Counterfeiting 24/365

The Meaning of Quantitative Easing by Michael S. Rozeff I begin by describing quantitative easing in technical terms. I go on to describe what it means when a central bank and its government engage in quantitative easing. What is quantitative easing? It is a central bank’s purchase of government securities (bills, notes, bonds) directly from the government. The term purchase does not capture the essence of the actual transaction. The government issues a Treasury bill, say. This is a liability of the government. The central bank takes this bill and holds it as its asset. It provides the government with its own official and legal State money or notes (or a checking account for such). The central bank accounts for this note issue as its liability. It is an IOU transferred to the government (or State). In the usual setup, these notes cannot be redeemed for anything. That is, if the government brought these notes to the central bank, it would get nothing in return for them. Hence, the money issue is not really a liability of the central bank. The government accounts for the receipt of these central bank notes as an asset. The net result of the transaction is that the government succeeds in transforming a liability (its issue of Treasury bills) into a new asset (its holding of central bank notes). If a person issues a debt and receives an asset from someone else in return, there is no new asset involved. If a baker issues an IOU and gets an oven in return, the oven is not an increment to the stock of ovens in the world. But when the government issues its IOU (the Treasury bill), it gets an entirely new asset, the central bank money. In the U.S., the government pays interest to the FED that holds the bill, but the FED returns this interest to the Treasury. Hence, the Treasury bill held by the FED is really no liability to the government. The net result of the transaction is that the government has a new asset that it can spend, namely, the FED’s Federal Reserve notes. There will be further effects on the banking system and the economy when the government circulates the notes. These occur through the fractional-reserve banking system, but it is not my aim here to discuss these as plenty of other sources have done this already. The main technical point is that the government has a new asset that is made an asset by coercion, since the money has, by the power of law, been made legal tender. If we had t-accounts for the government and FED and the government issued $1,000 in t-bills, we’d see the following: The government debits its asset: $1,000, Federal Reserve notes. The government credits its liability: $1,000, Treasury bill outstanding. The central bank debits its asset: $1,000, Treasury bill. The central bank credits its liability: $1,000, Federal Reserve notes. When we consolidate the accounts, we end up with the Treasury bill disappearing. The combined entity has Federal Reserve notes (money) as an asset and as a liability. Since it is a phantom liability that can be exchanged for nothing, the government has a new asset with no real liability connected to it. This completes the technical description of quantitative easing. The term quantitative easing has propaganda value. The implied proposition is that something is being eased that is currently tight or restricted. This makes it sound as if something positive and good is being accomplished. What is actually going on, however, is a form of seizure or taxation. It is also called inflation, when the focus is on the additional means of spending that has been created. The Congress lifts the debt limit of the government. Suppose the government then gets money via quantitative easing. All currency in the U.S. and other states is typically forced currency that is made to pass as means of payment by law. Since this currency is imposed by force on the society, the government spending that uses these notes is tantamount to using force to extract goods and services from society. Hence, quantitative easing is seizure and taxation. It is not direct seizure from citizens using soldiers and weapons, nor is it direct taxation by means of tax rates and payments made by citizens. Instead the government takes what it wants by spending its new asset – the newly-manufactured money. This reduces what is available for everyone else to spend on. The reduction in available goods in the private sector is the tax. One result is that society finds that the prices it pays for everything else rise (albeit unevenly). The government’s absorption of goods and services measures the seizure. Whoever participates in the consumption or receipt of those goods and services is the beneficiary of the seizure. If the government gives money to some farmers, they benefit. If it gives the money to Blackwater, it benefits. If it pays off Afghan warlords or Sunni soldiers, they benefit. The government rationales for its seizure and taxation by quantitative easing are all false. They vary according to the situation and what appeal sounds most appealing to a population that does not understand what is actually going on. There are usually some simple slogans that have a marked appeal, because of their simplicity and superficiality. Disposing of them takes more argument than the public is ordinarily used to or wants to hear. For example, the rationale may be that government spending is needed to get the economy moving. This is a total deception, since all that is happening is that goods and services are being shifted from one set of hands to another. When there is excess capacity, such as in the automobile industry at present, the government can buy new autos and stimulate auto demand for a time. But since the private society has already shown that it does not want these autos, a collective purchase by the government adds less to social welfare than it subtracts by the seizure of the goods and services that is necessary to build the autos. Discussing all this in depth is also beyond my limited purpose here. The main point to be made is that when a government resorts to quantitative easing, it shows that it has run out of other means to finance its endeavors. It has reached the end of the line. A government finances itself by taxes. Borrowing is a hidden form of taxation; it defers the taxes to the future. Taxes are more or less visible to the population. They are voted on by Congress or a similar body. They are coercive, but they have at least the partially redeeming feature of being somewhat in the open and somewhat controllable by the citizens who vote for their representatives. Inflationary seizure or coercion via quantitative easing means that the government wants to spend more than it can raise by taxation and borrowing. Its ambition exceeds its grasp. Ordinary coercive means of finance no longer suffice. The government resorts to the printing press. Quantitative easing is a resort to the money printing press. It means seizure and coercion of goods and services from the inhabitants of a country. But it also means either a government that is spending beyond its means, or one whose economy is not strong enough to generate financing by the usual means, or both. Suppose that a company could no longer issue debt to finance its purchases of assets. The capital market (investors) would be vetoing any further corporate expansion. This happens when a company is badly run or has problems that must be addressed or has run out of good investment projects. The governments that resort to quantitative easing are analogous to such companies, except that they can force the society to finance their spending. The term quantitative easing is a relatively new term. It is one of those modern euphemisms that disguises the use of brute force. Even the term inflation, which is what quantitative easing is, fails to capture the human impact of such government acts that invade life, liberty, and property. All such money manipulations, which, of course, are accepted widely by economists as the norm, are the antithesis of a free market. The results cannot be good if society sets up a body with power to inject purchasing power if, when, and as it pleases and to whom it pleases. This is too much power without control over the consequences. This power simply augments government, giving it an uncontrollable option to seize the society’s goods and services. This cannot be a good idea. The supposed benefits of central banking are all illusory and impossible. Standing beside those imagined good effects are the inevitable bad consequences for many, many people, such as the now millions of unemployed whose trades and occupations are now found to be not in demand and who will now be years making the adjustments to find new work and incomes. May 11, 2009 LewRockwell.com

