Thursday, November 17, 2011

food stamp junk food or traditional family farms?

Diet gurus must address the protein, fat, and carbohydrate content of foods. If they cannot answer that then they do not know what they are talking about. There is a large amount of biochemical and epidemiological research on the optimal ratio. Over the last million years hominids have averaged to 1/3 on each of protein, fat, and carbohydrate. This approximates most traditional diets as well.



Within the protein category there are dozens of amino acids. There are also dozens of kinds of fats carbohydrates, and fibers. There is much research as to what these do and how much is needed for what purpose.



I have noticed that supermarket isles are filled with brightly colored boxes of carbohydrates glued together by vegetable oils, but little protein. This is also reflected in junk food establishment menus. Burger king hamburgers are more balanced, but when you throw in a shake or coke with french fries they are protein deficient. Most junk food is fiber deficient. Excellent site below detailing junk food nutrition.



Junk food stamp liberals eat too many calories and not enough protein or fiber. Food stamps give them freedom to buy within certain constraints (WIC women infant children is on some labels). What is worse is that liberals eat very bad forms of calories such as hydrogenated vegetable oils with bad omega balance, high fructose corn syrup, sugars,… And it is mostly genetically modified GMO frankenfood. I am surprised they are not sicker and stupider than they already are.



I have looked at the Michael Eades protein power blog. He cites numerous good studies. There are lots of facts there and elsewhere online for those willing to study. But a good understanding would take more than a college degree in molecular and cellular biology. Takes a bachelors to be able to read the literature and another 10 years to read it.



Traditional diets are in general better — they were developed over long periods of time. I tend to migrate toward ethnic cusines more than the modern multicultural junk foods. I suspect most liberals would be better off poor working hard on the family farm than living on drugs and welfare in big fancy houses driving big fancy cars in the big cities without any garden, cow, or source of quality food. May be time to ship them back to where they came from so they can grow it themselves. Would do wonders for government budgets not to have to pay them to eat themselves sick and then to pay doctors to try to fix them or exterminate them.



http://www.weightcommander.com/burgerking.html
Burger King Nutrition Information



Calories Fat Carbs Fiber Cholesterol Sodium Protein

Saturday, November 12, 2011

Move to Israel for the Lifestyle and Opportunities

An educated, clean, safe, high tech, cosmopolitan city. Better than most USA beach cities. Sunny Latitude 32 prevents heart attacks, osteoporosis, cancer and other ills. Latitude south of San Diego, north of Panama City Pensacola Florida. Like between Dallas and Austin Texas but on the beach! Entrepreneurial center for starting high tech businesses. All USA has now that is comparable is Los Angeles crowded with illiterates and a collapsing education system is increasingly noncompetitive. You have to go to where the opportunities are.



http://www.nytimes.com/2010/01/12/opinion/12brooks.html
Jews are a famously accomplished group. They make up 0.2 percent of the world population, but 54 percent of the world chess champions, 27 percent of the Nobel physics laureates and 31 percent of the medicine laureates. The Jewish faith encourages a belief in progress and personal accountability. It is learning-based, not rite-based.



Tel Aviv has become one of the world’s foremost entrepreneurial hot spots. Israel has more high-tech start-ups per capita than any other nation on earth, by far. It leads the world in civilian research-and-development spending per capita. It ranks second behind the U.S. in the number of companies listed on the Nasdaq. Israel, with seven million people, attracts as much venture capital as France and Germany combined. Israel now has a classic innovation cluster, a place where tech obsessives work in close proximity and feed off each other’s ideas.



Tel Aviv is an economic hub, home to the Tel Aviv Stock Exchange, corporate offices and research and development centers. It is the country’s financial capital and a major performing arts and business center. Tel Aviv has the second-largest economy in the Middle East. David Kaufm0n named it the “Mediterranean’s New Capital of Cool”. The third “hottest city for 2011” (behind only New York City and Tangier) by Lonely Planet. Third-best in the Middle East and Africa by Travel + Leisure magazine (behind only Cape Town and Jerusalem). Ninth-best beach city in the world by National Geographic



http://www.ynetnews.com/articles/0,7340,L-3573481,00.html
New immigrant to Israel shares his new strategy for weekends. Shalom from Tel Aviv. Are you enjoying the gorgeous weather? I sure am. With the day job continuing at a fever pitch, I’ve adapted a new strategy for the weekends. I like to call it “sit on the beach and do nothing.” I highly recommend it. Tel Aviv proper technically may be Israel’s second most populous city behind Jerusalem, but its metro area dwarfs that ancient city, and includes a large swath of Israel. It’s a lively, modern, and increasingly cosmopolitan destination that, if it’s not on your travel list, should be. Named after the utopian town envisioned by Zionist author Theodore Herzl in his turn-of-the century novel Altneuland (The Old-New Land), Tel Aviv certainly lives up to its lofty moniker. Founded in 1909 by the Jewish population of nearby Jaffa, Tel Aviv immediately became an immigration hotspot among both bourgeois Eastern European Jews and artists from all backgrounds. Located on the scenic Mediterranean coastline, the Tel Aviv of today is still a hub of economic and creative activity in the Middle East: Browse the trendy shops lining several of its major streets or don your bathing suit and bronze on its beaches; spend some time visiting museums and historical sites or sip coffee in small cafes still populated by literary types. Come nightfall, Tel Aviv kicks up the energy a notch, with fine dining, music lounges, and nightclubs that rival those found in London, New York, and Paris.

Friday, November 11, 2011

coins, debts, government defaults

Coins last much longer than paper currency and are hard to counterfeit and less profitable to counterfeit. Nowadays only criminals use currency. Why not get rid of currency altogether? Use heavy duty stainless steel tungsten dimes and dollars that will last 1000 years. Most people can continue to use their debt/credit cards. Criminals who insist on selling drugs should have to lug heavy sacks of coins where they will be spotted and jailed. USA can set a deadline for depositing currency into the bank at which point the currency becomes worthless. This would cancel past illegal profits and punish countries overseas that have ruined their currencies and forced their citizens to use stable USA greenbacks for transactions.



Do you think a new war is coming? I keep hearing the liberal news media bad-mouthing Iran. Has Mitt Romney cut a deal to bomb Iran if he becomes president? If Obama is going to bomb Iran why has he not already done it? What is going on behind the scenes? Who is going to pay for the war?



Oil prices have gone up even though Libya war is over and more oil should be forthcoming. I am worried that a new Iran war will disrupt oil supplies again and cause $10 gasoline at the pump. This will ruin the USA economy. I am also hearing some talk about USA bailing out Greece and Italy because our banks are too exposed to Europe and a collapse in Europe will quickly spread here. How can USA afford a Euro bailout in addition to our wars, oils, and welfare programs? Why should Americans have to work until age 75 so that Greeks can retire at 50? USA is still deep in debt with continued deficits causing even more debt.



It would be nice to get off the grid with my own cow, garden, solar, windmill and water. And still have access to the big cities, universities, and professional activities. I would like to move to Texas but the drought may be ruining Texas as a place to live. It is getting increasingly hard to find any good place without some serious imminent problems — weather, financial, racial, wars, drugs, allergies, smog. I may be forced into Minneapolis Minnesota 40 degrees below zero. 2 founding faculty won the nobel prize. I was doing similar work in parallel with them back in the 1970s influenced by gossip about their work before it was published. I sat in Sargent’s Matlab class back in 1987 and studied out of his earlier text. He is basically a time-series engineer. Attached is a long term inflation graphic from his NYU website probably indicating inflation or default may be a way out of the USA predicament. People should study these ideas!



http://minnesota.publicradio.org/display/web/2011/10/10/economics-nobel-thomas-sargent-christopher-sims/



Former U of Minnesota faculty win Nobel economics prize



STOCKHOLM (AP) — Americans Thomas Sargent and Christopher Sims won the Nobel economics prize on Monday for research that sheds light on the cause-and-effect relationship between the economy and policy instruments such as interest rates and government spending. Sargent and Sims - both 68 - carried out their research independently in the 1970s and ’80s. But it is highly relevant today as world governments and central banks seek ways to steer their economies away from another recession. “It is not an exaggeration to say that both Sargent’s and Sims’ methods are used daily … in all central banks that I know of in the developed world and at several finance departments too,” Both taught at the University of Minnesota; Sims was on the economics faculty from 1970 to 1990 while Sargent taught there from 1971 to 1987



University of California at Berkeley graduation speech Thomas J. Sargent May 16, 2007 I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words. Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.



1. Many things that are desirable are not feasible.



2. Individuals and communities face trade-offs.



3. Other people have more information about their abilities, their efforts, and their preferences than you do.



4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.



5. There are tradeoffs between equality and efficiency.



6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well meaning outsiders to change things for better or worse.



7. In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.



8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.



9. It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore).



10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.



11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves).



12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.



Thursday, November 10, 2011

Vegans

True vegans do not exist. There are some pseudo-vegans but they take various pills, supplements, milk chocolate, burger kings. I don’t think there are enough of them for good statistics, and they will lie and cheat especially when paid by soy bar companies. Studies on large Indian religious populations indicate the vegetarians live shorter than carnivores. Rats fed butter can live and reproduce but margarine kills them. It is hard to do good studies on such topics, especially when people are involved.



