Creating havoc since 2006. Fair use is claimed for images on this site, but they will be removed (if owned) on request out of politeness. movingnorth@gmail.com
“Read Marcus Aurelius. Of each particular thing, ask what is it in itself? What is its nature?” – Silence of the Lambs
So, if I’m reading this right, I’m not supposed to stress out the alligators? I’m not supposed to stress out the 400 pound armored killing machine? Okay, getting right on that.
I ran across a health article about heart disease the other day by an actual medical doctor, not an amateur Civil War surgeon like me (Motto: Splinter in your toe? Amputate.). Dr. Mercola’s theory was simple, that stress causes inflammation which causes the damage that kills you. Here’s a link to his article (LINK). Now this article was on a political site, so it wasn’t even related to the main focus of the site, but I read the article and immediately thought of you Internet. And also me, since I was looking for something to write about today.
It just might be that stress is a problem for you that actually might kill you. It also just so happens that I have a 2000 year old solution for you – all bright and shiny since I dug it up in my backyard last night:
“Your present opinion founded in understanding, your present conduct directed to good, and your present contentment with everything that results. That’s enough.” – Marcus Aurelius, Mediations 9.6
Okay, okay, you say, it’s John Wilder Talking About Dead Romans Again. And you’re right. Because they were ever so much more like us than you might imagine. Marcus Aurelius was a Stoic. And he was also Emperor. The book he wrote, Meditations, was just that. His thoughts that he meditated on. He wasn’t writing it for us, he was writing it to sort out his own thoughts and feelings.
Yeah, a Roman Emperor, able to command power few before or since ever had – King, President, Pope, and General all rolled up into one – had to work out his thoughts. This makes sense, because Marcus was the last of the Five Good Emperors (spoiler alert) and thought himself something of a philosopher. It’s like Vladimir Putin took time out of his busy schedule of wrestling bears while shirtless and dating Olympic gymnasts to attempt to deeply study and understand a philosophy of living that directly worked towards the quote from Marcus, up above.
But the quote above encapsulates in just a simple two sentences the core of the Stoic philosophy. Let’s look at how it can help you reduce stress.
“Your present opinion founded in understanding . . .”
If I were to take liberties, I would re-write that one, “Your present opinion founded in truth.”
Dealing with reality was the core of the philosophy – that’s why it came first. And if you are dealing with truth, you’re dealing in certainty. You’re not lying to yourself.
“your present conduct directed to good . . .”
So, you’ve studied and know the truth. Now you have the opportunity to turn your work towards the good. You’re doing the right thing, the right way.
“and your present contentment with everything that results.”
You did the right thing for the right reasons. You have purpose, clarity, and are taking positive action. And, the best part? You don’t have to win to win. Whatever happens, happens. If it didn’t work? You tried. Be content. If it did work? Great! This is a formula for a low stress life. The Stoics got to the core of it – things have meaning because we place meaning on them. We think that the world should be a series of results, instead of a series of truthful opinions and actions directed toward good outcomes.
What happens, happens.
I know this is hard, because every day when I try to divorce myself mentally from the outcome of an action that I’ve taken, and just be cool when it didn’t work out the way I wanted it to work out. The worst part? When I get upset about something that didn’t go my way . . . that didn’t even matter.
Perspective that I need to remember. Most things don’t matter – at all.
Back to Marcus:
Marcus Aurelius had a really, really awful son. Commodus. So bad Commodus’ wife poisoned him. So bad that Commodus’ best friend strangled him. So bad that they had Joaquin Phoenix play Commodus in Gladiator. Did Marcus have a clue that Commodus would be so awful? Probably. But he did everything he could. And his book has reached across centuries to us.
So, he did the right thing for the right reasons. And it worked.
After a fashion. To quote Marcus again: “That’s enough.”
John Wilder is not a doctor. Go see your doctor before you take medical advice from a blog written in a basement . . . .
“Well, it’s not really fine, but it’s not why I’m here. Hell, man, you know me. Money’s not my issue. I could’ve retired straight out of MIT, off to some island, let the business run itself. Nobody told me to try and save the planet. I wanted to.†– Kingsman, The Secret Service
Downtown Houston, reflected off a building at dawn. No, I wasn’t there at dawn to catch the picture – I was working as hard as Jean-Claude Van Damme at a splits contest.
At some point, I’m going to retire.
No, not change the low-tread tires on the Wildermobile – I generally like to wait until the tires are completely showing steel before I change them out.
Silly, I’m talking about working all the time. For money. So this blog is safe.
Some people suck at retiring. I work with one guy who retired six years ago, Ted. About six months after Ted retired, he came back and asked, “Hey, have need for me to consult?â€
Although Ted decided he wanted to retire (and got the cake, party, and everything), Ted wasn’t really ready. He keeps coming in to work even now after six years. Thankfully Ted has a unique perspective and awesome experience on technical systems that can help train some younger workers, so it’s a win-win. But he’s not ready to retire. That switch that says, “hey, I’m done,†or “hey, if I have to go to hell it’s worth it to never see you people again,†or, “I never, ever, ever want to live in this soul-sucking environment again,†never flipped for him. And I don’t think it ever will.
Work for him is still a big part of who Ted is, the definition of himself when he gets up in the morning.
For a long time I was with Ted. I could no more see retiring than I could see Kim Jong Un and President Trump forming a “Guys Only†fort in the Oval Office and sending the secretaries out for chocolate milk while they watched Loony Tunes® cartoons on a Saturday morning before Mom picked them up to take them to the skating rink and the movies after.
But recently? Yeah. I’ve started to think that I’ll retire one day, and that’s what this is about. (The decision to decide to retire is a different post.)
I’ve discussed retirement before in the best and most comprehensive article ever written on early retirement strategies (LINK). But that article was focused on people who retire young. Which would be less than 1%.
Let’s see when people really retire, based on 2015 Census data, as analyzed by LIMRA SRI and as I found on Financial Samurai (LINK).
This excludes people like Abraham Lincoln who exit the labor force for other reasons, of course.
Most (68%) of people retire at age 65 or earlier. This makes sense, but first I’ll have to introduce a self-serving concept and graphic.
Let’s talk about John Wilder’s Iron Triangle of Retirement Fate (JWITORF).
I made this graphic at great expense, after paying Freddy’s Advertising, Kites, Etc. $2,300 and waiting six weeks for delivery as it came on a container from Shanghai. Oh, wait, I threw it together in 5 minutes.
Regardless of the cheese factor of the graphic, John Wilder’s Iron Triangle of Retirement Fate does explain pretty neatly how retirement works, and why people wait so long to do it. So, why 65? Statistically speaking, you’re at or near your maximum wealth as you near age 65. Additionally, you have a reasonably long life ahead of you (statistically speaking) but not an unreasonably long life. Presumably, you’ve also reached the age of wisdom where you’re smart enough not to blow through your retirement cash on cruises, vacations, PEZ®, pantyhose, and chocolates.
But let’s look closer at the Quantum Entangled Boxes at the Vertices of John Wilder’s Iron Triangle of Retirement Fate (QEBATVOJWITORF). Or, just the boxes with words.
The first one we’ll tackle is:
Lifestyle
You can upsize lifestyle to spend virtually any amount of money including a fortune the size of Johnny Depp’s $650,000,000. The world entrusted $650,000,000 to Johnny Depp over the course of 31 years. . He’s kinda broke now, since he buys mansions at the drop of a hat, and his personal expenses run to about $2,000,000 a month. His security alone costs $300,000/ a month. And hair gel? Thankfully he saves on soap and shampoo.
