Category: Weimerica

Silicon Valley Bank? You’re Soaking In It.

“Why don’t we pretend he didn’t die?  Just for a bit . . .” – Weekend at Bernie’s

Why can’t Ray Charles drive?  He’s dead. (Outside of this one, memes are “as found”)

On March 15, 44 B.C., Julius Caesar was walking to work, since Rome was declared by Gretanius Thunbergium to be a “walkable city” because she was concerned about the sweat of galley slaves and horses making the oceans too salty, thus enraging Neptune, the god of the sea.

This particular day was a good one in Rome, and the bright warm Sun shone down on Caesar as he made it to the Senate.  Caesar loved the Senate, since all of the Senators were really cool and he loved hanging out with them to watch the gladiator games every Sunday.

Then, on arriving at the Senate?  Caesar was stabbed in the back by raising interest rates, and, with his last, dying words, he said, “Please, take this salad dressing, and remember me by it.  Oh, and name a way that babies are born after me.  And Kaiser and Czar might be cool titles for kings in the future.”

Okay, that might not be exactly what happened.  But you can’t prove it wasn’t, because it’s not on YouTube®.

But interest rates have been a thing since long before even Julius Caesar crossed the Rubicon, took the throne, and then became a human pincushion.  And they’ve been gumming up society both before then, and also since then.

Last Friday, on March 10, a curious thing happened – the 19th largest bank, Silicon Valley Bank, went tango uniform.  To paraphrase Python, Monty:

“It’s a stiff.  Bereft of life.  It rests in peace.  If you hadn’t backfilled the coffers with Federal Reserve® notes, it would be pushing up daisies.  Its metabolic processes are now history.  It’s off the twig.  It’s kicked the bucket.  It’s shuffled off the mortal coil, run down the curtain and joined the bleeding choir invisible.  THIS IS AN EX-BANK.”

How, exactly, does a Norwegian blue parrot bank die so quickly?

The truth is, it has been dead for a bit.  I’ll explain.  You can get explanations of this elsewhere, but none of them will be as funny, since that’s what my job is.

When banks take in money, they have several options of what they can do with it.  They can bury it in Mason® jars in the back 40, they can loan it to other people, or they can park it in an investment.  Back in 2008, the big financial crisis was that the loans were to people that could never have paid the money back.  I was offered a guaranteed approval home loan on a house (with zero down!) that was ten times my income.

“Why would you offer me that?  I could never pay that back?” was my response.

The loan lady sighed audibly over the phone.  “I know, but I’m required to tell you that.”

It’s like they never learned anything.

So, part of the problem in 2008 was that the loans were junk because some folks said, “I could use a pool surrounded by marble columns with a champagne fountain built out of PEZ™.  I’m in!” even though they only made $32 dollars a month.  They even had a name for these loans – NINJA – “No Income, No Job”.

These banks also gambled with the cash of the average depositor, investing in champagne PEZ© fountain manufacturers.  Hey, how could they lose?

Oh, yeah.  Things don’t go up forever.  So when they end?  It gets ugly.

The response to that by the Fed® was to use a cash cannon and barrage the banks.  The idea was this, the banks would soak up the cash to paper over the bad debts, and if they had extra cash, they’d park it at the Fed™.  Essentially, the Fed™, working with the banks, made sure that the bankers could keep getting big bonuses, not face criminal charges like the average small-town banker might if he stole the cash from the deposits to pay for his 4.5 out of 10 mistress and trips to Vegas.

It’s like there are different rules for you and I.

Nope.  They got to keep their penthouses, private jets, and bimbos.  In order to keep this nonsense so it wouldn’t implode, the one thing the Fed™ had to do was keep interest rates low.  If the Fed© had tried this in 1975, or 1985, or 1995, the world would have punished it by driving the value of the dollar down (faster), cratering purchasing power and the economy.

But after 2008, there was no other big power.  Japan was a basketcase, Europe was still the Jekyll an Hyde level continent, with Western Europe mainly concerned about how many “Syrians” they could import, and Eastern Europe mainly working out how to make more potatoes so they could make more vodka.  Roads?  Why?

That left the United States as, amazingly, still the only kid with a currency anyone trusted, even though we were spending like a sixteen-year-old with dad’s credit card.

Huh, wonder when YouTube® will ban people for this?

Oh, the Left is already trying to censor people.  Nevermind.

I like the cut of his jib.

Not now.  The COVID world created the Trump/Biden policy of “How can we spend more money today?”  Contrast that with China’s “No body count is too high” policy, and, oddly, the world began to trust the United States less.  Add in Biden’s incoherent policy of a.) letting wars start and b.) pushing away allies like the Saudis, and now we live in a world driven by chaos.

And we’ve lost the trust of the world.

So, the banks still do the same three things with the cash deposited in their banks:  Mason™ jars in the backyard, loan it, or invest it.  Last time, the banks invested in whatever crap floated in the window.  That was silly.

The banks thought they had cracked the code:  this time, they invested in U.S. Treasury Bonds.

Yay!  That’s what a sober person would do, right?

Well, maybe.  But when a bank buys a 10-year bond that has an attached interest rate of 0.08%, and the stated inflation rate is 6%, the value of that 10-year bond craters.  Interest rates go up?  Bond values go down.  It turns out Silicon Valley Bank™ had some of these bonds.  How many?  Enough to wipe out all of the shareholder and bondholder (yeah, they bought and sold bonds) value.  And it’s not limited to them.  Here’s the take on the unrealized losses of the biggest banks in America:

Losers in 1901, Losers in 1921, Losers in 1929, Losers in 1937, Losers in 1945, Losers in 1948, Losers in 1953, Losers in 1957, Losers in 1950, Losers in 1960, Losers in 1969, Losers in 1973, Losers in 1980, Losers in 1981, Losers in 1990, Losers in 2001, Losers in 2007 . . . Oh, wait, the banks didn’t lose anything, it was just regular people.

The FDIC insures deposits to $250,000.  Except when (reportedly) Oprah had half a billion in that particular bank.  Turns out that the United States blinked:  “You get all your money, and you get all your money, and you get all your money,” because Oprah is more important than you and I.

Two other banks have failed already.  You can see that some of their CEOs were serious people only worried about the welfare of their depositors.

Yup, the “adults” are in charge.

This will not result in an immediate run.  The Fed® and the Treasury will continue to backstop the banks because to do otherwise would collapse the system.  They even say so.  Valuing assets “at par” means at what the banks paid for them.  I own a car from 2003.  In Fedspeak® that asset would be valued at the initial purchase price, despite the fact that it has one light-second worth of miles (kilopascals) on it.  Here’s proof:

See?  I’m a respected journalist.  Besides, I believe I am the VERY FIRST person to note that the reserve ratio had gone to zero.  You can check it out.  This will help my lawyer if I’m ever sued.  (Serious about the very first part.)

The Fed™ is screwed.  They want to keep Biden in office, which requires low interest rates and a booming economy and no inflation.  But to lower inflation, they have to jack up the interest rates far above the rate of inflation.  Biden cannot be re-elected.  Period, unless there’s a global war.

Nah, people would never buy a war started due to economic issues.

Ooops.  I’d say sorry, but this is already in the playbook.

Me?  My bet is this can keeps rattling around causing damage for several months.  Six or seven?  Maybe.  Eventually, the Fed® is going to figure out that they can’t paper over this mess.

