This is not a cut and paste but a summation of my own thoughts on the matter of paper currency and related items. Just a ramble, if you will, with my limited training in economics and thoughts on the economy of today.
There has been a lot of discussion around national debt, the gold standard and the inherent worthlessness of paper currency. Most of the talk makes assumptions that I have decided that I do not agree with.
In the very beginning, humans hunted and/or gathered for enough to keep themselves and their families alive. When some would have an excess, they would barter with others for other surplus items they needed or desired. Eventually, both people and tribes found things they could do better due to either innate talent or local resources and started to specialize. As this progressed, the original barter system proved impractical because the people who wanted your goods might not have what you desired to trade for it. Hence, some bright stars developed "mediums of exchange".
The original mediums of exchange were commodities like salt or gold, and they stood the test of time for many years due to their universal demand. Eventually, though, nations replaced the hard commodities (an abstract representation of value) with currency (an abstract representation of an abstract representation of value). Currency was originally backed up by real commodities a la Fort Knox, but this has now fallen by the wayside and currency is, in and of itself, been deemed to have intrinsic value by the government of the particular country.
It is popular to bemoan the departure from the gold standard and to say that the paper money has no value redeemable in a specific commodity. It is also popular to complain that the government spends money it does not have through borrowing from banks or other nations that hold its currency, thus indebting its citizens and requiring additional taxes to pay it back.
But what is the true nature of this cash?
The true value of any nation is what it produces. The GDP is a good approximation of that. Since we are now a very specialized society (we don't mine our own ores, build our own cars or grow our own food for the most part), we need some objective medium of exchange to represent each citizen's claim for a portion of that national product, theoretically in proportion to the effort that citizen has put into producing it.
Fixed commodities such as gold are problematic in today's society. Its availability is dependent on both the domestic holdings of gold and the amount of gold ore in a particular nation (somewhat similar to the availability of petroleum deposits in this day and age). For a country to base the fundamental medium of exchange of its GDP on a commodity that's available supply is fixed and arbitrary is, again, impractical.
So a nation decides to print or mint controlled amounts of documents that, in the aggregate, stand for the total output of the country. This medium, through supply and demand, provides each citizen with the ability to exchange the goods or services they produce for those they desire. The amount is finite and varies with the national output. Someone bargains their time, labour and skills in return for currency at competitive rate in the marketplace. Those who have higher demand skills and abilities command a proportionately higher return. Others take excess amounts they have earned and, alone or in conjunction with others, develop new production through the employment of others, thus becoming the capitalists. People then take the share of the GDP they
have earned, as represented by the money they hold, and purchase the goods they need and/or desire. Foreign nations trade amongst themselves for domestic currency, and redeem that currency at a rate that represents the desirability of any currency to purchase the goods of the issuing country.
This is simple, but it has gotten all cocked up.
First, instead of our governments issuing and maintaining the levels of money proportionate to the GDP, they allow a central bank (a private 3rd party in the case of the US) to issue it and regulate the levels. Instead of currency representing a share of the GDP, it becomes seen as a commodity in itself, defeating the purpose it was created for.
Second and directly related, this central bank and the other banks are allowed to expand the money supply by lending cash they do not hold on deposit. This increases the money supply without a corresponding increase in GDP, devaluing the currency and starting an inflationary
spiral. An argument can be made for lending fiat money for the start up or expansion of businesses that ad to the GDP, but much of the lending is for consumer goods and the additional money circulated results in inflation.
Third, these same bankers have convinced the governments that any excess currency needed for government aims must be borrowed. Borrowed from the banks that create cash out of nothing to lend and who then profit on the interest.
Governments have also compounded this by deciding that segments of society who do not contribute to the production of that society should receive a portion of it anyway and have set up entitlement programs to provide them with money representing this unearned claim.
To my way of thinking, the banks are the main culprit and the governments are accessories by buying into the banks' assertions that bankers control the money. A responsible government would control its own money supply and would ideally vary that supply in proportion to national output. It would not confiscate the claim to goods earned by people and redistribute it to those who have not contributed, possibly barring support for the truly disabled. Further, if those in another nation sold their goods into the domestic market in exchange for the domestic currency and chose to use that currency to purchase domestic goods to be exported, more power to them. The production capacity and desirability of goods would, by necessity, determine the rate of
exchange between currencies.
