Surplus Equipment, Items, And Goods Bill Of Sale: Fill & Download for Free

All of the below tips and habits will make you richer (if not necessarily wealthy). Habits compound—like money in a bank account—so the longer you stick with them, the better your results.I. Work on your attitude.Seriously, it will provide more benefits and more hard cash in your pocket than any technical tips. We are programmed by our social environment to think all sorts of strange things about everything. If you were lucky and you had the right social environment, you would believe good things about possessing and managing money and those beliefs would make you richer.Most of us, unfortunately, got crappy programming. Even today, schools are doing very little to change this (kids are taught tons of facts, but there is not a single lesson in the curriculum about how to save money).Advantageous beliefs and habits:1. Debt is your enemy.Debt compounds like the interest rate on your savings compounds. Uncontrolled, it will eat your finances alive. Controlling this consumes so much of your brainpower and mental energy that it's best to avoid debt altogether, as a principle.It's hard to put debt-avoidance in the context of habit, it's rather what you DON'T do: you never ever borrow money.2. You are responsible for your net worth.Not your daddy, not your boss and not your wife (yeah, I know she loves to spend, my wife loves it too; still, take the full responsibility). If you don't accept this belief, everything that regards your money "just happens" to you. Control over your cash flow is in most cases just an illusion (for example a car accident can wreck your vehicle, your body, your career and finances), but it's a necessary illusion, so you will act proactively to grow your wealth. Nobody will replace you at this job.3. Be grateful.And be grateful about more than merely your material possessions or the level of your salary. Be grateful for everything. William W. Wallace, the author of "The Science of Getting Rich", prescribes gratitude as the way to stay in touch with a mystic element of the universe that provides abundance (his theories were a precursor to The Law of Attraction, ideas which were more sensible than the modern versions).Science confirms that when the brain is positive, every possible outcome we know how to test for rises dramatically. By "every outcome" they meant also net worth, savings, salary levels and chances for career advancement. And gratitude is a shortcut to making your brain positive.A relevant habit: write down every morning three new things you are grateful for.4. Pay with cash.In the era of plastic money, we have a tendency to not see money as real... till it is too late and reality is biting you in your rear. Credit cards provide the illusion of abundance when in fact each use of plastic money moves you further toward poverty. To avoid this trap, pay for everything in cash. When you hand your cash money to someone else, it has a real feel. Your mind will not be lull into airiness.A nice piece of belief is this: "If you cannot buy an item with cash, you cannot afford it." You should never take a loan if you don't have enough cash stacked to buy the item in cash in the first place.5. Track your expanses.Track all of them. I note down a sum when I buy bread or a bread roll. I register every single cent that goes out of my pocket in an Excel sheet. This discipline makes me more disciplined when spending money on anything.The habit of tracking expenses provides you some much needed awareness of where your money goes. Carelessness and ignorance are the allies of poverty. Impulse spending will decrease significantly when you have to register each of your impulses on paper.6. Keep the company of rich/frugal people.Attitude is contagious. When you spend time with people who wisely manage their money, you’ll become better at this yourself.Of course the ‘example’ is more effective when they actively mentor you, give you advice (and you actually take action to implement it). But being around them is the basic requirement. Your copying mechanisms will work even in the background, it's how people are wired, and it’s how children learn life.This activity may be easily habitualized. Simply find an appropriate group of people and engage with them on regular basis. Play sport with them, volunteer with them or attend church services. Absorbing attitudes from others works better offline, but it works online too. If you cannot think of an opportunity to find such people in your neighborhood, find them in Facebook groups or forums.II. Work on yourself."Work harder on yourself than you work on your job" - Jim RohnYou are responsible for your net worth, so you need to take care of your most precious asset: yourself. This ‘taking care of yourself’ takes different forms and for some people is more required in one area than in others. But it's hard to get