The idea that the world is overpopulated is total, complete, and utter crap.
Watch, I'll prove it to you using 4th or at most 5th grade math. I'll even use algebra to make it seem neat.
X / Y = Z
Z > A
X is the world population
Y is the area (in square miles) of the state of Texas
Z is the resounding population density if you were to put the entire world into Texas
A is the population density of New York City.
X = 6,775,235,700
Y = 268,581 sq mi
Z = 27,532 people/sq mi
A = ?
Lets run the problem!
6,775,235,700 people/ 268,581 sq mi = 25,226 people/sq mi
25,225 > 27,532
The above inequality is false.
Therefore, the world is not over populated.
Look, one world problem solved by basic math. yay.
Saturday, July 23, 2011
Friday, March 18, 2011
Libya, and why I do dislike Sen. John McCain.
Wow, well it's been a while since I blogged, and that's just a crying shame isn't it? I know you were all just pining for me to post up some more political and economic mumbo-jumbo so you can question either my thought process or my sanity. Let not your heart be troubled 'O reader of mine, for I am back and rip-rearing ready to go to set any an all info you've heard or seen in the past two months since I've posted last. That's right, its 2 months to the day that I posted my last little entry.
I believe the last one I posted about was the comparison between the US, China, and a bunch of old countries that are either falling apart with good food, or are falling apart with mediocre food (I'm looking at you Greece). Well not today friends, not today. I think we will start off with a magical little journey to the near east. Well, northern Africa to be exact. The little country of Libya, which has been in the news, has decided to have a little skirmish within it's borders. The UN has decided to intervene. Now normally I'd applaud the UN for having a spine, but let's face it, the only reason that the current president of the United States has told his ambassador to the UN the go-ahead with approval of UN Security Council Resolution 1973 (that's in 2011) to establish a "no-fly zone" over the sovereign nation Libya.
Now, this may not seem like a big deal. I mean, Quadaffi is a brutal thug-dictator, but his impotence is almost embarrassing. I mean in being a standard dictator bad-ass he has failed miserably. No one been shut up as quickly as he was. Granted most didn't need to, but when Reagan decided to bomb Tripoli in '86 for the attack on a night club in Berlin that killed a number of US servicemen in a night club, well you get the picture.
Either way, the problem I have with the UN, the EU, and the USA is quite simple. What has Quadaffi done? Ok, he oppresses his people. So does China, so does Saudi Arabia, so does every other 3rd world shit-hole nation. Hell, even the US oppresses people's rights and freedoms, so who are we to go into Libya and tell the Mad-man Quadaffi that he can't go and stomp out a rebellion? The major problem I have, and this is mainly with the US's foreign policy by both Republicans and Democrats is that they're war happy.
War happy politicians are the closest thing to pure scum on this planet. Maybe its because I'm elligible for the draft, maybe its because I'm a cynic, maybe it's because I'm tired of being yanked around like some rag-doll, but either way when a politician starts talking about military engagements it makes my skin crawl. Like this moron.
Yes, the man I foolishly voted for in the 2008 presidential election is (as I soon after realized to my dismay) a complete and utter fool. When people like Sen. McCain state that we should implement a "no-fly zone" over a sovereign nation, that requires military assets. Now, Libya isn't exactly Bangladesh here, they have a moderatly sophisticated anti-aircraft system composed of Surface-to-Air Missles or "SAM" sites all over the country. Now, the kicker of this "No-fly zone" resolution isn't just a resolution imposed by a global version of the student council, it also allows for full on attacks from both air and sea against Libyan military forces. This is a direct quote from the UN Resolution...
Authorizes Member States that have notified the Secretary-General, acting nationally or through regional organizations or arrangements, and acting in cooperation with the Secretary-General, to take all necessary measures, notwithstanding paragraph 9 of resolution 1970 (2011), to protect civilians and civilian populated areas under threat of attack in the Libyan Arab Jamahiriya, including Benghazi, while excluding a foreign occupation force of any form on any part of Libyan territory...
Know what that means? That mean's we'll be doing this...
for these guys...
We will be doing their dirty work.
