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Stephen Pickering

Category: Economics

  • The Only Part of the Equation that Ron Paul is Missing

    Ron Paul is correct that gold is important. It’s very important. The only part of the equation that Ron Paul is missing is the demand for money. Inflation is caused by two factors: how much money is printed and how much demand there is for money (growth increases the demand) If you had enough growth it would soak up the excess liquidity and there wouldn’t be inflation.

    The reason Gold is so important to this picture is because it’s intrinsic value (for a variety of factors) is the most resistant or stable to economic or political factors. So what we need is not necessarily a “Gold Standard” but rather a de facto gold standard that uses the price of gold to indicate how much cash to print. In another words, the Fed’s policy should be to keep gold in a very tight trading range. When the price of gold goes above that range, that indicates that there is more cash in the system than the system can handle or demands (like now!) and the fed should sell bonds to soak it up. If and when the price of Gold goes below the target, that’s when they should print, because that indicates the economy is demanding more liquidity.

    When the fed does the opposite, which it usually does, because it ignores the gold signal, then you get the worst of both worlds: too much liquidity and no demand for it, which equals “stagflation”

    Growth is stimulated through fiscal policy (lower taxes, regulation) and inflation could be controlled through a correct monetary policy, which would be to target gold. So there is no reason at all for inflation, even during tough economic times. You can’t print your way to prosperity. You have to increase productivity and add real value.

    A “De Facto” gold standard would not deprive the economy of the liquidity it needs to grow, as the the opponents of such a policy argue as a scare tactic against it. Instead, it would give the economy exactly the amount of liquidity it needs to grow without any inflation. So, in a sense we could get rid of the Fed, or at least downsize it. (No more billion dollar Fed buildings needed!) Because basically it would only take one guy and a computer to effectively execute and maintain such a monetary policy.

  • The Reason for the Internet Connectivity Problem

    We all should be riding on waves of light, but false monopolies propped up by Government regulation of communications has stifled innovation and business plans alike.

    I was just listening to TWiT and they were having this discussion about the internet connectivity problem, the fact that we have a duopoly of telco and cable controlling it and now threatening bandwidth caps that could effect the coming consumption of video streaming that is coming online with Netflix, iTunes, Amazon, and the advent of live streaming from Ustream, Justin.tv, et. al. This is in fact the new paradigm, “Real-Time” as its known in the industry, and the falsely earned duopoly is threatening to turn off the spicket as it were just as video, a major leap forward for the net, wants to take center stage.

    Leo Laporte suggested why doesn’t the government just force the cable companies to sell their access to other companies, just like they do with telco, in order to solve the problem.

    Sounds reasonable, right?

    No, no, no! A thousand times no! This is the very action embodied in the Telco Act of 1996 that caused the problem in the first place. It was the false propping up of competition that killed real competition.

    Remember all those small telco companies that cropped up out of nowhere in the 90’s who promised you the moon and then quickly went broke?

    Their entire business plan was not competitive, not investing their own capital, but merely using government regulation that allowed them to piggy back on existing infrastructure with no capital invested.

    Then the whole thing came crashing down. It sucked the life out of broadband, and since all of the business plans of Web 1.0 were based on ubiquitous broadband, we had the great internet crash of 2000.

    Think about it. If you had the billions of dollars it would take to make a go of it in the connectivity market, would you invest in laying fiber to people’s homes, when the government can come in at any time and force you to resell that access at no profit to an upstart “connectivity” company, a phantom company? NO. And that, my friends, lays the problem.

    We all should have a fiber connection to our home for a reasonable price. The technology is there, the market is there, but the only thing that is standing in the way is Government regulation in the first place.

    People like Leo still believe that the government is on the people’s side in this issue. But it isn’t. The government is on the Oligarch’s side. It’s like the old bit of “Good cop, bad cop.” The government in the major industries plays “Good Cop,” but behind the scenes it is the industry leaders who are writing the very legislation that the Government blesses, and thus stops investment in productivity, and ends up lowering the standard of living for all.

    The only solution is for the government to get out of the way. On the one hand you have to let the Telcos and the Cables do what they want and have their data caps if they want. On the other hand they have to make it very clear that they won’t interfere with any real capital that is anxious to enter the market, making it clear that they can fairly compete.

