Monday, December 23, 2019

Pelosi's Gift to America

As we celebrate the 2019 Christmas holiday, let's all give thanks to Pelosi et al. for one of the funniest demonstrations of Congressional incompetence we've seen in a lifetime.

[Click on image for a larger view.]

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Wednesday, July 17, 2019

Theft By The Federal Reserve

I am thoroughly disgusted at the "legalized embezzlement" that is going on through repressed interest rates.  ["Legalized embezzlement":  A phrase originally used by E.C. Harwood, founder of the American Institute for Economic Research.]

Take a look at the following figures:

By way of illustration, let's say you are someone who has $100,000 to put aside at age 20.  Here are your savings after 40 years with 4% interest compounded daily:

$495,259.82, i.e. five times as much.

Here are your savings at today's savings rate at your local bank, about 0.01%:

$100,400.80, i.e. pretty much the same amount as you started with, in fact below the probable rate of price inflation.  (Keep in mind that $100,000 forty years ago had the same purchasing power as $350,427 today, according to AIER's Cost-Of-Living Calculator.  This means you will have LOST purchasing power even with interest on your savings.)

[Data from and Wells Fargo]

The formerly common 4% versus Wells Fargo's current 0.01% represents a loss of $394,859.02, stolen directly from your pocket by the U.S. Federal Reserve.  Counter-intuitively, it's not really the bank's fault, because the Fed is the one fiddling with interest rates and paying interest on bank reserves, making Wells Fargo less hungry for your money.

'Nuff said.

Disgusting.  Why do we say nothing and let this go on?  We really are a bunch of useless, blind, mindless lemmings.

[Image from]

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Thursday, June 27, 2019

Fractional Reserve Banking: Con-Fus-Ing!

I recently ran into a discussion about fractional reserve banking. [FRB]  There seems to be much confusion about it.

Basically, the definition is:

"Fractional reserve banking is a banking system in which only a fraction of bank deposits are backed by actual cash on hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties."  [Investopedia]

Certain economists are vehemently against FRB, especially some in the Austrian school.  But I don't always agree.  Sometimes fault appears in one place when it is actually in another.

I see it this way:  When you hold what you consider to be money, whatever that is (e.g., euros, dollars) you own them, period.  When you decide that you don't want to take the risk of seeing them stolen from your home and you look around for a safe warehouse, you find that the service is offered by banks.  The bank will hold that money for you, available upon demand, and if you want a little income it will even pay you interest, which it earns by lending your money out or using it as collateral.  If you put your money in the bank, therefore, you will have, in effect, lent your money to the bank.  

The risks will vary according to the type of bank you choose.  I consider normal and safe banking to be the lending of my money to someone for, say, a home, as long as the bank is a good one and judges well its debtors.  And it is my responsibility to see that I choose a good bank by studying its history.  I would expect a reasonable amount of interest for my loan to this type of bank.  And, depending on the interest I demand, I might expect to have free access to my money whenever I want it.  

This is not FRB.  It works as long as there are no economic panics, and even if there were, the banks can avoid money shortages simply by branching out into various states in other parts of the country.  (See Canada's experience during the Great Depression.)

Or, to take another example, I could lend the money to a bank that wishes to lend credit (not my money this time, but credit created by the bank) to a company that produces, say, trucks.  My money could be used as a small, say 10%, part of the reserve of the bank for that purpose.  The bank would know the truck company well and would expect to be reimbursed for the credit loan within a relatively short period of time, say around 30-90 days.  The bank would also hold, as collateral for the other 90%, documents called commercial paper for the trucks produced (basically a claim on the trucks).  The credit, upon reimbursement by the truck company, would liquidate, and my money would be quite safe.  I would receive good interest for this loan as well.  This is what I consider to be Healthy FRB.

Today in our looser banking world, I could also consider lending my money to a bank that issues credit, again beyond the amount of my cash deposit, but without commercial paper or other type of collateral.  This is much more risky, and normally I would expect to be paid a lot more interest in this case.  This is also FRB, but I would categorize it as Risky FRB.

The problem is that today ,with Risky FRB loans that are not collateralized and that are loosely distributed by unexperienced bankers, we are not offered proportionate compensation for the high risk involved.  If banks had to compensate us for the actual risks they are making us take, they would not make as many risky loans.