I don't like this. I don't mind if France and England and the rest of the "Arab League" get's their hands dirty; as a matter of fact I'd love to see French fighter/bombers fly over Tripoli and bomb the hell out of it. The simple fact is this, the UN loves to start wars, they love to interfere, the love to micromanage and inject their big-government, nanny state ways to become more powerful all while creating even more issues in their own wake. I really hope that President Obama won't commit US forces to this civil war in Libya.
Keep your eyes and ear's open, I know I will.
Smus
I believe the last one I posted about was the comparison between the US, China, and a bunch of old countries that are either falling apart with good food, or are falling apart with mediocre food (I'm looking at you Greece). Well not today friends, not today. I think we will start off with a magical little journey to the near east. Well, northern Africa to be exact. The little country of Libya, which has been in the news, has decided to have a little skirmish within it's borders. The UN has decided to intervene. Now normally I'd applaud the UN for having a spine, but let's face it, the only reason that the current president of the United States has told his ambassador to the UN the go-ahead with approval of UN Security Council Resolution 1973 (that's in 2011) to establish a "no-fly zone" over the sovereign nation Libya.
Now, this may not seem like a big deal. I mean, Quadaffi is a brutal thug-dictator, but his impotence is almost embarrassing. I mean in being a standard dictator bad-ass he has failed miserably. No one been shut up as quickly as he was. Granted most didn't need to, but when Reagan decided to bomb Tripoli in '86 for the attack on a night club in Berlin that killed a number of US servicemen in a night club, well you get the picture.
Either way, the problem I have with the UN, the EU, and the USA is quite simple. What has Quadaffi done? Ok, he oppresses his people. So does China, so does Saudi Arabia, so does every other 3rd world shit-hole nation. Hell, even the US oppresses people's rights and freedoms, so who are we to go into Libya and tell the Mad-man Quadaffi that he can't go and stomp out a rebellion? The major problem I have, and this is mainly with the US's foreign policy by both Republicans and Democrats is that they're war happy.
War happy politicians are the closest thing to pure scum on this planet. Maybe its because I'm elligible for the draft, maybe its because I'm a cynic, maybe it's because I'm tired of being yanked around like some rag-doll, but either way when a politician starts talking about military engagements it makes my skin crawl. Like this moron.
Yes, the man I foolishly voted for in the 2008 presidential election is (as I soon after realized to my dismay) a complete and utter fool. When people like Sen. McCain state that we should implement a "no-fly zone" over a sovereign nation, that requires military assets. Now, Libya isn't exactly Bangladesh here, they have a moderatly sophisticated anti-aircraft system composed of Surface-to-Air Missles or "SAM" sites all over the country. Now, the kicker of this "No-fly zone" resolution isn't just a resolution imposed by a global version of the student council, it also allows for full on attacks from both air and sea against Libyan military forces. This is a direct quote from the UN Resolution...
Authorizes Member States that have notified the Secretary-General, acting nationally or through regional organizations or arrangements, and acting in cooperation with the Secretary-General, to take all necessary measures, notwithstanding paragraph 9 of resolution 1970 (2011), to protect civilians and civilian populated areas under threat of attack in the Libyan Arab Jamahiriya, including Benghazi, while excluding a foreign occupation force of any form on any part of Libyan territory...
Know what that means? That mean's we'll be doing this...
for these guys...
We will be doing their dirty work.
I don't like this. I don't mind if France and England and the rest of the "Arab League" get's their hands dirty; as a matter of fact I'd love to see French fighter/bombers fly over Tripoli and bomb the hell out of it. The simple fact is this, the UN loves to start wars, they love to interfere, the love to micromanage and inject their big-government, nanny state ways to become more powerful all while creating even more issues in their own wake. I really hope that President Obama won't commit US forces to this civil war in Libya.
Keep your eyes and ear's open, I know I will.
Smus
Tuesday, January 18, 2011
Is America really Rome? I don't think so...
Well with a new year comes new challenges and new thoughts. As I was working today, this thought crossed my mind, "Is America in 2011 destined for the same fate as that of ancient Rome of the middle of the 400's AD? Would the collapse of the US economy bring around another proverbial dark age?" My thoughts lent me to this conclusion, and a mildly startling one at that. I don't believe were Rome. I think were Greece.
Now, this is the Greece of yore, the one that was unified against the threat of Persia, the one that was ultimately conquered first by Phillip II of Macedonia, and then continued by Alexander the Great until his untimely death. How is America like Greece? And if were Greece, then who's Rome?
