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Author: Stephen Pickering

  • The Biggest Problem the World Faces: No Stable Unit of Account

    Here’s the best way to put it: Quantitative Easing (QE) is like saying that simply feeding a guy will make him exercise more. It doesn’t. It just makes him more fat (inflation). On the other hand, someone who is working out and growing muscle (ie, a metaphor for a growing economy) does need to be fed more (i.e. in economic terms this is the time to increase liquidity) or else his body won’t have the energy or building blocks to create the new muscle (i.e., analagous to derailing a growing economy by raising interest rates and choking it.) Either way, whether we have growth or recession, we can’t win. And that’s why we have continual crisis after crisis, at a time in our Civilization’s history when there should instead be a Cornucopia of Abundance for all and a Golden Age.

    The sole mandate of the Federal Reserve, or any “Central Bank” should be to keep the supply and demand of liquidity (a fancy word for money) in balance. If there’s too much supply in relation to demand, then you get inflation. And this is the ONLY cause of inflation. They would have you believe that growth causes inflation, and that inflation is somehow a ‘natural’ occurence. But growth in no way causes inflation. Because growth causes an increase in production as much or even more so than it does in consumption. Growth also causes innovation with increases in productivity and efficiency. They try to make you believe that inflation is a natural occurance so that they can keep their jobs, their huge budgets, and their elevated status in society of some kind of Knights continuously “fighting inflation.”

    On the other hand if demand for liquidity outstrips supply, which is the case usually during economic booms, not only does this cause ‘deflation’ but even worse it chokes off the “air supply” of much needed liquidity and kills the boom in it’s tracks. An example of this would be the late nineties economic boom caused by the Internet boom that went suddenly bust in 2000, not because of failed business plans, but because the air supply was cut off. An example of the deflation of that period was when oil hit $10 a barrel.

    So, the Federal Reserves actions not only cause and unstable unit of account, they actually cause the downturns and “Financial Crises’” that seem to be a continual part of our lives, which is so ironic considering the times we live in: Technology and Science, whose knowledge and actual physical products are doubling in power and efficiency every 12-18 months, driving productivity increases throughout every area of our economy. Indeed, under such salutary conditions, it should be impossible to have any kind of economic crisis. There must be something that is throwing a monkey wrench, so to speak, in our economy, and unnaturally derailing it.

    The biggest problem in the United States and the World is that adding Monetary Liquidity doesn’t stimulate economic activity. It only causes inflation. And through inflation, it actually sludges up and slows the economy even more. That’s the biggest problem that the World faces: is that we don’t have any Standard Unit of Account.

    Only three things can increase economic activity: An increased appetite for risk, more work, or more efficiency, which is usually supplied through innovation.

    People are only going to work more if there is a financial incentive (unless they are one of the lucky few who love their work so much, that they’d rather be doing that than what they like to do in the free time. This is why a lot of people advise that whatever it is that is your hobby, you should consider making into your career. Or the other famous phrase that’s been used so much that it’s almost lost its meaning: ‘Do what you love.’ Or Joseph Campbell’s famous phrase: “Follow your Bliss.”)

    So, basically, the only way to achieve this kind of productivity, is through fiscal policy, reducing the amount of tax upon physical work. Allowing workers to keep more of what they earn.

    Increasing productivity through efficiency is intimately tied to innovation, which not always, but almost always is tied to the first part of the equation, which is an increased appetite for Capital Risk. This second part can only be achieved fiscally as well. A decrease or elimination of all unnecessary regulation (ie, regulation that is not helping or protecting the public) and a lowering or completely zeroing out of the Capital Gains tax. Indeed, many Economists believe (Alan Greenspan being one, I think) that the no. 1 impediment to raising the standard of living for all is the Capital Gains tax.

    This is not a tax on merely the “Wealthy.” For taxing Capital Gains directly decreases the amount and the rate of innovation in every area of society and the economy, which has a direct impact on the standard of living for all. Also, the Capital Gains tax is applied to every amount. So if a middle class or lower middle class person makes, say $1000 on a successful use of his mind and productive flow of capital into an area of growth in the form of a successful investment, he is taxed the same rate as someone who makes a million. And one could argue that the $300 confiscated from him is more of a discouragement as well as a practical harm, from a day to day living standpoint, than the $300,000 confiscated from the Wealthy person.