Furthermore, as it happens, we now have a number of government-instigated measures putting fuel on the Risky-FRB fire.  The Fed, without a gold or other standard, is dishing out dollars to banks with one hand, and with the other giving the banks interest just to park their reserves at the Fed.  This means that the banks have even less motivation to pay us any interest at all.  Quite the contrary:  Today savers receive at most 2% interest on their savings accounts, which is barely enough to cover the official price-inflation numbers.  In other words people are lending money to banks in return for no interest at all.

Just to keep it safe from theft?  Frankly, that IS theft.

In other words, it's not the FRB per se that is at fault.  It is: 

1.  The unstandardized, loose fiat monetary system in which we live, where risky-type FRB without collateral has allowed banks to make many more loans and take many times more risk than they would otherwise; plus

2.  The lack of proportionate compensation for the risk the banks are taking with OUR money; plus

3.  The new practice of bailing out large banks, which takes away even more incentive to lend conservatively; plus

4.  This new Fed policy of giving banks interest on reserves; plus

5.  The lack of viable alternatives for safeguarding our money.


Sunday, May 05, 2019

Wealth Gap Statistics: Mostly Nonsense, but Maybe a Grain of Truth

I am running into more and more information from influential people about the wealth gap.  Here’s an example by Ray Dalio, an influential financier in whom people have great confidence.  

To me, at least at first, it seems like just more gasoline on the fire of leftist hysteria about income and wealth inequality.

By U.S. Department of Agriculture - Flickr: 20130817-FS-UNK-0004, Public Domain,

Yes, I know the author is giving us statistical nonsense instead of true facts as do others, and as still others have countered.  However, in spite of its statistical errors, this article may have touched on a truly genuine and perhaps justified sentiment of injustice. 

Of course it is full of fake news, i.e. bad science that deserves to be countered.  Of course I have read Philip Magness’s marvelous pieces on income inequality, and I understand that much of what we read is poorly researched (Piketty et al.).  But in my opinion the most important point Dalio’s article makes is that there is truly an injustice that needs to be addressed today, and it has more to do with a slanted playing field that it does with wealth or income per se.

Here is an extract of Dalio’s article, in contrast to his other bad stats, that I think pinpoints the origin of the injustice:

"Central banks’ printing of money and buying of financial assets (which were necessary to deal with the 2008 debt crisis and to stimulate economic growth) drove up the prices of financial assets, which helped make people who own financial assets richer relative to those who don’t own them. When the Federal Reserve (and most other central banks) buys financial assets to put money in the economy in order to stimulate the economy, the sellers of those financial assets (who are rich enough to have financial assets) a) get richer because the financial asset prices rise and b) are more likely to buy financial assets than to buy goods and services, which makes the rich richer and flush with money and credit…."

Personally, this hits a cord.  I can definitely say that I am very miffed–indeed indignant and horrified–that my savings are so little remunerated today.  This is theft pure and simple, perpetrated indirectly by individuals in whom the public has placed its blind trust, i.e. the Federal Reserve.  

Dalio gets it wrong:  This is not capitalism; this is captivation of politicians by bankers.  (You can tell I’ve read Calomiris’s Fragile by Design, a fabulously enlightening book.)  

Also, it is entirely possible that not only are the wealthy buying financial assets more than usual but that, due to economic and political precarity, businesses have chosen to play in the speculative financial sector rather than risk their capital on producing useful things and services, and/or than invest in a trained workforce through higher wages.  

Does this notion not deserve more research?  I think so.  Yes, it’s true that Piketty and Dalio and others get the facts wrong, and I’m ecstatic to see that research institutes such as AIER and others are doing something about this.  But the anti-capitalists do get something right here.  In my words:  

Today’s politicians and their minions are acting in ways that come dangerously close to being criminal.  And perhaps even more significantly, it is precisely from this unjust state of affairs that all the hullabaloo about income and wealth inequality gets its power and influence, even as the rabble-rousers get the details wrong and miss the mark.

The troublemakers may be ineffective at inculpating the wealthy, but they have hit a sensitive nerve of the general public, and this is having an effect.  Free-market supporters need to up their argument.  Countering bad statistics is one thing; finding the underlying problem and convincing the voting public of ways to solve it are quite another.

This is just a thought on a Sunday afternoon.  I wish someone would do something to inform all of us ordinary people, modest savers such as myself who are truly the victims of government's “legalized embezzlement” as Edward C. Harwood used to call it, so that we can make changes through the ballot box.  