I'll answer the last question first, and explain later in this posting why I feel this way. The short and simple answer is China. China is Rome. Anyone who thinks otherwise is foolish.
Ok, on to the serious business of trying to link the USA with ancient Greece.
First and foremost, lets compare Greece to the US, versus Rome and China in terms of expansion. To begin, before Greece was unified under Phillip II, it was a land that was simply ruled by different kings, constantly squabbling and fighting over territory (much like our own states). Now, prior to Alexander the Great, the Greeks never had massive expansion campaigns, nothing major anyways. Similarly, the United States has held its own borders fairly well, only expanding when the price was right (a la Louisiana Purchase) or when the fight was worth the gain (Mexican-American Wars). This is dramatically unlike that of ancient Rome, which expanded at any given opportunity to grab resources and land (much like China is doing in Africa) which some argue was the primary reason for Rome falling. An empire so large was hard to control and its borders became very porous, leading to rebellions and marauding barbarians (arguably, the United States has more issues with that than China).
The second difference is technology. The biggest reason the Romans were so successful is the simple fact that they copied every single good idea the Greeks came up with. Everything from Art to Science was copied from the Greeks by the Romans and used to their own advantage. A perfect example of this is the introduction of private property ownership in China, a former "Communist" regime that is more of an authoritarian fascist government than one of true "Communism". Another example was allegedly leaked on the internet as photographs of a new Chinese stealth fighter they're developing. That's right, the Chinese are developing a brand new stealth fighter, ironic,it looks like a cross between the older F-22 Raptor and the brand spanking new F-35 Lighting II (or Joint Strike Fighter). Again, a pretty dramatic copy of a successful level of technology being implemented for their own use.
The third difference, and I think the most important one, and possibly the last one I touch on tonight, is a simple matter really and that matter is size. China is essentially tied with the US for overall size, but that size does include Alaska, subtract that and we are surely smaller. Now, on top of that factor in the incredibly rich resource area of northern China known as Manchuria, similarly sized coal reserves and an abundant mountainous region in the south known as the Himalayas which as far as I know have not yet been fully explored for their natural resources, and that's just minerals. The region of southeast Asia is fairly full of possible oil reserves, not to mention the closeness to Russia (a massive petroleum monster), its cozy relationship with the entire Middle East (it doesn't have any issues with Islam, and it kindly keeps its nose out of other peoples business, none of that Christian values of trying to help others ruining their plans) for petroleum products, it's booming industry's and its increasingly powerful technological and financial sectors and you have the possibilities of a very strong country, and empire if you will. This doesn't even include the most important factor, and that's population. China's population dwarf's that of the United States by just over 4 to 1.
Ancient Rome was not only larger than Greece in size, but in population. It took the technology that it gained and used it to it's advantage. It's power was unmatched, but that was its eventual downfall. To much power to control, to much land, and a constant barrage of marauders and opposing army's like Hannibal or Attila eventually lead to the crushing defeat of Rome.
So, does that mean we must stem the tide of power? To be honest, in my personal opinion, I don't think we could if we tried, nor should we. The power of Rome was unmatched, but not unquestioned. It's shear weight crushed itself, as we are seeing now. Without a blistering rate of growth the poor who moved from the countryside have began to become restless, tired of a lack of freedom. But, much like ancient Rome, the government knew how to stem the tide of discontent. I say we watch and wait to see what happens.
Keep your eyes open, I know I will.
Smus.
The F-22
The F-35
New Chinese stealth fighter
Now, this is the Greece of yore, the one that was unified against the threat of Persia, the one that was ultimately conquered first by Phillip II of Macedonia, and then continued by Alexander the Great until his untimely death. How is America like Greece? And if were Greece, then who's Rome?
I'll answer the last question first, and explain later in this posting why I feel this way. The short and simple answer is China. China is Rome. Anyone who thinks otherwise is foolish.
Ok, on to the serious business of trying to link the USA with ancient Greece.
