Kiss George goodby

You can kiss ole George goodbye.

He was great as a Father to our country. He was courageous as Commander of the Continental Army, when they ran King George’s redcoats back to England.

He performed wisely as our first President. Washington’s dignified leadership tempered the contentious impulses of our first politicians,  Jefferson, Adams, Hamilton, et al.

As a legendary figurehead  of American leadership he has served well for over two centuries.

Young George’s honest admission about the cherry tree incident  still inspires us to honesty and integrity.

But as the face on the dollar bill, his days are numbered.

Most of your purchases are (are they not?) far beyond the 1-$2 range. And, think about it, what can you buy with a dollar bill these days?  A sugar drink at a convenience store? Probably not. They’ll supersize you into greater quantities of go-juice with your gas and you’ll be whipping out the plastic stripe.

These days all that used-to-be-money is just  swiped stripes and inserted chips and electrons flowing around the globe.

And that old greenback—what is it really? Used to be a silver certificate, then a Federal Reserve Note. Now the Fed has got the legal tender’s stability all figured out, so that the value of a buck walks a fine line between what it was last year and a what the CPI will allow you now.

Which isn’t as much as it used to be.

So these days we have, and have had for quite a while now, a comfortably numb currency inflation. That Federal Reserve Note in your pocket appreciates at a predetermined rate of 1-2% per year, and this calculated depreciation compensates for the variability of our paper dollar’s value since we ditched the gold/silver standard back in the 1960’s.

But I think this waffling Dollar will be with us for only a little while longer.

How much longer?

Washington’s greenback will probably float around until such a time as BrettonWoods doth move against Dunce’nGame for the last time. Then the weight of the world will be too much to bear.  Tensioned Tectonic shifts in the world’s monetary plates will render our legal tender to disability status, and those Federal Reserve Notes slipping in and out of international accounts will no longer be the world’s reserve currency.

’Tis then the Treasury will nudge Ole George into retirement. He’ll be on Social Security like the rest of us, with direct deposit, never even seeing the checks, never handling the cash, merely reaping the debit presence of those positive credit numbers. ’Tis then they’ll gently compel Ole George into retirement.  Maybe they’ll give him a gold watch for old time sake.

So long, George. We’ve felt so fat and happy having your pocketbook visage to enable our consumer shopping excursions. Your accomplishments have been Notable, expansive and historic, like Norman Rockwell scenes from our magazine covers and dime store excursions in all those bygone petrol-fueled Main Street purchase excursions.

Fare thee well, George. But I’ll never forget the smooth, crisp feeling of your fibered texture between my digits. Ah, those were the days, the dollar days!  https://www.youtube.com/watch?v=2KODZtjOIPg.

King of Soul 

A New Bretton Woods?

We were in Rome about a year and a half ago, as part of a traveling celebration of our 35th wedding anniversary.

One evening as we were lollygagging through the busy rain-slicked streets and sidewalks, we passed in front of a very special building. It was the Rome headquarters of the European Union, or "EU".

I wanted to take a picture of the building's entry, because that is what tourists do--take pictures of important places. Seeking a broader view, I crossed the street. While positioning myself and the phone to snap a pic, the guard across the street noticed my activity. He started waving at me frantically, indicating that what I was doing was not permitted.

Excuse me. I was taking a picture of a public building.

In America, we take pictures of .gov buildings, because we have, you know, a government of the people, by the people and for the people, which means, among other things that the people can take pictures of their headquarterses (as Golem might say.)

Is this not the way you do it in Europe? No pictures of the RomeEU headquarters?

Nevertheless, here is my smuggled pic:

If you squint at my little jpeg here, you may discern the guard's upraised right alarm, a gesture of command intended to communicate a stop order on my touristic activity. It vaguely resembles another raised-arm signal that was in use in Europe 75 years ago, during the regime of Mussolini and that German guy who considered the Italian dictator to be his own puppet.

Or maybe I'm being too cynical about this incident. Maybe the guard was saluting me in some way, acknowledging my importance as an American tourist in the city of Rome.

Now, a year and a half later, this morning, seated comfortably in my own humble domicile, back in the USSA . . . I was pondering the idea of government--whether it is truly "of. . .by the people", or is it something else? Is it, as many citizens insist during these times of tumultuous societal change, actually an institution through which the "1%" (or as they said back in the old days, the "rich and powerful") project their oligarchical manipulations upon the rest of us?

I was thinking about this after reading online an article about how the worldwide financial system that has evolved.

http://seekingalpha.com/article/3993559-back-square-one-financial-system-needs-reset?ifp=0

In this Seeking Alpha blogpost, Valentin Schmid, as "Epoch Times" examines our international monetary system. His analysis appears to be generated from a well-informed position in the world of money, assets and power.

Mr. Schmid raises the question of whether the current (worldwide) debt load can ever be repaid, because there isn't enough "real money" to go around.

This got my attention, because I have been thinking for a while that there isn't enough "real money" to go around.

Haha, as if I knew about such things. I don't know much about money; if I did, I would have more of it.

Anyway, Mr. Schmid's question is answered by his guest interviewee, Paul Brodsky, in this way:

. . . "I would argue central banks lost the ability to control the credit cycle. Some relatively minor event could trigger a series of events that creates the need for a sit-down among global monetary policy makers who finally have to acknowledge publicly that their policies are no longer able to control the system, the global economy, which is based on ever increasing demand through ever increasing credit.

