5% +1.6%
7:30 am Q2 GDP Chain Price Index +1.9% +1.9% +1.9%
7:30 am Initial Claims - Sep 25 460 459K 465K
8:45 am Chicago PMI - Sep 56.0 54.9 56.7
10-1 / 7:30 am Personal Income - Aug +0.3% +0.2% +0.2%
7:30 am Personal Spending - Aug +0.4% +0.5% +0.4%
8:45 am U. Mich. Consumer Sentiment 67.0 67.0 66.6
9:00 am ISM Index - Sep 54.5 54.9 56.3
9:00 am Construction Spending - Aug -0.4% +0.3% -1.0%
sometime Domestic Auto Sales - Sep 3.7 Mil 3.7 Mil 3.7 Mil
during the day Domestic Truck Sales - Sep 4.8 Mil 5.0 Mil 4.8 Mil