First and foremost, lets compare Greece to the US, versus Rome and China in terms of expansion. To begin, before Greece was unified under Phillip II, it was a land that was simply ruled by different kings, constantly squabbling and fighting over territory (much like our own states). Now, prior to Alexander the Great, the Greeks never had massive expansion campaigns, nothing major anyways. Similarly, the United States has held its own borders fairly well, only expanding when the price was right (a la Louisiana Purchase) or when the fight was worth the gain (Mexican-American Wars). This is dramatically unlike that of ancient Rome, which expanded at any given opportunity to grab resources and land (much like China is doing in Africa) which some argue was the primary reason for Rome falling. An empire so large was hard to control and its borders became very porous, leading to rebellions and marauding barbarians (arguably, the United States has more issues with that than China).
The second difference is technology. The biggest reason the Romans were so successful is the simple fact that they copied every single good idea the Greeks came up with. Everything from Art to Science was copied from the Greeks by the Romans and used to their own advantage. A perfect example of this is the introduction of private property ownership in China, a former "Communist" regime that is more of an authoritarian fascist government than one of true "Communism". Another example was allegedly leaked on the internet as photographs of a new Chinese stealth fighter they're developing. That's right, the Chinese are developing a brand new stealth fighter, ironic,it looks like a cross between the older F-22 Raptor and the brand spanking new F-35 Lighting II (or Joint Strike Fighter). Again, a pretty dramatic copy of a successful level of technology being implemented for their own use.
The third difference, and I think the most important one, and possibly the last one I touch on tonight, is a simple matter really and that matter is size. China is essentially tied with the US for overall size, but that size does include Alaska, subtract that and we are surely smaller. Now, on top of that factor in the incredibly rich resource area of northern China known as Manchuria, similarly sized coal reserves and an abundant mountainous region in the south known as the Himalayas which as far as I know have not yet been fully explored for their natural resources, and that's just minerals. The region of southeast Asia is fairly full of possible oil reserves, not to mention the closeness to Russia (a massive petroleum monster), its cozy relationship with the entire Middle East (it doesn't have any issues with Islam, and it kindly keeps its nose out of other peoples business, none of that Christian values of trying to help others ruining their plans) for petroleum products, it's booming industry's and its increasingly powerful technological and financial sectors and you have the possibilities of a very strong country, and empire if you will. This doesn't even include the most important factor, and that's population. China's population dwarf's that of the United States by just over 4 to 1.
Ancient Rome was not only larger than Greece in size, but in population. It took the technology that it gained and used it to it's advantage. It's power was unmatched, but that was its eventual downfall. To much power to control, to much land, and a constant barrage of marauders and opposing army's like Hannibal or Attila eventually lead to the crushing defeat of Rome.
So, does that mean we must stem the tide of power? To be honest, in my personal opinion, I don't think we could if we tried, nor should we. The power of Rome was unmatched, but not unquestioned. It's shear weight crushed itself, as we are seeing now. Without a blistering rate of growth the poor who moved from the countryside have began to become restless, tired of a lack of freedom. But, much like ancient Rome, the government knew how to stem the tide of discontent. I say we watch and wait to see what happens.
Keep your eyes open, I know I will.
Smus.
The F-22
The F-35
New Chinese stealth fighter
Saturday, December 11, 2010
I really like cars...
Ok, so it's more like I love cars. Just something about them that gets me all excited. So, being that I am almost certain that I will soon have to give up any sort of sporty-ness for the automotive death known as practicality.
Being that I intend to stave off automotive death as long as possible, or possibly substitute it for something else on the side, I have compiled a list of cars that I think may suit the job of being a "fun" car, while not breaking the bank. My idea was to look at getting rid of my current ride for something more practical and better able to withstand the wintertime grind without getting stuck (or at least not without a helluva fight), but still have something that I can park during the winter and use during the seasons where you don't need a few extra layers to simply go outside.
Here's the list (bare with me, it's long and there are pictures)
Lets start in the US of A shall we?
3rd Gen Camaro
3rd Gen Firebird
Late 80's early 90's Mustang
How about Japan?
Mitsubishi Starion
Mazda RX7
Nissan 300ZX
Toyota Supra MkIII
How about Germany?
E30 BMW
E34 BMW
E24 BMW
SL Mercedes
Porsche 944
All of these cars were made in the late 80's and into the early 90's, making them just about 20 years old. This means that there should be some out there in decent condition with simply high mileage. They're old enough to be used, but not old enough to yet become classics. This I feel is the perfect time to pick up one of these gems and do them up right, get everything straightened out and then have some fun with them while they're still able to have fun. Then maybe sell it off at a slight profit or at least break even to start it all over again.
