47 minutes to kill?

This video, Money as Debt, by Paul Grignon outlines a central idea that debt creation as a means of modern banking is fundamentally harmful because it is in substance a subtle transfer of wealth vis a vis interest. Please watch it and decide for yourself whether any aspect of Grignon's case holds water. Regardless of where you fall politically with respect to monetary policy, as with any other major institution, technology, social convention, or way of life, we have the duty to consider its existence, efficacy and possibly even its obsolescence.

I would like to highlight my understanding of a few ideas I found thought provoking.

Grignon points out that money once commonly thought of as value or asset is today a measure of debt because modern lending recognizes an individual's "promise to repay" as a fungible form of currency. This fundamental switch came as a result of government mandate, presumably because the borrowing and lending by large banks turned the wheels of the economy. Repackaging a "promise to repay" or debt as value or currency allows the money supply to be greatly expanded past the actual total "value" of goods and services in a given economy.


Constant rates of growth, I hear this all the time on the financial reports... durable goods grew by x%, consumer price index up by y%, GDP up Z%. A constant rate of growth as it is commonly defined, increase by a fixed percentage (say 3.5%), is in fact not linear but exponential.
Year One $1.00 x 3.5% growth = $1.035
Actual growth = $0.035
Year Two $1.35 x 3.5% growth = $1.071
Actual growth = $0.036
Year Three $1.071 x 3.5% growth = $1.11
Actual growth = $0.038
Year Four $1.11 x 3.5% growth = $1.15
Actual growth = $0.040

The delta accelerates, it is non-linear, and over time it is impossible to maintain. Realistically the growth rates are not constant, so this is less a factor in a practical sense. However, constant rate of growth, is something I hear my buddies say all the time when they analyze the financials of a compnay, and it is very much in the conversation as an ideal to strive for.


Grignon rightly notes that the purpose of money is to facilitate exchange yet asks an interesting philosophical question; what is the justification for charging interest on borrowed money? Why is there such a thing as interest? If money exists solely for the purpose of making it easier to trade a chicken for a television, charging interest is not relevant to attaining that end. The justification of interest stems from the risk involved in lending - a borrower may not pay back his debt, therefore one either recoups an eventual loss from other borrowers in the form of interest payments, or one charges the borrower a risk of default premium in the form of interest on the debt in lieu of physical possession of some form of collateral. This is a logical argument for a profit seeking entity. However Grignon posits that the borrowing and lending that stimulates the economy should be overseen by the government and not private profit seeking institutions. Since it is the government that owns the mints, it should be solely the government that decides the proper amount of money needed to have a functioning economy. Government sponsored "banking" would either eliminate the need for interest wholly or redistribute the profits from interest on outstanding loans to the citizens in the form of a dividend. Interesting.
Consider the recent bailout, where the treasury department borrowed the future tax receipts of its citizens to pay the current liabilities of the for-profit banks that had made faulty loans to those same citizens today. Do you understand what this means in simplest terms? The banks have said "You cannot pay your mortgage anymore. Well, we are surely not going to go out of business because you failed to pay. We will threaten the politicians with fear tactics, then they will give us the future tax receipts of your children today so that we can settle our account, all the while we still transfer our interest to the backs of your children. Essentially transferring the obligation to the next generation."

Why wouldn't the government just pay the mortgages themselves? Even though it would be a more direct and less costly solution, it would also be perceived widely as socialist and an anathema to capitalism RA-RA USA! The banks know this and exploit it. They should have died. If you made crappy furniture, you will go out of business. If you make crappy lending decisions you should be out of money. It was a con job.

Grignon points out that non-profit banking is a way around this problem. Because the banks are in this business to make money, eliminating profits from borrowing and lending would eliminate the necessity of private banking. A far more efficient method of regulating trade, yet a threat to the existence of bankers.

Another reform movement stresses return to a sound money. This means making the dollar redeemable for something of fixed value, most popularly precious metals. However, the banks argue that this would tightly constrain borrowing and lending by sharply decreasing the money supply or it would create sudden wealth for those with gold and poverty for those without.