My needs are a bit more modest. Most planners say you should expect to spend between 70% to 80% of your take home pay when you retire. But others say you only need to plan for 50%. Or 100%. Or . . . more!
Part of the problem is that their guidelines assume you spend everything you make. If you have the ability to save (like in the earlier retirement article LINK) a very large proportion of what you earn, these metrics don’t make sense – you might only need to replace much less than half of your present income, since you’ve radically reduced your lifestyle and eliminated many items . . . like security for $300,000 a month.
Lifestyle is a retirement variable that you mainly control. Get a budget and live by it.
Biggest risk? Healthcare. Who knows what that’s going to cost – might be $60,000 per aspirin by 2019. You don’t want to guess what calf implants will cost . . . .
Longevity
If you’re dying tomorrow, like Abe Lincoln, you already saved too much for retirement. If you’re going to live another 80 years, you don’t have nearly enough.
When I first started looking at retirement with a spreadsheet and projected assets and lifespans, one fact popped out at me: the earlier you retire, the less you earn, so your retirement savings will be less. And you will pull money out sooner since you don’t have a salary anymore. Sure, it sounds like a “duh†conclusion, but once I put my numbers in and played with it, it began to make perfect sense.
So, if you retire early, it helps if you die early, too. And don’t forget your spouse! If they’re much younger than you, you might want to try to convince them to pick up smoking, skydiving, BASE jumping, and prison boxing so they don’t outlive you by too much. You’ll thank me for it later.
Outside of shortening life, you don’t control tons about your longevity, either. Biggest risk? You outlive your money and so does your spouse and you get a never ending stream of “I told you so†when you’re 90 but she just uses a crutch and can beat you and your walker. Thankfully you can be a burden to the state and your children at that age.
Amount of Money You Have
This is (mostly/kinda) in your control, too. Bill Gates has billions of dollars saved for his retirement, and I know some people who work a whole year and don’t make a billion dollars. Okay, I kid. But I am certain that you could save more money than you are saving right now. Part of the value is adding additional money to your savings, but the other value is in reducing your lifestyle and knowing what you really need.
A second portion of your money will come from your 401K. Most of these are a really good deal, since you company will give you free money to add to your savings. They do this to encourage you to contribute, since a portion of their bonus is based on how much you contribute.
Pensions are awesome if you’re part of the 0.0001% of private sector jobs that still have them. If you’re working for the government? Yeah, I guess you can count on* that.
Social Security is a real thing – and one that you probably can count on*.
*Bigger risks?
Inflation (here’s a LINK to my commentary on how that’s inevitable in our current monetary system).
Budget deficits (here’s a LINK to my commentary on what the likely impact of our deficits is).
Economic dislocation (here’s a to a discussion on Bitcoin and how it can disrupt economic systems).
Best idea now? Max out your 401K and savings. Understand what lifestyle is really necessary and what you have to do to pay for it, both in dollars today, and in years of your life in the future.
“Everyone thought the agency was a joke, except the aliens . . . “ – Men in Black
Yes, this is gun camera footage from US Navy fighter planes. Yes, it shows something no one can explain. Yes, it’s the real, actual US Navy. Not pictured – Will Smith.
It’s the end of the year, so it’s the holidays. By holidays I mean, of course, Christmas Eve, Christmas Day, Penultimate Day, New Year’s Eve, and New Year’s Day.
Okay, you’ve heard of most of those days, but Christmas Eve, really? Whose idea was that . . . ?
I kid.
We actually have a Wilder Family High Holiday, called Penultimate Day. Penultimate doesn’t mean the last (like many people do), it means . . . next to last. That’s one of the things I love about the English language – that there’s a word for “next to last” just like there’s a word for “throwing a person out of a window” – defenestrate.
Cool! But this isn’t a case of “Ask Mr. Language Person.” I’ll leave that to the MUCH older Dave Berry. This is just explaining our Wilder High Holiday.
It started (I think) in 2010 or 2011. The Mrs. had been having problems with her cell phone – at that point an actual Blackberry™ with a real, physical keyboard. We went shopping for a replacement on December 30. In order to get a new one from for/from our carrier, we had to drive nearly 100 miles. We went both to our carrier’s store and the local Best Buy®. We were frustrated by the deals, which were fairly incomprehensible unless you were fluent in a variety of Klingonese spoken only near Sherman’s Planet. And none of them were deals we liked.
We had a wide variety of their pasta (I think I had the one that mixed steak and fettuccini Alfredo) and joked about our frustrating search for cell phones. It was there and then, since it was December 30, the real and actual Penultimate Day that I proposed a new holiday, Penultimate Day. In order to observe Penultimate Day properly, one must:
Drive South.
Look At, But Not Purchase Cell Phones.
Eat Italian Foods.
I can see how religions schism. The Boy is adamant that the above list is heresy, and I could hear him conspiring with Pugsley that I should be cast down since the only true way to observe Penultimate Day was to:
Drive Two Hours South.
Look At, But Not Purchase a Sprint® Cell Phone.
Eat At Olive Garden®.
Perhaps one day after the apocalypse there will be a Council of Sheboygan where the Sheboygan Creed will come down that will indicate that to observe Penultimate Day, one must:
Look Southerly.
Have a race where one Sprints® and finishes second (Penultimate Place).
Eat an Italian.
While getting ready for our Penultimate Day celebration (which, for various reasons we had to celebrate late today), I looked at The Boy.
John Wilder: “So, with all of the crazy things this year, what’s the biggest new story of the year?”
I expected to hear something about Trump. Russia. Nuclear North Korea. Star Wars® being the worst movie of the year.
Nope.
The Boy: “Aliens.”
Yup. He got it in one.
Here’s the story: There were several United States senators who decided UFOs needed to be investigated. Since they were senators, they managed to get several million dollars appropriated. At the rate the Pentagon spends money, several million dollars would be less than they spend on attempting to milk mice with itty-bitty automatic mice milking machines to get enough mice milk to . . . well, its classified why the Pentagon needs mice milk. Move along, citizen.
Anyhow, they put together a program to monitor UFO sightings. In charge of this program was one Luis Elizondo. Here are a few of his recent quotes from Luis’ interview with The Telegraph:
“It was enough where we began to see trends and similarities in incidents. There were very distinct observables. Extreme maneuverability, hypersonic velocity without a sonic boom, speeds of 7,000mph to 8,000mph, no flight surfaces on the objects. A lot of this is backed with radar signal data, gun camera footage from aircraft, multiple witnesses.”
“. . . if this was a court of law, we have reached the point of beyond reasonable doubt.”
So, we have the person in charge of the government program researching UFOs indicating that we are seeing evidence of the amount and magnitude that indicates the phenomena is real. Not made up. Not swamp gas. Not little old ladies dipping too often into the cooking sherry or medical marijuana. Not even the Canadian Air Force (I hear their plane is working again, though).
This leaves us with several possibilities:
The evidence is faked.
The US (or Russians) have propulsion technology that allows them to do what no other aircraft in the history of aviation can do and no interpretation of our current physics can explain.
We are being visited by entities from off of Earth (in our solar system).
We are being visited by entities from another star.
We are being visited by entities from another dimension.
We are being visited by entities from another time.
That’s it.
That’s the full well of possibilities. There are no more. (taps well of possibility) Bone dry.
Let’s hit the possibilities one at a time:
Fakey Fakey UFO Bakey.
So, Luis and all of the Pentagon faked all of the data. Sadly, this is the most likely case. There is no reason that this would have happened, and plenty of evidence that past world leaders knew something was up . . .