("Legalized embezzlement" is Harwood's term for government meddling with the money and credit supply in ways that cause harm to the economy and to the general public, usually through price distortion, sometimes with price inflation (but sometimes not), and through exaggerated stock market, real estate and other market bubbles and subsequent crashes.)

It is the ordinary public that is most devastated by violent economic events caused by diddling with money supply in a fiat-monetary environment.  Someone should explain this underlying monetary injustice to voters.  It surely helps enflame the income-inequality hysteria.  

What might the solution be?  A return to a monetary standard that will ensure that money and credit act not as gasoline on an out-of-control fire, but rather as the water that puts the flames out and allows economic life to thrive.

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Thursday, March 14, 2019

Price Shock II: M&Ms Pack hits $2.29!

In January of 2011, I published a blog about price inflation using my personal index, which is the package of M&Ms.  I was shocked that the cost had reached $0.99, especially remembering having to pay $0.05 when I was a kid.

Eight years later in March of 2019, I checked out the purchase at my local grocery store and was shocked again to see that it has now risen to $2.29 for approximately the same size package (although I'm not being overly scientific about this).

So I conclude that it is time to update my chart.  I'll allow the reader to reach the obvious conclusion about the value of the dollar in recent years.

For those of you who enjoy math, that's well over a doubling of the price in ten years.  How can it be that official price inflation numbers would indicate the price should be more like $1.50?

From Cost-of-Living Calculator,
found here

Perhaps this uptick is a very recent phenomenon, and the chart doesn't yet have the latest figures in its database.  But whatever the reason is, I find it intriguing.

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Friday, December 07, 2018

What's Going On In France?

You may have noticed snippets of news about French people in yellow vests gathering in their townships to rabble-rouse. Do you wonder what it's all about?

My husband was born in France, and we travel there regularly. He turns on the French news every morning, and the scenes of discord and violence are taking up more and more of the daily broadcast. In my opinion, it’s developing into a second revolution, already getting worse than the student rebellion of ’68 that became quite violent. 

I suppose technically it’s a tax revolt. People have been struggling for at least 15 years now, first under a socialist government under Mitterand, then a right-wing-but-ineffectual-middle-of-the-road party under Chirac and Sarkozy, then another left-wing attempt under Hollande, and now under Macron. Macron was Hollande's finance minister who is in fact what I would call a “Third Wayer,” an amalgam between socialism and capitalism. He’s trying to pick a path between European-imposed austerity and an all-providing state, but he's discovering that oil and water don't mix.

He began properly by modifying the federally imposed employment contract terms. But then he promised more purchasing power to the populace and started by … raising taxes! Go figure. People then got hit with rising gasoline costs plus the added insult of a higher “environmental” tax (which most of the electorate supports in theory), and this was the last straw, apparently. 

The uprising started on social media and just exploded, somewhat like the Arab Spring events a few years ago. Now everybody is getting into the act: the labor unions, the truckers, the professors, the students, the nurses, the retirees, the unemployed, the hooligans–you name it.

It might not end until Macron and his government resign, although maybe he can salvage something temporarily by handing out some goodie or other. In the end, it may be the best news yet for France’s populist party, the Front National of Mme LePen (now called the Rassemblement National). She wants to close the borders, stop international trade, stop immigration, throw out the Arabs, tighten security, and still maintain the socialist national benefits. Good luck with that. 

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Saturday, July 14, 2018

The Theft Is Now Official Policy

The Federal Reserve has just published a report stating that it will continue to use new policy tools to control interest rates.

As stated in the Wall Street Journal, "The Federal Reserve defended having the flexibility to set interest rates by using relatively new tools that include paying interest to banks, in its semiannual report to Congress on Friday."

For those of you who are subscribed, see the whole article here.

Creating money and inviting the banks to park it at the Fed, with interest, is theft, in my opinion.

[Thanks to]

Have you any savings at all?  (Hopefully.). Have you noticed the rate of interest you are earning?  (Probably less than 1 percent unless it's in a CD.)  Have you also noted the official (never mind the unofficial) rate of price inflation currently?  (It's creeping towards 3 percent on an annual basis.)

That's a minimum of 2 percent loss of purchasing power per year, when the banks should be competing for our savings.

So who wins in this new Fed game?  The bankers and speculators.  Who loses?  Those who can least afford it, the forgotten men and women of the Western world.

What an embarrassment.

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Wednesday, January 17, 2018

The Vitriol in Today's Politics

Now that the holidays have past, perhaps we can take a moment to think quietly about the changes in our culture. Permit me to ask you two questions:

Do you detest people who voted differently from yourself?

