Monday, March 22, 2010

The bigger they are...

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Have you ever played "Monopoly"? I grew up playing and I can, with quite self-assured accuracy, tell you that I wasn't very good at it. I'd like to brag on the numerous 5 hour sessions of how I conquered friend and foe, building every high rise red plastic thingy to the doom of the boot, thimble and barrel. All bowed down to the dog! Alas, it wasn't so. I usually finished in 2nd place, not the worst and not the best.

Now, in Monopoly, who is the one person you want to suck up to? The one person who can help you in your greatest time of need? Everybody knows you absolutely have to have the banker on your side! I think we've all seen (if not been) a banker throw some extra cash underhandedly to the side for those they favored, and I'm sure we remember at least once being in the favor of such a circumstance. Now, we knew it was against the rules and if we caught someone doing it we busted them as quick and probably designated a new banker.

The great part of Monopoly is that there's a set number of paper bills, but imagine if someone raided another Monopoly cash stockpile before you started the game (or even during a "bathroom break"), wouldn't they have a sweet advantage?! If they were slick, you wouldn't even realize it for a while, just slip a little something here and there and before you know it they're owning far more than seems possible, but since you're operating under the assumption of fair play you don't question it.

Now, imagine if they kept doing it over and over again. At some point you'd look around the table and notice that it most certainly doesn't look right. There's WAY too many of those beautiful golden $500 bills laying around! Now you KNOW something is wrong, but you lack evidence to charge anyone, so at some point maybe you have to say that passing go doesn't get you $200 anymore, given the new amount of Monopoly money laying around you have to elevate it to a $500 bill. So on and so forth.

Of course that's only if you keep playing the game, I would probably quit instead of wasting my time on a rigged game. There is a real world version of this happening right now in the United States. And I hate to bear awful news, but it's far worse than our imaginary scenario, and you can't really quit without leaving the US.

There is an agency known as the Federal Reserve Bank and it doesn't need access to other Monopoly boards to get the money, because Congress nearly 100 years ago put it in charge of printing our money and to lend it out as it sees fit. Nobody watches them, and this should terrify you.

I'll tell you why.

Our current "Monopoly" banker's name is Ben Bernanke. He's the President of the Fed and he never has to open his books to anyone, including the Congress. This means if one of his banker buddies is in trouble, then he can print up a few billion dollars and loan it to them at a very low interest rate, or buy it outright at a price that benefits the buddy in trouble. Not only does it help banker friends in trouble, but it also helps political friends in trouble. In fact, more often than not it's the Fed that pays the bills in Washington more than foreign nations buying our bonds. It does this by buying bonds itself, which is basically like writing yourself an IOU.

Supply and demand should be no big secret, people know that when there's too much of something then it loses its value due to it being widely available. Thus, the value goes down. (This is also why competition is good, but that's almost another topic...almost.) The terror of the Fed is that it can pump in as much money as it wants, claiming that this will allow banks to feel more comfortable loaning money and thus jump-starting the economy and that they will somehow amazingly pull the money back in before inflation occurs. To call that a tricky propsition is something of a gross understatement.

In fact, it's so grossly understated that you can look at charts to see how inflation has destroyed the value of our dollar. Oh, here's one now!


You can see that for over 115 years the cost of living stayed largely in the same neighborhood, but as soon as the Fed was created...zooooom!!! They started printing dollars up with a dangerous pace and it has been crippling our world-dominating dollar ever since. The dollar has lost 96% of its value since the Fed's creation. That means that if your great pappy had left you $4 in an envelope from 1900, it would have had to have magically grown to $100 in order to keep its buying power. His meaningful gift would be virtually worthless.

This means that your savings mean next to nothing. Yes, you still need to save, I'm not suggesting otherwise. I *am* suggesting that what you save is going to be eaten up by runaway inflation and make your retirement a near impossibility, because what good is a dollar today going to be in 40 years if the Fed keeps dilluting it? So, in order to attempt to offset inflation you have to risk your savings by putting it in the market, it's essentially forced market participation.

If only that is where it stopped. The founding fathers knew something that we have largely forgotten today: money stops the government from being tyrannical. This is why they wrote into the Constitution that only Gold and Silver shall be legal tender and that only Congress can regulate it. (Congress was supposed to be the most powerful branch of the government, not the President.) They said Gold and Silver, because it's a limited resource that cannot be duplicated or dilluted.

See, in past historical governments they knew that what they ("they" being any number of historical governments) initially issued as a full gold coin, let's say it was issued as an entire ounce. Well, the government soon desires war, but there isn't enough money to fund the war (paying for weapons, food, shelter, wages, foreign help, whatever), so what they would do is shave a little of the gold off of the coin and use it to fund the war. Then shave a little more, then a little more.

Well, people caught on to this and merchants would raise prices, then the people would get rowdy over it, then the government responds by implementing a law that required everyone accept the half-ounce gold coin as a full-ounce gold coin. Soon enough it wasn't even gold being traded, it was some iron or copper being passed off as gold. This ended in economic turmoil and fallen currencies.