There have been many dietary changes in the past 80 years. War rationing forced people to eat more margarine and cheap plant products. They moved off the farm where they had access to natural free milk, butter, eggs and wild fish and game. Much more sugar, flour, and other plant products. From wiki: Margarine, particularly polyunsaturated margarine, has become a major part of the Western diet and overtook butter in popularity in the mid-20th century. In the United States, for example, in 1930 the average person ate over 18 pounds of butter a year and just over 2 pounds of margarine. By the end of the 20th century, an average American ate around 5 lb of butter and nearly 8 lb of margarine. Margarine has a particular market to those who observe the Jewish dietary laws that forbid mixing of meat and dairy products



Veganism is a religion that distracts from finding out exactly which fats, proteins, carbos, and fibers are needed and in what proportions. Whether the nutrients are found in plants or animals is irrelevant. If they are needed then people should eat them.



I am reading the book Professor Enig “eat fat to lose fat” the short new book of the previous bible. The book briefly summarizes many studies hard to find online or are expensive to buy. Cheap paperback on Amazon

Friday, November 4, 2011

Drugs, Brains, Sun, Cholesterol, Vitamin D, Race

Charlie Rose had an excellent brain program last night showing slides of reduced brain activity in drug users. I had noticed this personally, how organic pot smoking Humboldt hippies are amazingly stupid and do not even realize how stupid they are. The brain can continue to develop connections as people get older. College students still do not have a very well wired brain. Many never get properly wired. Wiring is made out of cholesterol. Skin needs proper sunshine to make cholesterol sulfate that is water soluble and can pass the blood-brain barrier and develop the wiring. West Texas hard water has lots of sulphur so the butter, cream, beef, eggs from that region are healthier.



White people need only 20 minutes in the sun to produce enough water soluble Vitamin D cholesterol sulfate. Black people need hours in the sun so are healthier in the equatorial environments. White people can live well farther north and spend more time indoors working calculus problems. Skin color determines the latitudes where the races are best suited to live, and that corresponds to where they were mostly living 100 years ago. The underground railroad and modern transportation has moved people to where they do not belong leading to health problems and social pathologies.



http://www.charlierose.com/view/collection/10702



Drug alcohol brain pollution images:
http://www.amenclinics.com/brain-science/spect-image-gallery/spect-atlas/images-of-alcohol-and-drug-abuse/

Wednesday, November 2, 2011

QE3?

Should the Fed buy underwater mortgages, liar loans, and other junk assets to help the fat cat bankers? If the Fed has so much money to waste why don’t they mail checks to veterans? Further, why don’t they quit buying government bonds and give that money to taxpayers? Seems to me that the federal government could fire most of the bureaucrats in Washington and save a lot of money. If they got rid of food stamps, medicaid, and welfare they could pay off the debt and quit issuing bonds altogether. Raising the retirement age to 70 would save social security and medicare for future generations. What is wrong with Washington DC? Do they want USA to become another Greece?



http://www.bloomberg.com/news/2011-11-02/fed-seen-laying-ground-for-more-large-scale-asset-purchases.html



Federal Reserve officials are probably engineering a third round of large-scale asset purchases “We are becoming increasingly persuaded that QE3 is coming, this time focused on purchases of mortgage-backed securities,”

Thursday, October 20, 2011

Silo Banking Reform

Banks give free checking now by investing the money that customers are not using. Banking reform idea:



Set up a special system of “checking banks” to issue all checking accounts. Checking banks hold the money until the customer writes a check or uses a debit card. Checking banks are not allowed to invest that money because they might lose that money. Instead they charge a fee for services — a swipe fee for debit cards, an ATM fee, a check fee for each check written and processed, a paper fee for issuing statements or online fee for access to online system if desired.



FDIC insurance applies only to checking banks. Risk is low because they will not gambling with depositor’s money. There will be dozens of such banks competing on the basis of low fees. If any bank fails only a few depositors will be affected and cleanup costs will be low. Most banks will be online because that is the cheapest. Federal law may require states to charter such banks and that state may require all employees to live in that state.



All checking bank managers must be honorably discharged from the military, never worked for any other kind of bank or financial institution, and post online their current GMAT test scores, college transcripts, credit reports, and other information. They should have a CPA, CFA, FRM or other professional certification. They should not consult or be on the board of any other company to avoid all conflicts of interest.



Then make other silos for investment banks, mortgage banks, commercial banks, consumer banks, land banks, common stock banks, bond banks, commodity banks, … Personnel would be specially trained for their industry. Investors would keep their money in their checking account bank for most purposes but when making an investment they would locate an appropriate bank and write a check to that bank. These investments would not be insured by the government. Consumers would have to pass an exam to invest in any of these risky banks to certify that they understand the risk of that investment. Consumers can diversify by putting part of their money in the different types of banks out there.



I get angry at JP Morgan Chase, Wells Fargo, and such banks trying to get me to invest in risky investments when all I want from them is a checking account or CD. Then later they want bailouts for them and their cronies. If they are so smart then why do they need bailouts? Why should I invest with them? Why don’t they work in an area in which they are competent? Bank of America and Chase both have very good online systems.

Saturday, October 15, 2011

Walk on Beach: Phages for Health

Do people need an excuse to walk on the beach every day? In addition to getting exercise and sunshine Vitamin D cholesterol sulfate. Another reason: seawater is filled with phages that kill germs. Guts and humans are filled with phages and bacteria that are needed for immune system and health. Phages can kill both good and bad bacteria. I wonder how the good bacteria defend themselves? Is this affected by diet? Phages can also kill good yeasts in wine barrels, cheese, buttermilk or yogurt. Control of phages can help control of good and bad bacteria and thus human health and the economics of numerous industries — produce more and better for less money. Interesting article and pictures of the phage gizmo linked below.



A bacterio-phage is a virus that infect bacteria. Phages are estimated to be the most widely distributed and diverse entities in the biosphere. Phages are ubiquitous and can be found in all reservoirs populated by bacterial hosts, such as soil or the intestines of animals. One of the densest natural sources for phages and other viruses is sea water, where up to 9×108 virions per milliliter have been found in microbial mats at the surface, and up to 70% of marine bacteria may be infected by phages. They have been used for over 90 years as an alternative to antibiotics in the former Soviet Union and Eastern Europe as well in France. Since ancient times, there have been documented reports of river waters having the ability to cure infectious diseases, such as leprosy. In 1896, Ernest Hankin reported that something in the waters of the Ganges river in India had marked antibacterial action against cholera and could pass through a very fine porcelain filter.



http://en.wikipedia.org/wiki/Bacteriophage#Role_in_food_fermentation

Wednesday, October 12, 2011

Generation Gap Biochemical Analysis

I believe much of the generational gap is biochemical. The generations are to some extent different races down to the DNA level due to different diets, lifestyles, environmental exposures and epigenetic evolution
http://en.wikipedia.org/wiki/Epigenetics#Epigenetic_effects_in_humans



Since WWII there have been dramatic changes in biochemical factors so the older generations are less afflicted. I am just starting to study neuroscience and biochemistry of social phenomena. Quite a lot has been discovered but I don’t know of any good compendium. Labeling the generations X, Y, Z, etc. are often sociologists who do not understand the basic science. There may be no such easy categories but various trends and cycles. I think my label would be “modern” whereas the newer generations would be “postmodern” but labels are nebulous
http://en.wikipedia.org/wiki/Postmodernism#Contested_definitions



Some of the factors affecting the new generations include:



Bombardment by electrics and magnetics that affect health and thinking ability. Then the flood of liberal influences by TV, radio, iPod, games,…



Dramatic drop in physical activity. Sitting on and damaging testicles (they are located outside the body to cool off and function correctly). People used to do difficult and dangerous physical activity 12 hours per day to survive.



Huge numbers of chemicals added to the food supply. Pesticides, herbicides, fertilizers,… Many are proven dangerous by themselves. In combination the hazards multiply.



Huge amounts of drugs, legal and illegal. Hazardous waste left by drugs. Drugs get into the water supply. Each drug is dangerous. In combination the hazards multiply.



Food composition has changed dramatically in terms of fat / carbo / protein ratios and within those categories the types of fat carbo protein vitamins and minerals have changed dramatically. For example people now avoid cholesterol yet cholesterol is concentrated in the brain and is required for building new learning grey matter so deficiency will cause low test scores, Alzheimers, Autism, and schizophrenia — epidemics in what were previously rare disorders.



Lack of sunshine required to produce Vitamin D sulfate and Cholesterol sulfate required for many physical and mental processes. The best forms cannot be found in pills. 90% of Americans are deficient. Why people like Galveston, Florida, Hawaii, Palm Springs, Santa Fe, West Texas, sunbelt … Darker people need more sun so negroes are especially damaged by living in cold dark northern cities. I can do ok in Seattle, Boston,…



Numerous such changes are causing the new generations to be much more dysfunctional than the previous generations. The new generations are often more alien than many of the illegal aliens from Mexico.

Tuesday, September 27, 2011

Homeland Security Failed?

