"When the power goes out, so does digital money! Credit cards donít work. Debit cards donít work. ATMs donít work. You canít wire money in or out. Banks shut down. And donít even think about bitcoin ó thatís 100% dependent on electricity and the internet."   ~Jim Rickards

Curmudgeon's   Archive.

Cancel That Funeral
Who Supports Whom?
One Foot in the Grave
Magical Money  

Posterity's Debt To Me
The Battle for Honest Money
From Riches to Rags
Fiddler's Broken Wrist
Jack-lantern Wealth
Chance of Gold Confiscation

Poobahs of Positivism

Blood In the Streets
America Descending
Just Plain Stealing  ?
A thing to fear
Heavenly Sex
What Fools, We Mortals
Unvarnished Truth
Hucksterism Gone Wild
Religious Violence


October 17, 2017
    Jim Rickard's remark, above, sums up the cash flow problem in Puerto Rico. The Federal Reserve shipped wads of cash to the hurricane stricken area but its distribution, as with electricity, food, water, etc., has been slow.

    The lesson is - it doesn't hurt to have a few bucks tucked away in a sugar jar or under the mattress. It will come in handy when Mother Nature momentarily upsets the digital money system. 

    On the other hand, think of the little paper money hoards that may have been hidden away in private homes in California that were destroyed by the recent firestorms. The owners lost not only their homes but cash as well, unless they had time to stuff it in a bag and escape with it.

    Which brings us back to the present "War on Cash."  Fans of cryptocurrency and other forms of digital "money" believe electronic finance is the future.  There's no question digital transfer of financial assets is quick and convenient. People still paying their bills by check and snailmail are constantly reminded by their creditors they should "go digital" to pay their obligations.

    The anti-cash proponents are quick to point out that hand-to-hand currency is favored by many criminal enterprises. That's true, although the  big money usually finds its way through the "laundry" into the mainstream economy. It's understandable why regulators are suspicious when they encounter anyone carrying unusually large amounts of cash. In fact, law enforcement officers are permitted to "arrest" the money and hold it until the owner can prove he came by it by lawful means.

    But it cannot be said that digital finance is safer. Hackers make off with billions of dollars each year.

    Our guess is pocket cash won't disappear altogether, despite the fact authorities don't like the anonymity of it. Besides, it comes in handy when Mother Nature kicks up her heels and shuts the electricity down for a few hours, or days, or weeks. 

   We hadn't planned to spend any space on the Weinstein drama, but Montana artist Ben Garrison's summary of the allegations against the former Hollywood mogul is just too good to pass up.  See GRRRGRAPHICS.com.

Imagine! A Congressman suggests the federal budget should be BALANCED!
    Improbable though it sounds after all these years of stupendous budget deficits comes Rep. Rep. Mo Brooks (R-Ala.) saying any member of Congress who refuses to figure out ways to reduce federal spending and move closer to a balanced budget is ďbetraying their country and betraying the future of our kids and grandkids.Ē

   ďEveryone who refuses to examine this issue and come up with constructive ways to cut federal government spending so we can balance our budget and minimize our risk of insolvency and bankruptcy, everyone who refuses to do that is betraying their country and betraying the future of our kids and grandkids because they're going to suffer enormously from the burden that we're placing on those who have no right to vote because they're not old enough or arenít even alive yet,Ē said Brooks.
   His remarks will fall on deaf ears, but we give him a standing ovation for speaking on the subject.  Most Congressfolk cannot think beyond the next election and therefore have rarely given serious attention to the long-run impact of multi-trillion dollar public debt upon posterity.  As Richard Lamm, former Colorado governor once said, "It's like Christmas in reverse.  We get the presents and send the kids the bill."

   Simon Black at SovereignMan.com points out that Americans have $1.021 trillion in credit card debt Ė the most in history.

    He also notes that auto loans are at a record high $1.2 trillion, and the US government is in the hole more than $20 trillion.

     "But people continue buying homes, cars, TVs and college educations by taking on more and more debtÖ And now, by swapping one type of debt for another. I canít tell when this house of cards falls. But rest assured, it will come tumbling down."

     Mr. Black is not one of the run-of-the-mill Chicken Littles  daily predicting gloom and doom, but he shares our view that no individual, family, state, or nation can forever pile up debt without eventually coming to grips with the fact that all debt must eventually be paid...either by the debtor or the creditor. This is famously known as "The Day of Reckoning." 

     Borrowing money is not necessarily a bad thing if it's done judiciously.  The United States government itself has never paid off its debt since revenue and outlay data were annually reported beginning in 1792. 

      In the early days surplusses sometimes occurred and were applied against debt.  In 1834 the national debt was $34,000. (!)  Today the public debt is more than $20,000,000,000,000. 