I personally, because of my fondness for physics and chemistry, would like to see our currency linked to Gibbs free energy. For example, how many Joules did it take to make this air compressor? How much heat or enthalpy, in an absolute chemical sense, is responsible for a loaf of bread? Ultimately, this is the value of matter, its heat of formation. Therefore, the truest way to represent the power to buy and sell goods is to link it directly to the energy required to bring it into physical existence. Is this not how the trillions of trillions of living cells trade everyday? Look at the majestic economy in even the smallest, loneliest, most nonessential cell. Does the mitochondrion charge interest to the nucleus for ATP?! Absurd! No interest. Only balance, beauty, function, and growth. The cell understands the interrelatedness of its components, the necessity of harmony for function, and that balance means existence. Bankers value the hoarding of money and getting something for nothing. The cell has no banker, and demands no interest on glucose. Ah, but wait, isn't there loss of heat over time? Isn't it true that no chemical reaction has ever occurred with balanced free energy between products and reactants? There is a payment made for every chemical transaction. There is such a thing as cosmic interest. There is entropy, the cosmic banker. True, but I have no problem paying the universe for being my home, existence is worth it.

Yes - I'm having my own dance party and this is how it starts...

and then i request



and one more before i stop to get water and booze for everyone...



ok - real quick one more



ok time for a little agua

If this works we're in business baby!

A few of my favorite quotes

Trust no future, however pleasant. Let the dead past bury the dead. Act now in the living present, heart within, God overhead.
-Henry Wadsworth Longfellow

Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and creation, there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one's favor all manner of unforeseen incidents, meetings and material assistance which no man could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now.
-Goethe

Good humor is a tonic for mind and body. It is the best antidote for anxiety and depression. It attracts and keeps friends. It lightens human burdens. It is the direct route to serenity and contentment.
-Kleiser

A lazy boy and a warm bed are a difficult thing to part.
-Danish proverb

Vows made in storms are often forgotten in calms.
-Latin Proverb

Keep you fears to yourself, but share your courage with others.
-Robert Louis Stevenson

From listening comes wisdom, and from speaking comes repentance.
-Italian proverb

He who takes the child by the hand takes the mother by the heart.
- German proverb

Our greatest glory lies not in never falling but in rising every time we fall.
-Thomas Edison

Whoever undertakes to set himself up as a judge of truth and knowledge is shipwrecked by the laughter of the Gods.
-Albert Einstein

When a proud man hears another praised, he feels himself injured
-English proverb

He who falls in love with himself has no rivals
-Benjamin Disraeli

Its easy enough to be pleasant
When everything goes like a song
But the man worthwhile
Is the man who can smile
When everything goes dead wrong

Courage is fear that has said its prayers.

I have fought the good fight, I have finished my course, I have kept the faith.
-2 Tim 4:7

Listen up muchachos

Press play and read please...