Are we sitting ducks? Should USA cut budgets of the DHS Department of Homeland Security? Seems they are more into oral intercourse than protecting the USA. USA needs more computer scientists. Jobs now cannot be filled without importing more Chinamen and Indians. Affirmative action has failed but may account for many hires at the DHS. Merit should be used to select the best students and employees who will be loyal to the USA. How can we get more Americans to study Math and Computer Science and to eliminate preferential hiring and admissions to those less qualified?



http://www.csmonitor.com/USA/2011/0922/From-the-man-who-discovered-Stuxnet-dire-warnings-one-year-later



Stuxnet, the cyberweapon that attacked and damaged an Iranian nuclear facility, has opened a Pandora’s box of cyberwar, says the man who uncovered it. A Q&A about the potential threats. One year ago a malicious software program called Stuxnet exploded onto the world stage as the first publicly confirmed cyber superweapon – a digital guided missile that could emerge from cyber space to destroy a physical target in the real world.

Iraq war a waste? Really?

Some contractors got a guilty conscience and are revealing what they saw and did. Links to a free chapter and a podcast interview below.



Muslims still don’t like gays, drugs, debts, jews. Why no Age of Aquarius in the Garden of Eden? Was it all a waste? Another big government spending project gone bad? Can Obama fix this mess or is he doomed too? Time to cut some budgets?



Podcast:
http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=140711553&m=140802814
http://www.npr.org/programs/fresh-air/
The Greedy Battle For Iraq’s ‘Hearts And Minds’ In 2009, Peter Van Buren joined a team working to rebuild Iraq’s infrastructure and economy. For the next year, he encountered comically misguided projects, greedy contractors and oblivious bureaucrats. In his new book, We Meant Well, he recounts the ground-level waste and corruption he saw.



Book:
http://www.amazon.com/We-Meant-Well-American-Project/dp/0805094369



We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People American Empire Project
Peter Van Buren

Thursday, September 22, 2011

Gold does not glitter

Good article. I agree and add that the USA government is more likely to sell gold than to buy more of it. If they sold all of it they could pay off 3% of the USA national debt! Wow! China is doing fine with 1.6% of its foreign reserves in gold. India has 8.7% of its foreign reserves in gold. They did not want gold when gold was cheaper, why would they want more gold now?



One reason for confiscating gold would be to spur investment. If the USA gave investors $1800 per ounce of gold then those investors would put some of that money in the bank or some other profitable investment activity that would help the economy grow, help banks and people to pay off debts, etc. Confiscating gold would also stop gold salesmen and hedge funds from ripping off investors by promising pie in the sky that will never happen. Gold has limited value. High prices are only sustained by intense efforts by hedge funds and salesmen. If all the gold disappeared, the real economy would not blip. There are better metals for jewelry nowadays that were too difficult to work with in the past.



I would not be surprised to see gold price drop to $500. Especially if some funds get into trouble and need to unload some of their positions. They are so tied up with derivatives that whenever big trends reverse they have to trade big to prevent collapse. For most assets, prices rise slowly along an exponential growth curve until they hit a cusp and then crash. Nobody is good at forecasting the exact timing of crashes even though they know a crash is coming. Thus they hedge themselves using derivatives that often make their position even more risky if they do not know what they are doing. Investment is hard even for experts.



http://lewrockwell.com/north/north1038.html



Wednesday, September 21, 2011

Split Banking

“Split Banking” discussed in the British article below is what I have recommended for a long time. Back in the old days Glass-Steagall split off investment banking from retail banking and set up firewalls that worked fine for a long time. Deregulation allowed mergers to form super banks “too big to fail” —- they could gamble with savers’ money and threaten taxpayers with losing all their money without government bailouts. In split banking the investment banks could be allowed to fail without damaging the retail banks that hold most savers money and handle most transactions. If the rich fat cats lose money in the investment banks who cares? That is the free market system.



Also back in the old days banks were restricted to one state. That is also a useful firewall to contain damage from a bank failure. Nowadays with electronic movement of funds we do not need the pony express to move money from state to state —- indeed technology should allow more choice and specialization, not less. There would be no loss of efficiency in forcing banks to operate in one state. Abandonment of traditional rules and regulations is a recipe for disaster.



http://www.garp.org/risk-news-and-resources/risk-headlines/story.aspx?newsid=34747

Friday, September 16, 2011

http://www.omaha.com/article/20110916/MONEY/709169946

http://www.omaha.com/article/20110916/MONEY/709169946.

Poverty, Obesity, Hunger

Amazing paradox. The poor are Obese and Hungry at the same time. Might government programs, welfare, food stamps be to blame? What if they were shipped out of New York City and given 40 acres and a mule? New York City has a shortage of engineers. Will they ever become engineers? Instead of shipping food to their farmer’s markets why not ship them to their food? Why don’t they eat vegetarian and run marathons and study calculus? I find liberals to be a puzzle. Further this is a major national economic problem. I think it can be solved by elimination of some government spending and more taxes, rules and regulations. Tax junk food and drugs and fat people. Limit the sugar, flour that fat people can buy. Outlaw GMO. Require school lunches to include broccoli, cauliflower, turnips, carrots, brussels sprouts, kale, chard, etc. etc. Require all politicians to exercise daily, keep their weight/height low, IQ’s high, and eat only healthy food.



Excellent article in the Times:



http://www.nytimes.com/2010/03/14/nyregion/14hunger.html



the most severe hunger-related problems in the nation are in the South Bronx, long one of the country’s capitals of obesity: the hungriest people in America today, statistically speaking, may well be not sickly skinny, but excessively fat.

Tuesday, September 13, 2011

Alternative Investments: Guns vs Paintings

You might be able to make a profit by investing in guns, but you will get more capital gains by moving to New York or Santa Fe New Mexico, studying art and investing in paintings. With the rich getting richer, all sorts of collectibles will grow in value if they become popular with the rich. Paintings and rugs are needed for large houses. Some kinds of stamps, jewelry and furniture will also do well but Paintings are the best investment over the long haul if you study the market carefully. See the Moses Mei price index:
http://www.artasanasset.com/main/
2000 year old Chinese painting attached. The singing bird pistol
auction was in Hong Kong
http://www.bloomberg.com/news/2011-05-31/christie-s-5-8-million-singing-bird-pistols-lift-hong-kong-sale-to-record.html



If you don’t want to study or farm, the USA S&P500 stock market is paying 2% dividends and in addition to dividends the value has grown from 5 to 1172 since 1871
http://www.multpl.com/s-p-500-dividend-yield/
Is not rocket science, just throw a dart at a newspaper to pick your stocks. The easiest investment.



Even in a deflationary environment you can find some inflating assets. What is relevant for the overall price level is how many dollars people have to pay for what they buy relative to what they get paid. Nowadays they buy a lot but don’t work much. Hence, they get fat, lazy, and stupid.



Best Jobs vs Student Loan Default Rates

The student loan default rate is over 10% and climbing. There are a trillion dollars of such loans, federally insured, so the taxpayer is on the hook. Subprime student loans may cause another crash as did subprime home loans so I hope they cancel eligibility for all institutions with more than a 5% default rate. Link to article below with the statistics



CollegeResults.org is a useful web site that gives all sorts of info on most colleges, including tuition, test scores, race, gender, loan default rates, dropout rates, etc. Regions vary widely in their support of education and quality of student.



Millions of high-paying U.S. jobs have no workers to fill them because applicants lack the education. New York City is trying to import Californians start an engineering college. Jobs in science and engineering make up 3.8 percent of New York’s workforce compared with 6.9 percent in the San Francisco Bay Area and 7.4 percent in Boston.
http://www.bloomberg.com/news/2011-09-13/stanford-s-hennessy-seeks-support-from-alumni-for-nyc-engineering-campus.html



Los Alamos Santa Fe New Mexico is even better than Boston: better people and better weather. More Phds per capita.

Monday, September 12, 2011

No hyper-inflation

Rich people do not want inflation, they want all the money and low prices. Bankers are rich. Bankers own the Federal Reserve. The rich also own the president, house and senate of the US and all the states, and the military, and the oil companies,….



The rich are winning. They are getting what they want and nothing can stop them unless the people unite 51% to elect different politicians. But the people have diabetes, addictions, aids, obesity, stupidity, and a host of problems. They get their info from the liberal news media that divides them into warring camps that will never get 51% of them to agree on anything. Just as the rich plan in their disinformation campaigns on the media.



USA can’t get inflation when most are in debt and can barely pay their mortgage, car, and credit cards. They don’t have enough money to splurge on high priced items. They cut corners wherever they can. The rich know that so they let prices stay low and they keep coming up with cheaper items such as ipods, laptops, tablets, GMO grains, artificial flavors to placate the sheeple and stave off revolution. Overall prices have been falling relative to incomes and what people “like.” Bernanke gave up on QEIII. Rich do not care about unemployment because they do not have to work. There is no reasonable scenario for inflation unless something changes such as a Rick Perry war on Iran $10 per gallon gasoline.

Food stamps, liquidity, money supply

Cash back is allowable, with different policies for different states, stores, banks, etc. Some links below. Regardless of the attempt at social engineering, the recipient can use their food stamps for food thus freeing up cash for alcohol, tobacco or whatever. When they get something for nothing they will develop attitudes of parasitism i.e. milking the system instead of contributing to it. TV, radio, movies valorizes consumption over production, hence many social problems.