In the meantime, the cash for businesses will dry up, and the only people that can borrow money will be those that don’t need it.  New projects?  They’ll be cancelled unless the company has the cash or it will ruin them if they don’t stop.  New housing?  Forget it.  The housing market will collapse, (it already is) and the costs of new stuff to make new are so high that no one can afford it, forget the interest rate.

People will stop eating dinner in a restaurant.  We already have.

No, the Ides of March won’t be the end.  But you can see it from here.  While you can, enjoy the nice walk on a sunny day.

And Neptune?  He’s always been a whiney bitch.  Ignore Neptune.

Civil War 2.0 Weather Report: National Divorce? Getting Closer.

“Dolores, I am making a citizen’s divorce.” – The Man with Two Brains

Big Alarm Clock is a conspiracy!  Wake up people! (all non-regular memes are as-found)

  1. Common violence. Organized violence is occurring monthly.
  2. Opposing sides develop governing/war structures. Just in case.
  3. Common violence that is generally deemed by governmental authorities as justified based on ideology.
  4. Open War.

I’ve kept the Clock O’Doom the same.  Again.  This is moving sideways, but things can unravel quickly.  The advice remains.  Avoid crowds.  Get out of cities.  Now.  A year too soon is better than one day too late.

In this issue:  Front Matter – The National Divorce – Violence and Censorship Update – Biden’s Misery Index – Updated Civil War 2.0 Index – The Silly Season – Links

Front Matter

Welcome to the latest issue of the Civil War II Weather Report.  These posts are different than the other posts at Wilder Wealthy and Wise and consist of smaller segments covering multiple topics around the single focus of Civil War 2.0, on the first or second Monday of every month.  I’ve created a page (LINK) for links to all of the past issues.  Also, subscribe because you’ll join over 740 other people and get every single Wilder post delivered to your inbox, M-W-F at 7:30AM Eastern, free of charge.

The National Divorce

I remember reading about research a while back that (my fuzzy memory says) indicated that when a married couple didn’t want to have a divorce, one of the easiest things they could do was not talk about a divorce.  I guess that would mean that the first rule of staying married club is don’t talk about divorce club.

Marjorie Taylor Greene brought up the issue in a big way:

It’s a stark question:  do we want to stay married, or not.  Folks on the Internet followed suit, with this poll:

The Internet is what it is, and a poll like that isn’t at all scientific.  But 19,000 people (75% of respondents) were done.  They were ready to get lawyers, and decide how we get to split up California and Virginia and who got alternating weekends with Michigan.

A much more scientific poll was done by Rasmussen® (more on them later in this Issue) and it emerged that a majority of Republicans wanted out.  47%, plus an 11% who might be in favor, but they wanted to know if they could still get Netflix™ off of Uncle Tim’s account it he were stuck in a Blue State before they made up their mind.

Leftists are never in favor of making anything smaller, since it lowers their power.  Remember, it is Leftists who are on the side of international and world governments.  I’m pretty sure they’d love to include Mars, too, since it’s Red.  This is shown in the poll below:

Fully a third of all people (based on Rasmussen’s™ report) are ready to check out.  That’s a lot.  Although Gallup® wasn’t around to do a poll, most literature I can find seems to indicate that only 1/3 of the folks living in the Colonies wanted the Revolution, so 1/3 is a big, big number.

I’ll add in this other (entirely unscientific) poll:

Again, unscientific, but it shows that there are a sizeable number of folks out there who believe that soldiers would, if ordered, shoot on American civilians.  That’s another scary thought, and perhaps feeds back into the idea that people would much rather have a peaceful exit rather than a violent one.

I read that this year’s CPAC (Republican fanboy convention) was poorly attended, and lacking in energy.  And why not?  The most fervent people in the Republican party are done, and don’t trust the vote, and don’t think that their votes may ever matter again.

Spiderman®, though, seems to have an opinion:

Violence and Censorship Update

Cancelling really isn’t government censorship, but it’s censorship nevertheless.  Scott Adams, noted cartoonist and author, really rustled the collective jimmies of the Left.  Rasmussen™ had a poll about whether it was “okay to be white” and 47% of black people indicated that it was either not okay, or they weren’t sure.

Scott has a YouTube® channel (still!) where he talks about whatever he wants to talk about.  In this, he opined that if that was the way that black people felt, he wasn’t sure he wanted to be around them.  The following cartoon describes it in such a way that Scott retweeted it:

The outrage was both predictable, even though Scott noted that many black people he knew called him up and said that his stance was completely reasonable.  Mr. Adams’ publisher dropped him.  Mr. Adams’ cartoon syndicator dropped him.  Mr. Adams’ agent . . . dropped him.  His new book, due out in the fall?  Cancelled.

I don’t feel bad for Scott, he knew what he was doing, and he has tens of millions of dollars.  But what is it about that simple narrative that makes the Left explode?  I’ll cover that in a future post.

The Silence of the Adams

It’s not violence now, but Illinois has now decided that most crimes short of murdering someone and taking selfies with the victim are now non-detainable.  Burn someone’s house?  Out without bail.  Kill someone while high?  Out without bail.

Florida.  Sigh.  Why?  They want to make bloggers who write about elected officials register if they make money for their efforts.  Is this the single stupidest thing to come out of Florida since they elected ¡Jeb!?

The publisher of Roald Dahl is going through his books an removing whatever they don’t like based on political correctness.  No more “ugly” or “fat” or . . . black.  Paging Scott Adams . . . These “corrections” are showing up in people’s previously purchased e-books, too.  This is why physical media is good.  And why I have lots of books.

It’s not censorship, exactly, when programmers prevent A.I. from coming to conclusions based on fact, but it’s close.  There are certain facts that are inconvenient, like boys have xy chromosomes and girls have xx chromosomes, so programmers prevent A.I. from talking about that.  Elon Musk says he’s going to do his own, non-woke A.I.

When the trains carrying ethyl-methyl-death crashed in East Palestine, it was a story that was minimized until it couldn’t be.  I follow stories like this that are under the news, and was aware of it within a few hours of it happening.  But the news?  No reporting on it, since it didn’t impact Baltimore and had the potential to make the Biden administration look even worse than it normally looks.

Biden’s Misery Index

Let’s take a look to see how we’ve done this month . . . .

Yup, up again, and, like Kamala’s womb, this graph doesn’t eggs.  Here’s a recap:

 

Updated Civil War II Index

The Civil War II graphs are an attempt to measure four factors that might make Civil War II more likely, in real time.  They are broken up into Violence, Political Instability, Economic Outlook, and Illegal Alien Crossings.  As each of these is difficult to measure, I’ve created for three of the four metrics some leading indicators that combine to become the index.  On illegal aliens, I’m just using government figures.

Violence:

Violence is still minimal right now.  I’m betting it stays down until June at the earliest.

Political Instability:

Up is more unstable, and it was down a bit more.  I think this is a conscious attempt to keep things together, Biden just came out in favor of “law and order”, because I think he saw it the show on cable.

Economic:

Economic numbers took a big dive this month, which surprised me.  The numbers look fairly unstable from month to month, which still isn’t good.

Illegal Aliens:

The number took a big drop!  Yay!  Oh, it’s still higher than ever for that month.  I’d say border is wide open, but we have no border.

So, when can we ask the Mexicans to leave?