rich, satisfied and happy, if you neglect any of them.1. Spirituality.You need an underlying theme for your life: a goal, vision or meaning. Well, you need it if you want to be richer. Otherwise you will waste loads of mental energy on struggling with the overall sense of your existence. You know, if life makes no sense, what sense is there getting richer? Religion may be an answer for you (it is for me), but I don't have just the ‘afterlife’ in mind. You must resolve for yourself individually the eternal dilemma of humanity: does my existence have meaning or not?Searching for your purpose and following it once you’ve found it can be habitualized. Journaling or prayer make good disciplines if you are looking for your life’s meaning. And once you get it, you build your life around it.Every day, I repeat my personal mission statement in my mind. It's my compass that keeps me directed toward my purpose. A big part of my life meaning is writing, thus I write about 1,000 words a day.2. Health.Exercise regularly. Eat well. Sleep well. Avoid stress."Well" may mean something else for you and me. Define ‘well’ for yourself. I know people who avoid this food or that food, or who are vegans. I eat everything and I'm still doing well.We’ve all heard that broad, sensible advice, but so very few follow it. Develop appropriate habits: exercise, eat vegetables, drink more water, go to sleep earlier, meditate. Perform them every day.When you are healthy, you are capable of more. You also don't waste time and money because you need to meet with doctors and buy medicines. I’ve only spent about $30 on medicines in the last 4 years. However, I have all those healthy habits firmly in place.3. Education."Formal education will make you a living; self-education will make you a fortune." - Jim RohnJim was right.I cannot attest about "fortune" (yet!), but I’ve doubled my income in the last four years and it has been a massive learning curve. You cannot stop at what you learned at school.Increasing your value doesn't end with gaining some technical skills or knowledge. Last August, I changed jobs and got a new salary about 35% higher. I’d got a couple of professional certificates and that was part of the reason I could ask for a higher salary—and get it—but mostly I was more self-confident. I’d overcome my shyness and I was feeling and acting much more easy-going during the job interview.Read every day. Listen to something valuable (audiobooks, podcasts, audio programs) every day. If it's your thing, watch videos (e.g. TED talks). I hate video, but each time I’ve forced myself to watch a TED talk I always end up a bit wiser). Accept the fact that you will be learning your whole life. That's how you increase your value.III. Work on your money habits.A few habits I mentioned in #I (paying with cash, tracking expanses) could qualify here as well.1. Learn to save money.a) Pay yourself firstThis was the saving lesson that contributed most to my financial situation. For years I struggled with amassing money. Then in autumn 2012 I read "Start Over, Finish Rich" by David Bach and learned about the importance of paying myself first. I started very timidly, from $60 bucks, about 3% of my income. In a few months I grew that to about 20% and never looked back.You may think about yourself as frugal, a good money manager. I thought that about me. I had been keeping budgets for about 3 years at that time. Even so, the simple act of reserving my own money and not spending it, fixed most of my money problems. All I did was use a savings account.If you have no money to spend, you simply don't spend any.Decide on a fixed amount or percentage of your income to save. Then, as soon as the money lands in your account, transfer the savings to an account that is not easily available. I do that with every buck I receive. It works.b) Don’t dip into your savingsThat was another reason I never could stash away my 'rainy day' fund: there were always some urgent issues we absolutely had to spend our money on. Buying our first apartment, then furniture for it, then our first car, then the car's repair after I hit a tree, vacations in Ireland where my parents live, buying our first house, its furniture, renovating it, buying a second car...Unfortunately, it was always my wife who was a driving force behind all those 'necessary' expenses. In the end I decided to keep her in the dark about how much money we really had.In my mind, our various funds are devoted for various goals and I never touch them for any other reason. And they are out of her mind, because she doesn't know about them. Hence, in March this year our savings once again equaled zero (after renovating our home), but at the end of December we have in savings sum equal to five month’s salary.c) Save excessI achieved most of this ‘rebuilding’ feat by stacking away the excess. There are different strategies for that. Brian Tracy said you