Food stamps are dangerous in a nation suffering from an obesity epidemic and should be opposed on ethical grounds. Poor, uneducated, and minorities tend to be fatter.



The balances on all electronic cards: EBT, Social Security, Debit, etc are part of the money supply and handled by the banking system in routine fashion. These balances are often small because people often spend them quickly.



Money and liquidity is increasingly hard to define and travels at the speed of electricity. Home equity can be tapped, converted to Italian currency, and Lamborghini bought within a few minutes, not showing up in the end-of-day money supply tally at all. Other assets are even more liquid.



Illegal drugs are a liquid asset that is not tracked. Food stamps can be swapped for illegal drugs, although not as easy as cash. USA has too much of an underground economy that is diverting attention to what is really needed: broccoli, carrot, tomato, etc.



http://en.wikipedia.org/wiki/Electronic_Benefit_Transfer
Cash benefits may be used to purchase any item at a participating retailer, as well as to obtain cash-back or make a cash withdrawal from a participating ATM. Most states’ online EBT systems are interoperable through the Quest network



http://www.gettingfoodstamps.org/ebtcard.htm
Can you get cash back at the grocery store from SNAP/food stamp benefits?
You can only receive cash back if you have both cash welfare(TAFDC) benefits and SNAP/food stamp benefits on your card. If you want to use your cash welfare benefits to buy food or get cash back, you have to swipe your EBT card in the machine a second time



https://www.ebt.acs-inc.com/
Replaces paper food stamps and checks
Safer and more secure than carrying cash or checks
Faster payment
Convenient and easy to use
WIC EBT
Replaces paper coupons
You don’t have to purchase all of your WIC food benefits at one time
The receipt given at the end of shopping shows your remaining WIC food benefit balance



http://www.ebt.acs-inc.com/ebtcard/mdebt/index.jsp
Welcome to the Maryland EBT card website! EBT stands for Electronic Benefits Transfer. You can use your card at the grocery store to spend your benefits and some grocery stores will give you cash back with your purchase.



http://www.mejp.org/ebt.htm
MAINE: If you want cash back with your purchase, you will need to either tell the clerk how much you want back or you will be able to enter the amount of cash back on the machine.

Friday, September 9, 2011

Horses vs San Diego Blackout

This is suspicious. Is the USA power grid so fragile? Are they covering something up? I lived in San Diego many years without air conditioning. It is not really needed. People are getting too soft. San Diego has the best weather in the USA. Properly constructed
houses do not need much air conditioning or heating, even in Missouri.



A power outage would not be such a big deal if people had more solar panels, windmills, stationary bike generators, horses, bicycles, etc. People should live where they can walk to most essentials. Bikes can go longer distances. Horses can pull heavy weights over long distances without paved roads or any imported oil. Horses are natural parts of the ecosystem and friendly vegetarian pets. Trains are the most energy efficient heavy haulers. Many modern problems are self-inflicted.



http://old.news.yahoo.com/s/ap/20110909/ap_on_re_us/us_power_outage



Authorities were focused Friday on trying to figure out how a mistake by a single Arizona Public Service Co. worker making a routine repair in Yuma, Ariz., could cascade across the Southwest.

Wednesday, September 7, 2011

Banking Panics and the Death of Capitalism

Interesting series of book excerpts on Bloomberg. Marx and others thought banking panics were signs of a dying free market. Instead the economy recovered. 150 years later the problem is obesity, excess, sitting, too many wasting time with TV, Radio, iPods, games instead of working. Economy is over-productive, giving people too much of what they want and not what they really need, including forcing them to work and work out. Has Obama finally killed the economy for good, or will it recover and prosper again?



http://www.bloomberg.com/news/2011-09-07/the-beautiful-minds-that-created-modern-economics-sylvia-nasar.html

Tuesday, September 6, 2011

Deregulation cause of Meltdown

The attached two charts show: (1) housing starts during the 2000s were below previous peaks and (2) total consumer credit actually grow slower during the 2000s Bush 2 era than 1990s Clinton era which in turn was grew slower than the 1980s which in turn grew slower than previous decades. Back in the old days credit grew exponentially but slowed to linear in the 1990s and did not even double during the 2000s. Now credit is falling! During Clinton, credit doubled from 800 to 1600 but during the 2000s never made it to 3200. Bush 1 was stagnant but Reagan doubled credit from 400 to 800.



FNMA and GNMA and mortgages have been around for a long time so their existence was not the cause of the crash. The crash was caused by deregulation that allowed the different kinds of mortgages to be issued differently and to be repackaged into derivatives without sufficient government oversight. Particularly bad was credit default swaps such as issued by AIG that would bankrupt AIG if too many mortgages went bad (as they did).



Back in the old days the smaller economy could handle more mortgages without serious problems. The problem was excessive pay for designing obfuscating derivatives. Deregulation allowed bankers to do what they were not smart enough to figure out the consequences of and really did not care. They traded short term gains for long term costs, realizing they could retire with those short term gains and let the taxpayers and investors pay the long term costs.



Much of the deregulation can be traced back to DIDMCA, a huge act that eliminated prohibitions on usury among many other provisions. I attach a paper discussing DIDMCA signed by Jimmy Carter in 1990 March. Reagan also rode the deregulation wave. Clinton finally repealed Glass Steagall and I was appalled, then not surprised at the debacle that followed
http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act#Repeal



Friday, August 19, 2011

No PPI inflation, depressing Obama bus tour

Inflation is not materializing, still far below the 1970s as the attached PPI graph shows. WTI Oil is $82 today so gas prices should fall further. If companies raise prices then people will not buy so there is a limit what they can charge for non-essentials. Companies are hoarding cash. People are paying off loans instead of spending so recklessly. Rich fat cat gays get lots of money, do not pay taxes, and hoard money or buy luxuries from abroad such as Bentleys, Bugattis, Mansions, Wines, Paintings by dead artists who are not working today, which does not provide jobs for Americans. Government is also cutting back. There is not much demand, not much spending growth. Looks like we are in permanent stagnation with not much inflation except in goods where they rich can screw the poor such as oil, food, medicine, and college. Black Obama’s black bus is like a hearse touring the country, an armada of doom further spreading depressing messages about the depressed economy. “The vehicle looks like a creation out of Batman and the president appears as Paul Revere of the Apocalypse.”
http://www.mitchellrepublic.com/event/article/id/55951/



If everybody is fearful and depressed they will hide out at home, not work or spend, and only come out to shoot at each other and thus cause a famine and political breakdown as in dark Africa. Are we in the early stages of a depression or will we just muddle along for years with little movement up or down? Seems the politicians have not changed their tune in years. Do they have any new ideas or is the current stalemate the best they have to offer? Is gridlock better than decisive action? Will our armies returning from victory in Iraq and Afghanistan save the day?



It is hard to get good price indexes for marijuana and other illegals:
http://hightimes.com/news/ht_admin/3074
Street Prices of Cannabis, Ecstasy and Cocaine at an All-time Low, Sep 10, 2006
http://www.priceofweed.com/directory



The Producer Price Index for finished goods rose 0.2 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This advance followed a 0.4-percent decrease in June and a 0.2-percent rise in May.
http://www.bls.gov/news.release/ppi.nr0.htm

Thursday, August 18, 2011

Urban Gardens

Another government program that should be cut is food stamps. I got stuck behind a lady with a rowdy brat in grocery store checkout who spent 5 minutes searching her purse for food stamps and cash because food stamps pay for some things but not other items such as her cigarettes. I think some use food stamps for junk food so they can spend their cash for drugs and contraband. USA has a glut of food and huge expanses of land that can be used for gardens. Liberals would benefit from the exercise and learning that comes with gardening and hunting and fishing. If we had fewer illegals there would be more space for legals. The article below discusses a promising trend to teach liberals how to grow their own food instead of becoming so dependent on government. There is also too much transportation of food long distance. Picked green, tastes terrible and costs as much as better local produce.



http://www.bloomberg.com/news/2011-08-16/atlanta-grows-lettuce-in-freight-containers-as-urban-farms-bloom.html



“People here are growing 24,000 pounds of food, everything from leafy greens to squash,” said the executive director of City Slicker Farms in Oakland, California that’s helped 170 inner-city families plant gardens in their yards. “If things cost $1.80 per pound— multiplied by 24,000 — people here are saving cumulatively over $43,200 a year,” Finnin said. “That’s money that can be spent in different ways.”

Wednesday, August 17, 2011

liquidity trap, deficits, balance of trade

Should Bernanke keep interest rates near zero for two more years? Doesn’t this penalize savers and retirees? Provide more fuel to speculators who want to borrow and trigger bubbles?



Are the Chinese right to be worried about their investment in US Treasuries? Shouldn’t China do more to correct the balance of trade by lowering their currency? Why should Chinese have to pay more to buy American ipods and Cadillacs? If China quit selling more in the USA than they buy then they would not have so many dollars to buy Treasuries. Seems they should let the China currency float upward to free market levels to solve their predicament.



Hilary Clinton was complaining about the loss of American ability to fund worthwhile ventures overseas that are in America’s interests. I wonder if it may be good if she had to stay home more? Is she our best representative? Is much of that money wasted anyway? Who is getting all those billions $ from opium and marijuana from Afghanistan?