What do you think? Either post responses here or post them on my Facebook page here
Being that I intend to stave off automotive death as long as possible, or possibly substitute it for something else on the side, I have compiled a list of cars that I think may suit the job of being a "fun" car, while not breaking the bank. My idea was to look at getting rid of my current ride for something more practical and better able to withstand the wintertime grind without getting stuck (or at least not without a helluva fight), but still have something that I can park during the winter and use during the seasons where you don't need a few extra layers to simply go outside.
Here's the list (bare with me, it's long and there are pictures)
Lets start in the US of A shall we?
3rd Gen Camaro
3rd Gen Firebird
Late 80's early 90's Mustang
How about Japan?
Mitsubishi Starion
Mazda RX7
Nissan 300ZX
Toyota Supra MkIII
How about Germany?
E30 BMW
E34 BMW
E24 BMW
SL Mercedes
Porsche 944
All of these cars were made in the late 80's and into the early 90's, making them just about 20 years old. This means that there should be some out there in decent condition with simply high mileage. They're old enough to be used, but not old enough to yet become classics. This I feel is the perfect time to pick up one of these gems and do them up right, get everything straightened out and then have some fun with them while they're still able to have fun. Then maybe sell it off at a slight profit or at least break even to start it all over again.
What do you think? Either post responses here or post them on my Facebook page here
Sunday, November 14, 2010
It's such a simple concept...
I'm watching "Supersize Me" on Planet Green HD. I should be going to bed within minutes, but I couldn't take it anymore, needed to vent, and since this is going out to the infinity of the world wide web, I figure someone will read it...especially if I post the link on my facebook status, but that's beside the point.
Everyone has a pet peeve, and I have a few. Like people who don't drive fast enough in the left hand lane, but I think my biggest peeve is enviromentalists.
Now, don't take this the wrong way if you're concerned about the environement, I am too. I don't want people to dump toxic waste in rivers or to poach animals, but I hate it when people try to shove ideas down my throat, or who do things that are totally unreasonable to attempt to prove a point.
This Morgan Spurlock fella apparently eats McDonalds for every meal for 30 days. So, after eating what I guess is a total vegan diet prior, he decides to delve into the world of further processed fast food. The only problem is that he is unreasonable. No one eats nothing but McD's, or if you do, not everyone gets the Breakfast Platter, then a supersized Big Mac meal, and then a Double Quarter Pounder, again supersized. Oh, I forgot to add he picked the most unhealthy soda, and he picked up shakes, and sundaes, and parfaits...a completely unreasonable meal. I am a big guy, I love fast food, but I would never have a Big Mac, and a Shake, and a Sundae.
What's the problem? Like I had said, he is unreasonable, as are most people like him. They try to prove a point by being unreasonable. Yes, fast food is dangerous, but so is walking down the street, but you don't see people making documentaries about the dangers of uneven concrete and inattentive drivers which could result in broken bones. But then, I'll be told that's not the point, that he's attempting to show the truth about the evils of big food.
Whatever. As long as people are stupid enough to forget that anything is dangerous out of modeation, there will be people like this Morgan Spurlock who has had not only a mediocre career (in film terms) but he's one of these in which no one cares. His documentary did nothing to stop the evils of McDonald, instead he just gave people like me a premise in which to launch the first of many salvo's.
It's late, my mind is foggy...and I just saw this lady compare ham to heroine...and that's where I draw the line. Ham is not heroine, but vegan lady thinks bacon is immoral, and there is nothing immoral about bacon.
Keep your eyes open, I know I will,
Smus
Everyone has a pet peeve, and I have a few. Like people who don't drive fast enough in the left hand lane, but I think my biggest peeve is enviromentalists.
Now, don't take this the wrong way if you're concerned about the environement, I am too. I don't want people to dump toxic waste in rivers or to poach animals, but I hate it when people try to shove ideas down my throat, or who do things that are totally unreasonable to attempt to prove a point.
