"President Obama could do this by announcing a NGDP level target that
would be implemented by the Treasury Department creating
large-denomination platinum coins that would be deposited at the Fed and
used to fund checks to the public. The Treasury Department would keep
making these coins until the the NGDP level target was hit. If NGDP
went above the target the Treasury Department would issue bonds to
withdraw the excess money."
--http://macromarketmusings.blogspot.com/2012/04/obama-needs-his-fdr-moment.html
This is still a really stupid idea, but an interesting idea would be to issue lower value coins, say $1 million platinum coins. And instead of just depositing them with the Fed, how about having a lottery and give 1 million of these away at random? They could be redeemed at the Fed, and have taxes taken out at that point. Some of the coins wouldn't be redeemed at all, as some collectors would want them.
That is a better idea than the trillion dollar coin.
Friday, June 29, 2012
Thursday, June 28, 2012
Broccoli Insurance
Could Congress pass a law requiring everyone to purchase Broccoli Insurance? Such insurance would cover 80% of the cost of broccoli, leaving the consumer with only a 20% co-pay, and thus bring down the cost. The reasoning would be that eating broccoli makes you healthy, which would have an impart on health care, which Congress has power to regulate.
But you might say, I hate broccoli and Congress can't make me eat it. But au contraire, you are engaged in the broccoli market by not eating broccoli. You are self-insured for broccoli by voluntarily choosing not to purchase broccoli insurance. Thus you are an active participant and the Commerce Clause gives Congress the power to regulate it.
The Chief Justice presents the argument, which he ultimately rejects, as follows:
"Many Americans do not eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance. The failure of that group to have a healthy diet increases health care costs, to a greater extent than the failure of the uninsured to purchase insurance. See reports detailing the “undeniable link between rising rates of obesity and rising medical spending,” and estimating that “the annual medical burden of obesity has risen to almost 10 percent of all medical spending and could amount to $147 billion per year in 2008”). Those increased costs are borne in part by other Americans who must pay more, just as the uninsured shift costs to the insured. See a report noting “overwhelming evidence that individuals with unhealthy habits pay only a fraction of the costs associated
with their behaviors; most of the expense is borne by the rest of society in the form of higher insurance premiums,government expenditures for health care, and disability benefits”). Congress addressed the insurance problem by ordering everyone to buy insurance. Under the Government’s theory, Congress could address the diet problem by ordering everyone to buy vegetables. 'Improved nutrition, appropriate eating behaviors, and increased physical activity have tremendous potential to . . . reduce health care costs'".
The dissent thinks the Chief Justice is being ridiculous, and says that just because you are required to purchase health insurance doesn't mean that the government could require people to purchase broccoli:
"THE CHIEF JUSTICE cites a Government mandate to purchase green vegetables. One could call this concern “the broccoli horrible.” Congress, THE CHIEF JUSTICE posits, might adopt such a mandate, reasoning that an individual’s failure to eat a healthy diet, like the failure to purchase health insurance, imposes costs on others. Consider the chain of inferences the Court would have to accept to conclude that a vegetable-purchase mandate was likely to have a substantial effect on the health-care costs borne by lithe Americans. The Court would have to believe that individuals forced to buy vegetables would then eat them (instead of throwing or giving them away),would prepare the vegetables in a healthy way (steamed or raw, not deep-fried), would cut back on unhealthy foods, and would not allow other factors (such as lack of exercise or little sleep) to trump the improved diet. Such “pil[ingof] inference upon inference” is just what the Court refused to do in Lopez and Morrison."
The "broccoli inference", thus differentiates health care from broccoli:
"The failure to purchase vegetables in THE CHIEF JUSTICE’s hypothetical, then, is not what leads to higher health-care costs for others; rather, it is the failure of individuals to maintain a healthy diet, and the resulting obesity, that creates the cost-shifting problem. Requiring individuals to purchase vegetables is thus several steps removed from solving the problem. The failure to obtain health insurance, by contrast, is the immediate cause of the cost-shifting Congress sought to address through the ACA. Requiring individuals to obtain insurance attacks the source of the problem directly, in a single step."
But then the dissent claims that while the government could not require people to purchase broccoli, could Constitutionally require that you only eat broccoli. But don't worry, even though it had the power, it wouldn't do that.
"The commerce power, hypothetically, would enable Congress to prohibit the purchase and home production of all meat, fish, and dairy goods, effectively compelling Americans to eat only vegetables. Yet no one would offer the “hypothetical and unreal possibilit[y],” of a vegetarian state as a credible reason to deny Congress the authority ever to ban the possession and sale of goods. THE CHIEF JUSTICE accepts just such specious logic when he cites the broccoli horrible as a reason to deny Congress the power to pass the individual mandate.