Do you avoid entering into discussions about politics when you are among people who are on the opposite side? Or alternatively, do you make deriding comments about the other side when you are with your friends, without bothering to ask yourself whether you really know how they voted in the last election?

Morris P. Fiorina has written a book entitled Moderate Voters, Polarized Parties, reviewed in the Wall Street Journal on January 6, 2018. The book describes how polarized American political parties have become, and yet how increasingly moderate and independent voters seem to be.

In reality, I would call this the New Charade of Politics, because neither description is accurate. What the author misses is this:

The parties pretend mightily and convincingly that they are pulling back and forth on a public policy tug-of-war, each trying to impress supposed "independents" and "moderates" to tip the scales in the party's favor. But in fact, the majority of Americans seem to want the same thing:  a larger and more intrusive government that benefits the voter at the expense of everyone else.

Rather than agreeing like adults to limit our state, federal, and local governments as the U.S. Constitution advocates–which limited government is meant to preserve our liberties, encourage progress, and increase our standard of living–more and more interest groups are feeding at the public troughs so conveniently provided by larger governments.

Please remember that interest groups are simply groups of people, whether they represent large corporations or themselves.

By Unknown - w:Harper's Weekly available at Library of Congress, Public Domain,

What riches or powers do those groups of individuals want our government bodies to control, so that the particular group can divide the confiscated goodies or powers among themselves? Here is a sampling, and you can probably identify the interested group yourself:

  • right to choose vs. right to life 
  • a public vs. a private health system
  • drug wars vs. liberalization
  • public land vs. private property
  • environmental protection vs. private stewardship
  • trade barriers vs. free trade
  • public safety nets vs. private charitable assistance
  • Social Security vs. private or public-private-partnership savings accounts
  • federal control of money issuance vs. private issuance
  • federal control of monetary policy vs. private banking with federally-imposed standards and competition-imposed results
  • over-indebtedness and “too big to fail” vs. sound money, realistic credit expansion, and creative destruction through corporate responsibility
  • public vs. private education
  • public utilities vs. private suppliers or public-private partnerships
  • public financing of the arts vs. private and charitable-foundation choice
  • complication vs. simplification of tax codes
  • and perhaps soon, censorship vs. free speech
The list of such issues goes on and on. Just as an example of how big our federal government has become, I'll quote my own comment in response to Mr. Fiorina:

"A Library of Congress web page listing government branch websites says it succinctly: 'With the time we have available, it is not possible to list every department agency.'"

In all cases, people on the left and people on the right have a vested interest in the decisions our governments make on each and every issue. The more subjects within government purview, the more the groups stand to gain. 

So instead of everyone voting to allow each other the freedom to resolve privately the issues that concern each of us to different degrees, people on both sides of the spectrum vote for a government that confiscates our freedom, takes over jurisdiction, and redistributes the power and/or riches to one side or the other. And the side changes every few years, just to keep the party rolling for those bureaucrats who are the most wily participants in this charade, since they win no matter which side is gaining.

The winning side feels vindicated for a while; but over the long term everyone loses. The whole nation becomes increasingly lackluster, unproductive, downtrodden, depressed, repressed, uncreative, and frustrated, no longer master of his or her own destiny. We all become less free and less valuable to our fellow citizens as this unhealthy cancerous growth evolves. 

Voters, take heed.

For those who are interested, here is my reply to Mr. Fiorina:

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Monday, December 18, 2017

What Is Bitcoin?

Exactly where does Bitcoin fit into the monetary scheme of things? Here are some questions and answers.

By Open Source

1. Is Bitcoin a form of money?

Bitcoin is not a physical good such as gold that you can hold in your hands. Nor does it fit into von Mises’s regression theorem. It is not a consumable economic good, or even a piece of paper. It’s frankly just a bunch of numbers in a database. But before we decide whether it is money or not, the first question becomes, “how are you defining money?”

The overly loose use of the word “money,” even among sophisticated economists, has caused much confusion in the field. In my world, I define money as a kind of claim check, which is a kind of contract. (For more on this, see Edward C. Harwood, Cause & Control of the Business Cycle, American Institute for Economic Research, E.E.B., Sept. 1974; and Money, Banking and Inflating, E.E.B., Apr. 1986.)