      Washington politicos don't like to discuss it, but they believe they will somehow engineer a booming inflationary economy that will make the debt seem insignificant.  They have been able to inflate away the impact of growing debt in the past, but this dodge is not working as well as it used to.  Fed chief Janet Yellen says "It's a mystery." 

       Judging from TV programming people love "mysteries."  Or, at least, the blood and explosions featured in the cop shows.  Couldn't one of the networks risk an hour here and there featuring some adult conversation about the nature of money and credit?   
   Galloping toward cashlessness.  
   "Payments companies including Visa benefit from the push toward a more cashless society and sometimes even offer businesses incentives to stop accepting cash. Visa in July announced it would give up to $10,000 to 50 U.S. restaurants and food vendors who stop accepting cash in favor of credit cards, debit cards and mobile payments."  Disappearing Cash

Don't abandon those coins and paper notes quite yet. A lot of consumers are in the habit of paying with cash and it's highly unlikely the U.S. Congress will approve a law to get rid of it anytime soon, despite Dr. Kenneth Rogoff and others who want to do away with it.

   Visa and other credit/debit card companies can bribe merchants to refuse cash but whether the program will work or not remains to be seen.

   Speaking of paper notes...the plan is to put abolitionist Harriet Tubman's image on the $20.00 Federal Reserve Note, dumping Andy Jackson.  Word is Treasury Secretary Mnuchin is rethinking this redesign. It may not happen.

      Our grumpy staff curmudgeon complains about funerals. 
   Mr. Gride has interrupted his retirement to issue an opinion on the customs of one's departure from life.  It was prompted a few days ago when he received a written invitation from a local funeral company to ease the grief and difficulty of his eventual death upon his family by paying for his funeral now.  The industry often calls it "pre-need planning."

     "A casual check of pricing indicates an average funeral hereabouts runs from $7,000.00 to $10,000.00.  This does not cover the cost of the cemetary plot, headstone or other marker.  (I've often thought cemetaries were an inefficient use of valuable land.  How are the living benefited by them?)

      "There is no harm done, except possibly to their bank accounts,  by those who feel the need of a formal farewell ceremony and are willing to  pay whatever the funeral companies ask for materials and services. These companies have a lot of overhead to support and are obliged to clear some profit for the owners.  On the other hand, people who hesitate to plunk down $10,000.00 for a ceremonial send off should be permitted to slip away to oblivion  with as little expense to their estate as possible.  After all, there is no law that requires funerals.  Or even expensive obituaries in the newspaper, for that matter.

       "As for me, that Celebration of Life business is appealing.  I have asked my relatives to skip the formal funeral ceremony.  A little drop-in at the house might be nice, but the idea of having a Beer and Barbecue Memorial Celebration at the lake at a later date is better.  Shouldn't cost anywhere near  $10,000.00."  CANCEL THAT FUNERAL

    "Why don't everybody leave everybody the hell alone?" the late songster/comdian Jimmy Durante is alleged to have remarked.  In Mr. Durante's youth anyone wanting to harrangue his neighbors or the public at large often set up a wooden soap box in the town square and sounded off at the top of his lungs to his heart's content.  Groups of passers-by would often stop to listen and sometimes challenge his sermonizing. 

    Today anyone wanting attention for his/her opinion merely "tweets" it on an iPhone.  Even major news outlets liberally quote "tweets" by prominent people and display graphics of the text.  We're glad journalists like Edward R. Murrow are not around to witness  this sad state of affairs.  We cannot picture Murrow ever saying "Senator Blow tweeted today. . . "

     Speaking of Murrow, he broadcast one of his regular CBS news reports from studios in Worcester, Massachusetts one evening in 1948. .  He was in town to address the Chamber of Commerce and it fell our duty to sit beside him holding a stop watch in plain view.  It's entirely true he was a heavy smoker.  It didn't bother us much.  We smoked then, too.

      Broadcast journalists in those days didn't think of themselves as entertainers.  Their job was to present the facts....the what, where, and when of current events.  They tended to let listeners draw their own conclusions rather than pre-digest and angle the news from any particular political position.  Commentators, who were clearly labeled as such, were a different breed and used plenty of carefully chosen adjectives to make their view clear.  Many listeners agreed with them.  Many didn't.  Their longevity on the air usually relied on audience ratings. 

       People should be free to tweet as they please.  But modern journalists are mistaken to rely on these gossipy truncated opinions as a source of legitimate news.

      After sixty years of continuous debt accumulation the United States has painted itself into a corner.  As Terence P. Jeffry at CNS News points out, "At the end of fiscal 2016, the federal debt stood at $19,573,444,713,936.79. By the end of fiscal 2017 (which closed on Sept. 30), it was $20,244,900,016,053,51."