But you might say, I hate broccoli and Congress can't make me eat it. But au contraire, you are engaged in the broccoli market by not eating broccoli. You are self-insured for broccoli by voluntarily choosing not to purchase broccoli insurance. Thus you are an active participant and the Commerce Clause gives Congress the power to regulate it.
The Chief Justice presents the argument, which he ultimately rejects, as follows:
"Many Americans do not eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance. The failure of that group to have a healthy diet increases health care costs, to a greater extent than the failure of the uninsured to purchase insurance. See reports detailing the “undeniable link between rising rates of obesity and rising medical spending,” and estimating that “the annual medical burden of obesity has risen to almost 10 percent of all medical spending and could amount to $147 billion per year in 2008”). Those increased costs are borne in part by other Americans who must pay more, just as the uninsured shift costs to the insured. See a report noting “overwhelming evidence that individuals with unhealthy habits pay only a fraction of the costs associated
with their behaviors; most of the expense is borne by the rest of society in the form of higher insurance premiums,government expenditures for health care, and disability benefits”). Congress addressed the insurance problem by ordering everyone to buy insurance. Under the Government’s theory, Congress could address the diet problem by ordering everyone to buy vegetables. 'Improved nutrition, appropriate eating behaviors, and increased physical activity have tremendous potential to . . . reduce health care costs'".
The dissent thinks the Chief Justice is being ridiculous, and says that just because you are required to purchase health insurance doesn't mean that the government could require people to purchase broccoli:
"THE CHIEF JUSTICE cites a Government mandate to purchase green vegetables. One could call this concern “the broccoli horrible.” Congress, THE CHIEF JUSTICE posits, might adopt such a mandate, reasoning that an individual’s failure to eat a healthy diet, like the failure to purchase health insurance, imposes costs on others. Consider the chain of inferences the Court would have to accept to conclude that a vegetable-purchase mandate was likely to have a substantial effect on the health-care costs borne by lithe Americans. The Court would have to believe that individuals forced to buy vegetables would then eat them (instead of throwing or giving them away),would prepare the vegetables in a healthy way (steamed or raw, not deep-fried), would cut back on unhealthy foods, and would not allow other factors (such as lack of exercise or little sleep) to trump the improved diet. Such “pil[ingof] inference upon inference” is just what the Court refused to do in Lopez and Morrison."
The "broccoli inference", thus differentiates health care from broccoli:
"The failure to purchase vegetables in THE CHIEF JUSTICE’s hypothetical, then, is not what leads to higher health-care costs for others; rather, it is the failure of individuals to maintain a healthy diet, and the resulting obesity, that creates the cost-shifting problem. Requiring individuals to purchase vegetables is thus several steps removed from solving the problem. The failure to obtain health insurance, by contrast, is the immediate cause of the cost-shifting Congress sought to address through the ACA. Requiring individuals to obtain insurance attacks the source of the problem directly, in a single step."
But then the dissent claims that while the government could not require people to purchase broccoli, could Constitutionally require that you only eat broccoli. But don't worry, even though it had the power, it wouldn't do that.
"The commerce power, hypothetically, would enable Congress to prohibit the purchase and home production of all meat, fish, and dairy goods, effectively compelling Americans to eat only vegetables. Yet no one would offer the “hypothetical and unreal possibilit[y],” of a vegetarian state as a credible reason to deny Congress the authority ever to ban the possession and sale of goods. THE CHIEF JUSTICE accepts just such specious logic when he cites the broccoli horrible as a reason to deny Congress the power to pass the individual mandate.
The real problem with Hong Kong/China integration
They drive on opposite sides of the road. Cars from the mainland can't go to Hong Kong and cars from Hong Kong have to have special licenses to go to the mainland.
"While Hong Kong’s vehicles with steering wheels on the right side can travel (with the addition of expensive to obtain dual license plates) to the mainland, the reverse is not true. That is now impacting massively expensive projects such as the US$3 billion Hong Kong-Macau-Zhuhai Bridge, currently under construction, which is expected to transport 14,000 vehicles daily upon opening in 2016 to a capacity of 49,000 by 2035. It is being built to China’s right side standards, but the ends won’t match up either in Hong Kong or Macau, which is also left hand drive.
As things currently stand, those predictions over traffic volume are now being downgraded by 90 percent, leaving the bridge as a potential white elephant. Just 22,000 licenses have been granted in total to Hong Kong registered vehicles with right side steering wheels to travel to China."