The following is a quote from Mikael Gorbachev:
“From the fireside house, President Reagan suddenly said to me, ‘What would you do if the United States were suddenly attacked by someone from outer space? Would you help us?’” (source: Smithsonian.com)
Gorbachev agreed to a full truce and full cooperation in the event of an alien attack. Yes. This is a thing that happened.
I’m not inclined to believe this is a lie, but still the highest probability merely because it’s easiest to explain – not because it fits any facts.
We have the tech.
Attractive. It would be nice to think that we have this technology. But the energy and speed involved dwarf literally all known technology by orders of magnitude . . . .
So, to believe this we’d have to believe that we can create not only speeds outside of our ability, but also control inertia so that any pilots weren’t turned into paste through inertia. Let’s pretend that’s not the case – the structure of the craft alone would be distorted beyond all ability to fly. After the first turn. And if the USSR had this tech? We would all be studying Russian now, comrade.
This, oddly improbable as it is, is the second highest probability.
We are being visited by entities from within our Solar System.
The Earth is about 4.5 billion year old, and could have created several sets of intelligent species during the last 250 million years. Mars might have had a similar window, but several hundred million years earlier.
Could they have escaped doom and watch us, even now?
Not really likely. It would get very boring – more even than watching reruns. But it does solve one problem of the next possibility:
We are being visited by entities from another star.
Moving between stars is Hard. Capital H – italicized Hard.
Stars are really far apart. Not far apart like driving through Texas far. But far apart like driving through Texas twice with Alaska in the middle Hard. And there are no gas stations or rest stops and you just drank 20 Big Gulps®.
And the confines of the life spans we are familiar with aren’t compatible with interstellar travel. Traveling 1/10th the speed of light, (which is fast, almost 19,000 miles per second) it would take you 40 years to get to the nearest star – and we’re not sure there’s even anything interesting there. And it would take as much energy to get you going that fast as the world’s largest nuclear bomb – ever. Add in supplies? At least the annual electricity consumption. Of the world. Just for you.
So, if you could freeze yourself (if you could figure out how to do that) and then spend thousands of years getting here. Just so you could fly around nuclear bases and make US Navy fighter pilots nuts – “I don’t know what it is, but I want to fly one.”
Alternatively, there could be technology that would allow faster than light travel, even though there is no indication, ever, that there is any way to travel faster than light. But we didn’t think that heavier than air flight is possible for . . . almost all of history. Is there a physics we don’t understand? Certainly. Does it include faster than light travel? Unknown.
But what doesn’t require suspended animation and won’t die on a long trip?
Machines.
Here’s a (really short) story I wrote a couple of years ago. Enjoy.
It didn’t use radio.
No one knew how it communicated, but they couldn’t pick it up on any band that we knew. On the TV, they speculated that maybe it used some sort of “quantum” thing to communicate, but that didn’t tell me much.
It was on the moon.
At school, my teacher Miss Rachel told us that some person using their backyard telescope pointed at this crater on the moon – Aristarchus – had seen something one night. That had happened before, but this time the flashes, the glimmers, they didn’t stop.
It was moving.
It didn’t stop, either. By the time they wheeled Hubble over, they were able to see it in real time. There were clouds of dust, but that didn’t matter much. There isn’t any atmosphere on the moon, so the dust drops out real quick. Something was going on, but we had no idea what.
The rock that it launched hit Stanford.
The professor in the wheelchair used his machine voice to tell us that we were too close. Whatever it was up there was listening to us. It maybe always had been. And it was old, old as the whole solar system, maybe. It was a tiger trap, a wolf snare. Stanford was where the best AI research was, he said. Maybe they were getting too close. Can’t be too close now – Stanford is nothing but a crater, and about two million people died, according to the Internet.
It’s watching.
I guess it always was. I guess it always will be. Wonder if the dinosaurs got too close way back when? Right now, I’m wondering if this was a warning shot or a warm up.
Yeah. Sleep easy. Don’t worry about the Terminator under your bed. Or on your Moon.
This has a low probability. But . . . it’s at the same time nearly 100% certain. Aliens could easily create AI that could travel between stars. That tech is nearly available to us now. If there’s intelligent life it’s high probability it will develop to our level of technology given enough time. And if it took thousands of years? Who cares if your iPhone takes 100 years or 100,000 years to get to a destination? If designed well enough, it could prep and wait for . . . whatever it was programmed to wait for.
We are being visited by entities from another dimension.
Well, now I just throw my hands in the air. We do know that there are other dimensions, or at least are pretty sure that they are necessary to explain much of the physical phenomena we see around us today. It’s possible, likely even, that there are alternate universes out there. Maybe an infinite number. But what if you could go to one that was next door? That sounds really hard. But might even be easier to move between alternate Earths than moving between stars. We simply don’t know.
But if I could move between dimensions? I could see wanting to keep track of the neighbors . . . .
We are being visited by entities from another time.
This one is way weirder, and I consider much less likely. Why? Moving through time is probably way harder than moving through space. The Earth is moving around the Sun. So, if I tried to travel back in time? I’d also have to travel through space to the place the Earth is now, not then.
And the Sun is moving through space. It takes about 230 million years for it to do a lap – so it’s done over 19 laps around the Milky Way galaxy since it formed. And the galaxy is moving, too.
Sorry to disillusion you, but if Doc Brown sent Marty back 25 years in time? He’s die gasping for air in a DeLorean off in interstellar space, since the Sun is moving 30 miles per second in its orbit around the black hole at the center of the Milky Way. He’d have been 24 billion miles from anyone who had ever heard Johnny B. Goode.
In space no one can hear your guitar solo.
This is the least likely scenario.
Regardless, it is “beyond a reasonable doubt” that something out there, came here.
Those are not my words. The dude who ran the program to study UFOs said this. Obviously he’s seen more than we ever will. I just hope he celebrates Penultimate Day in a non-heretical way.
“When some wild-eyed, eight-foot-tall maniac grabs your neck, taps the back of your favorite head up against the barroom wall, and he looks you in the eye and he asks you if you’ve paid your dues, you just stare that big sucker right back in the eye, and you remember what ol’ Jack Burton always says at a time like that:
‘Have you paid your dues, Jack?’
‘Yes sir, the check is in the mail.’” – Big Trouble in Little China
The Boy, testing the Manned Maneuvering Unit simulator at NASA. He did not get hired, but that’s okay, NASA doesn’t have rockets anymore.
It’s the end of 2017, so here are some ideas to get you out of a rut in the health and well-being portion of the open-book test we call life. Remember, it’s okay to cheat off of your neighbor to get the right answer but you don’t want to hurry . . . the test is life . . . so, calculators and pencils ready!
Play Your Game
One thing that we often forget is . . . it’s your game. Your rules.
What do I mean by that?
Define it your game by having cooler stuff than your friends? Sure. And take the consequences – consequences that can include lots of debt, long hours, a spouse that has to work so you can have an awesome pickup and boat rather than be home when the kids come home from work. And, if you’re unlucky, all that work to pay all that debt will allow you to see your kids every other weekend while a new guy lives in your old house.
Or live in New York. That’s a cool place, right? I see this in stories all the time – how it’s too expensive to live in New York, or San Francisco . . . but . . . why do you have to live there? There are dozens of places across the world where you can live like a king (or queen!) for the rent on a one bedroom apartment in San Francisco.
So, having stuff cooler than the stuff your friends have might not be the best solution.
What are the alternatives? Well, you could live to have money (which is not at all the same as having stuff) but it can have the same sort of consequences.