Sometimes a purchasing transaction is immediate. (I sell you a computer and you give me an ounce of gold in return.) Sometimes a transaction has an element of time. (I sell you a computer and you give me something that I think will buy me an ounce of gold in the future.) In the first transaction, the gold is considered something exchanged for its own value. In the second, the thing exchanged is a kind of contractual promise of stable purchasing power in the future.

Gold itself has both qualities: intrinsic value, and holding value based on contract-like trust. A dollar, although no longer tied to gold, still has value as a contract. So does Bitcoin (in spite of it being wrongly but conveniently classified by the government as a commodity). Neither has intrinsic value; but both have contract value, although to varying degrees, and certainly less than gold.

Bitcoin will have to prove itself to be a trustworthy store of value over the long term. As it stands, there are risks. But there are risks with the dollar, too. We have the habit of accepting the dollar contract even though it loses value at an average rate of 2 percent a year. Bitcoin’s value is very volatile at the moment, and therefore its utility as money is limited. But it may become more stable in the future, in which case its potential for acquiring trustworthiness–and therefore usefulness–accrues.

2. Is Bitcoin too volatile?

Admittedly, much of the current rise in Bitcoin’s exchange value vis-a-vis the dollar is due to speculative activity for a quick buck. But there may come a time when its value stabilizes. Remember that Bitcoin is not something of value in and of itself like gold; it is a contract, just like today’s dollar. The contract medium that is Bitcoin may come to a dollar exchange value that is relatively stable, or at least stable enough, perhaps because of its purportedly limited supply, or because it proves to be reliable, or because some people find it useful somewhere in the world for whatever reason.

If we could take away its speculative volatility, Bitcoin’s price probably would still vary. But the variance would be the same juggling that would go on if the government were to declare that within the next two months the US will return to the gold standard. The “price” of gold would seem to climb in dollars, but in reality it is the dollar that would immediately drop way below the current $1,200/oz and gyrate until it found an equilibrium between dollars in circulation and available ounces of monetary gold.

This is just as true of Bitcoin under what are similar circumstances. For sure, Bitcoin is volatile right now mainly for speculative reasons; but it may also be searching for its exchange value vis-a-vis the dollar and other currencies if and when it were to become more ubiquitous as a purchasing medium.

3. Is Bitcoin nothing more than a speculative bubble?

Possibly. It may just go down in history as today's version of the 16th century Tulip Mania. Some are even calling it a Ponzi scheme because there seems to be nothing behind it. However, once the speculative froth has been beaten out, and if Bitcoin’s utility can be quantified (admittedly a big if), its “price” (i.e. dollar exchange value) will drop to–or rise to–the level it needs to be at to fulfill its contractual duties. That may be zero or it may be many thousands. We just don’t know yet. And it may fluctuate wildly until the market determines whether it is useful as a medium of exchange, and/or as an alternative to other failing monetary units, and/or something else.

4. Are Bitcoin transaction fees too high?

They do seem to be increasing. But keep in mind that credit cards charge an average of 2 percent for every transaction. Think about it: 2 percent of every purchase you make with your credit card goes to the supplier of credit, not the manufacturer or retailer. And this is assuming one does not avail oneself of the credit option. If you do, you will pay up to 20 percent more to the credit supplier just for the privilege of not paying within the month. So apparently, people are willing to fork up transaction fees.  And in some countries the extra cost and/or risk is less than it would be with the local currency.

5. Are Bitcoin transactions irreversible?

This seems to be true, and this is where Ethereum’s smart contracts may come in handy. PayPal already works with the dollar and has established a great system for purchasing safely and efficiently at a distance. It arbitrates disputes and can reverse transactions. Some of the cryptocurrencies like Ethereum are doing this using blockchain technology, and they are even more efficient than PayPal. This could be tremendously useful, and not only in the US but in foreign countries where bank accounts and legal systems are not ubiquitous and/or reliable. Cryptocurrencies, even with all their drawbacks, now permit people around the world to use smartphones and digital units of account that bypass weak local currencies and insecure banking systems.

6. Are Bitcoin transactions anonymous?

Quite the contrary. Every transaction is traceable. The only thing keeping it semi-private is the password or wallet key feature that is tied to each user. Other forms of money are much more anonymous (e.g., cash, certain kinds of paper assets, gold), though not as convenient. In the US, it won’t be long before the government starts forcing Bitcoin and other cryptocurrency dealers to hand over records and/or to file reports to the IRS. Remember that all Bitcoin users owe capital gains taxes (and perhaps even sales taxes) on every transaction, for example if the value of a seller’s digital currency has risen between acquisition and sale. (Talk about a wrench in the works!)