The Silly Season

One way to deflect a story is to not tell it.  The other way to deflect a story is to flood the media with, well, nonsense.  My favorite this month?  The Chinese Spy Balloon™.  During World War II, the Japanese decided they would make Americans afraid.  They launched 9,000 balloons filled with explosives at the United States.  As near as I could find with an in-depth three-minute look, one exploded.  Out of 9,000.

Ohhh, I’m so afraid.

I’m not sure what we’ve found out about the Chinese Spy Balloon©.  I think that we’ll find out they were trying to check up on why Americans weren’t buying more extended warrantees based on those cell-phone calls.  Since we haven’t heard anything, I’m think that it may actually have been a weather balloon.  Regardless, they can solve their problem with just a little bit of camouflage that the United States would never shoot down:

Was this the story that they were attempting to distract us from?

It’s a scary one.  Why do we need so may people?  Why aren’t all the traditional people who would go into the military signing up?  Oh, yeah.  They’ve been told they’re racist.  They’ve been told they have unearned privilege?  They’ve seen the military force people to take the vaxx.  And now they want them to sign up to fight?

What could be next?

LINKS

As usual, links this month are courtesy of Ricky.  Thanks so much, Ricky!!

Bad Guys

https://www.dailymail.co.uk/news/article-11761485/NYPD-release-images-four-brazen-thieves-staged-50-000-raid-Manhattan-Givenchy.html

https://twitter.com/nofones/status/1628194739987046400

https://twitter.com/nofones/status/1626367620151738375

https://twitter.com/nofones/status/1626397252334809090

https://twitter.com/nofones2/status/1626369625314279426

https://twitter.com/nofones/status/1626447147225718786

 

Good Guys

https://twitter.com/i/status/1621965430930669569

https://twitter.com/nofones/status/1628225095893131264

https://twitter.com/nofones/status/1627464538609139714

https://twitter.com/762sfuxk/status/1626379421065134080

https://www.dailymail.co.uk/news/article-11735803/Armed-intruder-left-critical-condition-shot-neck-homeowner.html

 

One Guy

https://www.dailymail.co.uk/news/article-11632047/Vigilante-killed-robber-Houston-restaurant-breaks-silence.html

 

Body Count

https://www.dailymail.co.uk/health/article-11732497/More-48-000-Americans-committed-suicide-year-report-finds.html

https://www.dailymail.co.uk/news/article-11711353/Seven-states-eye-legalizing-assisted-suicide-America.html

https://goodsciencing.com/covid/athletes-suffer-cardiac-arrest-die-after-covid-shot/

https://stevekirsch.substack.com/p/new-paper-an-estimated-13-million

https://emeralddb3.substack.com/p/is-coincidence-now-the-leading-cause

https://www.dailymail.co.uk/news/article-11738179/Still-think-secure-Joe-Moment-500-Venezuelan-migrants-walk-southern-border.html

https://www.dailymail.co.uk/news/article-11730363/Biden-preparing-mass-deportations-non-Mexican-migrants-Mexico.html

https://www.dailymail.co.uk/sciencetech/article-11733577/Map-shows-14-million-Americans-live-5-miles-cancer-gas-emitting-plants.html

https://www.dailymail.co.uk/news/article-11776999/The-blanketed-fentanyl-NINEFOLD-rise-deadly-opioid-use-western-US.html

https://www.dailymail.co.uk/news/article-11701187/Zombie-Nation-Shocking-images-lay-bare-Americas-drug-crisis.html

 

Vote Count

https://www.dailymail.co.uk/news/article-11761979/Kari-Lake-vows-Arizona-gubernatorial-defeat-state-supreme-court.html

https://www.uncoverdc.com/2023/02/08/maricopa-heat-maps-the-story-keeps-getting-worse/

https://thefederalist.com/2023/02/15/everything-you-need-to-know-about-democrat-gov-tony-evers-bid-to-overhaul-wisconsin-elections/

https://alaskapublic.org/2023/02/17/launch-of-campaign-to-repeal-ranked-choice-voting-draws-a-crowd-in-anchorage/

https://raheemkassam.substack.com/p/fox-vs-dominion-discovery-docs-show

 

Civil War
https://www.zerohedge.com/political/keith-olbermann-calls-economic-civil-war-institute-gun-control

https://www.foxnews.com/media/olbermann-urges-blue-states-wage-economic-civil-war-red-states-starve-red-states-submission

https://www.foxnews.com/politics/internal-atf-docs-show-zero-tolerance-guidelines-shutting-down-gun-stores

https://www.carolinacoastonline.com/tideland_news/opinions/article_bec42134-ad30-11ed-979b-4365a8a67e62.html

https://thefederalist.com/2023/02/17/idaho-house-approves-talks-to-annex-oregon-counties/

https://www.peoplesworld.org/article/lost-cause-2-0-desantis-and-republicans-inspired-by-racist-confederate-history-re-writes/

https://www.milwaukeeindependent.com/newswire/gops-civil-war-republicans-confront-bitter-divide-no-clear-path-forward/

https://www.politico.com/news/2023/02/06/megadonor-gop-richard-elizabeth-uihlein-00081267

https://www.reformer.com/opinion/columnists/nicholas-boke-what-would-a-civil-war-look-like-anyway/article_c6beefac-aca1-11ed-9fa4-d74d7a722a44.html

https://sundayguardianlive.com/world/will-2022-witness-american-civil-war-2-0-will-happen-2024

https://news.uchicago.edu/us-headed-toward-another-civil-war-william-howell

https://www.businessinsider.com/mtg-defends-call-split-up-us-says-civil-war-looming-2023-2

https://nymag.com/intelligencer/2023/02/marjorie-taylor-greenes-national-divorce-was-the-civil-war.html

https://www.theatlantic.com/ideas/archive/2023/02/marjorie-taylor-greene-secession-civil-war/673142/

https://www.theringer.com/2023/2/24/23613267/emasculation-proclamation-civil-war-ii

https://nymag.com/intelligencer/2023/02/project-veritas-has-forced-out-james-okeefe.html

https://hard-drive.net/hd/technology/ken-burns-releases-4000-part-tiktok-series-on-the-civil-war/

Discipline, Romans, And Spending All The Money

“That’s newspapers for you.  You could fill volumes with what you don’t read in ‘em.” – The Green Berets

I decided never to jog with Marcus Aurelius.  It’s always dangerous to run with Caesars.

Self-discipline is hard, but it starts with the smallest step.  Even (the dead) Roman Emperor Marcus Aurelius in his book Meditations talked about how hard it was to get out of bed in the morning.  Marcus talked about how warm and comfy he was under the covers, and how he’d like to stay there, curled up.  In then end, though, he got up because he had responsibility to govern the Empire that was a bit more important than his desire to be comfy.

Me?  There are some mornings I would have given up Gaul for another fifteen minutes.  Okay, maybe not Gaul because of the food, but definitely Judea.

Marcus did the tough (maybe he had a hangover?) thing because he had a responsibility to millions of citizens to do his very best for them, and as nearly as I can determine, he took that seriously.  Plus?  It’s good to be the Emperor.  I hear they didn’t have to wait in the drive through for Chicken McNuggets® and always got enough Hot Mustard™ sauce.

My advice?  Never eat a Kid’s Meal at McDonald’s®.  Their mothers tend to get upset.

The difficult part of discipline is that it requires, well, discipline.  Getting good things in life is difficult – that’s why we work for them.  And that’s why it’s called work.  It’s tough.  But when the seeds are planted, cared for, and weeded, then at harvest it’s time to reap the rewards.  Discipline is like that.  Heck, some sort of east Asian place that I can’t be bothered to look up has a proverb that says that, “A woman who marries a man who works hard every day will never starve.”