The absolute next best thing was paper money! Now they can print as much as they wish, you only need more paper! You have to realize that the U.S. didn't invent paper money, it was around before our revolution, that's the very reason they wrote gold and silver into the constitution. The less money a government has, the less likely they'll wage war, instead they'll value trade and commerce and only wage armed conflict when the people support it, because it'll be the people who have to fund it.

So, the government went from valuing trade and free market enterprise, which encourages everyone to work and take care of themselves and their futures (who else was going to do it?), to creating a central banking system that allowed the government to fund wars and hand out foreign aid to gain favor. Hey, not enough money? Call up Ben Bernanke! He's appointed by the President and affirmed by Congress, so it's in his interest to keep them happy if he wants to keep his job, so regardless of what rhetoric is spilled he is in the business of keeping his pseudo-boss pleased or face not getting reappointed.

The Fed allows the government to print up endless money, virtually wiping out our savings by means of dilluting the value and buying power of our dollar (hey, where do you think we got the money to bailout banks). The Fed hands out money to prop up companies that the free market says should go bankrupt (oh, no one is buying your product anymore? Here, have some cash til you get back on your feet). The Fed was mandated by Congress to keep inflation down (fail) and employment high (fail) by means of central economic planning. The Fed has never been fully audited, so we don't know how much money they've actually given to foreign banks/nations, or really to anyone.

For instance, the Fed is largely indicated to have given money to Saddam in the 80s, but denies it. Thankfully, others were paying attention years ago.

The Fed funds government programs that would otherwise not be possible. Ultimately allowing government to grow as big as it wishes. Blame Democrats, blame Republicans. Neither wants to have less government, neither wants to cut down our debt and decrease the deficit by stopping wars and stopping government programs. (Sidenote: deficit is the yearly number of how much we're spending on any given year's budget that we don't have. Ex: We have $400 in taxes, but $500 in programs, it's a $100 deficit. Debt is the accumulation over the years. So, if after a decade of that same budget plan, then we'd have a $1,000 debt.)

If that isn't bad enough, the Fed also monetizes our debts. Oh, we owe China a trillion dollars? Start up the machine and print them out a trillion dollars. This is what's likely to happen sooner or later, probably once our dollar has fallen. Yes, it'll be worthless if it comes to that, but it'll be the fulfillment of a contract and thus legal, albeit immoral.

That's the beginning. Because what happens when hyperinflation starts? Well, our dollar will fall, which may mean a global collapse of epic proportions. China will be the new economic mecca, so brush up on your Mandarin. I'm not sure if our Dollar can be saved at this point, with the bailouts, the handouts, the debt is building trillions upon trillions and now the new health care reform, it's become a house of cards, waiting to tumble. And even bankers don't know where it'll start first.

There's a school of thought called the Austrian School of Economics. It suggests that free market principles (not crony capitalism like we have today) is the secret to long term financial success. Unfortunately, it predicts such bubbles as the 2000 dot-com bust, and the housing market bust of now.... it also predicts a much harsher bust. Because it's actually the Fed that creates these bubbles, the boom and bust cycle. They do it by trying to create business in an area that the market doesn't naturally want, so it pumps money in (usually through low-interest rates) and there's a bit of a gold rush until the mal-investment rears its head and the market dries up, creating the bust. That's a bit simplified but you get the point. And right now we're in a decades long bubble, and that bubble must burst and it will be devastating, you can only know it's coming, but not when.

Ohhh, you probably want hope. Well, hope is you and I, writing our congressmen and senators. Voting. Despite the runaway of our government, there is in place a repulic such as never constructed in history that allows us to reverse everything. The Federal Reserve Bank is a great starting point. Ron Paul has a bill to audit the Fed, make sure your congressmen have co-signed (HR 1207), make sure your senators have co-signed the sister senate bill (S 604). I have a feeling once it's audited there will be lots of public backlash and we'll soon move to end it altogether. Thus ending favoritism from our Monopoly banker, his favoritism to his pet-banks, to the government (local and foreign), destruction of our currency (and therefore our future security) and a tidal of other secret handouts. We must end the Fed to regain our civil liberties.

If we don't, well... the harder they fall.

Monday, March 15, 2010

Health Care is a it should be.

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There's something very important missing from the discussion of health care reform, and that's the idea of Doctors running a business. I'm no PhD, but I hear becoming a medical doctor is no fly-by-night operation, in fact I hear that doctors take years and years of schooling in order to earn their right to practice medicine. It isn't taken lightly and probably not something that you stumble into after a decade of school. Some doctors open their own practice, which makes them their own CEO. That's the head of a company!

Why is this important? It's important, because no one should be able to tell a businessman who his clients have to be and how much he must charge them. The beauty of a free market should be that if you don't like someone's services or pricing then you have the RIGHT to go somewhere else, it is then in the interest of Dr. CEO to offer a great service at an affordable price and to be sure that he keeps you healthy. You know, the stuff business reputations are born of.

