Wednesday, March 7, 2012
And what is Near Money?
Consider the US treasury bond, the T-bill. Uncle prints them and sells them to investors. The investors give Uncle cash money for the bond. Do the investors feel any poorer after exchanging cash for a T-bill? Not really. T-bills are the safest investment on the planet, and there is an active market for them, which means the investor can convert his T-bill into back into cash with merely a phone call to his broker. It makes no matter to the investor whether his fortune is in cash or in T-bills in so far is behavior is concerned. The investor can convert all his money into T-bills and still feel wealthy enough to buy new cars, new houses, yachts, whatever. In short, T-bills are nearly the same as money. Near-money is what Paul Samuelson called them.
Note here. Uncle gains spending money, which will be spent, the investor doesn't really give up any money. Issuing new US treasury bonds is nearly the same as printing new money.
And, it has the same inflationary effect as printing new money.
The Obama administration is spending way more money than the IRS is collecting in taxes. It finances this by issuing US Treasury bonds, i.e. printing new money. Forty percent of the federal budget is financed by selling T-bills. The US budget is unimaginably huge. Forty percent of unimaginable is still huge.
Hold onto your wallets tax payers.
Note here. Uncle gains spending money, which will be spent, the investor doesn't really give up any money. Issuing new US treasury bonds is nearly the same as printing new money.
And, it has the same inflationary effect as printing new money.
The Obama administration is spending way more money than the IRS is collecting in taxes. It finances this by issuing US Treasury bonds, i.e. printing new money. Forty percent of the federal budget is financed by selling T-bills. The US budget is unimaginably huge. Forty percent of unimaginable is still huge.
Hold onto your wallets tax payers.
Tuesday, March 6, 2012
What is money, really?
Well, it used to precious metals, stamped into a uniform size, with a date and a portrait and milled edges to prevent "clipping" (filing off gold or silver around the edge of the coin, keeping the filings, and passing the coin off as full weight). And having money gets us out of the barter business, an obvious goodness.
Then we invented paper money. It took a while for paper money to become pure paper. I can still remember "silver certificates" which promised to pay $1 in silver coin upon demand. The "Federal Reserve Notes" looked about the same, but made no promises to redeem the bills in coin.
Once we moved on to a pure paper money, some wonderful things become possible. We can print as much paper money as we like. If you are the treasurer of the United States, and you need to meet payroll, printing money is a wonderful thing. You have no idea how surly people get when they don't get paid on time.
The not so wonderful part of printing money is inflation. Print dollar bills by the carload, and pretty soon everybody has dollars, and storekeepers ask for more dollars for their goods. Customers grumble, but they have the dollars and they want or need the goods. So prices go up. I can remember a time when gasoline was 4 gallons to the dollar. After half a century of dollar printing, it's the other way round, 4 dollars to the gallon.
Inflation is tough on savers. We all want to save money, for the house, for the college education, for retirement. But if the money we put away last year is worth less this year, we know we have been robbed. (Actually we have been taxed, but that doesn't make us feel any better about it.)
Borrowers love inflation. Borrow the money today and pay it back with tomorrow's cheaper dollars. Such a deal.
US monetary policy has been a hot political issue since Alexander Hamilton's time. The savers and the lenders want "sound money" (i.e. no printing of new money) and the borrowers want the opposite. Ron Paul's push for a pure gold currency is the modern form. Over all of US history, the savers and lenders have had the votes, just barely, to limit the printing, mostly. Only existential emergencies, the Great Depression and the two World Wars, pressed the US government into heavy duty money printing.
Today we are faced with Great Depression 2.0. And the democrats want to print carloads of money, supposedly to cure Great Depression 2.0 but also having carloads of dollars to hand out to friends and supporters improves their chances of re election.
Unless the voters get wise and figure out that all that printing, causes inflation, which steals their savings.
Then we invented paper money. It took a while for paper money to become pure paper. I can still remember "silver certificates" which promised to pay $1 in silver coin upon demand. The "Federal Reserve Notes" looked about the same, but made no promises to redeem the bills in coin.