should always save 50% of every salary raise or additional money you get. Jeff Olson, a millionaire whose book set me on the life change path, kept his budget at $4,000 till he grew his fortune and was comfortable with increasing the household budget.I use a combined approach. I have a fixed budget for necessities: bills, food, clothes, medicines, etc. I don't allow a dime over this budget to be spent on such things. In fact I save, donate or reinvest 56% of every additional dollar over my budget. I use the remaining 44% for various objectives, but they are never connected to everyday consumption.It happens often that I use that money for savings as well. Almost every month I use at least a small chunk to pay off a bit of my mortgage. The rest goes for things I would not have bought normally: bikes for my family, better mobile phone, Kindle paperbacks and similar items.2. Pay bills and taxes on time.This goes back to point I.1. If you don't pay your bills and taxes on time, you just incur another kind of debt. You will have to pay these things anyway, but most likely there will be extra fees if you are overdue.3. Be aware of your cash flow.Part of it is knowing where your money goes. If you don't track your all expenses (point I.5), you should at least know the main points: your monthly payments, your loans, rough food spendings estimation, household maintenance etc.But part of it is knowing where your money comes from, too. You'd be surprised, if you ask around, how many people don't know how much they earn from various sources. It's quite simple when you have a stable paycheck, but even a regular paycheck still fluctuates, especially if there are bonuses or commissions involved.Most people have a vague idea how much they earn, but very few people know the exact amount every month. Some may know their salary pretty well, but have no clue how much child benefit they receive. But every incoming cent counts.I recommend to track your income as well as your expenses. It's especially important if you start any additional activity. Nowadays, my family has 8 sources of fairly stable income: my wife's salary; my salary; my Kindle and print books royalties; my coaching fees; royalties for foreign translations that are paid a few times a year. I register them all to the last cent.4. Consolidate your debt.Most people have debt, despite the fact that it's very unwise. Most people also have no idea that they can consolidate their debts. The more debt sources you have, the more probable is that you can merge few of them and get better conditions. Educate yourself. Call your bank. Ask friends if they ever consolidated their loans and how to do it. Everything can be re-negotiated, starting from your short-term consumer loans and finishing at your mortgage. You should redirect the surplus you will achieve into paying off your debt of course.IV. Live frugally.The key to getting richer is spending less than you earn. That way your surplus has a potential to grow steadily. If your income is smaller than your expenses, you are getting steadily poorer. You are always on one side of this equation and you should do everything in your might to be on the right side.1. Control your bills.Do you know how much you pay for energy? Water? Gas? You'd better know!Knowing the bottom line you can proactively decrease your bills. Use installations that save water. Check your energy expenditure. A significant amount of electricity can often be saved with minimal investment. I changed all the lights in our home to LED ones and it saved me about 10-20% of our monthly energy bill.2. Negotiate your deals.Do you know how much you pay for cable TV? Your mobile? Internet? You'd better know! And you'd better negotiate those deals. Depending on the competition in your country, it may be as simple as calling your provider and blackmailing them that you will go to their competitors. If it's not so easy to change or reduce your current terms, just be careful when you sign the next contract.In my village I use wireless LTE Internet and there are only 3 national providers who offer it. I spent several hours reading their offers, visiting their stores, borrowing their equipment and testing it. In the end, I saved only about $1 a month, but the deal I got is so much better than I had previously! The speed of my network connection doubled and I have no limits for data. (The previous contract had a 30 GB cap, after which connection speed decreased to a snail's pace).3. Buy used stuff.The obsession of modern culture about new stuff is downward dangerous. The only advantage of new over "old" is the producer's guarantee and in most cases that is pretty useless. Ask anyone who has tried to complain about faults in their shoes.I have a 7 year old vacuum cleaner. Its plastic sucker broke, but it's working fine after the application of few feet of duct tape.One of our cars has run for 18 years. The