If the government needs more currency for its legitimate objectives, print more. Don't borrow it. The downside is that, unless the government aims increase GDP, the price of goods produced would increase due to the interaction of aggregate national supply and demand while the foreign exchange rates would be similarly affected. On the other hand, if the government needed less, reduce the available money supply accordingly.
In this scenario, there would be no need to even levy taxes at a national level since the government could produce the cash it needed to buy the required goods and services in the marketplace (recognizing, of course, that improper use of this ability could destabilize their
national economy). Bottom line is that the citizens' futures would not be compromised by the need to repay "debt" to the bankers and provide them with a healthy income for no particular reason than they created money out of thin air.
Thomas Jefferson was extremely critical when Hamilton et al advocated for the creation of a central bank in the USA. It looks to me like his reservations were warranted based on history. The banks actually control the nation. They create the money and then expect the government to borrow that money to bail them out when their schemes go awry.
Leaving the credit standard would be painful in the short term, but returning the purpose of money to its ideal use would, in the long run, benefit everyone except the bankers and those who use their paradigm to get something for nothing.
Just my $0.02
Tuesday, October 19, 2010
Sunday, February 28, 2010
The Scientific Method, Faith and Climate Change
I am a great fan of the Scientific Method. I believe it is the means by which mankind tries to understand the laws the Creator set in place at the beginning of the Universe. My own version of God's Law.
The Scientific Method is a rational process. Someone gets an idea of how something works, a What If. So they design some experiments and make some observations. If the results seem to support the What If, the hypothesis, they publish their data and let other learned peers do their own tests and provide their own criticism. If the observations are repeatable, a Theory is born. This is not necessarily the be all and end all of the Law of Nature they are trying to understand because, as new technology, data and insights occur, they are challenged, revised and amended, all using the same Method.
Here is where Faith comes in. I am not schooled enough in science to understand the facts first hand so I need to put my Faith in the Scientific Method and those who are using it. I can't determine what is fact and what is balderdash so I look at the opinions of the scientists. If the Method seems to have been followed, I take the theory on faith.
So now we come to one of the great debates of our time. Climate Change/Global Warming. It all follows the Laws of Nature and involves physics, thermodynamics and a whole lot of other disciplines that are Greek to me. I once looked at the math involved in the calculation of friction of air masses which is basic to the study of meteorology and came away shaking my head.
There are these 'scientists' out there who have concluded that man is affecting the environment in a negative manner causing damaging climate change. Non-scientists have taken up their cry and have made a political issue out of it, demanding that we take drastic steps to change our ways in a manner that will negatively affect our economy and be detrimental to our standard of living.
I am not competent enoigh to understand the science involved so I look at whether the Scientific Method has been followed to draw the conclusions. It appears that a group of what appear to be politically motivated 'scientists' have studieed data they refuse to share. Climategate has shown that they have unashamedly massaged data to support their conclusions. They further have used political avenues to castigate their critics preventing any true peer review or discussion. Then they have had to retract some of their pronouncements made based on faulty input when they have been caught out.
As a laymen who is being asked to give up much based on their conclusions, I have come to my own belief that the Scientific Method has not been followed by these people. As a result, I have no faith in their findings and will not support their recommendations. Maybe there is some truth to what they say, since the climate appears to move in response to a 100K year cycle, but to conclude that it is man made or that any steps we take now can reverse the trend, if there is one, are unproven.
Let me see some open debate. Let all the data be shared, tested and discussed. Let a theory be developed that is generally supported because it is verifiable and repeatable. Then let's see if drastic steps will make a change or if we should be spending our time preparing for the inevitable changes to come.
The Scientific Method is a rational process. Someone gets an idea of how something works, a What If. So they design some experiments and make some observations. If the results seem to support the What If, the hypothesis, they publish their data and let other learned peers do their own tests and provide their own criticism. If the observations are repeatable, a Theory is born. This is not necessarily the be all and end all of the Law of Nature they are trying to understand because, as new technology, data and insights occur, they are challenged, revised and amended, all using the same Method.
Here is where Faith comes in. I am not schooled enough in science to understand the facts first hand so I need to put my Faith in the Scientific Method and those who are using it. I can't determine what is fact and what is balderdash so I look at the opinions of the scientists. If the Method seems to have been followed, I take the theory on faith.
So now we come to one of the great debates of our time. Climate Change/Global Warming. It all follows the Laws of Nature and involves physics, thermodynamics and a whole lot of other disciplines that are Greek to me. I once looked at the math involved in the calculation of friction of air masses which is basic to the study of meteorology and came away shaking my head.