My choice? A balance: meaningful work, finding ways to help other people grow, and having sufficient financial reserves that I’m not at risk for most life events.
Choosing your own balance is key to removing stress.
Remember, Life Isn’t A Race To Get To The End First
I had a great boss one time who, facing a 45 day period of intense work said, “I hate to wish my life away, but I’m looking forward to finishing this.”
Wow. Such wise words. Even a bad day is one that is your day. And, most times (not always) I’ve found that there are good parts of even the worst day. Don’t wish your life away, no matter how easy that might seem. Savor the bad days for the good things that happened during them, and for the good things that will eventually come from those bad days (LINK).
Get Some Sleep
I made a pretty intense effort to increase the amount of sleep I was getting this summer (LINK). And the effort paid off – I ended up increasing my sleep by over an hour a day, which was very significant. My mood improved, my energy improved, and life was better. It seems that sufficient sleep plays a huge part in my overall health.
If you’re not getting six or seven hours of sleep a night AND you’re tired and feeling low on energy, I’d suggest tracking your sleep at night. Most people can go one night with lesser amounts of sleep, but by the third day where you only get four hours of sleep a night? I start to drag. After a week? It starts to impact even more – mood, outlook, everything. Crazy thing? I can cure it all by going to sleep.
Make Something/Fix Something Frequently
This is a health post, not a home improvement show! What gives?
There is a feeling of competence, of satisfaction that comes from making something with your hands, of extending the life of an object through working it. The sheer time and thought processes involved pull you away from your day to day concerns, and give you multiple opportunities to solve problem after problem.
The problems are important in that you solve them. The completed object is less important than the process of completing it. When I was a kid I used to make models – and there was no feeling better than having built a model that looked great.
Oddly, some people get scared even to try to fix something that’s broken – what’s the worst that can happen? It’s broken. One time I tried to fix a car stereo. It started received television audio from the local television. I was listening to Gilligan’s Island® on my stereo.
Until it broke the next day. But it was cool for the day it worked like that . . . .
Write Something
This blog serves several purposes. One is for you. One is for my kids. The biggest beneficiary of the blog? Me.
When I work to write and construct something that I like, well, I get a similar (but different) satisfaction to fixing the light in the hall, or building an elevated bed for Pugsley (his desk fits underneath). It’s mental. So do I blog for you? Sure. But mainly for me.
Understand What You’re Playing For
To play the game, there has to be a reason. Why do you keep getting up in the morning? Would you do your job if you weren’t paid to do it? My post on this is here (LINK), and remains one of my most popular.
Keep Moving
I’ve watched folks as they get older. I once saw a 90 year old man run (and skip as he ran) to his garden. He lived another five years. His life was full as long as he kept moving. Other observations were that once older folks became bedridden, it generally wasn’t long. I’m not sure if it’s motivation or if it’s cardiovascular. Keep moving if you want to live. Say that in a Schwarzenegger voice for extra motivation . . . “Keep moving if you want to live! We’ve got to get to the choppa!”
Prayer/Gratitude/Meditation
Studies show that people are happier (and healthier) if they engage in prayer each day. Similar effects are shown with those expressing gratitude and those meditating. Keep in mind meditation may have side effects . . . (LINK)
I think these might work through different methods, with gratitude especially focusing thoughts on how fortunate a person is, rather than on how rough life is.
Something tells me prayer works on an entirely different basis . . .
Have a Routine, Not A Rut
This ties back to wishing your life away. How often do we see that a week has turned into a month or longer without any change to our lives, to ourselves?
This is a routine taking charge of our lives. Up at 6am. Off to work. Work until 5. Home at 6pm. Bed by 11pm. Up at 6am. Repeat. Recharge on Saturday and Sunday. When you’re feeling better on Sunday night? Prepare to start again.
Without a routine, I don’t exercise. I don’t go to bed before 3am. I end up pushing back writing this blog until it’s way late while watching Russian documentaries dubbed by the British about the Soviets fighting the Germans during WWII. (Spoiler: The Soviets win.)
So I need a routine. But I also have to keep that routine from turning into an excuse to have lived twenty meaningless weeks of life. I don’t have enough weeks of life to live twenty of them without meaning, without positive change (LINK).
And neither do you.
Experiment To Find Out What Works
Find Things That Make You Excited . . . Do Them
A life without excitement sucks. A life without fun sucks. Find the things that give you energy, and do them – just enough to keep you energized. A pleasure repeated too often becomes a punishment . . . .
We will all eventually finish the test, but the good news is you get to grade your own performance. How did you do? Did you help other people on the way? Did you make a difference? Have you paid your dues?
“The Mexicans predicted that the world was going to end in 2012.†– It’s Always Sunny In Philadelphia
 So, of these things? Deflationary Depression, $1,000,000 bills? Nope. It’s more likely that Hillary will hug Trump.
I know it’s not the New Year quite yet, but I thought I’d beat all of the big magazines to my predictions for 2018. Then we can make fun of them and laugh marvel at my stunning accuracy next December . . .
Bitcoin
Well, Bitcoin is all the rage, again.
I suppose I should make a prediction about Bitcoin, and I will, but I’ll hedge my prediction with the thought that it is so very different than what anyone has seen that it doesn’t follow any previous models of currency or other financial instruments. You can read my post about it here ()
After even more research, my most likely conclusion is that the National Security Agency/Central Intelligence Agency is behind the creation of Bitcoin, but I’m not sure they knew how big it could become. Risks to Bitcoin are significant:
Vulnerability to Hacking
The algorithm that’s used to verify that a Bitcoin exists is SHA-256, the (SHA) Secure Hashing Algorithm created by the National Security Agency. Should the NSA have a way to subvert that algorithm, they would control all of Bitcoin, at will. But, they also had the ability to read these words in real-time as I was typing this post, so they could just go and collect everyone’s passwords and private keys off of their hard drives if they wanted to.
I say the NSA could control Bitcoin, because I’m fairly sure that no other group on the planet could pull it off. The Boy says that the algorithm used by Bitcoin is published and lots of people have reviewed it and think it’s sound. But the NSA is very, very, very smart.
A risk that could drive Bitcoin to zero – in a day? Sure. But very low probability.
Nobody Takes Bitcoin  Â
You can’t go to Wal-Mart and buy RCs and Moon Pies with it. The number of places that accept Bitcoin are very small. The number of people using Bitcoin as money are likewise small. If truth be known, you couldn’t take gold or silver into Wal-Mart to buy a Moon Pie, either. But to be accepted as money rather than as a pure investment vehicle, it would need greater acceptance.
Volatility
Bitcoin price has been up and down more than a teenage girl’s mood. And that would just be today. In the last week it has dropped from $19,000 down to $13,900. That’s a 27% drop. In one week.
2018 Prediction on Bitcoin:
I predicted it would pull back, and it has. I think it might have more to fall before it becomes stabilized, maybe to $10,000. But I predict it would be higher than $20,000 next December.
The Stock Market
Hillary Clinton might not like Trump, but the stock market loves him, since the market is up over 24% since he was elected. 24% is huge. But it did 34% in 1995. 30% in 1997. 26% in 1998. So, just like Monica, the stock market loved Bill Clinton once upon a time, too. And none of those years had significant pullbacks immediately following. Risky? Sure. But the trajectory is still up. I think (if you look at the charts) this is the restart from a business pullback in 2015 and 2016. As I travel around the country, there is massive business activity. Things really are going well.
The biggest risks are North Korea, Iran, and Saudi Arabia, with anything that created higher oil prices being the biggest risk. Chances of impeachment this year? Nearly zero.