Tuesday, August 16, 2011

CalPERS Lowers Target for Real Estate Investments, Boosts Stock

At some point retirement checks will be reduced. Medicare, medicaid, and social security may take a hit before Thanksgiving. CalPERS will take a hit later.



Finally after a 4 year real estate price collapse and large losses, CalPERS has figured that out and are moving money into the stock market (another mistake?). Why is management of that fund so bad? Should they be moved out of Sacramento and the corruptive political influences? Could they be forced to hire based on merit? Should that fund be split up into multiple managers so that a few idiots cannot ruin the whole fund? or would that allow more corruption? Should they be prohibited from investing in California properties, stocks, and bonds so as to force diversification?



Because employees jobs and houses are in California if something happens to the California economy then their pay, houses, and retirements will all suffer at the same time. Isn’t it better to at least put the retirement money into a geographical region and industries that are not tied to their jobs and houses so when one asset goes down the other assets may go up? High correlations are fun on the upside but are brutal on the downside. Are they paying enough attention to fundamental rules of diversification?



http://www.bloomberg.com/news/2011-08-16/california-pension-lowers-target-for-real-estate-investments-boosts-stock.html



Calpers lagged behind its target because real-estate holdings suffered “significant write-downs” during the housing bubble

Wednesday, August 10, 2011

Another Bubble, Liberalism, Rules, Regulations

Obama Geithner Bernanke are triggering another bubble. Low interest rates will penalize savers and retirees while at the same time giving more money to speculators who will drive up asset prices that will eventually bust. Aside: hedge funds are dumping oil and buying gold and farmland? While many prices are low others are out of whack because booms and busts distort relative prices. I paid $3.359 yesterday per gallon for gas and $3 for a cantaloupe. http://www.bloomberg.com/news/2011-08-10/being-like-soros-in-buying-farm-land-lets-investors-reap-16-annual-gains.html



I also have been following the riots in England and the negro flash mob attacks in Chicago, Philadelphia, and elsewhere. Criminals use cell phones and texting to organize criminal activities. They riot to divert police and then steal everything and beat up people. Reminds me of the negro riots of the 1960s made worse by modern technology. I remember 1968 when a gang of LA negroes stabbed a USC fraternity boy who went to his car to get his pipe. I have not to this day set foot on that campus. UCLA is plush and safe.



Liberalism is unraveling. People can see the problems and don’t like what they see. Spoiled brat baby boomers have ruined this country — we are now run by negroes, hippies, gays, draft dodgers, addicts, illegals, ball players, talk radio illiterates and uneducated “greed is good” check recipients with TV radio movie fried brains who have reverted to a wild, feral, jungle culture. They have infiltrated government, banks, companies, universities, churches and now are the majority and demand tax cuts now that they got money while in the past they wanted to tax the greatest generation that built up the wealth that they are now squandering.



How to fix this mess? Return to high taxes, rules and regulations instituted in the Great Depression and WWII would help get out of this mess. 1950-1965 were reasonably good years in the USA at least where I was living. Similarly return to traditional diet, exercise, education and civic duty standards. USA needs to take 2 steps forward for each step backward, rather than 2 steps backward for each step forward.



————————-
Blackberry its easy-to-use messaging service is attracting looters in Britain’s worst rioting since the 1980s. At least 770 people have been arrested in the capital since Aug. 6, when the violence began after a local black man, Mark Duggan, was shot and killed by police.

Tuesday, August 9, 2011

Crash, Economy, Statistical Framework

I am sure you noticed the stock market crash.  It may be irrational pessimism but there are lots of problems in the USA, Europe and Asia.  But many corporations are rich and flush with cash and making lots of money.  One question: Does the average consumer have enough money to buy what the corporations want to sell them?  High debt payments, unemployment, and taxes limit spending.  Also news on the debt is scaring people into not buying. It may be irrational pessimism or rational realization that taxes may have to rise in the future, and social security will be cut.  



Pep talk by Obama did not help.  Hopefully Bernanke can do better today. 



My fancy German-made keyboard quit working on my Apple macBook.  I just plugged in my old Dell keyboard which seems to work even though the layout and some keys are different and it is not as fancy.  Will continue to use to see if it works ok.  Maybe cheaper is better.  Lots of fancy cheap computers on the market.  I need to upgrade both my Windows and my Apple computers to stay up-to-date.  It takes a lot of time to get full benefit of fancy modern technology.  



Maybe people need less employment —- instead spend more time at home learning technology, cooking healthier food, building stronger families instead of hiring illegals to babysit, clean house, and cook junk food.  100 years ago the economy was much smaller — Modern conveniences were not affordable or available at any price.  Is a bigger economy better if all people do is waste their money on health insurance that pays for drug addict diseases, gay diseases, junk food diseases, and the vast sums spent on drugs, taxes to support liberal spending programs, excessively large vehicles, houses built too far from work by illegals on farmland causing food to be imported from Mexico at higher cost and lower quality? May be more steps backward than forward.



It seems to me that the size of the economy as measured by popular statistics is about 70 years out of date — it was a first attempt developed during the Great Depression. Nowadays there are computers and huge databases on products, quality, health statistics, and so on that can be a better gauge on the “real” economy. These don’t get reported on as much or at all. Also nearly ignored are the readily available flow of funds statistics by the Federal Reserve. Probably because these were not taught in college in a systematic fashion by any department nor are any good textbooks available. It is probably due time to upgrade the theoretical and statistical framework. Like Keynes said:



The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.

Tuesday, August 2, 2011

Gloom vs Capitalism, Democracy, and Money

There have always been depressed people waiting for the coming depression or the end of the world. Preachers and writers can get rich by selling them sermons and books. I remember Ravi Batra selling doom in 1985 at the beginning the greatest bull market of the century. I remember my colleague in the Air Force selling gold and silver in the 1970s. It worked for a while before a crash and a decades long bear market (graph below). He has come out of the woodwork and is back online writing gold sales pitches again. Ron Paul’s timing was worse, advocating gold after the bear market had already begun. The nature of markets is to be cyclical so if you forecast gloom you will sometimes be right. Similarly you can always say buy, buy and sometimes be right. The trick is to be right on both sides of the market —- when to buy and when to sell. Most cannot do that.



There is not much danger from the financial system in terms of hyperinflation — it would have happened already. USA has had considerable economic stimulus since 2008 from both fiscal and monetary policy but we are still stuck with a deflationary stagnant economy. The fed may have to try QEIII but it won’t trigger inflation any more than QEI and QEII. The deal in congress to cut spending did not include any tax increases. I don’t see another fiscal stimulus in this political environment unless the economy really does sink into a deflationary depression and Nancy Pelosi gets elected president sweeping in all democrats. Even then we will not get much inflation — too many forces working in the opposite direction.



Rich people own the banks, companies, and politicians and like it they way it is going now. The rich hate inflation because the poor would repay them in cheaper dollars. Now the rich have lots of money in the bank, low or zero taxes, and they are buying up everything of value and dumping the rest on the poor who face some inflation while the rich get falling or low prices on most of what they buy. The rich are squeezing the working people to cut back their retirements, medical care, and freedoms, and pay more for food, fuel, health insurance, and college. Most of what the poor gets are declining in quality as well as quantity. The poor are addicted, sick from junk food, sexual diseases, and blasted by TV, radio, ipods, preachers, movies to brainwash them to thinking everything is ok and all we need is to vote for X to make it better (even though X is part of the system that is causing their problems).



Such is the history of the human race. The rich get richer and a few elites, priests, kings, and nobles end up owning and running everything. USA had a period of a middle class, good education, and democracy but we have now returned to rule by elites. The elites sometimes make big mistakes but they will not allow inflation voluntarily — the 1970s inflation was due to a middle east surprise and was quickly stopped by Reagan. If there is another meltdown it will be the poor working people who will pay for the bailouts — the rich will not have to suffer inflation.



The main risks are from the real physical environment. The rich do not understand ecology nor does anybody else. We could see a serious ecological collapse leading to billions of dead people. Population is growing exponentially against a fixed, finite resource base and a very delicate ecology. This trend cannot continue. A catastrophe could easily occur. However, it is not clear when or how that will happen.



Before a die-off, civil wars and world wars are possible. Many people forecast wars over fresh water and other natural resources. Even Texas, New Mexico, and California today are in trouble from water and racial conflicts. But the wars may be decades away. The environmental collapse can happen at any time. Somalia is an example of these problems.

Wednesday, July 27, 2011

USA Broke, Sick

The attached graph shows that the cost of medical services jumped from $13 in 1947 to $400 now, over a 5% annual rate of increase. But since 1974 the cost has been growing over 6% per year. This has resulted in the following two GDP shares according to the attached article:



14.4% of GDP for the federal government tax collections, lower than most countries and the lowest share since 1950.



17.4% of GDP for health care vs a 9.5% for healthier wealthy countries. Probably Obama care and increasing sickness of the population will make USA costs rise further.



It seems these imbalances cannot be sustained because of increasing debt. USA will have to quit spending so much on health care or raise taxes to pay for it. Which will it be?