There are these 'scientists' out there who have concluded that man is affecting the environment in a negative manner causing damaging climate change. Non-scientists have taken up their cry and have made a political issue out of it, demanding that we take drastic steps to change our ways in a manner that will negatively affect our economy and be detrimental to our standard of living.
I am not competent enoigh to understand the science involved so I look at whether the Scientific Method has been followed to draw the conclusions. It appears that a group of what appear to be politically motivated 'scientists' have studieed data they refuse to share. Climategate has shown that they have unashamedly massaged data to support their conclusions. They further have used political avenues to castigate their critics preventing any true peer review or discussion. Then they have had to retract some of their pronouncements made based on faulty input when they have been caught out.
As a laymen who is being asked to give up much based on their conclusions, I have come to my own belief that the Scientific Method has not been followed by these people. As a result, I have no faith in their findings and will not support their recommendations. Maybe there is some truth to what they say, since the climate appears to move in response to a 100K year cycle, but to conclude that it is man made or that any steps we take now can reverse the trend, if there is one, are unproven.
Let me see some open debate. Let all the data be shared, tested and discussed. Let a theory be developed that is generally supported because it is verifiable and repeatable. Then let's see if drastic steps will make a change or if we should be spending our time preparing for the inevitable changes to come.
Thursday, September 17, 2009
"...all men are created equal..."
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
I have been mulling over this part of the Declaration of Independence in light of the ongoing push for egalitarianism and social justice and I finally conclude (to my dismay) that Jefferson got it wrong.
If we were all created equal, we would
- all run the 100 meters in 9.58 seconds
- make new discoveries in quantum mechanics
- not consider Ron Jeremy's anatomy to be remarkable
It is obvious that we are not all equal in any way that our capabilities can be measured. Perhaps it should have said "...are created with equal opportunity..." or that the next phrase, referring to inalienable rights, might have covered what was necessary about liberty.
In any case, I see that the misapplication of the "equal" ideal is leading to many of the current issues causing problems today. The claim to equality at birth leads some to believe that we should all have equal outcomes in our lives. The move towards eliminating school grades, removing winners and losers from kids' competition and using affirmative action instead of objective testing are only a few of the warped applications of this misleading idea. As a result, we are being dumbed down to our lowest common (but equal) denominator.
I have been mulling over this part of the Declaration of Independence in light of the ongoing push for egalitarianism and social justice and I finally conclude (to my dismay) that Jefferson got it wrong.
If we were all created equal, we would
- all run the 100 meters in 9.58 seconds
- make new discoveries in quantum mechanics
- not consider Ron Jeremy's anatomy to be remarkable
It is obvious that we are not all equal in any way that our capabilities can be measured. Perhaps it should have said "...are created with equal opportunity..." or that the next phrase, referring to inalienable rights, might have covered what was necessary about liberty.
In any case, I see that the misapplication of the "equal" ideal is leading to many of the current issues causing problems today. The claim to equality at birth leads some to believe that we should all have equal outcomes in our lives. The move towards eliminating school grades, removing winners and losers from kids' competition and using affirmative action instead of objective testing are only a few of the warped applications of this misleading idea. As a result, we are being dumbed down to our lowest common (but equal) denominator.
Monday, February 9, 2009
Television Networks Rant
I'm not going to get into the merits of what is broadcast on television these days, but there are some shows that Sandy and I like to watch. Because there is an element of serialization in most series these days, we don't like to miss one but we also don't like to watch reruns of shows we have seen.
Does anybody remember the good old days when they started a series in September and a new episode was aired every week until March? Then they went into reruns and did it all again for people who didn't watch it the first time around.
These days, they will run a few episodes in a row and then put in some reruns or other programs and then, out of the blue, throw in a few more new episodes. Then they'll switch nights without telling anyone. Any viewer using old technology has very little chance of catching all the episodes.
I sit down ever Monday morning and check our current programs out at tv.com to get the air dates for the new episodes. I track these in a spreadsheet (what else?) and then make sure the PVR is picking all those up to record. Still, from week to week, they alter the line-ups on a regular basis. For example, last week they might say that we can expect three new Criminal Minds episodes over the next three weeks. This week, they may be delayed for a week or more.
I have a handle on this through some work on my part, but what is going through the minds of those network scheduling people? Do they purposely want to make it difficult to follow their shows or do they figure that viewers can't tell the difference between a new episode and a repeat?