other has run for 19. They perform their functions, they drive. Why would I need a new car ten to twenty times as expensive?I bought used Lego sets for my daughter’s Christmas gift. She was delighted. She had dreamed about such sets for a couple of years. I paid 25% of the new set's price.4. No impulse purchases.Never ever buy something when you feel like you want the thing so very much. Take a break. Go out of the shopping mall. Close the browser. Go back to the purchase after a week or so. If you still feel like buying the item, now it's the time to do it. If you buy under the power of impulse, usually it's due to marketing buzz, not a real need behind your decision.5. Wait for opportunities.If you know that you will need some more expensive items, take your time and hunt for discounts. Remember my vacuum cleaner? The adhesive tape will only work for so long. We will eventually buy a new machine, but we will wait for a fair price.In respect of any purchase, if you wait long enough—if you can afford waiting—you will get more for your money. Wait for Black Friday sales if the need is not urgent. There is so much competition in retail that you will get a hefty discount every time you wait a few months before making any purchase.

In most countries, impossible.In developing countries, laughably, hilariously impossible. 99.99999999999999999999% of these citizens do not even know what a private airplane is, let alone seeing one.▲Back seat of a Piper Cherokee: travel in comfort, like in a car!▲Beech Bonanza A36—the best used airplane ever. Any Bonanza A36 in good condition is a good investment. The long-cabin Bonanza is a wonderful airplane to fly and is also the best performer on the used market. The A36 came closer to being a true investment than any other personal airplane. Bonanza A36s depreciated only about 15 percent in the first three years of their lives. Depreciation then slowed further, and by the time an A36 was 15 years old it sold for more used than it did new.▲Cessna 182 Skylane: big cabin, large useful load, very low dollar-per-knot operating costs.In the USA, and only in the USA, plenty of used airplanes are available. They have very long lives (70 years and up), spares and mechanics are available, and most important, 100LL gasoline fuel is available: the only country in the world where this leaded poison is made and sold.The average single-engine airplane is 23 years old, and 25 percent of the single-engine fleet is more than 33 years old.Some owners are asking themselves if old airplanes are becoming dangerous to fly.Relax.Accident statistics are on your side.The National Transportation Safety Board has yet to blame a light-airplane accident on old age, and few accidents are blamed on poor maintenance.There are several reasons that older general aviation airplanes aren't falling out of the sky.Few are subjected to the repeated stress of pressurization cycles, a frequently mentioned factor in airline accidents.Most fly less than one-tenth the hours flown by commercial airplanes.And the conservative design of small airplanes tips the scale in their favor.Early designers overbuilt many airframes because they didn't need to produce ultra-lean airplanes capable of hauling maximum payloads.There are some shortcuts for ensuring that an airplane is properly maintained.The FARs require that an airplane manufacturer publish a maintenance manual or instructions for ensuring the continued airworthiness of the airplanes it builds or for which it maintains type certificates.A pilot may not fly an airplane unless the mandatory replacement times, periodic inspections and associated procedures listed in the manual have been complied with.Light airplanes flown under FAR Part 91 have few, if any, mandatory replacement or overhaul times, unless specified by an AD.During an annual inspection, the mechanic may use the inspection checklist in FAR 43, the one in the manufacturer's maintenance manual or another checklist approved by the FAA.It's up to the mechanic to use good judgment in choosing the best checklist for the inspection.There is plenty of variation between old and new maintenance manuals.The new ones go into extensive detail, while the ones for older airplanes are much simpler.In the absence of detailed instructions from manufacturers, mechanics rely mainly on the generic airplane inspection procedures specified in FAR 43.It takes more skill and experience to inspect some older airplanes because the process is anything but "follow the numbers."Since few owners are licensed A&Ps, most are at the mercy of mechanics.Nearly all larger shops are FAA-approved repair stations, which means they are routinely inspected by the FAA and use approved inspection and record-keeping procedures.But FAA approval doesn't guarantee top-quality work; a shop's reputation for thoroughness and safety does.Good airplane maintenance is worth its weight in