The Queen of England is a wealthy woman. In 2001, Forbes Magazine listed her personal fortune at $420 million. She is not as rich as you might think, given all the palaces. But most of those are owned by the Government.

What is hers: a handful of properties, including Balmoral Estate in Scotland, which has a castle and 50,000 acres of woodlands, moors and lochs; and Sandringham Estate, with dozens of houses, 60 acres of gardens and 20,000 acres of forest. The real estate is valued together at approximately $150 million. She also has her own private collections of art, furniture, jewels and horses, worth some $110 million. The rest of the fortune comes from conservative investments in blue chip stocks and bonds.

But even with her wealth, the Queen is known as being exceptionally frugal, including wearing her clothes sometimes decades after she previously last wore them. There are stories about lights being shut off in rooms of the palace when no one is in them and about her keeping the temperature turned down when they are at the family home in Balmoral (recently famously depicted in the movie “The Queen.”) It’s not exactly warm in that palace, even during the summer.

The Queen’s view? Wear a sweater.

Too bad her subjects don’t share her money management skills. Last week I outlined the troubles facing Americans and their debts. Seems our English cousins across the Atlantic are no better off. According to the Telegraph, nearly 400 people a day are going bankrupt in Britain.

Nearly 400 people a day became insolvent last year, as Britain continued to struggle under a burden of debt.

Government figures showed that a record 107,288 people in England and Wales declared themselves bankrupt or took out an Individual Voluntary Arrangement (IVA) last year.

This was a 59 per cent increase on 2005, when 67,500 people went bust.

Foreclosures are also rising:

The financial advice website MoneyExpert.com released figures this week that suggested many families are struggling with Christmas debts.

It says that people are most likely to have difficulty with credit card bills, estimating that around 332,500 will have missed a repayment. Council tax bills are also under threat with around 147,800 overlooking their monthly bills.

Figures from the Department for Constitutional Affairs yesterday showed that people were also struggling to hold on to their homes. There were 91,195 court orders made for repossession during the year, up from 70,843 in 2005.

It seems that the Mother Country has absorbed the American way of living: live for the moment even if you can’t afford it. How familiar does this sound? From the Independent:

James Falla, managing director of Thomas Charles, a debt consultancy, predicted a jump in insolvencies in the first quarter of this year as thousands of households face up to Christmas over-spending. “One reason for this is the ‘festive effect’ where many people spend beyond their means during the Christmas period, and put off taking action to address their debts until the new year,” he said.

Mr Falla said his clients came from all walks of life, from bank managers to refuse collectors, although most were males in their 30s and 40s. Many are self- employed people who have failed to put enough money aside to pay their tax bills. “We are also seeing more and more young people who have no assets and decide to declare themselves bankrupt because they feel they’ve got nothing to lose,” he added. “The other day, a 22-year- old man walked into our office. He lived at home with his parents but owed £75,000 on credit cards. It’s a cultural problem - a ’spend now, pay later’ attitude.”

(75,000 pounds, by the way, is equivalent to about $37,000 US dollars.)

More than just people losing their homes and their possessions is what happens to the global economy when the spending ultimately slows down. In the United States, two-thirds of GDP is consumer spending. In Britain, it is much the same story:

The surge in house prices, which the International Monetary Fund estimates are now 50 percent overvalued, has, according to the Economist, given €œsupport [to] consumer spending at a time when worries about pensions and the falling stock markets might otherwise have pushed up saving.€ As a result, the €œconsumer has been the mainstay of GDP growth in the past eight years.€

It’s likely both the United States and Britain could enter into recessions at the same time, due to a pullback in consumer spending.

The bigger question, though, has become, how to get people to stop charging more than they can afford. Credit must be tightened. But now that the credit card genie is out of the bottle, will anyone have the guts to put it back in?

Am I the only one who drives through a ritzy suburb and wonders, who is buying all of these big homes? When- if you look at the county income reports- most likely the average income is something like $77,000 but the home prices are $800,000 and up.

Something doesn’t add up.

It’s all an illusion. The economy is predicated on how things “look” to the outside world. If you delve a bit deeper, only then do you see how deeply in debt most Americans are.

Credit card debt is now at record levels. Home equity, despite the surge in housing prices, is actually shrinking.

And now, further evidence that something is seriously amiss in our country. The Commerce Department reported that the savings rate was again negative for the second year in a row. Not only that but we spent even more than we didn’t have than a year ago.

The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned, but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005, and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Depression.

Only four times in the nation’s history have Americans spent more than they made.

1932

1933

2005

2006

I don’t need to tell you what was happening during the first two years that are listed. What is this telling us?

During the Great Depression, when one-fourth of the labor force was without a job, people dipped into savings in an effort to meet the basic necessities of shelter and clothing.

Economists have put forward various reasons to explain the current lack of savings. These range from a feeling on the part of some people that they do not need to save because of the run-up in their investments such as homes and stock portfolios to an effort by many middle-class wage earners to maintain their current lifestyles even though their wage gains have been depressed by the effects of global competition.