I don’t think that was China, because if it was China, they have been starving every century by the tens of millions, especially when they embarked on the Chinese Diet Plan called Communism.  Maybe it was Puerto Rico?  Or Applebee’s™?

Probably not.  But I think it might have ended in a vowel, but not Y, because that’s sometimes only a vowel, and I don’t think that Asians use the same fonts.

So, if even a dead Roman can figure it out, why can’t we?

Some people want to ban Roman numerals.  Not on my watch.

The latest bouts of fiscal insanity in the United States have made me think that none of them have read Marcus Aurelius, or maybe even can read.  What triggered this post is the recent Supreme Court Case about ghosts.  Oh, wait, that’s later.  No, student loans.

Student loans in the United States are a particularly horrible thing that gives money to Leftist professors so that they can indoctrinate youth but the youth has to pay for it until they lose all their teeth or pay it off.  I think that was in the terms and conditions of my student loans, but I can’t be exactly sure, since after I signed my name, they gave me $7,500.  Duh.

The most pernicious thing about student loans is that they live forever.  I paid mine off in January, 2013.  I paid ahead, but didn’t want to pay them off completely if the world ended in December, 2012 (which was a thing).  Oddly, this is a true story, and illustrates how far I’m willing to take a joke.

But student loan forgiveness is just the tip of the iceberg.  For the last five or so years of my life, the government (both Right and Left) has been like a fat girl who decides on a Tuesday night that the diet is over.  That cookie dough?  Sure.  I can eat a tube or two.  Covered in frosting.  Oh, and I’ll just tidy up the frosting container so it doesn’t go bad.  If you’ve given up, why not go all in?

The cannibal decided to go on a vegan diet.  He found a family of them at Whole Foods®.

The government (again, both Right and Left) has decided that there is no limit.  Every Tuesday for them is time to give Ukraine more money for . . . (spins wheel) dental x-ray infrastructure.  Will $23 billion cover that?  Sure, if it were just Ukraine, that would be one thing.  But it’s not just that.  Biden’s Build Back Better means that we’ll just burn cash to make us warm if we run out of oil.

If I seem a bit cynical, it’s because that at every single turn in my life, that I’ve seen fiscal discipline further erode, and money fly a bit freer each day.  At no point have I ever seen (outside of Ron and Rand Paul) and politician say, “stop”.  Apparently, when elected to Congress, the “spend money on everything light” blinks on the dashboard of their cars.

My dashboard keeps telling me “trunk is ajar”.  Silly car.  A trunk isn’t a jar.

There is no discipline.  There is no pretending to have discipline.  It’s all just comfy warm covers and Chicken McNuggies™ while every sense of fiscal discipline is overridden by another trip of the spoon int the Pillsbury™ chocolate frosting.

But that’s okay.  I’m sure it will end fine.  Where’s the frosting?  I think I want to sleep late today.  Oh, but have we spent enough money on Ukraine?

Is The End Of The Road Nearly At Hand?

“If they have him, and they can somehow piece the country together, get communications up, they’ll control everything; the Federal Reserve, the military.” – The Last Ship

Where does the Fed® hide its monetary mistakes?  In debasement.

Pa Wilder was a banker, and when we communicated via a while back, I’d send him long-ish messages about most everything.  One time, I broached the economy with him.  As a small farm banker with more than 50 years of experience, he was familiar with the way the system worked.

When I first heard that the Federal Reserve™ wasn’t owned by the government, but by the member banks, I asked him.  I figured he’d tell me, “Nah, John, it’s really owned by the government, aliens aren’t real, go back to sleep – we won the war.”  Nope.  He then went through how each member bank was required to buy stock in the regional Federal Reserve Banks (as I recall) with at least 6% of their deposits.

Whoa.  His bank owned a tiny part of the Federal Reserve Bank®.  Certainly not much, but part of it.  The Federal Reserve Bank© is a private institution.  It was the 1913 mechanism to get the politicians out of the economy.  The Great Depression shows how well it worked.

What do you call a talkative Colombian?  Hablo Escobar.

After World War II, there was a time of relative stability – Europe and Japan were shattered, and the United States had industry that was just waiting to stop making weapons and start making washers.  The sudden influx of labor with the demobilizing G.I.s made a combination for economic growth.  After they drank the bars dry and made a zillion babies.

Even with the added costs of Social Security, it worked.  The economy was working so well that we could build an interstate highway system without breaking a sweat.  The highway system even added to the economic boom by lowering the cost and time required to move goods, effectively shrinking the country.

However, every good party has to end.  Johnson’s Great Society and financing for the Vietnam War out of “money we just made up” caused Nixon to end the last tether between gold and the dollar.  Sure, the Fed® had been cheating about the amount of cash it had been printing, but when the bluff was called, Nixon had the option of sending all our gold to France or saying “just kidding”.

He chose the latter.  I think it was a good idea, because it wasn’t like France was going to do anything about it, anyway.  The result was the petrodollar – the idea that all international transactions in oil would take place in dollars.  That also resulted in almost all transactions taking place in the dollar.  The inflation of the 1970s was the result – it was before we figured out how to tax the world by printing dollars in a sorta responsible way.

If I had a dime for every time I didn’t know what was going on, I’d say, “Hey, where did all these dimes come from?”

So, people all over the world needed dollars, even though we were printing them like we were, well, the Fed™.  As long as the Soviet Union existed, there was a counterbalance to the United States, so at least there was some check.  But after they went tango uniform?

That’s when the responsibility completely ended, the cash was printed, and the instability really started.

The Dotcom Bubble was the first – fed by cash from the Fed® with no place to go.  And then it tanked.  So the Fed™ printed a few trillion bucks.  That led directly to . . .

The Housing Bubble.  You probably have heard of it.

But this was different – it actually lead to protests against the banks.  A reprogramming was necessary – “put the bankers in jail” had to be stopped, because bankers like to use our money to buy themselves nice things like that tiny part of France where they don’t let Muslims in.  Except the Saudis.

I read that photographers and art thieves both take pictures.

A reprogramming was needed – Occupy Wall Street™ had to turn to . . . something.  That reprogramming of the Lefty rank and file was into “white people are awful” and it got the heat away from the bankers.  And made movies suck.

Meanwhile, the money hijinks led to country after country having revolutions, from Libya to Egypt to Syria.  Why?  Because inflation in the United States (at that point) meant that people had to pay a nickel more for Cheetos®.  In Egypt, that meant that one of the children had to be sold into medical experimentation.

The key to all of this was keeping the dollar as the key currency used in international transactions.  To be clear, Russia was a big threat in this.  Sure, Russia is ruled by corrupt folks who kill people who threaten them, but I can raise you a Jeff Epstein, a Hunter Biden, and Hillary.

The Russians certainly threatened all of this with Nordstream® and Nordstream II©.  These pipelines pushed natural gas straight from Russia to Europe.  Now, Russia could take . . . euros for gas.  Dollar not required.

Watch a 10-hour movie?  No.  But have Netflix® break it up into 10 one-hour movies?

And scary.  All the investment of the Left in Green Energy® led them to shut down nuclear power plants (Germany, I’m looking at you) and replace them with natural gas plants.  And you see the results.