gold, but some owners lose sight of that fact and seek out shops with rock-bottom prices.On top of that, there is fractional ownership, where two or more people share the cost and usage of an airplane, making it somewhat more affordable.What is a used airplane? It is as much an individual among airplanes as its owner is among men. For his $6,000, our prospective owner can buy, in conditions varying from poor to excellent, some model of virtually every single-engine aircraft that has been built in the United States.4- and 3-seater planes with cruise airspeeds from 84 to 200 mph are available. There is as wide a choice of two-place airplanes, and there are single-place, antique, homebuilt and surplus military airplanes available. These aircraft have all had the major part of their depreciation accounted for, and can very often be sold for their original price.Depreciation on new airplanes, while not so staggering as that on new automobiles, is still substantial. One New York broker lists normal new-aircraft depreciation as 25 to 30 per cent from the first moment of flight through the end of the first year, 10 per cent through the second year of operation, and another 10 per cent through the third year, where the value levels off at about 55 per cent depreciation from new.In a few instances, the value of a used airplane actually increases with the years.By allowing the original owner to pay for the depreciation, by allowing him to comply with the airworthiness directives during the first years of operation, by allowing him to work out the aircraft's bugs and install the radio equipment, the used-airplane buyer sets himself up for the best possible performance at the lowest possible price. ‘There is only one catch to this.The man who buys a used airplane must know the difference between a good airplane and one that will cause him endless hours of maintenance and enough operating and repair bills to outweigh the advantage of buying used over new. Although a let the buyer beware" attitude is not nearly so prevalent in used-aircraft sales as it is in used-automobile sales, the best insurance of a good buy comes with an exhaustive inspection of the airplane and its logbooks, and a check by an impartial mechanic.An initial walk-around inspection taking no more than 20 minutes along with a perusal of the log books will quickly eliminate an airplane which does not meet the standards previously established by the purchaser.A person seriously intent upon acquiring a used air-plane does not waste time on a lengthy evaluation of every airplane he comes upon unless he is just out for a free demonstration ride.Now a thorough evaluation can be accomplished on the few airplanes which have survived the elimination process to which the many airplanes have been put.SINCE, in each case, the airplane passed the walk-around inspection, a good first step would be to go over the log books more thoroughly. They will give a good picture of the airplane's maintenance history and parts replacement.The books can also be referred to during the inspection to check replaced and added items.All inspections and overhauls should be noted and properly signed off by an A&P mechanic or an FAA inspector. If a logbook has been kept in a slipshod manner, it is possible that the maintenance has been the same. The books should be up to date.Good maintenance has never been cheap, and the price isn't going down.Be wary if an owner has some excuse like, "I have the rest of the entries on a piece of paper but just haven't gotten around to writing them in yet."The log books should show that all Airworthiness: Directives (also called ADs or bulletins) have been complied with. The ADs specify unsafe items and the mode of compliance required by the FAA and are the responsibility of the aircraft owner to accomplish.Civil Air Regulations require a permanent chronological record of all ADs accomplished including date, AD number, a brief description of the method of compliance, and the signature and certificate number of the mechanic or repair agency who did the work.If it was not for one of the most phenomenal business failures in the history of the US, the new pilot would be hard put to find a time-building airplane and the privately owned four-place airplane would still be the incredible luxury that it was for the rich at the outbreak of WW ILThat magnificent failure that gives Americans the biggest market of used airplanes in the world was the post-war boom in aviation.In 1945, the Civil Aeronau7-tics Deputy Administrator estimated that there would be 300,000 registered personal airplanes across the United States by 1949.The Assistant to the Secretary of Commerce for Air predicted that the country would have 450,000 aircraft in the general aviation fleet by 1955.He said, "The price of a four-place airplane should settle in the $1,500 to $2,000 range . . ."There was every reason to believe that