Once we moved on to a pure paper money, some wonderful things become possible. We can print as much paper money as we like. If you are the treasurer of the United States, and you need to meet payroll, printing money is a wonderful thing. You have no idea how surly people get when they don't get paid on time.
The not so wonderful part of printing money is inflation. Print dollar bills by the carload, and pretty soon everybody has dollars, and storekeepers ask for more dollars for their goods. Customers grumble, but they have the dollars and they want or need the goods. So prices go up. I can remember a time when gasoline was 4 gallons to the dollar. After half a century of dollar printing, it's the other way round, 4 dollars to the gallon.
Inflation is tough on savers. We all want to save money, for the house, for the college education, for retirement. But if the money we put away last year is worth less this year, we know we have been robbed. (Actually we have been taxed, but that doesn't make us feel any better about it.)
Borrowers love inflation. Borrow the money today and pay it back with tomorrow's cheaper dollars. Such a deal.
US monetary policy has been a hot political issue since Alexander Hamilton's time. The savers and the lenders want "sound money" (i.e. no printing of new money) and the borrowers want the opposite. Ron Paul's push for a pure gold currency is the modern form. Over all of US history, the savers and lenders have had the votes, just barely, to limit the printing, mostly. Only existential emergencies, the Great Depression and the two World Wars, pressed the US government into heavy duty money printing.
Today we are faced with Great Depression 2.0. And the democrats want to print carloads of money, supposedly to cure Great Depression 2.0 but also having carloads of dollars to hand out to friends and supporters improves their chances of re election.
Unless the voters get wise and figure out that all that printing, causes inflation, which steals their savings.
Monday, March 5, 2012
Internet privacy?
The Obama administration, after the defeat of SOPA and PIPA, is now pushing for internet privacy laws. They want to enforce "do not track" requests by law.
That's not what we consumers need. We need browsers that defeat trackers. A good browser, backed up by a secure operating system (anything other than Windows), would deny trackers any information, starting by refusing to accept cookies. The WSJ recently reported that both Internet Exploder and Firefox, would accept cookies, and even worse, give websites access to cookies, AFTER the users had told the browser[s] to refuse all cookies.
There ought to be a market here. I would pay reasonable money for a less treacherous browser. Say $50, for a browser that would never accept a cookie. Right now browsers are free, so the browser programmers write browsers to make money by selling you out to marketers. The programmers get paid to do that. Surely there are enough customers to pay for a secure browser?
At any rate, I feel more secure WITHOUT Obama writing internet privacy laws.
What's a cookie you ask? Why should you care?
Cookies are data files ON YOUR HARD DRIVE, that are written by a website. They can be read back later by that same website, and probably every over website on the net. Once a website decides that you are interested in X, or Y, or Z, it writes that into the cookie file. Next time you visit that site, it shows you ads for X or Y or Z. The cookie is memory for the website, This is how the website remembers what kind of ads to plague you with. Get rid of the cookies, and the website has no way of knowing what you did last time you surfed their site.
In the mean time, you can remove all the cookies from your hard drive. Firefox at least will delete all the cookies on your hard drive. Click on tools->options. Select the Privacy tab. Select "remove individual cookies". Once into the cookie buster, you will find as selection to crush ALL cookies. In Firefox, this really works, the cookies do go away.
They come back of course, but the new cookies can be zapped again.
That's not what we consumers need. We need browsers that defeat trackers. A good browser, backed up by a secure operating system (anything other than Windows), would deny trackers any information, starting by refusing to accept cookies. The WSJ recently reported that both Internet Exploder and Firefox, would accept cookies, and even worse, give websites access to cookies, AFTER the users had told the browser[s] to refuse all cookies.
There ought to be a market here. I would pay reasonable money for a less treacherous browser. Say $50, for a browser that would never accept a cookie. Right now browsers are free, so the browser programmers write browsers to make money by selling you out to marketers. The programmers get paid to do that. Surely there are enough customers to pay for a secure browser?
At any rate, I feel more secure WITHOUT Obama writing internet privacy laws.
What's a cookie you ask? Why should you care?