2018 Prediction on the S&P 500:
Up. Not 24%. But up, say, 10%. 2019? We’ll see.
Interest Rates:
We’re recovering from the longest period of low interest rates in history. All of history. It really won’t make a difference, but the Federal Reserve simply must increase rates so that we can pretend that the money isn’t all made up. Eventually if there’s a credible alternative (Bitcoin?) the Federal Reserve will have to raise interest rates . . . a lot.
2018 Prediction on the Federal Reserve Rate:
Up slightly. Eventually (2019, 2020?) up a lot.
Gold/Silver:
Meh. Wanders back and forth. Probably ends the year +/-10% of where it started. 2019 or 2020 might be different stories, and longer term it will still experience huge upward swings during times of uncertainty. It appears we’re currently at the “no crisis†pricing, which would probably be a good time to stock up. The Boy accumulated several ounces of silver at $10-$20 and sold at $40.
So, there they are. I’ll revisit these each quarter so you can laugh at me . . .
Disclaimer: I haven’t started any positions in anything above the last three days (it was Christmas, you dolt) and don’t expect to start any in the next three. So there. Also, I’m not a financial advisor, and this set of “predictions†is probably as good as a Ouija® Board and probably worse than flipping a coin.
“We’re doing him a huge favor!  And do you realize how extreme this is to go from no debt to good old fashioned American debt?  That’s the way to do it.  Plus, I’ve been envisioning someone else paying for this thing the entire time.†– It’s Always Sunny in Philadelphia
Â
Yes, that’s stress. And you didn’t have to spend 8 hours in the car with it.
Stress. It will kill you. That’s what I heard on a commercial once. Or maybe it was the voices in my head. I forget. Anyway, probably it’s a good time to ask, “What causes stress?â€
Money – Yes. Not having enough money is amazingly stressful. At one point in my life after my ex-wife (PBUH) left (which made both of us happy) she handed me a plastic bag that represented my financial life. It took three months to sort out and at least be paying everyone something each month. And I realize how fortunate that makes me – some people go for decades like that. And it is the single most common stress – up to 75% of people are stressed out about money.
I feel really fortunate – I’ve not stressed out about money since (really) 2005. I paid off my last car in 2000. There just might be a connection.
If money is a stress – change your situation. The sheer discipline and communication required for a family to climb out of a debt pit might take years. But the day you write the final check to pay off the car. To pay off your credit card? It’s worth all the time you spent. And you won.
Lots of people have awesome plans, so there’s bound to be one that fits you. If you’d like my comments on a particular plan, email me or hit a comment. The plans all look the same on the basics:
Stop spending now.  Necessities only. Steak? That’s for future you. Current you gets rice, and Hamburger Helper® when you’ve had a really good week. Eating at a restaurant? That’s for rich people.
Get extra income. Work a second job.
Minimize transportation costs. Used cars you can buy with cash. Bikes if you can. Buy no new cars unless you have a million dollars in net worth (hint, when you get there, you won’t want a new car).
Get cheap, healthy hobbies, like hiking. Or hobbies that create income, like crafts you can sell.
Work – A little over two thirds of people stress about work. Sure. We’ve all been there. As a guy, for much of my life I’ve taken a significant amount of personal meaning from work, sometimes letting it be the thing that defines me. I go there, and I want to do something important. I want to go chasing dragons. I want to do meaningful things. I want to walk into a burning petroleum tank accompanied by two Chicago firefighters (spoiler, I’ve done that) and walk into stuff that’s just exploded to figure out how to fix it (spoiler, I’ve done that, too). But a significant amount of work we do today isn’t meaningful. And, based on observation? 60% of most people’s workday (assuming you’re in an office and not doing physical work) is wasted. Outside construction work, for example? I’m thinking about 40%.
TPS reports? Yeah, we’re doing a new cover sheet. Feel like your job has meaning now?Â
I’m not sure how girls feel, or even if girls have actual feelings (beyond light/dark or salty/sweet, I mean) but I get the sense that the meaning they get from work is most often secondary to the meaning they get from “being mom†or their social circle and social interactions.
So, if you’re not getting meaning from work, get it somewhere else. Be a kid’s sports coach. Brew craft beer. Find a passion to your life. Heck, if you’re really boring, you could even blog.
Economy – A little under two-thirds of people stress about the economy. This is borrowing future potential problems so you can worry about them today! With no interest charge! This was the most variable, but seemed stuck in third place. What would a stoic say? “Keep in mind you’re going to die, possibly in a painful and embarrassing situation involving a poodle, so the future economic indicators and the current price of bitcoin shouldn’t bother you.â€
If you’re stuck worried about what might happen? I can’t help you. You will have problems. They will get better. The economy will tank again, hard, during your life. The economy will grow again, massively, during your life.
Spend your energy improving you. And, be like me. When the stock market drops, microwave some popcorn and pull up a chair! It’s always fun to watch New York people panic.
Family Responsibilities – About six in ten get tied up about this. And at the point where I am in life, these take up about 50% of my free time. The Mrs. does more, but she also has more free time. But it really does seem like a vacation when you’ve had eight weeks in a row taken up by sports, Scouts or other kid activities and the ninth week you have NO PLANS FOR THE WEEKEND. Sometimes I don’t get out of bed until 1pm on Saturday. Delicious. I love having kids around. I also love time everlasting – time to play b-sides . . . and Blue Oyster Cult.
Okay, let me be the first to say, it looks like Blue Oyster Cult was right . . . according to our own Department of Defense. No, not about their beautiful 1980’s beards, but about not being alone. A future post on that, probably next month.
Relationships – More than half of people are upset about (romantic) relationships. Blah blah blah . . . people. I know.  I’ve been in a stable marriage for 20 years, so I don’t have as much as a foundation for discussing this. For half the people to be stressed about relationships? Yeah, sadly, that seems about right. Choose your mate well – and for the right reasons. Best case? PEZ® heiress. Worse? Johnny Depp’s ex-anything. Worst case? Johnny Depp.
The biggest driver of this has been a group of societal changes that have really messed up the way that men and women relate to each other, and not for the better. This will be a series of posts in the future, but I’m still working out the best presentation and point of view format.
Personal Health Concerns – A little over half of people are stressed about this. And not that many people are really sick. So, buck up, you hypochondriacs and stop worrying. The rest of you who are really ill? I’m with you, in spirit. Get better. I’m praying for you.
Housing Costs – Less than half are worried about this. Much less than half would worry if you just moved out of expensive places to live. Seriously. Don’t live there. Here’s a post on why your choice of location sucks (LINK). Never spend more than 15% of your income on housing costs.
Family Health – Less than half are worried about this. Math says that you’re worried about far more people than are worried about you. So, pick some family members to care just a little less about. Problem solved.
Personal Safety – This is pretty far down on the list of worries, but 30% get stress from this. About (0.4%) of the people in the United States are the victims of violent crime each year. If you’re that scared, I’d suggest you move from New York City if it bothers you that much. Move to an area that’s high in Republicans – since gun crime is lowest there. Oh, wait, stay in New York City. I’m sure it’ll get better. It’s not like you’d bring the same attitudes and values that made your location unsafe when you moved here, is it?
“We have no Great War. No Great Depression. Our Great War’s a spiritual war . . . our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact.” – Fight Club
Depression related to debt? Unpossible!