(hint:  Ukraine and certain underwater explosions)

Now we find that we have a currency that’s becoming worth less every day, foreign folks are building ways to not take the dollar.  So they need fewer of them.  And want fewer of them in their pockets.

It doesn’t help that we’re in debt by (spins wheel) over $25 trillion bucks, the economy is distorted, and that Medicare® and Medicaid™ will soon cost more than Joe Biden’s hair plugs.  And we’re going to double that in the next eight years, and double it again in the next eight.  That’s $100 trillion dollars.

Does anyone reading this believe we can last that long?

Oops.

Pa Wilder said 20 years ago that he didn’t see how it could last.  But many folks have gone broke by betting against the Fed™.  That one day they can’t paper it all over?

Nah.  Don’t worry.  It’ll be fine.

Rigging The Game

“Coupons. Well, what a wonderful way to economize. Well, I could clip them and give them to my personal shopper.” – Frasier

The first symptom of COVID-19?  Believing what the government says. (all memes this post “as-found”)

It’s a strange, new world.  During my childhood, there was an active focus on one concept:  we’re all humans, regardless of race.  We should all be treated the same, and have the same rules.  Sure, there were programs like affirmative action, but the primary impact of those was (for the most part) in making sure that minority candidates were considered for jobs.  The rule (generally) remained that the most qualified person got the job.  Meritocracy reigned.

I won’t pick the date this changed, because it’s been a continuum, a bit here, a bit there.  But if you had seen the following headline in 1980 or 1990, I think the first thought of people would have been, “How can that even be legal?”

I was trying to think of a Bank of America® joke, but I lost interest.

The idea isn’t just at Bank of America®, it’s also at Wells Fargo™, too, you can look it up.  The concept is that companies attempting to get their ESG (link to my previous post on this monstrosity here) score up are setting up programs like that.  To be clear, any loan by any bank that’s not rooted in the ability of the borrower to repay is awful, and immoral.  It’s also shenanigans like this that led directly to the 2008 housing bubble and Great Recession.

In a related story, I wonder if Pelosi shorted them yet?

If a country is searching for a solid economy, this isn’t it.  If a country is looking to make actual equality the measure, this also isn’t it.  If it were just this, it would just be (outside of being illegal) just a limited number of bad business decisions, but it’s not limited to just this.

How about electric cars?  I mean, I’m as much into having children dig for toxic cobalt in the Congo so rich people in California can have electric cars and feel smug about it as the next person, but to create a tax incentive?

Seems a bit like we’re rubbing it in.

If Apple® makes an electric car, will it have Windows™?

Not to mention reparations.  It’s odd that the people who want to abolish debt for people that borrowed money are also the ones that want to pay people for things that never happened to them.  I guarantee that, no matter how much is offered it won’t be accepted.

Why?  It will never be enough.  Ever.

Another symptom of the Kleptocracy.

What about the Biden family themselves?  Is their economy wrecked like they’ve wrecked the nation?

No.  Joe went from $0 net worth in 2015 to $9,000,000 (latest info I could find) today.  How’d he do that?  I’m sure he cut back on Starbucks®.  According to reports, Hunter asked a donor to set up a job for his “pled guilty to a felony for $100,000 credit card fraud for makeup” niece.

They agreed to hire this felon for $85,000 a year.  She refused.  She wanted no less than $180,000.  To be fair, from the pictures it does look like she needs that much makeup.

Again, that’s small potatoes, when looking at the billions that have already been looted from the open checkbook that is the Ukraine.

The IRS called Hunter and told him he was being indicted for tax fraud.  He hung up, and told his dad, “Ha!  I don’t even pay taxes!”

And yet, there’s more!   I’ll skip over the massive payments for illegal aliens to play computer games and stay in hotels at taxpayer expense while actual Americans are homeless and face bankruptcy to medical bills inflated by donor companies like Pfizer®.  I’m sure that doesn’t make anyone mad.

What’s the difference between E.T.® and an illegal alien?  E.T. learned English and wanted to go home.

In point of fact, what we are seeing is the looting of an economy.  Our economy.  I think it’s been going on for years, but the looting wasn’t so visible because it was papered over, literally.  After the 2008 Great Recession, there wasn’t really any attempt to make the economy better, rather, the idea was to just keep printing money – Qualitative Easing is what they called, it, which was a fancy way to say that the money would be printed and buy up the weakest assets of the companies that the Fed® had desired to support.

Bank of America™ and Wells Fargo© were among them.

COVID-19 was the lynchpin, though.  As the tide receded and undulated, we could finally see who didn’t have a swimsuit on.  It turned out, it was most of the economy.  Now, inflation.  And, to top it off, eggs appear to be the 2023 version of toilet paper, so I guess this year that Halloween pranks will actually add value to the house.

It also looks like the plan that The Mrs. was brooding on, “let’s get some chickens that lay eggs” will finally hatch.

Maybe.

What do Green Eggs and Ham, Fifty Shades of Gray, and our economy have in common?  They all make people who can barely read want to try new things.

Oddly, it gets even worse.  Since 1988, the United States has paid $13 trillion in interest to . . . use its own currency – the government needs currency, the Treasury prints bonds, the Fed® creates cash, the United States owes interest and pays fees to the Fed™ member banks.

That’s weird, because the United States used to just issue its own cash.  Without debt.  Sure, if you print too much, that causes inflation.

Oh.  I see we’re soaking in inflation.  And the Fed® actively plans for inflation as a part of the business plan.  I think there’s a pictograph that might explain things . . .

Chuck Norris mines cryptocurrency.  By hand.

The looting can’t continue forever.  And that’s a good thing.  This made-up economy filled with economic nonsense that, at times, makes Lenin look like an economic genius, has a time limit.  Merit will return, just as the Gods of the Copybook Headings have always predicted.

There can be no other outcome.

The Destruction of the American Education Society – On Purpose

“And I say to you gentlemen that this college is a failure. The trouble is we’re neglecting football for education.” – Horse Feathers

Remember, if you teach homeschool, you can’t get fired for drinking on the job.

Jimmy Carter doesn’t deserve all of the blame he gets. He handled inflation poorly, energy poorly, lost a lot of helicopters in the desert.  Oh, wait, was I talking about Biden?

Nope.  Carter.  One of the biggest things to blame on Carter was the creation of the Department of Education, which he did in an election year to get more votes.  Of course, Carter didn’t start the rot, that really started with Franklin Roosevelt, who attempted to federalize education, because he wanted to further centralize power.  Roosevelt started a quite lot of rot, but it took longer for some of it to surface than the run time of Avatar 2.

What has happened since education has come under the control of the feds?

How many introverts does it take to change a lightbulb?  One, unless he needs help.  Then it’s still one.

Previously each state and local area ran its school system.  The schools themselves were, generally, of excellent quality.  But a bigger bureaucracy led to two things.  The first is the activation of Pournelle’s Iron Law of Bureaucracy.  Dr. Pournelle’s description of it is below:

Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people”:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

Sure there are local school boards that are awful.  I’ve heard horrible things about Los Angeles, and other large cities.  Why?  Because the boards are so large that they have to have massive infrastructure – the idea of the neighborhood school disappears, replaced by massive numbers of administrators in a Soviet-style collective.

I couldn’t answer my daughter’s question, “What does a ballerina wear?”  I couldn’t put tu and tu together.

To make this better, we add in the feds???

Yikes.  That’s like solving an ingrown hair with a flamethrower.  It works, but what’s the cost?