This Morgan Spurlock fella apparently eats McDonalds for every meal for 30 days. So, after eating what I guess is a total vegan diet prior, he decides to delve into the world of further processed fast food. The only problem is that he is unreasonable. No one eats nothing but McD's, or if you do, not everyone gets the Breakfast Platter, then a supersized Big Mac meal, and then a Double Quarter Pounder, again supersized. Oh, I forgot to add he picked the most unhealthy soda, and he picked up shakes, and sundaes, and parfaits...a completely unreasonable meal. I am a big guy, I love fast food, but I would never have a Big Mac, and a Shake, and a Sundae.
What's the problem? Like I had said, he is unreasonable, as are most people like him. They try to prove a point by being unreasonable. Yes, fast food is dangerous, but so is walking down the street, but you don't see people making documentaries about the dangers of uneven concrete and inattentive drivers which could result in broken bones. But then, I'll be told that's not the point, that he's attempting to show the truth about the evils of big food.
Whatever. As long as people are stupid enough to forget that anything is dangerous out of modeation, there will be people like this Morgan Spurlock who has had not only a mediocre career (in film terms) but he's one of these in which no one cares. His documentary did nothing to stop the evils of McDonald, instead he just gave people like me a premise in which to launch the first of many salvo's.
It's late, my mind is foggy...and I just saw this lady compare ham to heroine...and that's where I draw the line. Ham is not heroine, but vegan lady thinks bacon is immoral, and there is nothing immoral about bacon.
Keep your eyes open, I know I will,
Smus
Thursday, November 11, 2010
You have metal...and Metal...and of course...METAL!
Ok, so this only has a little bit to do with METAL of the METAL kind, but it has to be said. In the early days of Glam Rock, (which is most defiantly not Metal) there was a band called Motley Crue. There's an umlaut in there, which makes them seem German and those Germans know how to rock, like the Scorpions for example.
I digress. One member of that mediocre band (filled with egotistical members in my mind), is going to be on "Skating with the Stars". That's right...this guy here is going to be doing ice dancing on national television.
Very not metal. The only good thing is that this guy here was so pissed at the man above...that they formed Metallica. Yes, a band so Metal, that they have Metal in their name.
Boom...James Hetfield.
To get back to the serious stuff though, commodities are on the rise still. There's been almost a dollar rise in soybeans, golds over $1400/oz, its gonna be brutal guys. There was almost no consensus at the G20 meeting. Germany, China, and others have been very aggressive in telling the US to stop devaluing the currency of choice, which luckily is still the US Dollar. There is really not telling how this will truly effect the US Economy. If we descend into a currency war with other nations, we will lose. Do not think that we can survive an massive devaluation of the US Dollar, we do not have the infrastructure or the wherewithall to survive a massive currency slide, or worse yet a massive flight of capital from the US economy. The Federal Reserves continued pumping of dollars will not work. In fact, it will do nothing but open a bigger hole in the sinking ship. If you own a home and can afford it. Get some food stored up. Prices will only be going up for the forseeable future, not only that, but its good to have a bit of food stored up. A chest freezer is a worthwhile investment.
Again, not to sound like a paranoid freakazoid, but if what could happen does happen and inflation hits hot and heavy, we will all be in a world of hurt.
Keep your eyes and ears open, I know I will
Smus
I digress. One member of that mediocre band (filled with egotistical members in my mind), is going to be on "Skating with the Stars". That's right...this guy here is going to be doing ice dancing on national television.
Very not metal. The only good thing is that this guy here was so pissed at the man above...that they formed Metallica. Yes, a band so Metal, that they have Metal in their name.
Boom...James Hetfield.
To get back to the serious stuff though, commodities are on the rise still. There's been almost a dollar rise in soybeans, golds over $1400/oz, its gonna be brutal guys. There was almost no consensus at the G20 meeting. Germany, China, and others have been very aggressive in telling the US to stop devaluing the currency of choice, which luckily is still the US Dollar. There is really not telling how this will truly effect the US Economy. If we descend into a currency war with other nations, we will lose. Do not think that we can survive an massive devaluation of the US Dollar, we do not have the infrastructure or the wherewithall to survive a massive currency slide, or worse yet a massive flight of capital from the US economy. The Federal Reserves continued pumping of dollars will not work. In fact, it will do nothing but open a bigger hole in the sinking ship. If you own a home and can afford it. Get some food stored up. Prices will only be going up for the forseeable future, not only that, but its good to have a bit of food stored up. A chest freezer is a worthwhile investment.