Most of the health care costs are for obesity, addiction, sexual diseases such as HIV AIDS, and Medicaid and Medicare. The costs are paid for by government or health insurance, both ripoffs that drive up the cost of health care for everyone. Is it fair to force people to pay for this mess or should we move to Panama for lower priced medical care?



My opinion is that the government should get out of health care except for the military and maybe medicare. Personal responsibility should be emphasized, such as eat broccoli and walk more. Most people don’t get sick until they are old and by then they will have saved enough to pay for it. I have been paying insurance my whole life and never got sick. The current system is a ripoff that needs to be cancelled.



Joe



ln(400 / 13) / (2 011 - 1 947) = 0.0535392998
ln(400 / 40) / (2 011 - 1 974) = 0.0622320295



http://old.news.yahoo.com/s/ap/20110727/ap_on_re_us/us_global_economy_tracker



This year’s federal tax revenues are forecast to equal 14.4 percent of gross domestic product, a broad measure of economic output, according to the Office of Management and Budget. That’s the lowest share since 1950, long before Congress approved expensive programs such as Medicare. Tax collections have been reduced by the recession and by tax cuts enacted in 2001 and 2003. Among 29 countries ranked by the Organization for Economic Development and Cooperation, only Japan and Spain take in less tax revenue than the U.S. as a percentage of GDP. When it comes to health care, the U.S. spends the equivalent of 17.4 percent of its GDP — by far the highest percentage among wealthy nations. The next highest is the Netherlands, where health care spending equals 12 percent of GDP. Among the 34 wealthy countries that belong to the OECD, health care spending averages less than 9.5 percent of GDP.



Wednesday, July 20, 2011

Tax the Rich?

Why is Obama cutting the top tax bracket again? That proposed tax rate would be a third of what it used to be, back when USA could win big wars quickly and amassed a huge manufacturing base where even an uneducated negro could move to Detroit and assemble cars that he could afford and have a middle-class life. Higher taxes would allow repayment of the national debt as under Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, and Clinton. It seems like nowadays the rich like Bill Gates and Warren Buffet are more concerned about curing HIV-aids in Africa and rebuilding Iraq and Afghan instead of rebuilding the USA. USA is becoming a third world banana republic as in Latin America (like Panama) with rich people living in gleaming towers in the big city surrounded by poor people pushed into slums and rural areas. If the USA rich people and politicians are so smart, why are USA businesses getting clobbered, banks going bankrupt, dollar tumbling, infrastructure crumbling, schools not educating, health deteriorating, jobs not increasing as fast as population? Maybe the rich should pay some taxes to help solve these problems as they did back in the good old days.



Historical tax rates:
http://www.taxfoundation.org/files/fed_individual_rate_history-20110323.pdf
http://www.irs.gov/pub/irs-soi/02corate.pdf



Monday, July 18, 2011

Borrowers Support Savers in Old Age

Pablo never saved, like most in the USA. They live in debt and die in debt. This is good for bankers who collect interest off Pablo and pay that interest to savers in retirement. Sooner or later we will get old and will need the Pablo’s to pay us interest so we do not starve in old age. Pablo has fun borrowing and spending all that money, eating junk food, movies, TV, radio, fancy cars, hubcaps, ipods. Pablo’s desire to borrow and spend now helps those who want to save and earn interest.



Pablo may die young from excess food and not enough exercise but that is good too because Pablo cannot afford to retire. ObamaCare will pay for his expensive diseases. Some people prefer to have a few good years for certainty than to live a long time waiting to die: live hard, die young, and leave a beautiful corpse.



On the other hand one good thing about staying healthy and living a long time is that when you die, you die quickly because your whole system is weak. For $300 you can get your telomeres measured that says how old you really are biochemically
http://antiagingnutritionnews.com/blog/1856/today-show-telomere-testing-reduced-price/
The Hayflick limit is around 120 years at which point you will die when your cells can no longer divide. Bad health practices can cut that to 40 years or less.
http://en.wikipedia.org/wiki/Hayflick_limit
You can see if you have been robbed of years of life. The usual suspects: diet, exercise, healthy habits.



I expect to see the limit of 120 years raised to 1200 years soon. That will be followed by raising the age of retirement to 1000 years. It is just biochemistry. Unfortunately this will lead to world population jumping from 7 toward 70 billion people and constant wars and maybe an eco-system collapse that kills everybody.



I think ObamaCare premiums should be raised for fat people, short telomeres, drugs, homosexuality, smoking and other health hazards that increase the need for medical treatment.

Sunday, July 17, 2011

Blankfein vs Pablo

Yes, Pablo and Blankfein are fulfilling their evolutionary roles. Pablo is reproducing like rabbits and having a good time while Blankfein slaved away doing god’s work through 18 years of difficult private schools and ivy-league colleges only to be taxed excessively to pay for Pablo’s government checks and health care expenses. In the free market there is always demand for near worthless assets such as gold and government mandated sub-prime loans so investment banks must figure out a way to meet that demand or they will be gobbled up by smarter rivals. Pablo will never understand if the contracts were legal or not because he never went to college and his mental abilities are crippled by obesity. But Pablo is still living in the house he cannot afford, like most of his cousins, and his other cousins are buying foreclosed houses real cheap. Like Pablo says “the best asset is a party!” The government or crooks cannot take away that party once it has been held. A bastard is still your own flesh and blood so if you reproduce like rabbits eventually you will take over the world, or at least so Pablo thinks.



In equilibrium there are a small number of Blankfeins and a larger number of Pablos. Unfortunately Blankfeins parents were democrats who voted for LBJ who ushered in a new set of Great Society welfare benefits. Blankfeins grandparents voted for FDR who set up SS and other programs. Blankfeins uncles developed GMO and other green technologies to greatly expand the food supply, and ipods and drugs to let Pablo stay happy for optimal reproduction. Bill Gates is giving his fortune to stopping AIDS in Africa so more will survive in that troubled dark continent. These policies enabled the Pablos to expand their numbers in far excess of equilibrium, worldwide as noticed by many US residents and also shown in maps at http://www.indexmundi.com/map/?v=24
The infallible pope is opposed to the most useful means of stopping this trend — maybe Martin Luther was right? Now Blankfein is getting worried that life has been made too easy by deflation and that the ballooning populations and government deficits threaten the existence of the entire species. We can only hope that Blankfein can figure a way out of this predicament but Ecology and Demographics was not part of his education and is not very well understood by anybody.



Lessons from the animal kingdom show that when prey reproduce faster than predators they can outrun their food supply and die off suddenly leaving the predators with nothing to eat so the predators go extinct as well. In human history we have have many examples such as Easter Island where the population dropped 80% due to ecosystem collapse and cannibalism:
http://en.wikipedia.org/wiki/Easter_Island#History
180 Spanish defeated 80,000 Incas
http://en.wikipedia.org/wiki/Inca_civilization#Spanish_conquest_and_Vilcabamba
The Aztec population also declined by 80%
http://en.wikipedia.org/wiki/Aztec#Spanish_conquest
In such cases, the Catholics won out over the native religions due to disease, infighting, and conquest. In the coming catastrophe Pablo may have big numbers, but he is in poor health, lacks knowledge, and owns legalized guns that can be used to kill his cousins and neighbors as they fight over scarce resources. Blankfein is holed up in the big city with the best funded doctors, cops and US military to defend himself or fly off if it gets really bad. After the big collapse we will see more Blankfeins than Pablos — The system is designed to ensure that future. Like they say “give a fool enough rope and he will hang himself.” Survival of the fittest has happened over and over in history and is the will of god.



Q: ———————————
Reviewing the Pablo Parable I now get it!! When Lloyd Blankfein, GS CEO, responded to congressional inquiries about any possible guilt feelings over his creating and selling derivatives KNOWN to be likely to fail, he said “I’m doing God’s work.” Many of us wondered (as did I) what he could possibly mean after openly acknowledging the creation and sale of “certain to fail” derivatives to various pension funds, widows & orphans et al.

Now it all makes more sense in light of Pablo’s plight. Blankfein and his bankster cronies are simply engaging in eugenics, an enhanced anthropogenic “natural selection” process. By inflating prices and reducing incomes to these groups of “useless eaters” they are culling the herd and paving the way for the “ubermensch.” They are accelerating natural selection and restoring, I suppose, the ongoing evolution of mankind. The human must evolve and adapt (to the banksters’ new paradigm), or die. What happens to the “masters of the universe” after the process is unclear at this point – maybe they’ll migrate to some other planet to continue the process.

Thanks ever so much for helping me to finally see the actual purpose of the Wall Street thugs.

Friday, July 15, 2011

Green Revolution vs Malthusian

These are all important points and get to the heart of the matter: what are people doing with their money? In a free market they are free to buy what they want, and that dictates what corporations must sell to stay in business. Both consumers and producers are poorly educated so they make poor decisions. I just learned about GMO problems a month ago and am not yet convinced GMO is a problem but am avoiding GMO. I just learned about lectins last week, a worse problem, and now will avoid them too.



However, GMO and lectins are not necessarily “bad things” just because they are unhealthy. The economy needs to produce these to prevent mass starvation. The world food system cannot produce enough alternatives to feed even half of our current 7 billions in the short run, or maybe never, without GMO, lectins and the like.