    And what is more is that it’s the millions of thousand dollar investments that make up a much more huge majority of the nations Capital markets than the few million dollar investments. Whether they are in the form of a stock certificate on Wall Street or a small business on Main.

     

    Related Links:

    I wrote a comment to this Yahoo post:
    “So true. Monetary “Stimulus” doesn’t stimulate anything except inflation. There’s no evidence of it ever stimulating economic activity or “growth.” The only way to create a runway for growth and jobs is to maintain a stable unit of account, which should be, in fact, the only mandate of a Central Bank. “

  • The Law of Detachment

    The Law of Detachment:

    “If you get attached to the outcome, you won’t be in the process.” – Deepak Chopra

    “Life is a metaphor for what’s happening in our consciousness.” – Deepak Chopra

    I guess I should add this to my “Consciouness Quotes” page, or my “Deepak Chopra Quotes” page. I don’t know about you, but whenever I’m watching something or reading something that I’m interested in, it could be anything: Science, Spirituality, Entertainment (the fact that we feel the need to ‘categorize’ everything speaks volumes about the state of fragmentation our consciousness is, indeed, in.), there’s always one or two things that really “Hit home” with my “Subconscious” or my “Archetypal Instinct.” I feel the need to write these down, to remember them.

    I wish I could find a way to organize them in a better way, but for now the spontaneity of a blog post will have to do.

     

    Related:

     

  • Considering an Investment in Pandora ($P) in Light of Spotify, Rdio, and Songza

    I really fell in love with Pandora a year or two ago. I think the market cap was treading around 2 billion. I told myself that if the Market Cap hit 1.5 billion, I’d make an investment. Well, I haven’t logged it, but it seems like it must have bounced off 1.5 billion about 7 or 8 times in the last year and a half. Seems like it’s bounced between about $9.50-and $11.50 about the same many or more times during this period. From that perspective it seems it would make a great “Channeling” stock, as the traders call them.

    But then, a couple months ago, I subscribed to Spotify, and from a consumer point of view I haven’t looked back. I love it so much. I thought I might still use Pandora occasionally for “discovery” but since then Spotify has launched their own “Radio” feature. So, for myself, I literally can find no reason to use Pandora anymore.

    Still, I have Pandora (P) on my “Stock Watch” list. I still believe it’s part of the bigger paradigm of all media moving to the digital. So I still think it would probably be a good investment, just on the general paradigm itself. It’s hard for me to make an investment in a product that I don’t use, though. If, however that changes, and they launch some new features that make me want to use it again, I’m sure I’ll even be more excited.

    Being in this state of wondering whether to invest or not, I was happy to come across this GigaOm article today: Despite New Competition Pandora Grows It’s Users

    The take away is that Pandora is still growing fast in registered users and total minutes per month of listening, but the number of minutes per registered user is actually decreasing, which is weird, until I think about it: I’m a registered user, and my usage has dropped to Zero because Spotify finally picked me off. Back when I was in love with Pandora, I thought, I’d never pay a subscription, but I think seeing Spotify constantly in my Facebook Newsfeed finally wore me down. Like Ogilvy said about advertising: The first time you see an ad, you curse it. The tenth time you see it, you’re writing a check out for the product. Anyway, the GigaOm post inspired me to comment on his site, which I copy and paste here:

    “I was a big Pandora fan last year, and I told myself I’d make an investment at a 1.5 billion market cap, which it’s close to now, and has bounced off of several times, but since I’ve become a Spotify Subscriber, or actually since Spotify launched their “Radio” feature, I don’t see any need to go back to Pandora. That’s what keeps me from making an investment, myself. I don’t use it. But I do believe it will grow with the whole digital revolution, as you mention. It definitely had a head start on mobile and has brand recognition.
    Once crucial feature of Spotify and Rdio, which seems so vane and egotistical, yet very potent, is the sharing what you listen to to Facebook. I mean even if I own an album, I usually will prefer to listen to it on Spotify, to show everyone what I’m listening to, especially if the record or artist is considered “hip.” I guess Pandora has this feature, but I never see it in my feed. I constantly see Rdio and Spotify in my feed though, which obviously is also free and invaluable advertising for them too. I don’t know why Pandora doesn’t copy all of Spotify’s features (assuming they can) just as Spotify has copied one of the crucial features of Pandora: Discovery.”

