Saint Valentine vs. The Economy
Valentine’s Day is just around the corner and if you’re thinking about getting something made out of gold, think again. An ounce of gold is over $1,700 right now and just a decade ago it was around $300. In addition to the cost involved, Warren Buffett has a few choice words about it. He rightfully states that gold has limited uses and doesn’t have the potential of farmland or the ability to generate wealth. So here’s an idea, instead of buying something made from gold, this year you should buy a goat. Obviously you shouldn’t be taking relationship advice from me. All jokes aside let’s take break from the usual and explore the economic impacts of V-Day.
2012 is expected to be a better year than 2011 in terms of spending. The National Retail Federation (NRF) estimates that V-Day will contribute $17.6B into the economy and this number is 8.6% higher than 2011. According to the NRF this is the highest figure since they started keeping track over 10 years ago. So here are some key figures:
- On average each person plans to spend $126.03 in 2012 and for 2011 it was $116.21
- Men spend more than women, $168.74 per man and $85.76 per women.
- Married folks actually ending up saving money as they spend $74.12 per spouse.
- In total $4.1B will be spent on jewelry. If we assume that 30% of that is spent on gold, this translates to a total of 723,529 ounces or 20,259 kilograms of pure gold. Its mind boggling to say the least.
- Cards & candy $1.5B, flowers $1.8B, dinner $3.5B, coming up with a unique idea priceless.
- The good news is that this year only 37% of gift buyers will go to discount stores, compared to 40% a year ago.
Okay, so shouldn’t Valentine’s Day be about spreading the love? Just think about this for a second, there are close to a billion people that are undernourished. According to the UN it will cost around $30B - $35B to feed all these people for an entire year. Just from the US alone we can get to over half of the amount. When we consider the amount of money spent on Valentine’s Day in the US, Europe and Canada I am confident that we can make world hunger history. (Source: About.com, Bloomberg, stopthehunger.com)
Note all commentary is based on US figures
Written by: Sam Perera, Financial Savant
Hello,
I like the idea about giving but may I suggest trade in your paper money for real money. Honest money (gold).
There is a reason the price of gold is so high and it is not gold that is going up as it is the value, the theft of your purchasing power. The paper money game.
I also recommend reading Warren Buffet’s Father advice on gold. He got it. Warren has failed to understand the fundamental evils behind the central controlled, paper monetary monopoly system.. which empowers the elite and steals from the poor. Change that, there will be plenty of more goats to give.
Kind Regards,
Peter
ps. giving a goat via globalgiving.org is a great idea. a much better present than some unwanted materialistic item that ends up unused.