My Mom went through the Great Depression (she was pretty old when Ma and Pa Wilder adopted me, nearly fifty) as a child, so she told us kids ALL about it. To hear her tell about it, the Depression wasn’t all that Great from her perspective, but no one wants to talk about the Mediocre Depression. One of the ways that she was impacted by the Depression was her relationship to physical objects that might be of use someday. Tinfoil that you used to cover last night’s casserole? Hey, you might be able to use that again. Aluminum pie tins? They could be cut to make a great decorative lantern (no, they couldn’t, but Ma kept them anyway). They call this “hoarding” now. Pa even built a building to hold Ma’s stuff.
The reason for her obsession was understandable. During the Depression, many times her family had to do without basic necessities. Our family was well off by comparison, but Ma Wilder never got over the times when she had so little. We wrapped our Christmas presents one year in the comics section of the Sunday paper to economize. Food? Never thrown away. It fed us, then the leftovers went to the dog. During my life as a kid, we never spent a cent on dog food. Pa Wilder eventually got her to throw away old TV Guides® (kids – it’s a tiny part of the Internet that describes “what’s on TV” that they used to print out and send to us every week).
Perspective: Pa Wilder was the president of a bank at that time. We were NOT hurting for cash.
And I recall that Grandpa McWilder plucked a fiberboard suitcase for me out of the closet so I could pack my things to come and visit him and Grandma McWilder every weekend (LINK). The suitcase was missing its original handle. Grandpa took an old leather belt and cut it and wrapped it as a handle on the suitcase. It was (probably) better than the original suitcase handle. Whenever he needed something, his first trip was not to the store, but to his shop, where he would craft whatever he needed out of wood, leather or metal.
And Ma Wilder followed her dad’s example. Her crafts were legendary, making a passable statue of Ben Franklin out of a wine bottle, some sand, a sock, some blue felt and grey yarn and some copper wire. Our family was not in need of Ben Franklin statues, but Ma Wilder liked to keep in practice, since at that time the US was also tied up in a great period of inflation – it looked like the wheels were coming off of the great capitalist experience called the United States. Interest rates to buy a house were all in double digits. Even the Treasury notes were yielding 18%+.
What this did (looking backwards) was trim all of the non-productive investments from the economy, and I do mean all. If you could stick your money in a bank account and make 12%, you’d do it. Why risk your money in a business venture, unless that business venture was really, really good?
So what business ideas got money at that point in time? Only the best. And those great ideas had to have great teams behind them. The crappy ideas were laughed out of the bank. These high interest rates also depressed the stock market. Why buy stocks when you could buy government bonds at 15%?
This high-interest rate environment led to a recession, but what followed the recession was the greatest peacetime economic expansion in history – the stage had been set by winnowing away the crappy companies.
As time went on and as the economy expanded it also changed as small companies grew to enormous size and replaced large ones that didn’t serve a purpose in the economy anymore (MicroSoft® grew, Montgomery Ward™ exploded).
The interest rate was then lowered.
And lowered. And lowered.
The idea behind this (from the standpoint of a politician) is that cheap money encourages business. Which encourages hiring. Which is one way of using the people’s money to buy their votes.
And, it’s a great idea. Companies borrow money. That makes the banker happy. People get jobs when the companies use that money to invest in stuff, like buildings, stores, employee PEZ® dispensers, Johnny Depp’s ego, factories (once upon a time we made stuff here) and oil wells.
In a functional economy, some of these businesses flourish, and some fail. The flourishing businesses more than compensate for the lost incomes (and bad loans!) of the failures. This is healthy in an economy – bad ideas, like my Internet pizza by the slice company (no, we don’t deliver, you have to pick it up) fail. Good ideas, like Amazon.com, flourish.
But as you can see above, we got to a point where the graph went . . . flat, like Johnny Depp’s career. And flat as in zero. Also like Johnny Depp’s career.
So, if high interest rates force businesses out in a Darwinian competition that only the strong survive? What happens when interest rates are low?
Well, we live here in Smallville. Smallville is . . . small. It had some hotels built during the 1950’s and 60’s. And one obviously from the 1970’s. One might have been the late 1980’s. And one last hotel built around the late 1990’s. Most nights nobody is in any of these hotels. I’d bet it’s generally a 10% occupancy rate or so. Low. In a nearby town, you can buy one of the 1970’s vintage motels with 50+ rooms for $200,000 or so. Yes, you read that right. Annual income for the thing is about $120,000, and it probably nets out at $40,000 a year or so after costs. Sort of expensive for a $40,000 a year job.
But right now in our very lightly visited (and way off the beaten track of any busy highway) town they just built a brand new hotel. That might be 15% full on a good night.
Why?
Because money is historically cheap. Like 5,000 years of history cheap. Save it? Never! The investment only has to yield more than the interest rate of the loan to be profitable.
Cheap money is like gasoline to the bonfire that is our economy. To start the fire, a little is needed. But to really get the party going? Toss on more gasoline.
When there’s a competing economic system or discipline from organized investors, this won’t work. The confidence of the economic system would be lost, and interest rates would go up as people fled the money system.
If there’s an alternative. But today? There really isn’t a credible alternative to the dollar (the euro is too new, the yuan and yen are too closely held, and every other currency on the planet (except the Swiss and British) is generally more valuable as holiday wrapping paper than as actual money.
Without this constraint of an outside competitor, politicians did what politicians do. They opened the spout to the money supply. Yay! We can borrow and spend ourselves into infinite economic prosperity, right?
Not exactly.
A little debt adds a lot of GDP. It funds great ideas like desktop computers to massively increase business productivity. It funds control valves and robots and data systems that automate pipelines and car factories.
The big ideas get funded first. They change the world.
Eventually you get to funding ideas like “bigger cupholder” in a Camero®. You get less return, less profit with each dollar invested.
That’s shown pretty well on the following graph – it relates debt to GDP (GDP is like the country’s salary – it’s all the money the country makes). The first bits of debt (earlier on) produce the greatest growth in productivity. The last bits of debt? It shows that they aren’t horrible, but in reality this graph reflects consumers getting out of debt as fast as they can during the Great Recession – individuals don’t take on more debt when they’re not sure they’ll even have a job at the PEZ® factory next month. Unless you’re Johnny Depp, in which case you just buy $30,000,000 in castles and some albino bears.
This is called diminishing returns – the latest debt doesn’t add as much to the economy, unless you really need a castle filled with albino bears and can sell tickets. The later investments are worth so much less than the previous investment. Eventually? You get debt without GDP growth, so you pay interest on the PEZ® that you ate last night. Forever. Your bonfire? The wood has burned all away, and the only thing that keeps the fire going is the gasoline. And it makes a much smaller and more dangerous fire.
Yes, eventually the added borrowed money swings your income downward, as you pay interest on investments that produce nothing.
This was like another time in history. Just wish I could remember what it was.
“I’ve come back. Give me a drink, Brother Kipling. Don’t you know me?” – The Man Who Would Be King
Kipling in 1895. Good heavens, what a handsome mustache! No wonder the English ruled most of the world – any group that can create such handsome whiskers deserves to run the place.
I first heard this from a friend in 2002 or so . . . there were several of us that would get together to talk about ideas and concepts, and one of the participants told this story:
There is an old Chinese story about a farmer. One night, there was a terrible storm. The wind blew so hard, it opened up his corral, and his horses got out.
“Bad luck!” said his friends.
“Good luck, bad luck. Who can say?” replied the farmer.
The next week, his horses, lonely for home, came back. But while they were loose, they got in with a group of wild horses. The wild horses came home with them. The farmer now had twice as many horses.
“Good luck!” said his friends.
“Good luck, bad luck. Who can say?” replied the farmer.