this would be true.Thousands of military aviators would be returning from the war,expecting to be able to fly with their families anywhere and anytime they wished.Even 450,000 airplanes would be conservative; an equal of the nation's automobile production during 1908.This tremendous market would at last break the vicious circle—until there are enough buyers to buy the airplanes, the airplanes can't be built cheaply enough to attract buyers.On the strength of predictions, full-color advertisements blossomed in magazines around the country, and millions of dollars were spent tooling for mass production of airplanes. The Seabee came into being, an all-metal, four-place, 220-hp amphibian selling for $3,995 brand new. North American spun the Navion off the assembly line; four-place, low-wing, controllable-pitch propeller, retractable landing gear: $6,100 new. Similar features in a new Navion-sized airplane in 1963 began at prices of $17,000.The Cessna 120 and 140 sold for $2,695 and $3,245 respectively, the Swift for $3,495. The postwar skies would usher a world at peace into a new era of civilization, where every family would lift heavenward on gossamer wings and the streets and highways of the country would be turned to something useful, like acreage for corn and beets. Multiple millions of dollars were lost as the new era died in a one-turn spin after takeoff, but the inertia of it, the thousands of Cessnas, Pipers, Seabees and Navions, has made the general aviation used-airplane market what it is. In 1963, 17 years after the boom-that-wasn't, airplanes built during 1946 and 1947 amounted to 30 per cent of the total active general aviation fleet. The 80,000 active airplanes on the books then struck a mark far short of the predictions of 1945.Yet, were it not for the 32,000 airplanes built just after the war, the used-aircraft market would not be nearly so inviting as it is today.But higher maintenance and operating costs generally go hand in hand with older airplanes, especially with older high-performance airplanes.There are maintenance problems with variable-pitch propellers, retractable landing gear and warning-light systems, and fuel boost pumps in low-wing aircraft.High-wing airplanes offer fewer problems of this sort; most have no retracting gear, no controllable propellers, and no boost pumps. Their performance, of course, is correspondingly decreased.It is a very precisely balanced proposition, this airplane owning. One way or another, as performance increases, so does the cost. One of the aims of the buyer in his pre-purchase inspection is to avoid the aircraft that combines low performance with high operating and maintenance costs.Brave souls build airplanes out of kits.Once again, ONLY IN THE USA.

If you’re really curious about the full economic reasons; I’ve written the explanation below the first link. The source is at the bottom.The short of it is the US’s entire economy is based on selling oil on the US dollar. It determines our investments, our interest rates, our global economic power, and keeps the US as the #1 economy among nation-states in the world. Without controlling the oil of the Middle East pegged on US dollars, we’d go back to being a third-world country within a month. We basically stole their golden age of modernity, incorporated it into our own, and placed dictators they never wanted on them to torture and kill them with impunity. The US even helped spread hatred and fear of Westerners in Afghanistan through USAID textbooks funded by taxpayer monies to teach 6-year old Afghan kids to hate and kill Westerners.President Reagon’s policy of teaching Afghan kids that it was morally right to hate and kill Westerners: From U.S., the ABC's of JihadDefinition of PetrodollarsPetrodollars may be defined as the U.S. dollar earned front the sale of oil, or they may be simply defined as oil revenues denominated in U.S. dollars. Petrodollars accrued to oil-exporting nations depend on the sale price of oil as well as the volume being sold abroad, which is in turn dependent on oil production. The overall world supply of oil, on the one hand, and the world demand, on the other hand, determine sooner or later an actual market price for oil regardless of any administered pricing system. A price determined by OPEC can be maintained only so long as there is sufficient demand to absorb the amount being supplied in world markets. If demand exceeds supply, oil will be sold at an even higher price than that determined by OPEC. The opposite holds true when an oil glut occurs. This is reflected in a drop in the price after a certain time lag regardless of the price dictated by OPEC. The experience of the seventies and the eighties is no more than art application of microeconomic tools to the pricing of oil in world markets.Petrodollar surpluses may also be defined as the net U.S. dollars earned from the sale of oil that are in excess