Sit down right there and let me tell you a thing or two:
Beethoven’s ninth symphony is the best piece of music ever written. No exceptions, no argument, no ifs ands or buts. It is the divine melody, it is the rhythm of the cosmos, it captures the majestic beauty of existence, it was handed down to a deaf man by the grace and infinite wisdom of God. And do you know what? Our ears are inadequate to truly "understand" it, for just as a cube drawn on a napkin is distorted from its form being merely a representation in two dimensions, so is the Ninth a crude representation barely accessible by the limited perception and conduction of our sad primitive nervous system. Ha! Listening to the ninth is a communication with the higher love. Do not tolerate any other answer from anyone. To change one note, to alter the pace, to hesitate, even in the slightest would scramble the message. It is perfection.
And another thing, bankers are the fancier thieves and scoundrels, I despise them. I don’t care what anyone says it doesn’t matter, yes they provide liquidity etc etc… But you know what, you can still provide liquidity and shop at Payless, but you won’t ever see it. Why??? Because they are in it for the MONEY. They are corrupt. They have no love, no substance, and are the parasites of society. True story.
You don’t have as much time as you think – so get up and do whatever you have to do right now. Push it a little farther, work harder, get up earlier, you’re still going to get to bed tonight -don’t worry, and you’ll probably sleep better for it. Always be looking for more ways to cram productive activity into the day. Stop waiting – its not going to happen without your hand – so get up and do it now -even if it is just the smallest start. You will know when you are tired, it will feel great, then you can rest and that will feel great.
Family is the most important – more important than career, fame, money, and yourself. You will never experience the happiness, security, and fulfillment of a family anywhere else in life. I am blessed to have experienced this firsthand – and I thank God for it. I have the responsibility to convey the love of my family outward like a little positive charge bleeping in the vast darkness of the universe. If you have had a mother or father active in your life, thank them the next chance you get.
To whom much is given, much will be expected. You were probably given a lot. Get cracking. Don’t be lazy. Give me dumb, slow, nasty, dopey, I’ll work with them all. Just don’t give me lazy. Lazy gets sent home. Lazy goes hungry.
Don’t be proud – pride just gets in the way. It stops you when you should be in motion– and causes improper actions when you should be still. Don’t look in the mirror too often, especially if you’re a man, Don’t worry about clothes, especially if you’re a man. If you’re secure with yourself it won’t matter if you wear an Armani suit or a barrel and straps. People respect you, not your clothes.
Don’t be a sucker – many, many, many people are out to take advantage of you. The trick is determining who needs actual help and who is out just to get their next mark. You have no responsibility to be another’s mark. Making a decision? The golden rule is all you need. Do unto others as you would have them do unto you. Act with this in mind and you will always have a clean conscience even if you’re wrong. I’m not saying the trip will be hassle free, I’m just saying that you’ll be on the right side.
I learned this one in the academy, don’t ever let anyone take anything out of your hands. No matter who, your boss, his boss, anyone, if they try and take a tool, a pencil, whatever, stop and say, “What do you need?” And be sure to make eye contact.
Always make eye contact. Don’t eyeball people, just make sure you’re focused on the eyes, nine times out of ten, it will tell you everything you need to know. And smile; when appropriate, which almost always.
Your life is going to be what you make of it. If you are a person who is happy and resilient, you will probably be this way through good times and bad. If you are pessimistic or downtrodden, you will probably find something wrong with a winning lottery ticket. Ultimately, it is up to you to decide the proper psychological frame in which to conduct your life, so why not choose to find the love, humor, and wonder in life? Yes, deal with the crap-ola, and bad stuff, we all have to, but focus in on the humor, love, motivating, animating aspects of life. I’ve felt the spirit, it is the most beautiful experience – it is a vital fever.

These things comprise a good day... a good day is composed of these

1. Its Saturday, although that matters less and less now that my "work week" consists of learning. I never knew I would have it so good.

2. Up early (relatively) for a Saturday - 6:55- which means I got the whole day in front of  me. 

3. My legs and are sore from the previous day's basketball - this means:

          a. I expended myself.

          b. I get to do the morning stretch leg kick thing in bed that one of life's treats.

          c. I have working legs, more valuable than anything except hands, vision, brain. 

4. Coffee and fruit in the morning watching the traffic on the GW bridge back up, comfortably stowed in my tiny room. (the room is clean - this makes the confinement enjoyable instead of lamentable).

5.  I get to go to a conference on a scientific topic that fascinates me and challenges/expands my understanding. My brain is engaged in focused concentration for several hours. The talks are on memory. I try to remember everything. 

6. The sun is shining brightly - I walk around the fancy fifth avenue shops getting gift ideas for family and people watching. The streets are filled with thousands of people.

6 1/2. I move freely and easily about the hustle and bustle, I have no impediments. It dawns on me that I don't need/want any of this crap thats for sale. I feel light physically. I wish others could feel this way. I know that me and the sales clerk at Louis Vuitton would disagree about a lot of things. I thank God I'm not in retail.