The poor SSI retirees etc. you speak of would not be alive to complain about inflation without the massive deflation in food prices and the increased production of food items and other life-support technologies including financial technologies that has occurred over the past century.



Around here I see daily thousands of fat white trash who are clueless as to how the system works and would not be able to survive and reproduce even 60 years ago when I saw their grandparents barely making it even with some modern technology and lots of spoils from WWII. In California the Mexican is more common, but they share with white trash an extreme dependence on an economy that has greatly pushed up wages with respect to the prices of food and other essentials. Such “progress” is to be the main goal of economic policy — balanced growth. White trash are born with these benefits, while Mexicans migrated here to escape a less financially sophisticated government and institutions. The Mexican derivatives exchange began in 1998 while the Chicago Board of Trade was established in 1848, for example, and played a major role in the development of the USA breadbasket.



Those who get their checks boosted due to CPI inflation may see that cut off as budgets get balanced. The CPI is a poorly constructed index that does not reflect what the average person can buy today. There may not be enough voters to force politicians to allocate money based on CPI. Even if they do, in a bankruptcy the court may not only refuse promised CPI adjustments, but cut the whole check in half or worse. If there is not enough money then it won’t be paid. The rich own the politicians and bankers who will decide what they want to spend on the poor.



Ultimately it is survival of the fittest. The rich will eat steak in New York City and Los Angeles and make history while the poor starve in the barrios or remote areas where nobody will hear them as has been going on for a long time as a law of nature http://en.wikipedia.org/wiki/Malthusian Nowadays there suddenly is a much bigger population, most overfed, widely dispersed and less educated, so when push comes to shove there will be numerically more misery. It will be interesting to see if the exponentially growing population slows down or shrinks before an ecological catastrophe. Graphs attached. Populations are like prices — what goes up suddenly is likely to fall back suddenly.



Q:
“Government checks adjusted for inflation?” If Pablo is on SSI there has
been no COLA for two years because the official indices say there is no
inflation. I speak with persons on a fixed income on a daily basis. They are both retirees and SSI recipients of all education levels. Pablo does not realize that his corn tortillas are now GMO grown and contain a variety of adulterants designed to fill space without changing the flavor while lowering the cost. The retired teacher on a fixed income DOES realize he/she is getting a Frankenfood because that person can read and investigate. But what is really important is the net profit of corporations. The human species be dammed.To many “eaters” anyway as the elite like to say. We are no longer persons we are now “consumers.”
     You are partially correct in that inflation per se is not the sole
direct cause of Pablo’s woes. Inflation is simply a hidden additional tax on Pablo’s already meager earnings. Thanks to institutionalized central bank currency debasement his earnings are like sand falling thru his fingers as he attempts to provide for his loved ones. Pablo may not be very sophisticated. He is unaware of the dynamics behind his predicament. Because he is a poor unsophisticated Mexican worker does not make him a gun and drug runner for the Calle cartel. He is most likely honest and god fearing and only wants the basics that more sophisticated others need as well. He doesn’t understand derivatives and auction rate securities.



     So if his air is polluted, his food adulterated, and he daily has a
corporate boot on his head it really does not matter whether it is being
done by a Mexican cartel or a member of the Goldman-Sachs or ADM gangsters who wear $5000. suits. They are moral equivalents.



Pablo is much like the young child in your lap or the pet dog at your
feet looking up at you with blind trust. As for what ultimately awaits those
who prey on the weak or naive. As the Bible says; “It would be better to
have a millstone placed on their heads and have them tossed into the sea”  
   

Two-Tier Medical System

I realized by 1972 that the rich have their own medical system and everybody else gets leftovers. Even if the poor marry a doctor that doctor is probably not as good as what the rich get. I was in Boston and knew people at Harvard Medical school who gave me this opinion. This can also be seen by the bell curve, where in any profession there are only a few people at the top in any field. I realized by age 20 that there is a dramatic difference in quality between the top producers and those a few rungs down. Medicine is especially problematic because the monetary incentives are wrong. Also medicine for a long time was affirmative action for rich white kids whose parents could afford to send them to medical school even though they were not as smart as many poorer kids including blacks, jews, and catholics. California colleges have been cheaper than those in Massachusetts so this allowed some smarter but poorer to rise to the top of the heap. But if they are good they will still treat only the rich who can pay cash. Kaiser, Blue Shield, Tricare are at best a training ground for doctors or more likely a dumping ground for those who are not good enough to treat the rich who can pay cash. One reason the rich cluster in certain expensive zip codes is that is where their doctors are, and their lawyers, and accountants, hairdressers, and all professional services. Birds of a feather tend to flock together.



Now we have the phenomenon known as medical tourism where supposedly you can get the same work done for half price or less in Panama, India, etc. I looked at some online prices and it does not appear cheaper if you factor in quality and transportation. Indeed it may be a scheme to exterminate some of our excess population.



I have recently read studies that the better educated live longer, irrespective of income. Good health habits can also prevent needing a doctor in the first place. Given the above system, I would recommend avoiding doctors unless absolutely necessary. Invest that time into study and practice of good diet and exercise.



Q:
I wonder what if any correlation was found between income as a predictor and education level as a predictor. Presumably better educated persons make better lifestyle choices throughout their lives. Higher income persons have access to state of the art diagnoses options and treatments but may have unhealthier lifestyles. These two categories may greatly overlap but they are still mutually exclusive.



“Best health care system in the world”? There are at least two health care systems in the U.S. At the bottom rung are for profit corporations available to the average working person. These offer low co- pays for checkups and routine testing but little in the way of high end treatment. At some point a difficult case is retired to home and painkillers. Kaiser Permanente is representative of this group. At the other end are institutions such as Sloan-Kettering available to the uber wealthy. This may be why you see billionaires such as David Rockefeller and Kirk Kerkorian leading active lifestyles well into their 90s while the average American is an overweight borderline diabetic popping Vicodins by the age of 50.

Thursday, July 14, 2011

Inflation: Conceptual problems

Assume that starting in 2001 that prices double in one year, then fall in half the following year and the cycle repeats indefinitely.



2001 2002 2003 2004 2005 2006……
price 100 200 100 200 100 200…..
%ch 100% -50% 100% -50% …



This gives an average rate of inflation of 25% per year (100-50)/2.



Consider Pablo in the Porterville Barrio who lives on government checks that are adjusted for inflation so that they also double or fall in half each year, say either $10,000 per year or $20,000 per year. Assume he spends that whole paycheck each year and buys exactly the same basket of goods each year. Despite the raging inflation rate of 25%, his consumption pattern is totally not affected. He consumes the same basket of goods each year. This shows that inflation does not impact people if prices and wages move in tandem. The price level per se does not add any information.



Pablo is still eating too many tacos, getting fat, breathing smog, and spending too much money on drugs, guns, cigarettes, beer, hubcaps, gold, and silver. He is uneducated and is not getting enough work done so will be replaced by cheaper illegals. He will probably not live very long — if he does not get shot he will get diabetes, cancer or a heart attack. All these problems are not solved or caused by inflation.



Another problem with inflation indexes is that people do not buy the same basket of goods over time. It is an apples and oranges problem. If they buy 5 oranges for a dollar one year and 6 apples for a dollar the next year have prices gone up or down? A conceptual problem.



Another problem with inflation indexes is that people tend to substitute away from expensive goods toward the cheaper goods as prices change over time. Turntables and vinyl records can be quite expensive in comparison to an ipod and not get video. Students can pay $200 dollars for an ipod touch that can watch free videos all day at a higher quality and more portable than they could decades ago. This may be one reason they spend more time watching music than working with their 20 pound $200 Calculus textbook — some skip the hard classes and build up a large student debt without learning anything, like Pablo.



There are too many conceptual and practical problems with the inflation indexes to get very excited about them. People who are smart enough to solve some of these problems will not do it because they are getting rich in other fields of endeavor. Trying to fix Pablo after he crashes will pay well even if it does little to help him. That is rehab, physical therapy, medical insurance, medicare, counseling, auto-body, etc.

Monday, July 11, 2011

Negative Real Interest Rates?

They are really positive real interest rates. Nominal interest rates are near zero but prices are falling in absolute terms or quality adjusted terms. House prices have been falling for years, as have computers, and many other items. Some items may go up in price but their quality is going up faster. Even a cheap used car nowadays is cheaper than the new ones a few decades ago but are far more reliable and luxurious.



The CPI and such indexes do not properly account for quality or they would show a massive deflation over the last century. The quality of goods for sale today is very high. I never even imagined an ipod, cell phone, or PC when I was a boy and millionaires could not afford them but nowadays they are commonplace and an incredible variety of items are now available in our local small-town shopping center that you could not buy in New York city at any price a few decades ago. Interesting 60 minutes film of San Francisco April 1906 just before the great quake:
http://www.cbsnews.com/8301-504803_162-20019755-10391709.html
People are rich now and pay more to buy higher quality. There is no theory on how to adjust CPI for quality. You can read some of the BLS articles and see that they run a lot of regressions but do not have any theory as to what these mean — they are just printing out a lot of numbers to confuse the numbers so they can give retirees a few crumbs while the rich fat cats take over the country:
http://www.bls.gov/cpi/cpihqablsbib.pdf



What we are seeing is one of the Friedman rules that sets interest rates to zero and deflates the currency. Go ahead and put your money in a bank at zero nominal interest rates because anything you want to buy you will be able to get something better or cheaper within a few years. Especially gold and silver which are still in a bubble. The zero real interest rates are really positive in a deflation.