And what might occur is a natural drop in output. So you'll see GDP growth begin to fall. Real GDP growth across the world maybe even be going into contraction and that would spell doom for these balance sheets. And this is not something I'm predicting or trying to time at all, but the natural outcome of that would be a sit-down like a Bretton Woods where arrangements are reconsidered."

https://en.wikipedia.org/wiki/Bretton_Woods_Conference

So what is coming is, perhaps, this:

To compensate for a stalling of global productivity, the movers/shakers of the world may construct a new, top-down rearrangement of the world financial system. The purpose of this revision will be to fix the problem of not enough money to go around. Such an extensive reconstruction as this would be has not been done since the Bretton Woods agreement that was promulgated by delegates from 44 Allied nations in 1944.

In a 21st-century world inhabited by billions of inhabitants, our accessibility to natural resources has heretofore been determined by how many holes we could drill in the ground to extract natural resources; and how many acres of crops we could plant to produce food; how many factories we could build, and so on. . . building an economy to work toward spreading the bounty around.

In the future, however, we will be moving to a "knowledge" economy. Wealth creation will not be about how much you can dig in a day's time, nor how much you can plant, nor what you can cobble together in your back yard or over on Main Street.

Wealth generation in the future will be determined by what you know, so start learning now.

The first three essential things to know are these:

Reading, Writing, Arithmetic.

Well gollee, maybe it won't be such a brave new world after all.

However this thing plays out, if enough of us can master these three skills, .gov of the people, by the people and for the people will not perish from the earth, we hope.

Glass half-Full

the Minotaur metaphor from Yanis V.

The day after we arrived in Greece for a vacation, they

held an election there.

The leftist Syriza party won, propelling Alexis Tsipras into the office of Prime Minister. With no delay, Mr. Tsipras appointed Yanis Varoufakis as the new Finance Minister for Greece.

Before that week was over, these two men were visiting national leaders all over Europe. They were abruptly leaping into the Continental fracas of unbalanced financial equilibrium between their bankrupting government and the Euro creditor overlords up north.

Messers T and V immediately let it be known that their negotiating strategy on behalf of the Greek people would be very different from that of their predecessors. Austerity was not working to solve the problem, and would no longer be tolerated by the poor people of Greece. And it was time to acknowledge that fact. Something had to change.

That was about 3 and a half months ago. Now, in May 2015, the then-newly-appointed finance minister Mr. Varoufakis has already been replaced; he is now moving on to other roles in the international order of things (if "order" is an appropriate word for whatever it is that holds our nations together.)

As I write this, on a Sunday morning in May, in the USA, I am 2/3 of the way through reading Mr. Varoufakis' book The Global Minotaur;

http://www.amazon.com/The-Global-Minotaur-Financial-Controversies/dp/1780324502

I can tell you I am not surprised that his role as a negotiator was so brief. The man is a truth-teller. (of the leftist type; there are truth-tellers on both the "left" and the "right".)

As a regular ole conservative-leaning working-stiff kind of guy, I've done quite a bit of reading on this financial Crisis that has engulfed us since the fall of '08. Mr. V's explanation of that 6-year devolving tsunami is the easiest to understand that I have seen.

Yanis' strategy is centered on what we call these days a narrative. That is to say, a kind of story. He converts the whole unfolding circus of events into a story based upon the ancient Greek mythical tale of a terrible flesh-devouring beast, the Minotaur. If this sounds far-fetched, it is.

My conservative brethren these days disdain the narrative approach to elucidating current events; they prefer, as Sgt. Friday used to say back in the day. . . just the facts, ma'am.

As if such a thing--separating facts from fluffy hype--were possible in this day and time of cyber bewilderment. Even statistics, raw numbers, are near-nonsense nowadays; they're almost useless for making sense of contemporary fiscal/financial conundrums.

One has to survive by intuition in the 21st century.

There's "spin" imposed on everything! Consider the unemployment figures that the BLS cranks out every month. Talking heads await those stupid numbers on the first Friday of every month, so they can have something to talk about, forming projections and predictions about future events based on stuff that already happened last month. Looking for the "trend."

To hell with the trend! What's the truth?

Unemployment rate, or Labor participation rate?--you tell me which one really tells the tale.

It's like the CPI, Consumer Price Index. They leave fuel and food costs out of the equation, when those two factors comprise the biggest impact on every "middle class" household budget. Go figure.

But I digress.

Here's this lefty, Mr. Varoufakis, an economist. He writes a very interesting book, using the Minotaur analogy narrative, and helps me understand what the hell has been happening in the world of money, which is to say the real world.

And though he claims to be some kind of neo-Marxist, I don't care. If some conservative can do a better job of explaining why the free market has been buried under a landfill of toxic assets and leveraged finance-babel, let him/her do so.

I've blown my wad here in ranting, which is something I hate to see in other blatherers online, so I'll not weary you with more of this grievance;

I'll not explain the Greek's minotaurial metaphor. Except to say it involves the global recycling of economic surpluses since the post-WWII Bretton Woods financial arrangement that slanted everything in the world toward American advantage.

But now, since 1971, when Nixon shut down the gold window, all of that US-favoring international baggage has been lost in an airport somewhere between Brussels and Beijing and so the great recycling flow of surpluses has reversed. So that now it morphs into recycling deficits instead of surpluses and the winners will someday be losers and vice versa and so austerity is for the birds and now Mr. V thinks the Bretton Woods potentates should have listened to Mr. Keynes in 1944 instead of Harry Dexter White.

Or something like that. More about this later, probably next week after I finish the book. I suppose I'll have to jump over to Hayek or Schumpeter or Mr. Volcker for some right-leaning controlled financial disintegration explanations after this tragi-comedic death-toggle with Greek mythology.



Glass Chimera