  • The Moments of the Big Bang From the Perspective of Inflation.

    In the moments of the Big Bang an amount of space the size of Molecule expanded to the size of the Milky Way Galaxy (100,000 Light Years) in a billionth of a billionth, of a billionth, of a second.

  • Rackspace Cloud Sites Advantages: Pages that Load in under 2 Seconds

    pingdom load testAnd as you can see from the photo to the right, you sometimes even get Millisecond loads! And keep in mind that is all the way from Amsterdam to Dallas/Ft. Worth.

    I would be remiss if I didn’t mention CloudFlare here too. I use CloudFlare connected to my Cloud Sites account. And they are at least partially if not the majority reason one gets such fast load times. They do a lot of things to optimize every aspect of your site as well as protecting it from botnets, scrapers, hackers, and email harvesters.

    Oh, and did I mention CloudFlare is free? I mean they do have a paid version, but the free version, which I’m using, gives you all these advantages I’m talking about. Never has a company built up such good will in my brain. I’ll probably end up paying for the “Pro” version just because of the amount of “Goodwill” they’ve built up in my brain.

    This company should be one of Seth Godin’s “Case Studies.”

    Anyway, the advantage of Cloud Sites is simply that you get the best in managed hosting, best equipment, facilities, data center, Cloud Technologies, 24×7 fanatical maintenance. The “best in class” nature of the facilities combined with Cloud Technology, allows for two additional things: Superior Uptime and the ability to handle all the traffic that can be thrown at it.

    Now you can step up to a dedicated server, or even a Cloud Server, but the performance you get with Cloud Sites + CloudFlare for the price and the level of management, I believe, is unmatched.

    To me, Cloud Sites is like the Apple of hosting. You know you’re getting the ‘best’ but it’s also easy to use. You feel safe, and you don’t feel like you have to be a geek to use it. Although if you are a geek, and there’s nothing wrong with that (I’m at least part geek), it’s still a lot of fun to work with.

  • How to Kill a Task or Force Quit an Application on the Galaxy SIII

    Coming from iPhone, everything is taking a learning curve, but less than you might imagine, as each year, Android gets better and better, and this Galaxy SIII, as I write seems to be the phone of the moment.

     

    Not that I understand the rationality behind how the pages are ordered or where they put the icons on the page or even the concept of “Widgets”, but out of the box, which is pretty much the way I’m using it now, if you “swipe” enough pages you’ll come across an icon that is “gear shaped” called “Settings.” On mine its at the bottom of the page, bottom right, to the right of “All Share Play” “S Memo” and “Gallery.”

     

    So you click settings and about half way down the page is “Application Manager,” and then that shows you all of your apps running. Click any app and you can click “Force Stop,” which will do the trick.

     

    I don’t know about you, I mean I love spotify, but there seems to be something buggy about the app, both on iOS and Android. Especially when switching between Wifi and Mobile data. It’ll just stop working. Doesn’t handle the hand off for some reason. And then it’s like you have to kill the app and re-open it. ANNOYING!

    What’s weird is, even before I learned how to “kill an app” on Android, the Spotify app would suddenly come on and go off seemingly at will, for no reason that I could think of. The bars on my Wifi would be full (I’m not 10 feet away from the wifi router) and one minute Spotify would act like there’s no connection and then 10 minutes later as I’m working on something else, having forgotten about it, it would suddenly come on. I tend to think it’s a Spotify issue, as I had similar issues even on iOS with it.

    Love Spotify though, just hope they’ll fix this bugginess soon.

    Oh, I’ll put some screen shots up of this whole process once I figure out how to do that on Android.