Sunday, July 10, 2011

Climate, Income, Diet, Long Life

High income and long life are positively correlated as shown in the attached graphs. However, both income and longevity can be caused by underlying factors such as diet, weather and geography. Most rich people live in big cities near the coast which has better weather than deep inside continents (often cited as an important cause of African poverty). The attached summary of a project at Yale shows some excellent graphics on economic activity on a fine-mesh grid. More detail work is needed to trace down the exact causal pathways. Fogel found that the high calorie diet since 1700 caused an “increase in human body size of over 50%, and an increase in longevity of over 100%.



Cool climates also trigger brain activity that cause economic activity that causes higher income. Cool climates also trigger physical activity that leads to better health and better diet that leads to longer life. I feel more sluggish on hot days and perform much more slowly physically and to some extent more slowly mentally as well. The best dairy comes from cool climates: Jersey, Guernsey, Wisconsin, etc. Good diet is required for good health, as discussed by Fogel.



http://www.amazon.com/Escape-Hunger-Premature-Death-1700-2100/dp/0521004888



Escape from Hunger and Premature Death, 1700-2100 is an extension of Fogel’s briefer 1993 Nobel Prize Lecture. It provides a synergistic view of the impact of increasing human environmental control on the demographic, economic and physiological conditions of successive generations over the past 300 years. According to Fogel, the interaction of these forces has over this period, and most dramatically over the last century, brought about a new stage of evolution —- non-genetic “techno-physio evolution.” He indicates this is evidenced by an unprecedented positive change during this period in caloric intake of about 250%, human body size of over 50%, and an increase in longevity of over 100%. Pointing to the future, Fogel’s extrapolation of data over the last 140 years in optimal life circumstances, suggests that centenarians will be common by the last quarter of the 21st century. During the past three centuries there has also been an accompanying substantial decrease in the hours it takes each day to earn one’s daily bread and increase in the percentage of discretionary income.

Friday, July 8, 2011

Oil Price versus Milk Price

The attached chart shows that oil prices are high after a common inflation adjustment. This agrees with my personal observations. But many cars get better mileage than they did back in the 1970s, sometimes double or triple the mileage. Also people can walk or take the train to work to mitigate the high prices.



I remember paying .33 for gasoline in the late 1960s and now prices are up tenfold to 3.33 per gallon of gasoline. That same .33 would buy a quart of milk that now costs 1.33 so the price of gasoline has gone up more than the price of milk.



Nowadays the price of a gallon of milk about the same as a gallon of gasoline, although milk prices varies widely. Back around 1970 gasoline was much cheaper. 40 cents versus 99 cents.



Milk has deteriorated in quality more than gasoline. Cows are stuffed into factories and fed chemicals and breath smog resulting in foul tasting milk. My grandparents had a cow that produced better tasting milk. Nowadays good tasting milk can be found but you have to search around for it and pay more.

Wednesday, July 6, 2011

Are Bankers Overpaid?

These NYU professors analyzed 100 years of history and prepared the attached graph. A U shaped pattern appears. The regulations after the crash of 29 great depression drove talent into other professions such as fighting wars. During the booms of the 1920s and 1990s that talent moved back into finance and banking.



Will banking pay remain high due to the increasing size and complexity of the global financial system and the computational mathematical infrastructure of that system? I wonder if even 1% of college graduates even know about this system or if even 1% of ivy-league college graduates have a good idea of how it works and the theoretical rationale of financial derivatives?



http://sternfinance.blogspot.com/2008/11/are-banker-over-paid-thomas-philippon.html



Employees of the financial industry have enjoyed very high compensation in recent years. The bonuses of Wall Street reached more than $200,000 per employee in 2007. Bonuses fell in 2008 but remain surprinsingly high in light of the industry’s dismal performance. So, are bankers over-paid? The history of wages and human capital in the US financial sector turns out to be quite fascinating. Before I spoil the suspense by showing you what actually happened, ask yourself what one should expect. Here are a few hypotheses:



- “Textbook economics” hypothesis: finance has always been a relatively high skill/high pay industry. So financiers have always been more educated and more highly paid than the average worker, and this reflects an efficient allocation of human ressources.



- “Bankers as parasite” hypothesis: finance wages are unrelated to their true contributions to economic prosperity.



- “Stock market” hypothesis: when the stock market goes up, wages in finance go up (why this should be the case remains unclear, however)



- “Computer” hypothesis: all these traders and managers have seen their productivity boosted by computers and IT. This is why they earn so much.



These are just a few extreme hypotheses, and they are not mutually exclusive. It turns out, however, that none of them is correct.



Historical Evidence



Ariell Resheff and I have analyzed human capital and wages in the US financial sector over the past century. Our analysis reveals a set of new facts. First, the relative skill intensity and relative wages of the financial sector exhibit a U-shaped pattern from 1909 to 2006. From 1909 to 1933 the financial sector was a high skill, high wage industry. A dramatic shift occurred during the 1930s: the financial sector rapidly lost its high human capital and its wage premium relative to the rest of the private sector. The decline continued at a more moderate pace from 1950 to 1980. By that time, wages in the financial sector were similar, on average, to wages in the rest of the economy. From 1980 onward, another dramatic shift occurred. The financial sector became once again a high skill / high wage industry. Strikingly, by the end of the sample, relative wages and relative education levels went back almost exactly to their pre-1930s levels.

Monday, July 4, 2011

Inflation or Deflation

I don’t think there has been as much inflation as commonly assumed and reported by CPI — that is only an illusion caused by comparing apples with oranges and not taking into account quality or variety. I go shopping every day in dozens of stores. Prices are not that much changed since the 1960s but there are vast improvements in the quality and variety. In one case I get to see them still selling the same old vinyl LPs for $1-$5 in the shopping center right next to Walmart where you can get Lady Gaga for $15 in a more useable format. The new stuff sells much better than the old, nobody wants the old stuff, they have “substituted” into the new. People have a lot more money now and buy a lot more stuff and it is fancier. They make a lot of poor decisions and waste a lot of money but that is the free market. They are not suffering from high prices but from their money being able to buy too much, especially junk food and fancy vehicles that deprive them of exercise.



Ultimately, individual people decide how much money they want to hold. The fed can influence this by offering to buy or sell securities and impacting interest rates. But it is up to the individual to engage in such transactions or not.



Always in a money transaction one party gives up some integer number of pennies in exchange for 1 or more items such as a bill, deposit, tire, sox, coke or whatever. I think what you are describing what is known as “helicopter money” where they fly over in a helicopter and throw bills out of the helicopter to citizens on the ground. This is not really creating money, it just changes its location and who has the money. I don’t think the PC printer version of that would work because people would think those printouts are a forgery and would not accept it for payment.

Friday, July 1, 2011

FOMC, Gold, Audit the Fed, Treasury

The FOMC operations are of public record and are accounted correctly to the penny and reported at http://www.federalreserve.gov/econresdata/releases/statisticsdata.htm
and can be verified by the the records counterparties to the transactions. They deliberately want people to know what they are doing so as to achieve the market impact they desire.



There have recently been a lot of other secret and semi-secret transactions, some reported later. There is a reason for secrecy — to avoid bank runs. But at some point, maybe within 2 years, I think all of these should be made public as well, and an “audit” should be periodically conducted to make sure all that information is divulged.



There is nothing physical, it is all paperwork, so there a physical audit would be a waste of time.



Gold is not really an issue because that is held by the Treasury. Should not be brought up when talking about the Fed or people will get confused and no audit will happen. Maybe the Treasury should be audited, but that is a different issue. Gold is a distraction, like Puerto Rico, might be good to get rid of but how and when?



Bloomberg and others have been suing to get at the Fed information. NYC is filled with journalists with inside contacts. Much is leaked into the press indirectly if one wants to follow the news that carefully. Anybody interested should move to New York and develop contacts. Eventually everybody will find out, but it will take years longer. You can get a good sense of what is going on just by talking to the right people. When large amounts of money move around they show up in all sorts of accounts. Banks are public corporations that have to file numerous statements.



There is a theory called “contagion” or something like that. My whole adult life I have seen little ideas by one or more people diffuse through the info food chain: 1) discussions 2) seminars 3) meetings 4) journals 5) books 6) textbooks 7) students 8) Media, TV, radio and it can take 5-10 years at each stage. Geography is critical. People on the east coast and west coast talk about different things even when discussing the Fed. The further away from the source of information the more the disinformation can thrive.



I don’t pay a whole lot of attention to these issues. Most trading systems do not need them. The main problems are theoretical — Bernanke and the whole crowd studied the Great Depression and are trying to apply theories developed then even though the financial system is greatly changed. It is not surprising we crashed in 2008. Like right now, house prices have declined yet most banks have not written down the value of the paper they are sitting on. There have been a lot of suggestions on how to do that but often not precise enough to be implemented. Basle II leaves much up to the banks but nobody knows how to do this right. The whole system has become a Rube Goldberg device that needs simplification, not further obfuscation.