"What this country needs is more unemployed politicians."  ~Edward Langley

May 18-19, 2013

 

 

 

Money Magic
Twittering to Death
Posterity's Debt To Me
Butchers, Bankers,Cong

Honest Money
Coping with Deflation
From Riches to Rags
Fiddler's Broken Wrist
Jack-lantern Wealth
Gold Confiscation

Look Out Below!
Poobahs of Positivism
A Wistful Vista


1948
An Unknown Road
Vern's Precipitation
IOU-nothing
Blood In the Streets
How To Buy Gold
Natalie's Predicament
America Descending
Just Plain Stealing?
A thing to fear
Unstuffing a Lifetime


Heavenly Sex

FDR & History
Chicken Little Convention  
Lead us not into temptation
My Obituary
 Legislature and Embryos  
Ac-cent-tchu-ate the Positive
What Fools, We Mortals


Unvarnished Truth
End-of-everything Blues
My Immigrant Relative
The Eloquent Pogo
Nesta's Complaint
Unionize School Children
Hucksterism Gone Wild
Unmanageable Religion

 

PUBLIC DEBT: May 8
$16,784,106,881,842.76


Viewpoint

Radical Independents 

Inflation in One Page

Cycle of Democracy



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   Coming to your nearest bank this fall.
New $100.00 Fed'l Reserve notes

   Bloomberg Business Week magazine takes us on a "tour" of the new $100.00 bill, scheduled to come into circulation in October.  The official reason for the redesign, as usual, is to thwart counterfeiters.  That blue security strip alongside Mr. Franklin's portrait ought to do the trick.  Unless counterfeiters can highjack skidloads of currency paper from the Crane Paper Company it's unlikely they will be able to print fake notes that will fool anybody.  

   Will the Treasury Department call in the old one-hundred dollar notes?

   Probably not, although it would flush the world of this popular paper currency.  All the older notes, including those "horseblanket" bills from the pre-1928 era are still valid as legal tender.  

   But the idea of scuttling the underground trade in paper currency - especially 100s - has probably crossed the minds of Treasury officials.  If they changed the present rule anyone hoarding $100.00 notes would be required to turn them in for new ones before a certain date.  This would put the hoarder in a spot.  He would have to explain why he was holding so much cash, or simply watch his stash become worthless.  Israel did something quite similar when it converted from the old Israeli monetary unit to the new shekel some years ago. 


  

    Almost 80 years have passed since a person could walk into a bank and swap paper currency for gold coins.  (It has been almost a half century since one could swap paper notes at a bank for silver coins.)

   The fact is, banks don't traffic in gold and silver.  Generations have been told that "money" is what Congress decrees - that is, paper Federal Reserve notes are legal tender.

   The folks at Agora Financial point out in the chart above, however, that the central bank of the U.S. - The Federal Reserve System - is apparently quite fond of gold even though it hasn't served its ancient role as money for a very long time.  The Fed holds more than twice as much physical gold as Germany.

   One argument is the Fed is storing a gold stash owned by the U.S Treasury Department and cannot sell it. Another is most of the official U.S. gold has long since been sold or loaned.  But assuming the graph is relatively accurate, and the United States government actually holds the largest gold hoard in the world, the question is - - should Joe and Jane Twelvepack bother hoarding any?

   We've spent nearly 50 years mulling that question and concluded that since gold has a track record as store of value for more than 5,000 years and has served the role of "money" on and off for several millennia, it probably makes sense to have some.  The ultimate "rainy day fund," one might say.

   Restless investors have lately been searching elsewhere for return on their assets, hence the recent price drop in the precious metals.  With inflation perceived as low and the U.S. dollar and the stock market showing strength, gold has lost some of its luster.  That could change very quickly.  If history be a guide, it will.


   "It took me 10 years to pay off my undergraduate degree and 10 years to pay off my graduate degree. My conservative values and upbringing told me that I borrowed the money for college and it was my responsibility to pay it back, in full, with interest."

David Dilts, Cary, N.C.

< A little breath of fresh air among the Letters to the Editor of the Wall Street Journal this morning. 

     College debt is said to have reached nearly a trillion dollars and a great many Americans think it's awful that young people be saddled with such debt.  But is it fair to send the bill to the struggling taxpayer?  

Bill has supper with Neil and learns a lot!
But where the $700 billion TARP went is still a mystery.

   Mr. Bonner went to Washington last evening for supper with the former head of the TARP fund, Neil Barofsky.  He asked Barofsky how the program turned out.

  Barofsky explained;  "It was amazing to me that no one knew. We gave [the money] to the banks. But no one knew what they did with it. I proposed to Tim Geithner that we find out. He was outraged. He cursed me out, using the F-word. He said it would bring the whole banking system down, if I asked.

  "I went ahead and sent out a letter. I didn't really have the authority or the staff to insist. But all of the big banks wrote back. And most of them gave me dodgy responses or gave me the brush-off.

  "What did they do with the money? They were supposed to increase lending to help bring about a recovery. None of them did that. Instead, they used it to repay each other's loans. In other words, they used it to reduce the amount of credit available... not increase it. And they bought US agency bonds... just as you'd expect. And they paid out their bonuses."  What Mr. Bonner Learned

  Recommended.  Mr. B. also tosses in a brief squib that explains why government spending does not usually help the financial position of average folks.  


Gallup Surveys the Retirement Scene      

      "The average U.S. retirement age has climbed to 61, up from 57 two decades ago, and it's likely to age higher, according to Gallup's Economy and Personal Finance survey.

     "The average non-retired American now plans to retire at 66, up from 60 in 1995, according to the Gallup survey."

<   It's interesting to see how views about retirement evolve.  We quit the workaday world at 70.  "Put out to pasture" as we like to say.  We have several years of retirement behind us and never found it to be quite the fun and frolic the recreation ads claim.,  Not being guilty of golf may be part of our problem. 

        The missus doesn't fancy retirement very much, either.  At 83 she speaks of it now and then but still puts in five 8-hour days a week at her workplace.  Her job description puts no cap on age, possibly because it never occurred to management someone would want to keep on after 65.    

 Rep. Stivers is playing a losing hand.

   U.S. Rep. Steve Stivers is tired of waiting for change. The Columbus congressman began pushing a plan more than a year ago  that would alter the make-up of pennies and nickels to a new, more-affordable composition using American-made steel.

   His proposal, dubbed the Cents and Sensibility Act, sat last year as a two-year study by the U.S. Mint on the topic was nearing completion. The results of that study? More study needed.

   Stivers’ response? Move ahead with an expanded act that would include dimes and quarters as well. The 50-cent piece and $1 coin were left off since neither are made or used in large volumes.  Reluctance to Change

   The Stivers plan isn't very good.  The better plan would be to merely stop minting cents and nickels.  Let dimes, quarter-dollars and half-dollars continue to be made from nickel coated copper until such time as Congress gets it act together and mints coins of more valuable materials, as directed by the U.S. Constitution.