A wild horse is good to no one, so the farmer’s son began to work on breaking the horses. Most of them were no problem, but one particularly fierce horse bucked the farmer’s son off. The farmer’s son broke his leg.
“Bad luck!” said his friends.
“Good luck, bad luck. Who can say?” replied the farmer.
The next week, the Emperor, having decided to go off to war due to a very dangerous threat against the empire, marched with his troops through the farmer’s town. They called up in a draft all of the able bodied young men to accompany them to war. The farmer’s son could not go – his leg was broken.
I think you can see where this is going.
But the story does stop there (thankfully!), though you see that it could keep going indefinitely, probably ending up with the farmer’s son constructing an evil robot army to enslave the human race that ends up saving us instead by stopping the invasion of the mole people from below South Carolina. Oops! I think that’s the plot of the sequel to Pacific Rim.
Source: Uproxx, by porkythefirst
Despite my firm belief in the power of self-determination, even I’ve got to admit that sometimes you just have no idea how an action will impact your future – what will the result be of a decision you make today. Opposite effects aren’t unknown.
For example, brush your teeth every day in order to keep them longer, right? Well, at one point they used abrasives in toothpaste in order to scrub off that yellow tint that evolves over time. Unfortunately, over time you weren’t brushing your teeth – you were sanding them down to nubs.
That’s an extreme example, but here’s another:
You work really hard at your job. You’re smart, and come up with innovations to make things work a little bit better. Your boss notices, but so does his boss. Rocket ship to the top, right? I mean, at least a promotion?
No. Your boss is lazy and scared that he’ll lose his job. The last thing they want to see is you breaking the curve at work. He is now focused on . . . . getting rid of you. Again, the opposite of what you’d expect, and the opposite of what your work merits.
Which brings me to this:
If
by Rudyard Kipling
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too.
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster,
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools:
If you can make a heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on!”
If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
I am an unapologetic Kipling fan. And in this poem is more good philosophy than you’ll find anywhere. Well, anywhere but here.
At a certain point, you realize that you’re not going to be a trillionaire. Or even a billionaire. You have to settle for what you’ve done and not feel regret that you’ve not transformed the world entirely. In reading history, it wasn’t just one of the best poets ever to live who understood that, but also, over a thousand years earlier people understood it.
“If you are distressed by anything external, the pain is not due to the thing itself, but your estimate of it; and this you have the power to revoke at any moment.” Pretty cool statement. From? A frigging Roman Emperor, Caesar Marcus Aurelius. I’ve mentioned him before. His book, Meditations was something he wrote for himself. He didn’t write it for other people to read to see what a smarty-pants he was. No, these were his private thoughts.
And as Caesar, he had more power than most people on Earth have ever had. And he still worried about stuff. He worried about doing a good job. His back hurt him. He worried that he wasn’t being a good dad (he wasn’t – his son was horrible and was destined to be played by Joaquin Phoenix – a curse of history).
But Marcus, the unnamed Chinese farmer, and Rudyard all had it tuned into the same thing – we can’t understand exactly what the outcome will be. We can only go out there and do our best – break the horse, fill the unforgiving minute with sixty seconds of distance run, or do our best to run the most complex civilization ever devised.
So, today’s your day. Go out there, and run as hard as you can. Maybe, just maybe, one day you can have a mustache that will rival Kipling . . . .
“Violent ground acquisition games such as football are in fact crypto-fascist metaphors for nuclear war.†– Back to School
Does this look like the Bond villain Satoshi Nakamoto who put together the million 7 bitcoin fortune???
As a family we often go out together for Friday night dinner. It’s a nice way to close the work week prior and get together as a family and talk. We (generally) have a strict policy of leaving the phones at home (LINK). A corollary rule is “no talking about computers†at dinner, mainly to keep The Boy and Pugsley from entering a nerd mind meld where they talk to each other in binary:
The Boy:Â 0101 1001 110010 10011 0111?
Pugsley:Â 10010!
Both:Â Laughter.
On this particular Friday, The Boy would not shut up about bitcoin. (฿ is one suggested Internet symbol for Bitcoin.)  He told me how bitcoin was a cryptocurrency – a currency that uses cryptography to verify transactions and make sure that some people don’t just counterfeit a bunch more of them.
You prove that you have a bitcoin via mathematical checks that only work if you have the “magic number†– your key to your money. Again – secret codes – cryptography – is used to access your money. Lose the code? Not only can you never use your money – no one can ever use it again.
Bitcoin is also unique in that it’s mined. Not in a real mine, but by using computer processors to break yet more codes through trial and error. It’s not like all the bitcoins were available on day one – the inventor of bitcoin designed the system so that code breaking the next bitcoin is harder than code breaking the last one, so it gets exponentially more difficult to crack the bitcoin codes.
When people first started mining the coins, they used a computer processor. Then someone came up with the idea to use graphics cards, like the ones in your computer that generate the images you see on the screen to do the processing. Sounds crazy, but the graphics card is an order of magnitude better at doing the math than the processor. Right now, most bitcoin mining is done on purpose-built processors, and a lot of it is done in cold places (Iceland) to make it easy to dump the heat from the processing with cheap electricity (Iceland has cheap electricity from geothermal).
Bitcoin started not only with a set number of bitcoins in the future, it was introduced in tandem with something called “blockchain.â€Â Blockchain is an open ledger system where people look at and record transactions. If everyone looks and sees the transactions (not the details, mind you) then everyone agrees that a transaction happened. There are multiple copies of this ledger, so it’s redundant and decentralized. There are some people who think that blockchain might be the real innovation that will long outlive bitcoin.
I looked at The Boy as his tutorial on bitcoin came to an end.
“How many bitcoins do you have?â€
“Five.â€
I was astonished. The Boy was 12. He had, in his bedroom, concocted a scheme where he mined an alternate cryptocurrency (litecoin) and traded it back and forth between different currencies until he (finally, at peak wealth) had seven bitcoin. When he had seven bitcoins, his net wealth was several thousand dollars.
“Okay. The computer comes out of your room.â€Â I had no idea he was a budding day trader.
Eventually his trading losses ate all of his bitcoins, besides a few he used to register a domain name. He even gave me 0.5 bitcoins for my birthday in 2012, but, I gave it back to him.
Yeah. He gave me something that is worth about $8500 today. Biggest birthday present to me, well, ever.
But don’t feel bad, at least I didn’t trade away $123,060 (today’s value) worth of bitcoin. Like he did.
Even stranger is the origin of bitcoin. It was created by a shadowy internet figure who used the name Satoshi Nakamoto. Since he originated it, he also mined the first million bitcoins – worth $19 billion dollars today.
Yeah. And they’re just sitting there.
Did he lose his secret code? Is he dead? Is he waiting to buy New Zealand? Was Satoshi the CIA? Was he a time traveler from the future? What if it was created by the first sentient AI as a plot to crash the economy? No one really knows if he is even a he, or if he is alive or frozen in nitrogen next to Walt Disney.
Yeah. Weird.
But bitcoin exists. And now it’s recognized as a commodity like pork, oranges, or PEZ® and traded in futures markets, which are regulated by the Securities and Exchange Commission.
What’s going to happen with bitcoin?
I’m not sure. Predictions are pretty hard, especially about the future.
