Posts Tagged ‘value’

Kiss George goodbye

November 12, 2017

You can kiss ole George goodbye.

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

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

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

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

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

Dollar

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

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

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

Which isn’t as much as it used to be.

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

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

How much longer?

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

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

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

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

King of Soul 

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Time for the fiscal cliff plunge?

September 9, 2012

Back in the 1930s,  the United Kingdom was the declining economic power of that age, as the United States is today. During those turbulent early ’30s, the Brits were having some trouble balancing their accounts, and they didn’t have enough gold reserves to back up the money demands being made on their financial system. So they forsook the gold standard as a means of backing up their currency, the pound.

About that time, as this 21st-century yeoman internet-reader (me) hath been able to ascertain, the Brit economist John Maynard Keynes figured out that, even though the currency was no longer backed up with gold, folks were still passing money around and doing business as if nothing had changed. This discovery became, by and by, the basis for all monetary activity throughout the world for the last eighty years or so.

Money is money, whether there’s a vault full of gold.gov somewhere in England or in Fort Knox or anywhere else in the monetized world. That’s the point. We’re still passing the stuff around as if it had real value, even though there’s no gold backing it up. People love spending it, and the love getting it. Perhaps they always will, even when money becomes mere electrons.

Now we are running out of money again, so the financial markets and the stock markets are obsessing about whether the Fed will bail out our money system yet again, for the third time, since the big thrill roller coaster ride of 2008.

This morning, I encountered an article online by a fellow, Joseph Stuber, who seems to actually know what he’s talking about, and can explain the current ramifications of this money dynamic better than I can:

http://seekingalpha.com/article/852831-market-euphoria-continues-as-we-get-ready-to-jump-off-the-fiscal-cliff?

Mr. Stuber mentions, right off the bat, one morsel of truth that John Maynard Keynes left behind; it is this statement:

“The market can stay irrational longer than you can stay solvent.”

That’s basically what happened in ’29.

These days, the  whizzbangs who run the markets will work hard milking profits out of the system for as long as they can.

In fact, every stock trader will wheel and deal and play chicken with their suckerish counterparties right up until the time that the whole money machine runs out of fuel (imagined value), in hopes that he will be able to exit the game before the house falls and somebody else is left holding the bag of severely devalued assets.

Some of the perceived value of this market pertains to what Congress and the Fed will do, or not  do, to retain the integrity of our currency and, therefore, the value our entire economy.

Mr. Stuber offers two possible scenarios of what may happen when Congress attempts to (or pretends to) deal with the fiscal cliff that awaits us, come January. The so-called fiscal cliff is the deficit debacle that Congress shelved for a year so they wouldn’t have to contend with its difficult choices before the election.

My layman’s rendering of Mr Stuber’s two scenarios (extreme paraphrasing) goes something like this:

If Congress make a deal, like they did last year, to extend  the expiring “Bush” tax cuts, then we will muddle through the next year or two just as we have been doing. High unemployment will become the new paradigm, a semi-permanent steady state of dysfunction and financial misery for sizable segments of our population, and nothing much will change, or maybe, who knows? it will all get worse.

If Congress doesn’t make a deal, and the tax cuts expire, and the so-called “automatic” austere cuts of last year’s sequestration deal are put into effect, then the long-awaited economic correction that we’ve been forestalling since fall of ’08 will, at last, take its toll on our high-on-the-hog standards of living, and it will not be pretty, and recovery will probably not roll into effect until, say, 2017, or so, when our overvalued economy tumbles to a new (lower) foundation for true growth to get a foothold.

Someone should mention this to Mr. Romney before he makes as many vain promises as his predecessor did.

We shall what happens on Nov. 6.

And we shall  see what happens  when Congress re-convenes after the election.

In Charlotte on Labor Day, I heard Chris Matthews mention that the Dow, which was at around 8000 when President Obama took office, is now hovering around 13,000. Chris’ implication was that the President must be doing a good job, or the Wall Street crowd would have pulled their rug out.

Perhaps that is true. I think that Mr. Obama has done as well as can be expected of any Democrat, under the circumstances that were passed to him.

But the question arises: what has the level of bubblish value in our stock markets got to do with anything that is happening in the streets and factories and households of our country?

Meanwhile, back at the ranch, or the apartment, as the case may be,  what about you, Mr. America, Ms. America? What will you do this week to pitch in and help solve the problem?

Glass half-Full