Then, they screw up the PVR's by having a program go from 9:00 to 10:01. What's with the extra minute? I can record two shows in a given time period and that minute keeps me from recording a pair starting at 10:00. I can start early but not late. I can end late but not early. So I have to time shift.
Another beef is that we got watching a couple of series with ongoing story lines (Eli Stone, My Own Worst Enemy) and they cancelled them. After they had shot the last show for what they thought was an ongoing series. You get involved, like the characters and then they leave them hanging forever.
Jericho was the exception. At the end of Season 2, they didn't know whether there would be a 3 so they shot two final episodes. A cliff-hanger and another that wrapped the story up. It was cancelled and we had closure.
It's easy to see that there is no concept at the networks of what makes a rewarding viewing experience. Morons are running the world. It's too bad that it's an inexpensive pastime that I enjoy or I'd take up video games instead.
There, I got that out of my system. For now.
Does anybody remember the good old days when they started a series in September and a new episode was aired every week until March? Then they went into reruns and did it all again for people who didn't watch it the first time around.
These days, they will run a few episodes in a row and then put in some reruns or other programs and then, out of the blue, throw in a few more new episodes. Then they'll switch nights without telling anyone. Any viewer using old technology has very little chance of catching all the episodes.
I sit down ever Monday morning and check our current programs out at tv.com to get the air dates for the new episodes. I track these in a spreadsheet (what else?) and then make sure the PVR is picking all those up to record. Still, from week to week, they alter the line-ups on a regular basis. For example, last week they might say that we can expect three new Criminal Minds episodes over the next three weeks. This week, they may be delayed for a week or more.
I have a handle on this through some work on my part, but what is going through the minds of those network scheduling people? Do they purposely want to make it difficult to follow their shows or do they figure that viewers can't tell the difference between a new episode and a repeat?
Then, they screw up the PVR's by having a program go from 9:00 to 10:01. What's with the extra minute? I can record two shows in a given time period and that minute keeps me from recording a pair starting at 10:00. I can start early but not late. I can end late but not early. So I have to time shift.
Another beef is that we got watching a couple of series with ongoing story lines (Eli Stone, My Own Worst Enemy) and they cancelled them. After they had shot the last show for what they thought was an ongoing series. You get involved, like the characters and then they leave them hanging forever.
Jericho was the exception. At the end of Season 2, they didn't know whether there would be a 3 so they shot two final episodes. A cliff-hanger and another that wrapped the story up. It was cancelled and we had closure.
It's easy to see that there is no concept at the networks of what makes a rewarding viewing experience. Morons are running the world. It's too bad that it's an inexpensive pastime that I enjoy or I'd take up video games instead.
There, I got that out of my system. For now.
Sunday, April 15, 2007
Why libertarian?
My first response is to ask Why Not??????
I didn't set out to be a libertarian. As a matter of fact, I didn't even know what a libertarian was. I was raised in a typical Canadian household where political ideologies weren't discussed much. In the early 60's, my parents did give me a respect for JFK and Martin Luther King, but this was base on what they did and not the politics they espoused.
As I grew, I found that I wasn't comfortable in either traditional political camp. Formal political science education wasn't something I ran across and political ideology wasn't a big staple in Canadian debate. Sure, you would support one or the other of the big parties but, with the exception of the NDP, they were virtually interchangeable. What I did do a lot of was read novels, both fiction and science fiction. The ones that stuck with me the most were those of Ayn Rand and Robert A. Heinlein.
In recent years, I found my way to the Vulcan Riders and Owners Club. In addition to sharing ways to improve our Vulcan motorcycles and planning where to gather to ride, a number of VROC members engaged in political and religious discussions on our Newsgroup.
Drawn into the debates, I found a curious thing. On individual freedom topics, like gay marriage, blue laws, drug legislation and freedom of speech, I found myself aligned with the left wing element. My thought is that my freedom should stop at the end of another's nose and that anything that happens between consenting adults is just fine by me. On other issues such as personal accountability, affirmative action and welfare, I found that I was squarely in the right wing camp. I was accused several times of being wishy-washy and a Mugwump (a creature who sits on the fence with his mug on one side and his wump on the other). I didn't think this was true because, dammit, none of my positions was wishy-washy.