Again, not to sound like a paranoid freakazoid, but if what could happen does happen and inflation hits hot and heavy, we will all be in a world of hurt.
Keep your eyes and ears open, I know I will
Smus
Monday, November 1, 2010
What's the worst that could happen...
November 3rd is a big day. Mid-term elections will be at the front and center of everyones minds...except for mine. Rather, I'll be gnawing at my fingertips wondering what sort of action the US Federal Reserve will take in regards to it's planned Quantitative Easing...part 2.
Oh, Never heard of Quantitative Easing? Didn't even know there was a QE1? Yeah, most of us didn't. Quantitative Easing is troublesome, but that I'll attempt to explain futher down. Quantitative Easing 1, however, took place during the last year. QE1, (if I'm not mistaken) included the purchase of selected mortgage backed securities, primarily the purchase of those nasty little subprime loans, the ones that started it all.
Here's the problem.
The US Treasury doesn't print money. Don't believe me? Read the very top of this $1 bill.
Oh me oh my. Yes, it is a Federal Reserve Note.
So what's the issue here? The issue is that the US Federal Reserve, on Wednesday November 3rd 2010 will announce whether or not they will attempt Quantitative Easing Redux.
Didn't answer your question did I? Let me say it this way, the US Federal Reserve will attempt to increase the US money supply by $500 billion to $2 trillion over the next 12 months. This is a massive increase in the money supply. The issue must be explained in basic economics (so pardon me if you hate economics). If you increase the money supply, the demand for dollars drops. That means that dollars are worth less, which is good right? Not necessarily. What happens when the value of the dollar drops is an increase in prices, but your pay check stays the same, so everything costs more. This is called inflation.
Inflation itself isn't bad, a small amount of inflation is almost required for a growing economy, the US Federal Reserve (in charge of monetary [money] policy) increases the money supply yearly, making sure there is enough dollars available, and preventing monetary deflation. Inflation turns into an ugly beast when it happens at a time like now.
The worst happens when the debt of a country is purchased by its own central bank. This is called "quantitative easing" by some, others call it "monetizing the debt". Either way, it doesn't end well. If the Fed decides to openly monetize the debt, purchase US Treasury bonds, and help to fund the US government through 2011, it can't end well.
How does this affect you? I mean I told you this was important right? Other than the obvious, a hidden problem could be lurking in the commodity market. As a man well in tune with agriculture I know for a fact that something isn't right. The closing price for December corn (the primary grain in animal feeds) was 577.6, or in regular person speak $5.77 and 3/4 of a cent...per bushel. Lets compare that to even 5 years ago at this time. That price in November (7th to be exact) for corn to be delivered in December, was a humongous $2.72. Everything is on the rise, the Dow Jones Industrial Average ended up 6 points at 11124. Gold is up, Silver is up, Copper is up, Oil is up, Soybeans are up.
This could be the creation a a whole new bubble. Prices are on the rise, and dramatically so. Partially due to the decrease in yields in corn this year, but also because of speculation in the commodities market that really began during the first part of this economic crisis in 2008. The speculators never left the market. Part of this is due to speculators, part of it is due to the increase of ethanol, and another is due to the decrease in expected yields throughout the US. The problem then becomes one of "what do we do next" especially if the Fed decides to start with QE2 and doesn't half-ass it, goes for the full monty, and puts it all on 00 and gives the wheel a spin.
The best thing that could happen, is the economy is stimulated, and we get out of this sluggish ~1% growth rate, decrease the unemployment rate, and begin to truly recover. Whats the worst that happens? If the US Federal Reserve screws this up, we could be on a path to total economic destruction. Not to be Mr. Doom-n-Gloom here, but the possibilities of something bad happening by the monetization of the debt is higher than it should be. The possible outcome could look something as benign as Japans "lost decade" where they were caught in a liquidity trap, and their economy has never truly recovered. Or, it could be as malignant as hyperinflation.