The current debt crisis is a ticking time bomb. It means there is absolutely nothing for most households to fall back on. Look beneath the surface.

For instance, take a look at an actual house in Downers Grove, IL (a western suburb about 20 miles from Chicago) that is currently on the market. I am withholding the address to protect the home owners from embarrassment.

House was bought in 1995 for $210,000. It’s on the market for slightly over $525,000. They’re on easy street, right? Wrong. Seems the home equity bug has biten at that residence. The following mortgages have been taken out:

2003: $19,750

2004: $333,700

2004 (again): $60,000

2006: $378,000

If I can do my math right, that is a grand total of $791,450. Again, the house is for sale for the low $500,000s. And it will likely sell for much less than that. It could be that some of the earlier loans have been paid off. I’ll give them the benefit of the doubt. But it’s unlikely the whopper of $378,000 taken only a year ago is paid.

Who needs $400,000 and why?

It’s America, right? Why not. And no, the house has not been renovated. It’s your average historic bungalow.

Or take a second example. Look at a nice 1800 square foot home in Clarendon Hills, Illinois (also a western suburb near Chicago).

Listed ten months ago for the low $600,000s. Now listed in the low $500,000s. Bought in 1992 for $250,000. Again, they should be rolling on easy street. But they’re not. Mortgages:

2000: $50,000

2005: $296,000

Original loan on the house as well.

Again, I have no idea if some of these home equity loans are paid off (and some of the original mortgage would certainly be.) But somewhere along the way, this family added quite a bit of debt to their bottom line. If they have to reduce their house further, they are in danger of breaking even on the sale or going underwater.

And, no, they did not renovate the kitchen and put in a Viking stove. Actually, the house needs a total gut of the kitchen and bathrooms.

Maybe that’s why they haven’t lowered the price further (even though it’s been on the market nearly a year.) They financially can’t.

These are just two random examples. I don’t know the story behind the numbers, just that the numbers are not normal. Home equity loans or second mortgages are debt that must be repaid- eventually.

Now every time you drive by one of those ritzy suburbs, ask yourself- how deep in debt are they?

And can they ever get out?

That is going to become the question. When will Americans stop their spending ways and actually save again.

There is no sign of any change in behavior except for this. The agent at one of these homes seemed quite anxious when some sellers went through it the other day. She said to “make any offer. The owner will consider all offers.”

Yes, I’m sure.

In 1849, when the prospectors were standing in the creeks in the California mountains panning for gold, who knew that the real wealth wasn’t in the yellow metal they were seeking, but in the rushing water running by their calves?

Water is soon to become the number one beverage drunk out of bottles in the United States.

Plain, regular, free, water.

It’s pure genius.

The San Francisco Chronicle ran a three part series on the rise of the bottled water industry two weeks ago.

So great is our thirst for the stuff that Americans now drink more bottled water than any other commercial beverage except carbonated soft drinks — more than milk, more than coffee, more than beer.

And the trend shows no sign of abating. Both the amount spent last year on bottled water and the amount consumed represent nearly 10 percent increases from 2005.

Within a decade, says Gary Hemphill, managing director of Beverage Marketing Corp. in New York, bottled water could overtake soda as the leading beverage in the United States. (The average American currently drinks more than 50 gallons of soda annually.)

In the United States, bottled water is dominated by three companies: Nestle, Coca-Cola and PepsiCo. The largest, Nestle, sells water under a wide variety of brands, including Perrier, Arrowhead, Poland Spring, Ice Mountain and San Pellegrino.

In 2002, Nestle consolidated its dozens of bottled-water brands worldwide into a single subsidiary, Nestle Waters. The division now accounts for nearly 10 percent of the Swiss food conglomerate’s total worldwide sales, with almost half of that amount coming from North America.

To help meet steadily rising demand, Nestle signed an agreement in late 2003 to bottle water from the slopes of Mount Shasta and sell it under the Arrowhead brand.

I believe that most people think that bottled water is “safer.” Despite all of the treatment that goes on at water plants, many people think that the pipes that carry the water to our homes are somehow tainted. Yet, the pipes carrying the water off the mountain may be tainted as well.

Both bottle and tap water in the United States are under similar guidelines and regulations. Bottled water is regulated by the FDA.

Most Americans are probably unaware that Dasani, like many bottled waters sold in the United States, doesn’t originate from pristine mountain springs; it starts in the same pipes that run into people’s kitchens.

Dasani undergoes a filtering process and, according to Coke, is “enhanced with minerals for a pure, fresh taste.” But, in the end, it’s still tap water.

The amount of money the American consumer spends on water is enormous. There is tremendous outcry about the “profits” that Big Oil is making off of selling gasoline (i.e, how dare they charge us more and more money to drive our cars) and yet no one bats an eyelash when they go to the Walgreens and buy the $1.50 bottle on the hot Saturday afternoon. From the Chronicle:

Beverage Marketing Corp. estimates that the typical half-liter container of bottled water sells for about a dollar. That equates with a price of roughly $7.50 per gallon (although it’s cheaper when bought by the case or in the five-gallon jugs found in many offices). Some of the more expensive brands can cost as much as $11 per gallon.