7. Could Bitcoin replace the dollar and other currencies?

I believe Bitcoin will never replace the dollar because of this taxation feature. It is what has prevented gold from being used more widely as a purchasing medium. As it stands, governments have three choices if they want to retain their monopoly on money: Reduce Bitcoin to a crawl through taxation; make it illegal; or create a parallel system that would out-compete it. The last would be expensive and the second would be unpopular, so I will bet they will choose the first.

8. The dollar is backed by debt. What is behind Bitcoin?

In fact, Bitcoin is backed by nothing, at least not in the traditional sense. But first, let’s clear up one point: The dollar is not backed by much either. Some say it is backed by debt. More accurately, it is backed (and only to a percentage) by US creditworthiness, which in turn is backed by the country’s potential source of payment of its debts, i.e. the American taxpayers and the relative strength of its political-economic system. This is certainly better than nothing, but it’s not something to crow about, especially since the US came very close to a dollar collapse in the late 1970s and almost did again in 2008. What will the next showdown look like?

Today, the Fed is putting us in even greater peril of another dollar collapse, so in fact the dollar isn’t much better than Bitcoin with regard to what’s backing it. In fact, it is this current dollar fragility that explains, in part, the interest in Bitcoin, because Bitcoin and others like it are outside the dollar system and therefore might preserve and even increase in purchasing power if the dollar (or another currency) were to collapse.

9. Is Bitcoin just a ledger of unbacked liabilities?

This seems inaccurate. There are no liabilities behind Bitcoin, backed or unbacked. It is a ledger of a series of contract terms in the form of exchange transactions. The whole notion of assets and liabilities is avoided by Bitcoin’s structure. In fact, that’s the beauty of it. Bitcoin is a set of records of contracts on a medium that is not paper but rather digital memory, and it is allegedly permanent and inalterable.

The contract can be verified and preserved in a way that is unique to the modern world: electronically. Because it is (purportedly) un-inflatable, Bitcoin completely avoids the whole idea of assets and liabilities “behind” each unit. It seems to completely obviate the need for something of trusted value (gold or paper dollar) altogether, since the contract itself is said to be 100 percent reliable.

That is, until the lights go out.

Bitcoins (computer records) have not yet been proven to be permanent and stable. To that degree and up to now, they are fragile. Bitcoin creators can decide to create more, or fork, or cause some other deterioration of its current qualities; or dealers can go broke, or get hacked, wiping out all the Bitcoins they are holding; or a war could damage the electrical infrastructure. Then what?  But today, that is also true of all accepted monies.

Today, money is all about trust. Much of the advancement of western civilization came about because of trust among contracting parties. Before banks, the money used between contracting parties was often a commodity such as gold. As banks evolved, as trust in bankers evolved, and as stability evolved, money evolved as well to include paper instruments promising to pay gold, such as a bank note. With further evolution, banks began creating credit backed by real bills, which is a type of short-term loan contract based on things coming to market. In this case, the borrower reimbursed the loaned credit in a timely fashion as the things were sold, and the trustworthy banks retired it from circulation as promised. (For more details, see the above-linked books by Edward C. Harwood.)

This tried-and-true banking system based on a promise to pay gold or gold-equivalent instruments broke down during the 20th century, and along with it trust has eroded. During those years we allowed our government to replace gold and real bills with Treasury debt. We have become accustomed to using dollars as money based on the value of Treasury bonds that purportedly back it; but ever since we gave the government this power, the dollar has lost around 2 percent purchasing power every year. Over time this is something like a 98 percent loss in value. Some people believe the system will hold up anyway, but since debased currencies tend to fail over time, some monetary historians (and I) are worried about the dollar. So are some Bitcoin investors, apparently.

Only patience will reveal if this technological version of money will take hold in the world economy. Personally, I would prefer gold and gold-backed money, but we don’t have that option, do we? We use dollars every day, all the time, even though these dollars might collapse within our lifetime.

So, in your opinion, which will be first? Bitcoin or the dollar?

Saturday, December 02, 2017

Trump Wins One

Trump probably stayed up until 1:50 a.m. last night (this morning) to hear that the Senate passed the tax reform bill, 51 to 49.  For a businessman, the government workings must be trying, to say the least.  Here's my imagination's thinking about the moment.

Trump's late night TV thoughts
(Click on the image for a larger version.)

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