of internal development needs. Petrodollar surpluses, accrued in the process of converting subsoil wealth into an internal income-generating capital stock, refers to oil production that exceeds such needs but is transformed into monetary units.Since petrodollars and petrodollar surpluses are by definition denominated in U.S. dollars, then purchasing power is dependent on the U.S. rate of inflation and the rate at which the U.S. dollar is exchanged (whenever there is need for convertibility) by other currencies in international money markets. It follows that whenever economic or other factors affect the U.S. dollar, petrodollars will be affected to the same magnitude. The link, therefore, between the U.S. dollar and petrodollar surpluses, in particular, has significant economic, political, and other implications.First, the placement of petrodollar surpluses of the Arab oil exporting nations in the United States may be regarded politically as hostage capital. In the event of a major political conflict between the United States and an Arab oil-exporting nation, the former with all its military power can confiscate or freeze these assets or otherwise limit their use. It can impose special regulations or at least use regulations for a time, in order to attain certain political, economic, or other goals. It may be argued that such actions are un-American, since they are a direct violation of the sacred principles of capitalism and economic freedom. Nevertheless, the U.S. government resorted to such weapons twice in the l980s against Iranian and Libyan assets. It follows, therefore, that governments placing their petrodollar surpluses in the United States may lose part of their economic and political independence. Consequently, the more petrodollar surpluses are placed in the United States by a certain oil-exporting nation, the less independent such a nation becomes.Second, an oil-exporting country can have petrodollar surpluses only if its absorptive capacity is less than its earnings from the sale of' oil for any particular period of time. It follows, therefore, that petrodollar surpluses depend on oil prices, quantities exported, and the nation's absorptive capacity.Third, petrodollar surpluses do not represent real wealth but rather are a vehicle by which the latter can be acquired. If kept in liquid form such as paper dollars, their purchasing power will gradually be eroded by inflation and adverse foreign exchange rates. Both are affected in the United States by a host of variables, for example, money supply, interest rates, marginal productivity, stage of a business cycle, and balance-of-payments deficit. Also a factor is U.S. monetary and fiscal policy which in turn affects some of' these variables. Furthermore, changes in the U.S. laws and regulations have an impact on the economic variables, which may affect inflation rates and foreign exchange rates. Thus, the purchasing power of liquid petrodollar surpluses belonging, for example, to Arab oil-exporting nations is determined by a complicated set of variables whose trends and quantities are a function of' factors that are not in the control of these countries.Fourth, efficient allocation of petrodollars for internal investments could increase the productive capacity of an oil-exporting nation and may work to its relative advantage. However, dependency on imported consumer goods, including luxury and rare collector's items, promotes the export of limited resources that could have been otherwise used for internal capital development.Fifth, the economic development of an oil-exporting nation is based on the conversion of its subsoil resources into other assets such as industrial plants, equipment, education, technology, infrastructure, and other forms of real wealth, that is, real capital stock. Obviously the conversion process can be carried on at different rates. An optimum rate is achieved when oil is pumped at a level that can maximize the present discounted value of the income created in the conversation process. By pumping oil in excess of an optimum production rate, countries such as Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, and others accumulated petrodollar surpluses until 1981. It is worth noting that the difference between the volume of oil actually supplied and the volume that should have been supplied in observance of standard microeconomic theory is in fact a subsidy granted, in real terms, to oil-importing nations such as the United States, Germany, France, and Japan.Allocation of Petrodollar SurplusesThe bulk of petrodollar surpluses is held either in U.S. treasury bills and other short-term instruments or in American and Western European banks. An examination of balance sheets of banks operating in Saudi Arabia, Kuwait, Qatar, Bahrain, the United Arab Emirates, and Oman reveals that most of their monetary assets are deposited in foreign banks in Europe and