Cookies are data files ON YOUR HARD DRIVE, that are written by a website. They can be read back later by that same website, and probably every over website on the net. Once a website decides that you are interested in X, or Y, or Z, it writes that into the cookie file. Next time you visit that site, it shows you ads for X or Y or Z. The cookie is memory for the website, This is how the website remembers what kind of ads to plague you with. Get rid of the cookies, and the website has no way of knowing what you did last time you surfed their site.
In the mean time, you can remove all the cookies from your hard drive. Firefox at least will delete all the cookies on your hard drive. Click on tools->options. Select the Privacy tab. Select "remove individual cookies". Once into the cookie buster, you will find as selection to crush ALL cookies. In Firefox, this really works, the cookies do go away.
They come back of course, but the new cookies can be zapped again.
More Snow
We got 4.5 inches last night. A decent little snowfall. And all without Winter Storm Watches, predictions of 4 to 14 inches, nothing. The radio just mentioned 30% chance of flurries. We got an inch more than we got last week after all sorts of dire warning. You ought to know that when the weather forecasters talk about odds, it means they don't have a clue.
Sunday, March 4, 2012
Ira Flato is a global warmist
NPR's Science Friday, host Ira Flato, did an interview with Michael Mann. Mann is a big warmist and the creator of the "hockey stick" graph of world temperature, the one that goes flat from the beginning of time until the 1900's and then soars up to the ceiling. The one that got him a freedom of information lawsuit when he refused to release the data from which he built the graph.
In the course of a lengthy half an hour interview, Mann refused to discuss the science of global warming, you know instrument readings, ice cores, historical records, real data. He had a lot to say about the habits and ancestry of his critics, but nothing to say about the science. He still thinks tree ring width indicates temperature, where as real people know that tree rings are influenced by rainfall not temperature. In short, Mann is a crusader for warming, he knows little about the science.
And it looks like Ira Flato is a supporter.
In the course of a lengthy half an hour interview, Mann refused to discuss the science of global warming, you know instrument readings, ice cores, historical records, real data. He had a lot to say about the habits and ancestry of his critics, but nothing to say about the science. He still thinks tree ring width indicates temperature, where as real people know that tree rings are influenced by rainfall not temperature. In short, Mann is a crusader for warming, he knows little about the science.
And it looks like Ira Flato is a supporter.
Train Show
In Essex Junction VT. It's only 80 miles as the crow flies, but it's cross country east-west, on two lane roads. The mountains all run north-south, so there is a lot of climbing up and down and it takes two hours. It snowed over night, so the roads were slippery enough to keep me doing no more than the speed limit (50 mph). I go faster when it's dry.
It was a big show, held in a county fairgrounds site. Lots of people. Aisles were jammed. They had a fine big G scale layout running, and some equally fine HO and Lionel layouts. I picked up a bright jade green NYC box car, and four head end cars (baggage and mail). Also, a beautiful Ford woody station wagon. And some tank car decals. After I got home, I discovered that two of the head end cars actually had the prized and long-out-of-production Central Valley trucks.
My feet gave out after three hours, and I had done all the vendors tables twice. So I drove into next door Burlington VT just for sight seeing. Oh boy. Talk about a college town. It gives Harvard Sq a run for it's money in terms of groovy taverns, trendy clothing stores, co-op food stores, and head shops.
Then I drove back, the southern way. The northern way is US route 2. The southern way is US 302. The southern way is a sportier drive, if you are into wrapping the car around curves, take the southern route. Both ways take 2 hours.
It was a big show, held in a county fairgrounds site. Lots of people. Aisles were jammed. They had a fine big G scale layout running, and some equally fine HO and Lionel layouts. I picked up a bright jade green NYC box car, and four head end cars (baggage and mail). Also, a beautiful Ford woody station wagon. And some tank car decals. After I got home, I discovered that two of the head end cars actually had the prized and long-out-of-production Central Valley trucks.
My feet gave out after three hours, and I had done all the vendors tables twice. So I drove into next door Burlington VT just for sight seeing. Oh boy. Talk about a college town. It gives Harvard Sq a run for it's money in terms of groovy taverns, trendy clothing stores, co-op food stores, and head shops.
Then I drove back, the southern way. The northern way is US route 2. The southern way is US 302. The southern way is a sportier drive, if you are into wrapping the car around curves, take the southern route. Both ways take 2 hours.
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