7. Further, it dawns on me that I already have what I want/need - my health and the ability to pursue my understanding of the world/universe. I wonder for a brief second how long my health will hold up and give thanks.

8. Then I realize that it doesn't matter how long it will hold, because all I can do is live my life while I am still able - and as long as this truth is not abused to justify reckless behavior, I can safely remain in the mystery.

9. I note a paradox. I'm completely happy, even though I abandoned the quest years ago. I consider these two scenarios: 1. As a younger man, I remember always being unsatisfied with everything, and always looking to the future. Critical in the bad way, controlling in the bad way, impatient in the bad way. I would always think when this or that finally happened - THEN I WILL AUTOMATICALLY BECOME HAPPY AS A RESULT OF SUCH AND SUCH ACHIEVEMENT. I viewed it as cause and effect. When I have money/prestige/"the girl" etc. it would just happen. I never bothered to ask why these things would make me happy, because I was a follower. 

At some point, I realized that ALL (every last one) of the people I looked up to/followed had no better idea than me about the truth of life/happiness. They just knew what worked for them better than I knew what worked for me. 

Scenario 2 - After finally realizing that nothing I was doing was working - I had to finally admit that I had no idea what I was doing in my life. It dawned on me when I was 26 that I am older now and that while talk of the future is an acceptable practice for a wide-eyed 18 year old, now I either am or am not. And more to the point, as I age, talk about doing this or that in the future only makes me look like a fool. Whoops what did I just say? It was too late I couldn't take it back, that's exactly what I was all those years walking around this spinning ball of electron probability waves and protons existing among the infinite darkness, a little fool. The only remaining step was determining if I had the humility to admit that. 

And then I understood my ego had been weighing me down the whole time.

Everyday I give thanks and ask for guidance. For me, understanding beats happiness ten times out of ten, a hundred times out of hundred. 

Time moves along, what am I doing this moment? Because that is my life. I ask for discipline and concentration to be in the moment - here . The final step was to figure out what to spend the moment on - selling designer shoes? Insurance? Law? Trading futures? Having fun? Farming? Attempting understanding and passing it on to another? Yep thats the one that works best for me. I don't have to say I'm going to do this or that because I am doing this and that. Next conversation.

10. Contemplating the vastness of space time and vowing to read more Carl Sagan. 

 

Candy wrappers

I was on the subway one day recently. A young kid, could not have been older then 13 sat across from me diagonally by six or so seats. It was just me and him on this car. I watched him throw the wrapper of his candy bar right on the floor of the car. Should I or shouldn't I say something? What would you do?

Option one: "Hey son, don't you know that littering harms us all? Our civic duty is to respect the common municipal property. So please do your part and dispose of your garbage in the proper receptacle!" in my best Wally Cleaver. What is the probability that the kid picks it up and contritely promises to do better next time? What is the probability that he tells me to go BLEEP myself? Would you be humble enough to be corrected by a stranger even when you know you're wrong? Not bloody likely. 

Don't worry - I'm aware that the Metropolitan Transit Authority does not need yet another superhero/psychopath trolling the subways and buses, accosting passengers about candy wrappers and spilled coffee.

Option two: Look the other way. Its not my problem. What a shame... etc. (this is what I did)

*Option three - Darn! I thought of this one later that night, too late, but I'll know next time. I would have gotten up walked over to the wrapper - bent over and picked it up - saying nothing - but making eye contact that says, "I'm picking up your garbage because you won't, and you know its wrong, so everytime you do it from now on, at least you will be aware of the fact that you are acting wrongly." And for extra credit, "Every time you throw your snickers wrapper on the floor someone has to pick it up, which is however infinitesimally small still both a needlessly added responsibility to another and  a waste of public resources." Yes, one look can communicate that to another. Provided they are "listening". 

Its just a candy wrapper! Relax!

I'm not getting self righteous in this case because I don't litter, and I'm not judging the kid, only the action.