Good teachers, for one.  Teaching has always been an important profession, and with local control, the messages that went out to the kids reflected both American values, and local values.  Even if you didn’t agree with the values of Los Angeles, you could move to a place where the school district mirrored your values, like mine, which has classes in PEZ™ dispenser maintenance.

But with federal control, you get federal rules on what can and can’t be done.  The result was the second problem with federal control:

Indoctrination.

I tried to indoctrinate a hairdresser, but I couldn’t condition her.

Schools used to start with teaching basic skills.  If there was a student who wasn’t getting it, they were flunked.  Try to flunk a kid today?  It can’t happen.  The result in (as I recall) the Baltimore school district is that the parents are suing the schools because, after 13 years of education and a diploma, graduates can’t read.  For the sake of the school district, I hope the plaintiff’s lawyer went to school there.

But why can’t the students read?

The idea was that there was a certain minimum competence in reading, writing and math that was required and expected.  The basics of history and geography were also taught, as well as classic literature.

And that was it.  Bring your own lunch.  Need someone to talk to?  Go talk to your friends.

The basic function of the school was education.  Sometime around 2006, though, the competence level was reset to “breathing”.  Now?  Biden’s Department of Education wants “projects” that increase Critical Race Theory usage in schools.  The same initiative is called “Promoting Informational Literacy Skills” which essentially involves coming up with ways to convince kids that The Current Thing is correct, i.e., not to “do your own research” and to only trust .gov sources.

I guess she was just biden her time.

The bureaucracy was bad enough, but the indoctrination is worse.  The difficulty is that most school districts compete for federal money, and when they accept it, every single rule applies.  Remember, the first rule of government club is that you do whatever the government says.

Back during Obama, the Department of Education even put out a “letter” that indicated they would investigate any school who didn’t discipline students the way the Leftists in Washington wanted.  So, suspensions and detentions essentially ended in many school districts.  The result?  Well, I don’t think anyone is complaining the schools have too much discipline nowadays.

Why would they want that?

We can be assured that the Department of Education never educated a single kid, in fact whoever was responsible for my algebra homework was fired.  But they have been responsible for indoctrination with Leftist values.

If you listen to Pink Floyd and eat ice cream, you become comfortably plump.

The solution starts with saying no.  No to federal rules, no to federal money.  And if anyone wanted to actually improve education in the United States, the first thing to do would be to abolish the Department of Education and every single one of its rules.

After that?

Time to think about that pesky Department of Energy . . .

Biden And The Coming Revolution?

“No, I quite approve of terror, arson, murder, any tool that serves the revolution.” –Nicholas and Alexandra

I wonder if this came as a peasant surprise to the nobility?

The worm has turned on Biden.  Pardon me if I say that this is right on schedule.  Trump document frenzy made the Left drool like Amy Schumer when she’s near a cake or AOC when she’s near a new coloring book.  To get Trump, the Left would do anything.  Anything.

In a very real sense, just as the Left views abortion as a sacrament, the destruction of Trump is a religious goal, as he is the manifestation of their supreme Evil being.

This is nothing new.  Remember when George W. Bush was president?  His politics were, essentially, as controversial as lukewarm dishwater.  But the hate flew strong.  Until he started showing up in group hot tub photos with Bill and Hillary and Barack and Mooshell.  Then he was no longer the Prince of Darkness, instead just a fuddy-duddy old man who chose wrong.

I’m really glad I couldn’t find the hot tub photos.

Biden, though, is in as bad a shape politically as he is mentally.  Joe was (s)elected for the job because he has never really stood for anything in particular, so he’ll stand for anything at all.  Even his “memories” are false half the time, talking about things that never happened so that he looks the best to whoever he’s talking to at the moment.

The perfect candidate.

Who is in control then?  One would first point to the Chief of Staff, but that person just quit.  It’s clear that half of his appointees have little to no competence at anything – I’m fairly certain that only one or two of them could pass the probation period making pizzas at Chuck E. Cheese™.

Kamala says her body is a temple.  Everyone is allowed in.

So, I’m not at all sure who is running the show, but we all know it’s not Joe.  And whoever is running the show is done with him.  Will they force him to step down?  Maybe.  It would be chaotic, and risky.  Replacing kneepads as Veep would require a majority vote – of both the House and the Senate.  Since the Republicans hold the House, this would not necessarily be an easy choice.

Even if Joe survives (politically) to 2024, the only reason to have him run again would be for the amusement factor.  It’s also clear that the person who will eventually replace Joe is not Kamala.  Oh, sure, she might do that until the next election if Joe’s forced to resign, but “they” will make sure that she’s not allowed to do anything of particular importance.  Maybe she could do coloring books with AOC.

Someone asked her why the chicken crossed the road.  She said, “It’s because of corporate greed!  Chickens should not be forced to lay eggs – the eggs should lay themselves!”

The danger is the weak leadership combined with the political polarization and the hidden nature of those who are actually running the government.  This seems to me to be very similar to the period before the French Revolution.

  • A weak leader,
  • Massive governmental debt leading to economic crisis,
  • A significant rural/city divide,
  • A significant atheist/religious divide,
  • Political polarization fueled by agitators, and
  • Silly clothing styles.

One of the interesting things to me are those agitators.  They were clearly in place at the time of the French Revolution since the Leftist (the French Revolution is where the name “Leftist” came from) pamphlets that appeared “spontaneously” and the large number of inflammatory newspapers that were designed to fuel the Revolution, primarily in Paris.

I tried to tell a guillotine joke, but I always mess up the execution.

The effort was too large and too well coordinated to be an accident.  Was Marat, the lizard-skinned angry little toad of a man the leader?  Was Robespierre?

In the end, it didn’t matter.

The Revolution gave way to the Terror, where (thankfully) Robespierre and Marat were finally executed.  They had to be executed, since, once any Leftist revolution starts, it keeps moving Left in great gouts of blood until someone has the gumption to kill everyone that’s to the extreme Left.  Stalin learned that lesson, and purged Trotsky along with millions of others.

The end result has almost always been the same as what happened in France.  Tired of the nonsense coming from the anarchy they accepted a new Emperor, this time one named Bonaparte rather than Bourbon.

What position would Quasimoto play at Notre Dame?  Probably halfback.

The playbook is the same, and it seems to follow the same parameters over time.  Understand that as the statues were pulled down from Notre Dame, and as it was transformed from a church into the “Temple of Reason” that we’re seeing the same things today.  The Left removes the past, because nothing can come before – they see this as a cleansing, the ability to return to “Year Zero”.

The future does not repeat, exactly.  The Russian Revolution wasn’t the same as the French, but they certainly rhymed.  As I look to weak leadership, polarization, economic difficulty, and Amy Schumer, I see the same conditions that existed back in 1789.

I’m still interested in who is going to benefit . . . if there’s less Amy Schumer, then everyone.

D’Oh, Canada: Showcasing The Leftist Plan So We Can Plan, Too

“I’d like to share a revelation that I’ve had, during my time here. It came to me when I tried to classify your species and I realized that you aren’t actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with its surrounding environment, but you humans do not. You move to an area and you multiply, and multiply until every natural resource is consumed. The only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You are a plague, and we… are the cure.” – The Matrix

Greta is the solution to climate change.  Every time she’s on the TV, tens of millions of people shut it off.

