Free Listening English lessons

Fed Gets Ready to Pump $600 Billion More Into US Economy

January 12th, 2011 at 06:44am Under Economy Report

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

This is the VOA Special English Economics Report.

The Federal Reserve calls America’s economic recovery “disappointingly slow.” So the Federal Reserve decided Wednesday to add six hundred billion dollars to the financial system by the middle of next year. To do this, the central bank will buy Treasury securities from dealers.

The action is known as quantitative easing. The goal is to reduce long-term interest rates. The hope is to create conditions where businesses will invest more and people will spend more.

Buying longer-term Treasury securities will make less government debt available to investors. This will raise the price. As bond prices rise, their rates fall.

Long-term securities affect rates on home mortgages and other loans. Lower rates on corporate bonds could lead businesses to invest in more equipment and jobs.

Lowering short-term interest rates is the Federal Reserve’s main way to get banks to increase lending. But those rates are already near zero.

The Fed earlier bought one trillion seven hundred fifty billion dollars of Treasuries and other securities. That program ended in March.

Fed Chairman Ben Bernanke, writing in The Washington Post, said “Easier financial conditions will promote economic growth.” But interest rates are already low.  And critics say further cuts are unlikely to create much growth.

Inflation also is low — so low that some economists worry more about the risk of falling prices and wages. But others say pumping more money into the economy will weaken the value of the dollar. They say it could raise inflation to dangerous levels — and not just in America.

Interest rates in the United States and Europe are lower than in Asia and Latin America. As a result, Asian and Latin American economies are already struggling with an overflow of investments.

Large flows of capital can raise currency values and make export-based economies less competitive. Several nations are considering limits on capital.

The Fed’s action this week had been expected. But it comes as the heads of twenty leading economies prepare for talks in South Korea next week.  And it came a day after the Republican Party retook control of the House of Representatives from the Democrats.

President Obama has invited leaders of both parties to meet on November eighteenth. One immediate issue: what to do with tax cuts that are set to end next month.

And that’s the VOA Special English Economics Report. I’m Steve Ember.

___

Contributing: Heda Bayron, Jim Randle and Avi Arditti

By admin 21 comments

Where Every Day Is Christmas

December 21st, 2010 at 12:12am Under Economy Report

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

This is the VOA Special English Economics Report.

(MUSIC)

There is a place where Christmas lives all year long. It is called Bronner’s CHRISTmas Wonderland in Frankenmuth, Michigan. The family-owned business calls itself the world’s largest Christmas store. The late Wally Bronner started the business in nineteen forty-five.

Wayne Bronner, Wally’s son, is president and chief executive of what is now a multi-million dollar corporation. He learned the business from an early age. Some of his best memories are traveling to other countries with his father to find new products for the store.

Goods for sale at Bronner’s

Bronner’s sells more than fifty thousand holiday products from seventy nations. Half of the products cost less than ten dollars. Wayne Bronner says demand for small objects to hang on Christmas trees has expanded over the years. People put more time, effort and money into decorating their homes with these ornaments, lights and religious scenes. Bronner’s is famous for its nativity scenes which show the birth of Jesus Christ.

Michigan has the nation’s highest unemployment rate. Bronner’s has been affected by the recession, too. But not in reduced sales.

WAYNE BRONNER: “Even though people are spending less, we’re having more people visit here. And as a result we’ve actually had a sales increase.”

Bronner’s success is also linked to community cooperation and investment. Frankenmuth is a town of five thousand people in eastern Michigan’s farm country. The town was settled by Bavarian Germans in the eighteen hundreds. It has kept its traditions alive in buildings and restaurants.

Bavarian cultural themes and Bronner’s huge store bring three million visitors a year. The town is the most popular place for tourists in the state.

Bronner’s business is aimed at a single day of the year. But that is not too different from other businesses.

WAYNE BRONNER: “About half of our business is done in the last quarter of the year, in the last three months. And actually when you contrast that with most retailers, that follows the same pattern.”

Wayne Bronner says the family’s long-term planning and willingness to reinvest profits has grown the company into what it is today. Still, it does not hurt to build a business on a holiday celebrated worldwide. Currently, about two percent of sales are overseas. But Wayne Bronner sees room for growth, especially through the Internet.

(MUSIC)

And that’s the VOA Special English Economics Report written by Mario Ritter. I’m Steve Ember.

By admin 7 comments