Productivity Killed by its Own Worshippers

The perversion of productivity, intuition, and 27 thoughts on blogging for the artist, don't miss this one. None of this is brain-surgery. In fact, nothing is brain-surgery except -- brain-surgery. Are you lifehacking too much? Productivity is dead! Long live living! The other side of productivity: Coincidences, synchronicity, and serendipity. Intuition. The problem with infinitely optimized and worshipped productivity is that it's all too easy to cover up coincidences, synchronicity, and serendipity out of fear of becoming less than serious. In the same spirit of bringing things back in perspective, consider these 27 thoughts on blogging for the artist -- If you're the real thing, you'll be around in 30 years, still working. Most of these services and sites you now admire will not. You do not need a signed letter from The American Academy of Arts and Letters to begin. Blogging is easy. Art is not. Exactly. Each and every one of them. Read them all. Now, go out and please don't let things happen to you but instead, make sure that you happen to things. Related Items Integrate Life, The Renaissance Way Free ebook Peer pressure, vanity and behavior, motivation tricks and hacks, success and pain, and how to excel, Celebrate Your Beauty.

Olden train

Experts Warn Against Long-Term Use of Common Pain Pills

From NYTimes.com: Aspirin and ibuprofen are staples in just about every medicine chest and first aid kit. They’re sold over the counter, and they’re not expensive. Most people don’t think twice about taking them. But they should — especially if they’re elderly. Last week, an expert panel of American Geriatrics Society pretty much bumped all non-steroidal anti-inflammatory drugs, or NSAIDs, off the list of medicines recommended for adults ages 75 and older with chronic, persistent pain. Long-term use of drugs like ibuprofen, naproxen and high-dose aspirin is so dangerous, the panelists said, that elderly people who can’t get relief from alternatives like acetaminophen may be better off taking opiates, like codeine or even morphine. All this despite the fact that NSAIDs are known to be effective for chronic pain conditions that often plague older adults — and despite the fact that opiates can be addictive. “We’ve come out a little strong at this point in time about the risks of NSAIDs in older people,” said Dr. Bruce Ferrell, chair of the panel that made the recommendations and a professor of geriatrics at the University of California, Los Angeles. “We hate to throw the baby out with the bathwater — they do work for some people — but it is fairly high risk when these drugs are given in moderate to high doses, especially if given over time.” “It looks like patients would be safer on these opioids than on high doses of NSAIDs for long periods of time,” he said, adding that for most elderly, the risk of addiction appears to be low. “You don’t see people in this age group stealing a car to get their next dose.” The risks from chronic use of NSAIDs are myriad. They can cause life-threatening ulcers and gastrointestinal bleeding, a side effect that occurs more frequently and with greater severity as people age. Some NSAIDs may increase the risk for heart attacks or strokes, and they don’t interact well with drugs used to treat heart failure. They can make high blood pressure worse, even uncontrollable, and impair kidney function. And the list of potentially hazardous interactions with other drugs is a long one, experts say. “Physiological changes in the elderly affect the way drugs are absorbed and secreted and how the body responds to them,” said Dr. Keela Herr, a professor at the University of Iowa College of Nursing in Iowa City who researches pain management in the elderly and was involved in drafting the new guidelines. “Younger people can use this class of medicine with limited risks. In older persons, it’s a different story. Physical changes make them more sensitive.” The geriatrics society’s new guidelines say NSAIDs should be considered “rarely” in the population of frail elderly people, and used “with extreme caution” and then only in “highly selected individuals.” For those patients with moderate to severe pain that diminishes the quality of life, opiates may be considered, the guidelines suggest, after both the patient and caregiver are screened for prior substance abuse. It is the third revision of the guidelines, originally created in 1998 and updated in 2002. In this latest version, acetaminophen remains the top choice for chronic pain. But acetaminophen is a fairly weak analgesic, experts say. “Opioids are, everyone agrees, probably the strongest pain medication you have,” said Dr. Roger Chou, a pain expert who was not involved in writing the new guidelines and believes decisions about opioid therapy must be made on a case-by-case basis. “The down side is the potential for abuse, and we’re seeing huge increases nationwide of reports about the misuse and diversion of prescription drugs and related deaths. . . .The concerns about opioids are very real.” He argued that opioids must be prescribed very carefully, no matter what the age of the patient. Patients with chronic persistent pain will be on the drugs for a long time, because the pain usually does not go away, and they will also be at risk of developing other problems related to the medication, such as constipation, nausea and fatigue. The guidelines are not meant to discourage the treatment of pain. On the contrary, chronic pain is rampant among the elderly, affecting an estimated 25 to 50 percent of elderly people living in the community and up to 85 percent of nursing home residents. Often caused by degenerative spine conditions, arthritis and cancer or cancer treatment, chronic pain takes a powerful toll on quality of life. Untreated, chronic pain can disrupt sleep and affect mood, restrict mobility and lead to depression, anxiety and isolation, experts say. It can also contribute to falls, which lead to further complications and often death. Although non-drug treatments like physical therapy, cognitive behavioral therapy and other educational interventions are often helpful, adding drugs to the mix usually enhances treatment, experts say. “There really continues to be a significant amount of unrecognized and untreated pain in older people, and it’s a huge problem,” Dr. Herr said. “A lot of people think that just because they’re getting older they’re going to have pain and just have to learn to live with it. That’s not the case.” Pain cannot always be entirely eliminated, she added. “You can get to the point where it’s in the mild category — where it’s annoying but not causing such impairment that you can’t function and interact and do the things that are important.”