Apparently, Justin Trudeau up in Canada needs to be reminded that in the movie, The Matrix, Agent Smith was the bad guy.  Really.  Check it out.  Keanu Reeves fought him, and everything.  For whatever reason, Canada (and Leftists in general) have adopted the idea that Agent Smith was their dude and the inspiration for their philosophy.

In two words, their philosophy is self-hatred (does the hyphen make it two words?) and power.  I’ve established that again and again.  It is why (really) I’m in favor of bringing bullying back.  As a society we let losers do loser things, give them participation medals, and then after having zero incentive for self-improvement, they wonder why they’re not the head of the class.

I was bullied in school.  I deserved it.  I used it to get better, stronger, and faster.  I’ve even seen communications between Leftists where they advise each other not to exercise because exercise leads them to become members of the Right.

God, I wish someone had bullied Justin Trudeau so that he would have developed into a man, rather than the corporate globalist man-child with no sense of identity and a sense of entitlement the size of Canada.

Okay, this is supposedly a Photoshop®.  But, admit it, it wouldn’t surprise you if it was real.  And this is my only original meme for this post.  Rest are “as found”.

This brings us to Canada’s plan for self-immolation – “Just Transition”.  Just Transition refers not to Justin finally admitting he’s transitioning, but rather the “teenager’s idea of a good plan because climate is scary” transition from fossil fuels to, well, they don’t really say.  It can’t be too much solar, because, last time I checked, in the winter in Canada at northern latitudes, the SUN IS DOWN MOST OF THE DAY.

That probably doesn’t bother Sunshine Trudeau, since he will be in some mansion somewhere pretending to be Queen Victoria’s seat cushion.  But I’m thinking that ordinary Canadians, the ones who have to deal with this nonsense and will either freeze or starve, might have an objection.

Another Just Transition that probably wouldn’t surprise Canada.

The plan itself contemplates that at least 200,000 Canadians will lose their jobs, which will certainly hurt the back bacon and Elsinore Beer prices.  These 200,000 Canadians are in the energy industry.  What will replace that?

Don’t know.  This Just Transition plan, again, has nearly zero actual thought by adults who have more than a single functioning brain cell.  It is built on those old Leftist thought patterns:  self-hatred and a desire for power.  Why would people need light and heat?

Alberta is not a hot girl who has daddy issues and is thus a stripper with a heart of gold, but rather a Canadian province.  I guess that means admitting I’ve been in Alberta sounds a lot less dirty when I put it that way.  But Alberta does have a heart of gold, because they’re pushing back, hard, against the nonsense coming out of whatever town where Trudeau lives.  Ottawa?  Heck, I thought that was a river mammal.  Turns out Ottawa is where the bad things come from in Canada.

Maybe it will work this time?

Canada planning to destroy its own economy just to gain good boy points and score some additional chicken tendies at dinner isn’t unusual under the Trudeau leadership.  The main problem with Canada is that it doesn’t have an actual constitution with a bill of rights that puts a brake (no matter how fleeting) on tinpot dictators with delusions of godhood exercising their will.

Looks like Justin’s dad had the same idea.

Alberta, however, seems to have had enough.  The nice part of Canada is that they haven’t yet had a Civil War, and it would appear that the individual provinces seem to be able to tell the national government to go to, well, Ottawa.  Or at least the subject hasn’t been settled by armies yet.

It’s not just energy, it’s food, too.  We’ve seen the protests in the Netherlands.  Why?  They want to shut down the farms.  Why?  To stop climate change.  Canada has promised to do the same thing.  Look it up, search, “Canada nitrogen” – and I remember when I thought Canada Dry® was a national menace.

I’m not making this up:

And this a consistent Leftist theme:

Why do they want to shut down the use of fertilizers?  It’s not climate change, it’s food.  The Mrs. once read a story of a party in Washington, D.C.  At this party, the writer noted that he had a conversation with a Leftist.  I’d give you a source if I recalled it, but it was several beers ago.  “Too many people on the planet, by several billion,” the Leftist said.

“What are you going to do about it?”

“Well, we will practice food restriction.”

“So, you’re telling me that the Leftist plan is to starve to death billions of people?”

They were silent when the bald fact was put to them like that.  So, yeah, Justin is working to ruin the economy of Canada.  But he won’t be sad if millions starve, in fact, that’s the plan.  I’m not sure Justin is smart enough to figure that out, since I’m pretty sure he’s just a lapdog of below-average I.Q. who wasn’t bullied enough as a child.

Canada has, unwittingly, provided people in the United States with a viewpoint of what the Left intends.  Watch closely.  And pray for the Canadians who will oppose this, in Alberta and elsewhere.

Hopefully, the folks in Alberta are very good at dealing with rats.

And remember, Agent Smith is the bad guy.  And he lost.  And the Leftists will lose, as they always have in history.  But I’ve never said that any of this will be easy.

Related:

Ricky sent me this video, and I can’t recommend it enough.  A few “s” bombs, but otherwise it should be required viewing from elementary schools on up.

The Most Dangerous Thought Of The Day

“On a long enough timeline, the survival rate for everyone drops to zero.” – Fight Club

Amber lost the lawsuit to Johnny Depp to the tune of $15 million.  I guess she’s now deep in Depp.

One thing that I like to do is test ideas.  Sometimes, like PEZ® and velvet Elvis posters, the idea is a classic of Western Civilization.  Other times, like communism, communism, and communism, the idea is horrible.  Others?  Others are a kludge that we’ve made work.  Or the idea is just the system that we have.

This post will test an idea that just might be the most dangerous one I’ve ever shared.

An idea that has been with us for most of recorded history is the concept of interest rates.  The idea is simple – I borrow $10 today, and next year I give back $11.  The extra dollar is the fee I pay for borrowing the money.  There are records that compound interest was charged by the Sumerians back even before your momma was born, back in 2,400 B.C.  They even had the math to accurately calculate it.  Area of a circle?

Nah.

How much you owe me?  That’s easy as pie.  But not as easy as a nearly 22/7 pies, I guess.

Sorry, that joke was irrational.

Regardless, interest rates have been with us a very, very long time.  And they have been vexing us for just as long.  The good properties of interest are that it allows for people who don’t have money to get it, which they like.  It allows people with “excess” money to get something for having the money, which they like.

There are some pretty significant downsides.  Let’s take a simple example:  There are several people on an island after a three-hour tour.  A three-hour tour.

There are 10 ounces of gold on the island.  I need to borrow them because, well, I have no idea.  Assume it involves me trying to get to Mary Ann’s coconuts.  Whatever.

A year later, the person who lent me the 10 ounces of gold wants 11 back.  But there aren’t 11.  I default.  I default because there is a limit on the currency.  This simple example shows that, in a society where interest exists, eventually there must be either a default, or there must be an inflation of the money supply.

I guess there’s a reason The Mrs. buys coconut shampoo?

This leads, inevitably, to a series of booms and busts.  It also leads to, over time, a greater and greater concentration of money (or cash) in the hands of those who actually do nothing more than have the cash.  In our society, these people often just print the cash, unbacked by anything, like it’s some amazing Sumerian money magic.

I hear the ladies love a man in cuneiform.

Thus, the financial sector, through the use of interest, both (over time) gains control over society through the concentration of capital.  The golden rule?  He who has the gold, makes the rules.  In this case, the Federal Reserve® (which is not federal, and doesn’t have reserves) is actually owned by the member banks.  So, the banks own the Fed™.  Which makes the rules.