     The last fiscal year in which the federal debt declined was fiscal 1957. That was the year the motto "In God We Trust" first appeared on U.S. paper money.  In that year, according to the Treasury, the total federal debt dropped from $272,750,813,649.32 at the close of fiscal 1956 to $270,527,171,896.43 at the close of fiscal 1957.

      Small wonder perpetual debt is now seen as the norm.  It has been rising at the federal level for sixty years!

      We know the argument that it "doesn't matter as long as it's a relatively small percentage of the Gross Domestic Product." But common sense and a short course on practical economics confirms that it DOES matter and that loading future taxpayers with this mountain of debt is hardly the old-fashioned "American way." 

      Spendthrift parents cannot force their children to pay off their reckless debt, although their offspring may see their inheritance cleaned out by creditor claims against their parent's estate.  Governments, on the other hand, can borrow far beyond their income using as collateral their power to tax future generations. 

      How high a tower of debt can a nation build before it collapses?  No one is sure.

       The graph below tells the tale.  We aim to post it on our front door Halloween to frighten visitors.

 Searching for Answers
   Small wonder so many people are jarred by current events.  The massacre in Las Vegas makes people numb with a combination of sadness, anger, and a sense of helplessness. 

  What prompted Stephen Paddock to kill 58 people and wound more than 500? His intent may have been to destroy more lives, but for what purpose? Guesses abound. Commentators have already noted that he was a white man shooting into a crowd of white people.

  A female legal executive at CBS lost her job because she remarked on social media she had no sympathy for the victims because they were probably mostly conservatives. This only supports the impression that media tend to lean to the political left and have little use for Republicans. She also assumed that country music fans are generally politically conservative.

  The event also triggered a renewed call for gun control. One third of Americans are said to own guns. There are enough guns in circulation to arm almost every citizen. On one side of the debate 2nd Amendment supporters argue that "Guns don't kill. People do." They point out that if the guns are taken away knives, axes, hammers, explosives, clubs, acids, rocks, etc., must also be removed.

  We'll leave it to the philosophers to explain how an advanced civil society divided itself almost exactly in half - with one faction opting for the political left and the other half leaning strongly to the right. Something seems to have happened to the vast stabilizing center. It has all but disappeared.

  The 2018 mid-term elections will undoubtedly feature many fireworks and much bluster as a sharply divided voting majority wrestles with the nation's political differences. We hope to be around to witness it.

  Although we can only guess how the fall of the Roman Empire felt to the citizens of that day, we have a hunch it may have felt somewhat like the turmoil of the second decade of the 21st century. And partly for the same reasons.

     Michael Snyder, an Idaho Republican candidate for Congress, says:  "We need to go back to a non-debt based system that does not funnel all of the wealth to the very top of the pyramid.  Unfortunately, most Americans donít even realize that our current debt-based system is fundamentally flawed, and it will probably take an unprecedented crisis in order to wake people up enough to take action."

      How should we react to the doom/gloom commentaries that pop up from everywhere?

       First of all, it would be a mistake to accept reality as "doom".  Common sense should demonstrate that a debt-based system in business, government, or one's personal life must eventually lead to trouble.  Accepting reality can hardly be called gloomy,  despite the fact it invariably leads to economic inconvenience.  It's childish to think one can keep spending money one doesn't have without paying a penalty.

        Snyder complains most Americans don't even realize the flaws that exist in our debt-based system.  He's right.  But how can Joe and Jane Twelvepack discover this fact if the subject is rarely discussed among the popular media?  Scandal, gossip, and anti-conservatism rule the airwaves and much of the print medium.  Also, recent generations haven't had any public school exposure to monetary fundamentals.  Where is the teacher who will explain to the tots in plain terms a basic definition of the noun, "dollar"?  What, exactly, is it?  Can it be trusted to hold purchasing power over time?  If not, why not? Most bankers would have trouble explaining it.
         We'd like to see the question "What is a dollar" advance through the court system to the Supreme Court of the United States.  Imagine the members of the high court having to explain why four 1960 quarter-dollars are legally different for tax purposes than four quarter-dollars minted in 2017.  They all have George Washington's image on them but their metallic content is different.  Four quarter-dollar coins from any year are legal tender for $1.00.  Present them at the tax office or a bank and you will be credited with the face amount.  BUT - you cannot receive payment for work you perform in pre-1965 dimes, quarter-dollars, half-dollars or dollar coins without reporting their actual metallic value as income. (They contain 90 percent silver.)

         Rare is the judge who would  consider accepting this question in his court.  It could  wreck the present fiat monetary system.