the United States. Petrodollar surpluses have also been used to increase the official reserves of the oil-exporting countries at both the International Monetary Fund and the International Bank for Reconstruction and Development.Petrodollar surpluses have been recycled by commercial banks in the United States and other industrialized nations as well as by international institutions. By drawing against petrodollar surpluses as deposits or certificates of deposits, banks were able to expand their volume of lending. For bankers the most obvious clients were the developing countries, mainly in Latin America, such as Mexico, Brazil, and Argentina.The process of petrodollar recycling makes it possible for commercial banks of industrialized nations, international lending institutions, and Arab banking consortia to provide financial assistance to less-developed countries (LDCs). Western Europe, Japan, and the United States buy oil from oil-exporting countries (OECs). LDCs pay for oil imports and other foreign goods and services with money borrowed front Western commercial banks. The process of recycling is complete when those commercial banks and institutions obtain cash and investments from OECs.Petrodollar surpluses have also contributed to the growth of the Euromoney market, which was treated by the Soviet Union in the fifties, when it opened a dollar account in London. Its purpose was to protect the Soviets from a U.S. freeze on their deposits, which could happen if such deposits were placed in the United States. Prior to the first oil shock of 1973, the main source of Eurodollars was the U.S. balance-of-payments deficits; these grew from $17 billion in 1964 to $96 billion in 1970. Additionally, several regulations set by the Department of the Treasury discouraged American multinational corporations from repatriating profits from overseas operations; thus, these deposits remained in Europe and served as a source of international finance. In 1971 U.S. balance-of-payments deficits suddenly tripled, thus precipitating a huge leap in dollar holdings in foreign banks that led to a massive expansion of money supplies in member countries of the Organization of' Economic Cooperation and Development (OECD). In my opinion this was one of the main causes of the leap in the rate of inflation and the economic disequilibrium that came long before the rise in the price of oil at the end of l973.Another major use of petrodollars has been for foreign aid. Since 1973 Arab oil-exporting countries have been among the ranks of the major donors of the world. Basically, Arab states distribute aid in five ways, through (1) bilateral agreements; (2) multilateral arrangements; (3) official development assistance (ODA) flows; (4) various Arab funds established specifically to extend loans for development projects in foreign countries; and (5) the International Monetary Fund as well as the International Bank for Reconstruction and Development, by providing them with loans that are recycled to other countries in need to finance balance of payments deficits or development projects. It should be noted that Arab oil-exporting countries had extended a total of approximately $44 billion in foreign aid between 1973 and 1980. It is also important to point out that the ODA flows as a percentage of gross national product were the highest in Arab oil exporting nations, as compared with the United States and all other countries.Indeed, even after the substantial decline in oil revenues, Arab funds for economic development are still active in their lending policy.At any rate, Petrodollar surpluses accumulated after the oil shocks of 1973 arid 1979 became the second major source of outside funds, after the U.S. balance-of-payments deficits, feeding into the Euromoney market. Such surpluses whetted the appetite of Western banks, which had eagerly sought borrowers for the new Euromarket deposits.From 1974 to the end of 1981 total current account petrodollar surpluses were approximately $450.5 billion for all members of OPEC .It should be noted ill this regard that prior to 1979 Iran had accumulated some petrodollar surpluses, although the Arab OECs had acquired over 90 percent of OPEC's investable surpluses. Since 1979 OPEC's surplus has been generated mainly by the Arab Gulf countries and Libya. Since tile beginning of the 1980s Saudi Arabia alone has accounted for 42 percent of the amount of the surplus, followed by Kuwait (18 percent), Iraq (17 percent), the United Arab Emirates (11 percent), Libya (8 percent), and Qatar (3 percent).According to the U.S. Treasury information petrodollar surpluses have turned into deficits since 1982. In my opinion there are three main reasons for this turn of events: increase in imports by oil-exporting nations; reduction in the demand for oil, particularly from OPEC; and the oil glut. which led to a reduction in its price.Economics of Petrodollars