The Clarence Thomas - Leah Ward Sears Friendship

I have previously noted that Leah Ward Sears is a serious contender for Justice Souter's Supreme Court seat. According to the Washington Post, Justice Sears may need to worry that her friendship with Justice Thomas could undermine her bid to join the Supreme Court. According to the story, Thomas reached out to Sears during the early 1990's when she was facing political attacks in Georgia. Sears, who terms herself a moderate with a progressive streak, was apparently touched buy Thomas' interest - and became friends with Thomas. According to the WaPo: It affected her that he would take the time to comfort her in that situation," said Bernard Taylor, an Atlanta lawyer and longtime friend of Sears, now chief justice of the Georgia Supreme Court and a potential nominee to replace retiring U.S. Supreme Court Justice David H. Souter. "They're still friends." I wonder how the two might interact on the Court. We know that they have very different views on some hot-button topics. I assume that liberals worry that Thomas could sway Sears, moving his junior colleague to the right. But it seems equally conceivable that the opposite could happen - Thomas might open his mind to certain perspectives when argued by a person who he respects. And the highest odds of all are that the two of them will retain their personal views, and maintain a friendship. Scalia and Ginsburg don't seem to have had a problem with this.

satisfying veggie eats in Stockholm

as you walk through Stockholm, there are a lot of food stands, many selling grilled items like hot dogs, burgers, and falafel. many also have veggie dogs and veggie burgers- woo! just make sure to ask them to leave the creamy sauce off the veggie burger, and the yogurt sauce off the felafel, and you have a quick and tasty vegan snack as you're walking around.my uncle had scouted this wonderful veggie restaurant for us, the Légumes Vegetariskt Matcafé on Hornsgatan, in his neighborhood of Södermalm. This casual restaurant allows you to pick from among a lot of options, to assemble a plate to your taste. Out of about 20 different dishes, only 2 were vegetarian, all the rest were vegan. On my plate above, you see brown rice, a stew made with potatoes, aubergines, tomatoes, and peppers, some soy beef in a spicy sauce, a couple of stuffed grape leaves, and some salad. This was so satisfying! Unfortunately, I was stuffed after the first plate- I say unfortunately, because you can go back and get refills if you want. Daiku and my uncle both took advantage of that option!More Swedish foods to come!

i have much farther to go

I need a favor.My blog is moving. Officially. I can't magically import all my old posts into iWeb, and I want to have a "top 10" posts archive. Any of you have a post of mine that is especially memorable?I am committing to the move. Officially. Comments are disabled for now - but it's like that on the server in general since the switch to MobileMe. I know it sucks for now, but I love the way it looks, and I know it will get better. And it's not done yet. I haven't moved my daily reads yet and some other things need done - but my dad will have the upgrade for me next week, so I'm kinda waiting for that before I do anything crazy - like themes and backgrounds and stuff. Yay pretties!So I am here now.The one thing I ask is for you those of you that have me in your blog roll to change the address tohttp://web.mac.com/questionsfordessertI am keeping this blogger blog up because I don't feel like cutting and pasting all my old entries (no easy way to do so) and I also like the idea of starting over at a new blog.I may randomly post here to direct people to my iMac blog, and feel free to keep commenting here. I get them by email, so I will see them.Oh, and Kim, I'm still working on your cd! I've got too many songs to fit on 1 but not enough to fit on 2, so I'm struggling a little. It is in progress though.What? You want a prize too? Change my link in your blogroll (or put me there!) and post a comment (on this blog, obviously). First 5 will receive mix cds!And visit me!