As I said in a previous post, there has been a concentrated effort to remove the political from the economic, and the economic from the political.  Sure, Congress passes $1.7 trillion spending bills so we can send lots more money to the Ukraine, but who finances all of these shenanigans?

The Fed®.  Look in your wallet, and pull out some cash – it says “Federal Reserve Note®” – not United States Dollar.  A difference.  Congress doesn’t print the cash – the Fed™ does.  And the Fed© has to print more of it each year, because people keep getting charged interest.

This leads to cyclic bouts of inflation and/or currency default due to the accumulated debt.  The Great Recession of 2008 was brought about because of a debt-fueled housing spending spree that collapsed.

What car does the Chairman of the Fed® drive?  A Fiat™.

So, what happens if . . . we don’t allow interest to be charged?

It’s a big thought.  And the world has had interest rates for a long time.  In Imperial Rome, they varied from 5% to 25% depending on the time and on what was being invested in, and there are records of just the same sorts of credit crunches as we see today.  And also the need for the Romans to take their silver coin, the denarius, and turn it into a mainly base-metal coin by the end of the Empire.

But I’m not alone in speculating about what would happen if we stopped charging interest.  Aristotle himself (and not the Aristotle who makes the gyros at the fair during the local harvest festival in Modern Mayberry) had the idea that it shouldn’t exist because, heck, I’ll let him tell you:

“The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural.”

I’m not sure if Aristotle was upside down on a used goat that he bought, but what I think he’s trying to say is this:  the act of lending money creates no value.  If I buy a building and build a PEZ® factory, the PEZ™ factory either makes a profit or makes a loss.  If it makes a profit, that’s one signal that it has created value for society.  It has employed people to make a wholesome product that, when consumed in moderation, is harmless.  If I can make a profit doing that, I’ve created value in society.

If I lend money?  Not so much.  My singular objective is only the profit from making money.

It takes an infinite amount of Zenos to screw in a light bulb.

How would such a world work?  Perhaps people combine to lend money to businesses based on the idea that they might create value (and thus a profit) and take the gain in their money from that value created through the business?  People combine to finance a business for a purpose, and thus gain.

No interest required.

How about a house?  Why would I loan money, absent interest, on a house?  Perhaps the payment could be based on the assessed value (thus making the loan an investment, rather than a loan).  If the value goes up, the payment goes up.  Down?  Payment goes down.

This would put skin in the game for the banks, and they would have a vested interest (pardon) in making sure that the investment was good.  No incentive for the housing crisis.  Payments linked to . . . value created.

Car lending?  Yeah, that’s harder, since that is a declining-value asset.  I’m sure that it could be figured out, since I’ve already solved tons of loan issues with the two solutions above.  I’ll leave solving the car loan problem to the class.  Oh, and the student loan problem, too.

I hear that $221 million in student loans were canceled.  Those lucky seven people!

It can be done.  It has been done.  Oddly, I think it would result in a freer world where, rather than focusing on ways to, uhm, view people as assets to extract value from, people would be forced to seek to provide value for their fellow man.  Making happy customers.

Think of it as a thought experiment.  A dangerous one that would change who has power in this world.

See, I told you this was my most dangerous post.

The Energy Problem: No Outlet

“Imagine it, Smithers, electrical lights and heaters, running all day long.” – The Simpsons

If Dyson® releases an electric car, I think they’ll suck.

This is the next in an occasional series of posts about the economics of energy.

There was one headline from the last few weeks that has really amused me.  The Swiss, makers of cheese and hot chocolate let folks with electric cars know:  don’t charge them until spring.  Instead, they suggested the Swiss citizens continue to use their diesel and gasoline cars.

Electric economy?

No.

In fact, we’re far from that.  Again, the electricity has to come from somewhere.  Wind is great, when the wind is blowing.  Oh, and Lefty environmentalists are against it because it kills bats and birds.  Hydroelectric?  I love hydro power, except the number of new dams that can be built is approximately zero, since the environmental permitting process and protests don’t allow that.

Solar?

No.

Investing in solar energy won’t happen overnight.

Here is where I have to bring in the concept of Energy Return on Energy Invested.  Not dollars.  Energy.  The idea is simple, if I eat a food that takes more calories to digest than it provides me in available calories that I can use to smoke cigars and think of PEZ®.

If I eat a food that takes me more calories to digest than I get, I’ve invested more energy than I get out of it, and the return is negative.  If the price of oil is a bazillion dollars, and I invest more Btus than I can get out of that oil, it’s the same idea.  Regardless of the dollar price, if the energy price is too high it will simply make me poorer in terms of energy that I could use.

Solar, in the best case I can find, is about a 10 to 1 rate of return on energy returned from energy investment.  The most recent number I saw is 2 to 1.  That means, over the whole lifetime of the solar cell, it produces twice as much energy as it takes to make it, ship it, install it, and junk it.

Sounds great, right?

No.

Like a Dyson®, it sucks.

I think if coal is so bad for the environment, we should just burn it all.

Coal is about 30 to 1, even with stringent environmental controls on soot and sulfur and nitrous oxides.  Natural gas is about the same.  Hydro is 35.  Nuclear (by the most recent estimate I’ve seen) is 75, though I think that’s optimistic.

But nuclear isn’t 2.  And it isn’t 4, like wind turbines.

Where, exactly, is that energy coming from?

And how are we going to get it to houses?  The grid in California can’t take a typical Tuesday in summer, so how is it going to power all the air conditioners and all the PEZ® mines and incubators and tent cities and, on top of that, all the cars?

I tried to sell a tent company to investors.  It was difficult to pitch.

It simply won’t.  Even now it’s so overtaxed that some summers the electric companies release more energy in forest fires than they do in electricity.

We look for efficiency in the world and are taught a mantra – efficiency is good.  The power companies around the country and even in Switzerland have heard that.  They have enough power generation and transmission capacity for most days.  But not every day.  That wouldn’t be efficient.

Mathematicians don’t ever get blackout drunk.  They know their limits.

Why not?  Most days aren’t peak days.  To build that extra capacity in generation and transmission means spending money.  And that isn’t efficient.  It’s more efficient (and better for the bottom line) to have a series of brownouts and blackouts.

It is.

That’s the way it is, today, with all of the gasoline-powered cars.  Imagine a decade into the future with all the Tesla® and Edizzon™ and Voltaire© new-model electric cars, and a grid that goes down when it’s 89°F (34 megajoules) outside.  Finally, the achievement of a full socialist worker paradise – everyone has equal-opportunity HVAC with the people living in tents under the overpass.

Does anyone, I mean, anyone still think that controlling energy has anything to do with climate change?

Even if there were a magical energy source (unicorn hair?  Obama sweat?) that provided electricity better than sweet, sweet fossil fuels, the investment in the grid in the United States to keep the current standard of living using electric cars would be more than Biden spends on anti-senility drugs and the Ukraine, combined, in a month.

It’s a lot.  And that’s ignoring the cost to build the treadmill that Obama would have to run on and the Obama-sweat power generators.  Investment of this type takes decades.  Decades where we haven’t spent the money – not only in California, but everywhere.  Because, instead of wanting resilience, we wanted efficiency.

The end result is this:  the Swiss are right.  Electric cars are not, in any foreseeable future, the answer.  See?  You can always trust people who make great cheese and hot chocolate.  Heck, I just got a Swiss flag for my collection, and that’s a big plus.

 

Remember, never give up.  Share this with someone who might need it.