  • Advice from the Better Business Bureau concerning the 2010 Census

     

    2010 Census

     

    With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft. The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the county. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.

     

    The big question is - how do you tell the difference between a U.S. Census worker and a con artist? BBB offers the following advice:

     

    If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice. Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.

     

    Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census.

     

     

     

    REMEMBER, NO MATTER WHAT THEY ASK, YOU REALLY ONLY NEED TO TELL THEM HOW MANY PEOPLE LIVE AT YOUR ADDRESS.

     

    While the Census Bureau might ask for basic financial information, such as a salary range, YOU DON'T HAVE TO ANSWER ANYTHING AT ALL ABOUT YOUR FINANCIAL SITUATION. The Census Bureau will not ask for Social Security, bank account or credit card numbers, nor will employees solicit donations. Anyone asking for that information is NOT with the Census Bureau.

     

    AND REMEMBER, THE CENSUS BUREAU HAS DECIDED NOT TO WORK WITH ACORN ON GATHERING THIS INFORMATION.

    No Acorn worker should approach you saying he/she is with the Census Bureau.

     

    Eventually, Census workers may contact you by telephone, mail, or in person at home.  However, the Census Bureau will NOT contact you by Email, so be on the lookout for Email scams impersonating the Census.

     

    Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.

     

    For more advice on avoiding identity theft and fraud, visit www.bbb.org

    Posted via email from stephenpickering's posterous

     
     

  • The Unnatural Phenomenon of Inflation

    Today on CNBC they said one could make a pile of money if one could guess when they would raise rates again. This highlights one of the biggest atrocities in the World’s economic system. Trillions of dollars are tied up in the currency futures, hedging the wild swings in the value of currency, trillions that could be invested in productive activities, if only the world had a stable unit of account. The price of commodities didn’t budge an inch from 1920-1971, 51 years of the greatest economic growth in world history. Then in 1971, at the urging of the monetarists, Nixon closed the London Gold window. Gold was $35 an ounce then, and oil was $3.50 a barrel. Inflation is not a natural occurring phenomenon, and especially not due to growth and prosperity. The only thing that causes inflation and deflation is an imbalance in the amount of liquidity in the system, a balance that is the single and only charter of the Federal Reserve. It is a failure of epic proportions.

  • You Go, Blanche Lincoln!

    3 Democrats Could Block Health Bill in Senate – NyTimes.com

    United States Senator Blanche Lincoln
    355 Dirksen Senate Office Bldg., Washington, D.C.  20515
    Office:  202-224-4843; Fax:  202-228-1371.

    Hi,

    I want to go on record as supporting Sen. Lincoln in being AGAINST the Health Care Bill. I believe real Health Care reform could be accomplished by simply removing the regulations that are in place that protects false monopolies in the industry. Blue Cross’s 70%+ market share in Arkansas, for instance, is not something they “earned.” They have that and their high prices simply because of regulations, perhaps at the state level, that crowds out honest competition. A real health care reform act would simply bring down the walls to honest competition and thereby lower prices for all. Another government bureaucracy, especially this one, would simply create another endless money pit that would perhaps bankrupt the Country (some analysts believe Medicare itself is capable of that) but for sure give no value back to the people, as taxes would rise and the money would flow to people who have not earned it, the various “hangers on” and other dishonest people close to the system, who, as is the case with all government programs, are simply there to scoop up the money without providing value.

    Thank you for your time,

    Stephen Pickering
    Little Rock, Arkansas.

  • The Health Care Reform Act of 2009

    Article 1

    1. The Health Insurance Industries’ exemption from the Sherman Anti-Trust Act of 1890 is hereby revoked.
    2. All citizens of the United States shall not be barred from purchasing Health Insurance from any company or individual, foreign or domestic.
    3. All policies may be written in any manner, for any amount, with any provisions the contractor chooses and the contractee accepts.
    4. Congress shall make no laws regulating the contracts or any of its provisions for Health Insurance legally signed between the contractor and contractee.
    5. Congress shall pass no laws forcing any United States Citizen to purchase Health Insurance.

    The End.

    This meeting is hereby adjourned.