In the past, every single currency that’s not based on something like gold which prevented wanton printing (called a “fiat†currency, after the Italian car) has eventually failed. Bitcoin isn’t based on gold, but it is based on the mathematical certainty of scarcity – once it’s all mined out in a decade or so, there won’t be anymore. Ever. In fact, the amount of bitcoin in circulation will end up getting smaller over time as people lose the secret code for their wallets (this happened to The Boy – he has a wallet with about 0.001 bitcoins in it. About $180. But can’t get the code. And if he can’t? Those coins are lost forever. Theoretically, we could divide bitcoin forever. And the losses mean it will go up, not down in scarcity.
Additionally, bitcoin has no government backing, and is outside the control of central banks like the Federal Reserve Bank or the International Monetary Fund. They don’t like that, but they can live with it because it’s small. If it gets to be of any size, they’ll kill it. China has already made bitcoin trading illegal, and it’s possible that more countries could do the same. Could they kill it entirely? Bitcoin buffs say “no.â€Â But they could make the penalties so high and make exchange into hard currency so difficult that it’s effectively the same. Other countries besides China will ban bitcoin. Expect “terrorism†to play a part in this.
Currently, like a Dutch tulip bulb (LINK), it’s gone too high, too fast.  I have to think that it will come back down. And back up again after that? Yeah. Probably. The difficulty is that bitcoin is based entirely on what people will believe about it in the future, which is very hard to predict. If people don’t believe in it, it will go to zero . . . but if people see a continually inflating dollar, a deflating currency will look very good.
All the gold in the world is worth somewhere around $1.9 trillion. Bitcoin is worth about $300 billion.
Bitcoin is real, and it’s around to stay, especially when governments start printing money like it’s going out of style – bitcoin will provide a non-inflationary alternative – Gresham’s law (LINK) says that bad money will drive out good, and people will get rid of their currency that’s becoming worthless, and save the currency that’s becoming more valuable.
So, I wish that The Boy had not frittered away his seven bitcoins. And I wish I knew who Satoshi was. I could certainly help him look under the couch cushions for his code . . . for a small fee.
But . . . what if . . . The Boy is Satoshi?
I’m not a financial advisor. I don’t have bitcoin and won’t buy any this week. Disclaimer, disclaimer, disclaimer.
“Wait, let me guess. You want me to fly the Maru into the teeth of what amounts to an interstellar hurricane just so that I can shut down yet another Seamus Harper science experiment thereby saving all of our butts from certain doom?” – Andromeda
So, here’s “Just in Time” food inventory . . .
Since the first industrial revolution, businesses have been on a relentless drive to create additional efficiency. This has resulted in a lot of wealth creation since the “stuff” that we consume becomes cheaper.
How does it become cheaper?
Over time, production processes have been automated. To give an example, it takes less than three equivalent people working less than a day to turn 1800 parts into a car. Sure, the parts were produced elsewhere, so more days were taken than that – but to me it’s astonishing – less than 24 hours of labor to produce a vehicle.
Part of the reason for the efficiency is that so much of the process has been automated. Hundreds of robots are on the factory floor, which allows the car to be built with so few hours. Imagine if the same level of productivity went into the construction of a house . . . .
Focus is spent on elimination of waste at every part of the process – it’s that destruction of waste that allows industry to focus on production.
One (relatively) recent initiative to reduce waste is to create “just in time” production. It’s been a driving force since Toyota popularized it in the 1970’s in factories (and in business) across the world. The way this concept works is beautiful in its simplicity. Let’s say you’re producing 1000 cars a day. And you want to put steering wheels on those cars (I know, a crazy luxury). That means that you want to have enough steering wheels to build the cars you’re building today. Which also means you have to have the right steering wheels (not one that turns only right, but the correct steering wheel that goes with the car) since one model of the car might not take the same steering wheel as another.
So, of the 1800 parts that make up a car, you have to deal with a MILLION of them each day. And not every car is the same – there are different carpets, stereos, seats and any number of variations for each car.
So, do you keep a 60 days’ worth of inventory? No.
In fact, in your best possible world, the company that manufactures the steering wheel that you need shows up and puts it in your hand right as you’re ready to install it into the car. In practice, that doesn’t happen exactly like that, but it’s close. The company that manufactures the seats, for instance, knows which ones you want on Tuesday. It delivers them to the line in the order required for your production run. Your effective inventory of seats is zero – you let the seat supplier deal with the hassle of getting the seats ready and in place for when you need them.
Likewise, the seat manufacturer doesn’t want a month’s inventory of foam in the place, so they order it to arrive . . . just in time.
The genius of this idea is that you can reduce inventory across every manufacturing system . . . everywhere. You eliminate bins and shelves and racks of stuff and all of the difficulty in counting it and keeping things dry that should be dry, while not forgetting you have 75 tons of leather for seats in the back corner where the lights are out.
Great idea, right?
Well, it is. Until something goes wrong. It is the manufacturing equivalent of going bumper to bumper at 80 miles per hour. That space between cars is like inventory – it gives you time if someone makes a mistake to correct before catastrophic damage occurs. So, if a seat isn’t there, I’m sure it’s painful to pull the car off the line, but you can make do. If all the seats aren’t there? The factory will have to shut down fairly soon – you’ll just have piles of seatless cars, which are only popular in Southern California. “Just in Time” makes the factory more efficient, but also less resilient, more prone to catastrophe brought about by the simplest shortage.
But in real life . . . where else are we using just in time philosophy?
Gas stations. There’s about 28 gallons of gasoline for each person in the US. My family uses that much in a few days (three cars). But if production went down for whatever reason? The US would run out of gasoline in short order. See, it’s all fun and games when we’re just talking about steering wheels . . . .
Food stores. The average food store turns over their entire inventory . . . 19 times a year. Oddly, that’s nearly the square root of 365, so the average inventory turnover is . . . 19 days. But that includes things that don’t move as fast, such as sponges and nosehair trimmers. You can imagine food, especially perishables like meat, frozen foods and vegetables are probably at a week or, more likely, less. And if there’s an emergency? The inventory is measured in hours.
We were in Houston prior to Hurricane Ike hitting. I was out of town on business, but got back in time to ride the storm out (no, not with REO Speedwagon) with the Wilder family.
Oddly, we were completely prepared. We had food for weeks, a gas grill, canned goods, matches, candles, wine, cigars and pantyhose and chocolates for trading. Oh, and fifty gallons of drinking water.
I went by the local Target® store that night and found . . . everything gone. The place was picked clean, even the wine. I think people went into a frenzy and bought extra hairbrushes because . . . hurricane hair? You can read about the Wilder experience in Hurricane Ike in more detail here (LINK).
Why did I go to Target™? Really, just for grins. It’s a nice feeling knowing that you and your family are protected. That night as the storm set in, we lost power early on. So we sat, drinking wine, smoking cigars (yes, The Mrs. joined me) while we roasted hot dogs over the candle (not recommended) and watched John Adams (the HBO® miniseries) on a laptop until the battery died.
The next day? Power out, so time to eat the steaks. Mmm.
The next day? Pretty hot. Oppressively Houston hot. This wasn’t good, but I got my hands on a battery operated fan, which was worth approximately a million dollars. I noticed people were selling ice for $8 a bag on the roadway. Was I mad at them? Heck no! If you really needed ice, you could get it from these people, and nowhere else since the every store was still closed. These people were doing humanitarian work.
Road ice. Ain’t capitalism grand?
We were ready – we were practicing the opposite of “Just in Time” – we have stuff around our house all the time so that little interruptions won’t ruin our lives. But a reasonable question to ask yourself is . . . how ready are you when the car in front of you taps on its brakes and you’re going 90 miles per hour?
 So, of these things? Deflationary Depression, $1,000,000 bills? Nope. It’s more likely that Hillary will hug Trump.