So, as a businessman what do you turn to once you no longer have control over your services, clientele or prices? You are in essence no longer a CEO, you're now an employee to a very large thumb. Finding a good doctor is already as difficult as finding a good mechanic, but once you start discouraging independent thinking then your hospitals and health practices will only be as good as finding a good teacher or school, because you'll chase away a lot of doctors.

Health care reform is certainly needed, but we need to reverse the trends, because right now health insurance is how we pay for nearly all health services, but isn't "insurance" something bought in case of an extenuating circumstance? Imagine having to pay $200/mo for "Mechanical Insurance" if you wanted an oil change! And if you chose not to have our hypothetical "Mechanical Insurance" then you'd be charged $100 for a $20 service. Once you take the actual rates directly away from the consumer then price inflation begins, because it is ultimately the consumer who needs to regulate costs and along with those costs the service itself. That is how a free market works, the good service at a valuable/reasonable price thrives while the bad business model falters, but when the choice is taken away from you (think "in network" vs "out of network") and it's regulated by anyone other than the consumer then the incentive is to make that governing/controlling body happy which means the client/patient suffers.

This doesn't even touch the affect on our Dollar and a dozen other implications. The reality is that a government owns nothing, and what it gives, it first needs to TAKE from someone else.
That doesn't sound like freedom at all.

Monday, March 8, 2010

BlackPrint Reloaded

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So, a few years back my CEO gave a "test run" speech that he was giving at SxSW about how to start an internet company for less than $100. It was a fantastic speech that set my mind on fire. He basically gave what he called "The 4 Horsemen of the Internet Apocalypse", aka: why there was a Dot-Com bust. Without my notes (I'm sure they're in one of my many notebooks) I'll just have to vaguely recall some of the high-notes (it was a 20 minute speech, so it was all high-notes really).

The 4 horsemen were (forgive me if I get this a little inaccurate):
1) Internet Access - the internet wasn't widely available.
2) Internet Speed - broadband wasn't affordable or highly available.
3) Trust - Nobody was willing to put in personal information to make purchases (i.e. credit card, address, etc).
4) Advertising - There was no advertising model in place, so no way to capitalize on the audience that was there.

Obviously, internet access and speed are now both ubiquitous and inexpensive, most of America has a computer now and availability is enough that competition is bringing down price (well, it was, but price-fixing is another topic). Sales numbers surpassed $100B a few years ago, ad revenue has hit $23B, so clearly trust is there as well as an advertising model. Google Adsense has done something no other advertising model has ever accomplished: it's made generating revenue off of content accessible to anybody.

That last line really made me sit up. I don't have any wares to peddle, but I do enjoy writing, and I like movies and music. And with that I decided to start publishing my own reviews, it only took a few minutes to sign up with Adsense (what Google calls their advertising platform). I was doing all the HTML coding by hand which got really old, very quickly and after about 60 articles I saw that the site was going to grow and when I wanted to go back and redesign it that it would be far too monstrous to do without spending a few Grand.

So, I put it on the backburner, until recently.

A few weeks ago I learned about a Content Management System (CMS) called WordPress, I read and watched a lot of videos about the install and setup, and the more I read the more I liked it. So, I installed it and found a skin that I liked for it and pushed all of my content over to the new system. While it is far from finished (I envision future redesigns), it's a good enough jumping off point, despite being up til 7am "last night" to fix last minute bugs when the domain transferred to my new registrar.

So, my site for Music Reviews, Movie Reviews, various Articles and a little bit of Poetry: BlackPrint. New content will be coming soon, and hopefully often.


Monday, March 1, 2010

A Love Race

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If you see my profile you'll no doubt notice that I'm white. I grew up in a fairly diverse town, lots of white people, lots of black people and plug in a solid latin population as well. For most of my life it's been normal for me to be attracted to "darker" colored girls (read: black). In fact, you could safely call it my preference (YEAH BAY-BUH!).

It's not a big deal to me to date or ask out a girl who isn't black of course, but it would seem that I have a bit more chemistry with black girls (as noted by the number of girls who've hit on me, etc). I think it's gotta be a beautiful thing to see cultures mixing in such a way that people are willing to not only look outside the familiarity of their own mirror, but outside the context of their very family makeup. Maybe not "boldness" (depending on the situation), but the ability to care more about what you want, than what others *may* think of you.

I've been watching "Mad Men" lately (FYI: the show is about an ad firm in NYC, set in the early 60s) and one of the characters in the show is dating a black girl, and while the show is fictional it certainly does make me to pause to consider just how hard dating outside your "race" or ethnicity probably was, but now, while it still may not be necessarily easy, it's something that you won't need to look too far to find acceptance.

I've seen people disowned by their family over this. My mother married a Mexican-American and said that it took years just for her father to speak to him. It's these situations I hope flicks the light on in people, because the logic inside of us should kick in during such episodes to say, "That isn't right. If this person is good enough for me to love, then they're good enough for my family as well."

Certainly the example I'll show to my kids, because what sense would it make to teach them kindness but draw a line in the sand that says: "You should be good to everyone, but such love and kindness has restrictions."

Of course, before I have kids I'll need to marry one of these lovely ladies first, but that's a different kind of race.