What needs to happen, is there needs to be a concerted effort to understand the situation that we may be heading towards. A time in which everything we know will not be the same. Hyperinflation can destroy a country in no time at all. It's hyperinflation that caused prices to double in 15 hours in Hungary in 1946, and it's hyperinflation that leads to something like this fella here off to buy a loaf of bread during the Weimar Republic of Germany in 1923.
and its hyperinflation, and the economic chaos it brings that allows people like this to seize power.
Keep you're ears and eyes open. I know I will.
Smus
Oh, Never heard of Quantitative Easing? Didn't even know there was a QE1? Yeah, most of us didn't. Quantitative Easing is troublesome, but that I'll attempt to explain futher down. Quantitative Easing 1, however, took place during the last year. QE1, (if I'm not mistaken) included the purchase of selected mortgage backed securities, primarily the purchase of those nasty little subprime loans, the ones that started it all.
Here's the problem.
The US Treasury doesn't print money. Don't believe me? Read the very top of this $1 bill.
Oh me oh my. Yes, it is a Federal Reserve Note.
So what's the issue here? The issue is that the US Federal Reserve, on Wednesday November 3rd 2010 will announce whether or not they will attempt Quantitative Easing Redux.
Didn't answer your question did I? Let me say it this way, the US Federal Reserve will attempt to increase the US money supply by $500 billion to $2 trillion over the next 12 months. This is a massive increase in the money supply. The issue must be explained in basic economics (so pardon me if you hate economics). If you increase the money supply, the demand for dollars drops. That means that dollars are worth less, which is good right? Not necessarily. What happens when the value of the dollar drops is an increase in prices, but your pay check stays the same, so everything costs more. This is called inflation.
Inflation itself isn't bad, a small amount of inflation is almost required for a growing economy, the US Federal Reserve (in charge of monetary [money] policy) increases the money supply yearly, making sure there is enough dollars available, and preventing monetary deflation. Inflation turns into an ugly beast when it happens at a time like now.
The worst happens when the debt of a country is purchased by its own central bank. This is called "quantitative easing" by some, others call it "monetizing the debt". Either way, it doesn't end well. If the Fed decides to openly monetize the debt, purchase US Treasury bonds, and help to fund the US government through 2011, it can't end well.
How does this affect you? I mean I told you this was important right? Other than the obvious, a hidden problem could be lurking in the commodity market. As a man well in tune with agriculture I know for a fact that something isn't right. The closing price for December corn (the primary grain in animal feeds) was 577.6, or in regular person speak $5.77 and 3/4 of a cent...per bushel. Lets compare that to even 5 years ago at this time. That price in November (7th to be exact) for corn to be delivered in December, was a humongous $2.72. Everything is on the rise, the Dow Jones Industrial Average ended up 6 points at 11124. Gold is up, Silver is up, Copper is up, Oil is up, Soybeans are up.
This could be the creation a a whole new bubble. Prices are on the rise, and dramatically so. Partially due to the decrease in yields in corn this year, but also because of speculation in the commodities market that really began during the first part of this economic crisis in 2008. The speculators never left the market. Part of this is due to speculators, part of it is due to the increase of ethanol, and another is due to the decrease in expected yields throughout the US. The problem then becomes one of "what do we do next" especially if the Fed decides to start with QE2 and doesn't half-ass it, goes for the full monty, and puts it all on 00 and gives the wheel a spin.
The best thing that could happen, is the economy is stimulated, and we get out of this sluggish ~1% growth rate, decrease the unemployment rate, and begin to truly recover. Whats the worst that happens? If the US Federal Reserve screws this up, we could be on a path to total economic destruction. Not to be Mr. Doom-n-Gloom here, but the possibilities of something bad happening by the monetization of the debt is higher than it should be. The possible outcome could look something as benign as Japans "lost decade" where they were caught in a liquidity trap, and their economy has never truly recovered. Or, it could be as malignant as hyperinflation.
What needs to happen, is there needs to be a concerted effort to understand the situation that we may be heading towards. A time in which everything we know will not be the same. Hyperinflation can destroy a country in no time at all. It's hyperinflation that caused prices to double in 15 hours in Hungary in 1946, and it's hyperinflation that leads to something like this fella here off to buy a loaf of bread during the Weimar Republic of Germany in 1923.
and its hyperinflation, and the economic chaos it brings that allows people like this to seize power.
Keep you're ears and eyes open. I know I will.
Smus
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