A gallon of regular unleaded gas was selling nationwide last week for an average $2.20, according to AAA.

What makes us do it? What makes us buy huge cases of water at the Costco for $20 every month?

In Chappaqua New York, Businessweek reported on a new take on the bottled water craze: designer water. There has long been designer champagnes and wines and recently, up popped designer coffees (where you could get a latte with a “special” bean that was “limited edition” for $11.) But now, you can buy your very own bottled water for as much as $55 a bottle. The cafe, Via Genova, sells 33 different brands of designer bottled water.

The stock comes from 15 countries on five continents and costs from $4 to $55 a bottle. The menu provides a bit of history for each brand, and discloses its pH and “total dissolved solids” content. Several of the bottles are corked.

There’s a Japanese one that comes in what looks like a sake bottle (”Goes great with sushi,” says cafe owner Diane Felicissimo). An Italian water “is rumored to be the water of choice at the Vatican.” The Canadian one called 10 Thousand BC is “the world’s finest luxury glacier water.”

The prestige item, and the only United States entry, is Bling H2O, which comes in a corked, glazed-glass bottle decorated with Swarovski crystals and costs $55 for three-quarters of a liter.

“Everybody loves it,” Felicissimo says. “Someone came in and bought a bunch of bottles for Christmas gifts.”

The cafe’s owner says she is selling $400 a week of the stuff.

Yet if you think that old piping is what you should be worried about when drinking the tap water, studies are starting to emerge about the dangers of the plain ole plastic bottle. The Daily Mail explained breathlessly:

A potentially deadly toxin is being absorbed into bottled mineral water from their plastic containers. And the longer the water is stored, the levels of poison increase, research reveals. As the sell-by date on many bottled waters is up to two years, scientists have now called for extensive further studies.

The tests found traces of antimony, a chemical used in the making of polyethylene terephthalate (PET) bottles, used by most mineral-water sellers.

Small doses of antimony can make you feel ill and depressed. Larger quantities can cause violent vomiting and even death. The study stressed that amounts of antimony were well below official recommended levels. But it also discovered that the levels almost doubled when the bottles were stored for three months.

Professor Shotyk, of Heidelberg University in Germany, said: “I don’t want to shock people but here’s what I know: Antimony is being continuously released into bottled drinking water. The water in PET bottles is contaminated.”

He tested ground water and 15 types of bottled mineral water in his native Canada. The ground water contained two parts per trillion (ppt) of antimony. Bottled water had an average 160 ppt of antimony when opened immediately after bottling. But ground water stored in a PET plastic bottle had 630 ppt of antimony when opened six months later.

So- what’s a person to do?

Americans should be so lucky as to have this problem (of choosing between relatively safe water out of the tap or to buy bottled water.) It’s a luxury most people around the world do not have. Yet the National Resources Defense Council says that even some larger American cities have water that is below standards:

For example, these four cities have fair-to-substandard drinking water:

• Atlanta, which maintains its distribution system poorly
• Albuquerque and San Francisco, which have poor treatment systems
• Fresno, which has no real source water protection

So, you can get poisoned by the plastic bottles or poisoned by the contaminants in the water because the treatment systems are over 100 years old.

So we buy it. We buy bottled water by the case load.

And then we throw the plastic bottles into the landfills when we’re done.

Is bottled water the biggest scam in capitalist history? $7.50 a gallon for something that is otherwise free.

You tell me.

Supermarkets are interesting places. You not only buy food at many of them, but clothes, music, plants, and even furniture (if you’re at a Super Target or Super Wal-Mart.)

Supermarkets say a lot about the world in which we live. Take Meijer for instance. For those of you not familiar, it’s a large grocery store and Target like combo store found in Michigan, Illinois, Ohio, Indiana and Kentucky.

In one of the stores I was in recently in suburban Chicago, there were two aisles of food called “international foods.” It included the Indian sauces, the Thai noodles, the Japanese Teriyaki sauces and the Mexican spice packets. You would expect to find these items in the international aisle.

But they also included the Ragu and Prego there.

When you actually stop and think about it, spaghetti sauces are, technically, “Italian” so, yes, they would belong in the international aisle (though I have never seen them labeled as such at Safeways or Dominicks, for instance.) They usually are just found under pastas.

Also in the Meijer international aisle were “southern foods” such as spice packets for making hush puppies or “authentic” southern fried chicken.

It may sometimes seem to many up in the North that the South is a whole other world, but “international”? Hm…

It all makes you stop to wonder, just what is NOT international then? What is native to American kitchens?

They might have an aisle that includes Kraft Macaroni & Cheese, Spaghettios, Campbell soups. But what about the Minestrone soups? Aren’t those “international” as they are distinctly Italian. And what about Italian dressings? Or pizzas? Shouldn’t those be in the international aisle as well?

I’m sure Meijer has a person solely in charge of deciding what is “international.” Maybe they need to re-think the southern foods designation.

Just a thought.