Richard Feynman explains everything
Here are some great short clips of Feynman explaining all sorts of things you were probably never taught (properly) in school. What keeps a train on the track Niall Ferguson – The Ascent of Money
Niall is a Professor of History at Harvard, he has a written a book about the history of money. What follows is a PBS documentary of his book. Part 1 We already have hyperinflation… in the shadow banking system
We have two banking systems, the official banking system and the shadow banking system. The official banking system runs on dollars, the shadow banking system runs on collateralized debt and other derivatives that trade as if they were dollars, I will call those derivatives shadow bucks. The reason dollars increased in value (which many people, myself included, didn’t expect) is due to what I call a “hyperinflation” of shadow bucks. The value of shadow bucks collapsed (as the housing and credit bubbles burst) causing prices measured in shadow bucks to soar. As any intelligent Zimbabwean with Zimbabwe dollars has already demonstrated, when the value of your money collapses you find alternate forms of money. Zimbabweans fled to US dollars, so did the holders of shadow bucks. The effect may not have been that significant if it weren’t for the size of this market — I didn’t appreciate the extent to which the shadow banking system dwarfs the official banking system. The buying pressure from economic refugees overwhelmed any other consideration. The case for gold in our time
I hear many people predicting gold will drop below $500. If it does, it would represent the buying opportunity of a lifetime, perhaps of several lifetimes. Those who believe gold should not continue its bull market advance believe we are entering a long-term economic bust that will reduce demand for everything other than money and consumer essentials. Indeed that would be true should the government sit idle, and they’re not, but that’s a topic for another post. Even if we experience a long term quasi-deflationary bust, here is where their analysis is mistaken — they presume people will always consider dollars the best form of money. Some say, “inflation in what you need, deflation in what you don’t” and since gold isn’t edible the price should drop, but that assumes people don’t need savings. Of course people need savings, especially rich people, and when you have a distribution of income as unequal as today, that means an enormous amount of savings may be looking for a new home. “I’ve seen kids making guns with their bare hands. In Caves.”
Very interesting look at the tribal areas of north west Pakistan. John Taylor Gatto – Weapons of Mass Instruction
His book, Weapons of Mass Instruction, is essentially a rant outlining his hatred of forced public education. It’s compelling and resonates with many of my personal experiences, for example read Are Universities Destroying the Economy. Even if you disagree with the conspiracy element of his hypothesis (public schools were not institutions created with the intent to educate, but to condition people to become obedient consumers and workers) you must take his opinions seriously, because they have the ring of truth. Watch his 1991 documentary, Classrooms of the Heart. The last greatest hope: technology
I was shopping for a new computer and office chair a few weeks ago and was struck by how absurd prices have become. I bought a fully loaded quad-core PC for about $500 and was stunned to find the best office chairs cost even more! What kind of crazy world do we live in? Consider all the research, engineering, design, manufacturing, assembly, shipping from the four corners of the earth… required to build a computer, then compare that process to a few pieces of plastic/metal with a cushion wrapped in some cloth or leather. Are you kidding me? That’s an astounding testament to the incredible productivity of the technology sector and those who work in it. Every other industry sucks in comparison, you heard me. Government steals money from bankrupt people to waste on frivolous projects
This is my entry to Nick Rowe’s challenge to come up with a model demonstrating the damages of fiscal stimulus. The belief in government stimulus requires us to believe the previous level of demand is sustainable, desirable and not declining for some fundamental reason. That isn’t necessarily a question of economics, you can’t plot culture on a chart. If people were comfortable in previous decades living with more debt-based consumption and a bias towards equities instead of savings, but the culture changes and people are no longer comfortable with that formula, the economy has changed for a very real and fundamental reason. If people want less, why should the government force feed us things we don’t want? If people are determined to save and the government threatens to destroy savings (with negative interest rates or some other stupid ideas) people will simply find alternate means to save. Maybe they will hoard food or gold and cause other problems like shortages and hunger. Commanding Heights (PBS)
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