Then good old Chris 'U-Turn' Ritz suggested I look up the definition of libertarian. The philosophy, not the party. Lo and behold, there I was. There is a second axis to political thought. One does not need to buy into a one dimensional ideology after all. I can have my cake and eat it too, but there is No Such Thing As A Free Lunch.
Libertarians come in various stripes and do not suffer political platforms at all well, so we have very little chance of prevailing in the polarized US or Canadian scenes these days. It is interesting that most of the US Founding Fathers' writings, particularly Thomas Jefferson, show a decidedly libertarian bent. This is what led them to be the first to introduce the ideal that individual freedoms were paramount to the world stage.
I am not a pure libertarian, however. I do accept the Canadian concept that universal health care is a right because we said it was, although I deplore the bureaucratic mess the governments have made of it. I also, in these times, have strong protecionist leanings because a globalization in its current form is not a level playing field. There will be more on these exceptions later, but my general position is concurrent with the principles of libertarianism.
One thing that does intrigue me is that discussions with people who don't usually get into political philosophy often reveal the person to have libertarian leanings. I can't help but wonder that, if we get more vocal and share our views, maybe the world can be changed.
For those not previously familiar with this topic, talk radio host Neil Boortz is a blunt and often obnoxious proponent of the creed. I am currently reading his book, Somebody's Gotta Say It (thanks Scotty), and find myself agreeing with his observations almost completely. I will put the link to his website in the Links section of the sidebar to the right. The Nuze section has daily rants that I like reading.
I'll sign off now, but promise I will be back rambling before too long.
I didn't set out to be a libertarian. As a matter of fact, I didn't even know what a libertarian was. I was raised in a typical Canadian household where political ideologies weren't discussed much. In the early 60's, my parents did give me a respect for JFK and Martin Luther King, but this was base on what they did and not the politics they espoused.
As I grew, I found that I wasn't comfortable in either traditional political camp. Formal political science education wasn't something I ran across and political ideology wasn't a big staple in Canadian debate. Sure, you would support one or the other of the big parties but, with the exception of the NDP, they were virtually interchangeable. What I did do a lot of was read novels, both fiction and science fiction. The ones that stuck with me the most were those of Ayn Rand and Robert A. Heinlein.
In recent years, I found my way to the Vulcan Riders and Owners Club. In addition to sharing ways to improve our Vulcan motorcycles and planning where to gather to ride, a number of VROC members engaged in political and religious discussions on our Newsgroup.
Drawn into the debates, I found a curious thing. On individual freedom topics, like gay marriage, blue laws, drug legislation and freedom of speech, I found myself aligned with the left wing element. My thought is that my freedom should stop at the end of another's nose and that anything that happens between consenting adults is just fine by me. On other issues such as personal accountability, affirmative action and welfare, I found that I was squarely in the right wing camp. I was accused several times of being wishy-washy and a Mugwump (a creature who sits on the fence with his mug on one side and his wump on the other). I didn't think this was true because, dammit, none of my positions was wishy-washy.
Then good old Chris 'U-Turn' Ritz suggested I look up the definition of libertarian. The philosophy, not the party. Lo and behold, there I was. There is a second axis to political thought. One does not need to buy into a one dimensional ideology after all. I can have my cake and eat it too, but there is No Such Thing As A Free Lunch.
Libertarians come in various stripes and do not suffer political platforms at all well, so we have very little chance of prevailing in the polarized US or Canadian scenes these days. It is interesting that most of the US Founding Fathers' writings, particularly Thomas Jefferson, show a decidedly libertarian bent. This is what led them to be the first to introduce the ideal that individual freedoms were paramount to the world stage.
I am not a pure libertarian, however. I do accept the Canadian concept that universal health care is a right because we said it was, although I deplore the bureaucratic mess the governments have made of it. I also, in these times, have strong protecionist leanings because a globalization in its current form is not a level playing field. There will be more on these exceptions later, but my general position is concurrent with the principles of libertarianism.
One thing that does intrigue me is that discussions with people who don't usually get into political philosophy often reveal the person to have libertarian leanings. I can't help but wonder that, if we get more vocal and share our views, maybe the world can be changed.
For those not previously familiar with this topic, talk radio host Neil Boortz is a blunt and often obnoxious proponent of the creed. I am currently reading his book, Somebody's Gotta Say It (thanks Scotty), and find myself agreeing with his observations almost completely. I will put the link to his website in the Links section of the sidebar to the right. The Nuze section has daily rants that I like reading.
I'll sign off now, but promise I will be back rambling before too long.
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