--http://www.2point6billion.com/news/2010/07/28/hong-kong-faces-left-hand-drive-dilemma-6538.html
"While Hong Kong’s vehicles with steering wheels on the right side can travel (with the addition of expensive to obtain dual license plates) to the mainland, the reverse is not true. That is now impacting massively expensive projects such as the US$3 billion Hong Kong-Macau-Zhuhai Bridge, currently under construction, which is expected to transport 14,000 vehicles daily upon opening in 2016 to a capacity of 49,000 by 2035. It is being built to China’s right side standards, but the ends won’t match up either in Hong Kong or Macau, which is also left hand drive.
As things currently stand, those predictions over traffic volume are now being downgraded by 90 percent, leaving the bridge as a potential white elephant. Just 22,000 licenses have been granted in total to Hong Kong registered vehicles with right side steering wheels to travel to China."
--http://www.2point6billion.com/news/2010/07/28/hong-kong-faces-left-hand-drive-dilemma-6538.html
Monday, June 25, 2012
Soros: 3 days left to save Euro
Billionaire investor George Soros says Germany has three days left to spearhead the creation of the "embryo" of a European fiscal union in order to save the eurozone.
"There's a disagrement on the fiscal side, and unless that is resolved in the next three days, then I'm afraid the summit could turn out to be a fiasco, and that could be acutally fatal because you are facing the possiblity of Greece leaving the euro and perhaps the European Union, and you need to strengthen the remaining euro structure to withstand that shock," Soros told Bloomberg TV.
--http://www.huffingtonpost.com/2012/06/25/george-soros-germany_n_1623810.html
Ok, this should be easy enough to test. Let's see what happens on 6/28. The healthcare decision will also be announced that morning.
Update: 6/28. The eurozone hasn't fallen apart yet. I'll give it one more day before calling him an idiot.
Update: 7/2. This sort of prediction is meaningless unless you define the terms more carefully. The Eurozone hasn't fallen apart yet, so I guess it has been "saved". Yet was the embryo of a European fiscal union created? I don't think so, but who knows. So I say either his prophecy failed, or his prediction was too meaningless to tell. Either way, he failed. George Soros, you have no credibility. The next time you say something we will just ignore it.
"There's a disagrement on the fiscal side, and unless that is resolved in the next three days, then I'm afraid the summit could turn out to be a fiasco, and that could be acutally fatal because you are facing the possiblity of Greece leaving the euro and perhaps the European Union, and you need to strengthen the remaining euro structure to withstand that shock," Soros told Bloomberg TV.
--http://www.huffingtonpost.com/2012/06/25/george-soros-germany_n_1623810.html
Ok, this should be easy enough to test. Let's see what happens on 6/28. The healthcare decision will also be announced that morning.
Update: 6/28. The eurozone hasn't fallen apart yet. I'll give it one more day before calling him an idiot.
Update: 7/2. This sort of prediction is meaningless unless you define the terms more carefully. The Eurozone hasn't fallen apart yet, so I guess it has been "saved". Yet was the embryo of a European fiscal union created? I don't think so, but who knows. So I say either his prophecy failed, or his prediction was too meaningless to tell. Either way, he failed. George Soros, you have no credibility. The next time you say something we will just ignore it.
Is the CNH becoming a global currency?
See: http://www.hsbcnet.com/rmb
The CNH is the offshore version of the Chinese Yuan. It is regulated by the Hong Kong Monetary Authority (HKMA), thus there are 2 competing currencies in Hong Kong.
A recent idea is to merge it with the Hong Kong Dollar, thus providing instant credibility.
The CNH is the offshore version of the Chinese Yuan. It is regulated by the Hong Kong Monetary Authority (HKMA), thus there are 2 competing currencies in Hong Kong.
A recent idea is to merge it with the Hong Kong Dollar, thus providing instant credibility.
“The obvious answer is to combine the dead HK dollar with the embryonic CNH. This would be a completely independent, floating currency not fungible with the CNY. The CNY would be used for current account transactions such as exports and imports, while the new Chinese dollar (HKD/CNH) would cater for capital account financial transactions.”http://blogs.ft.com/beyond-brics/2012/06/24/fund-file-hk-dollar-route-to-rmb-convertibility/
Deflation is more likely than inflation
See: http://www.martinarmstrong.org/files/How%20Do%20Empires%20Die/index.htm
Is this true? In deflation, the price of gold keeps dropping. Debts become more expensive to pay back, and when defaults occur, the amount of money in circulation drops.
Eh, there might be something to this, but I don't see it happening now. Check out M2. It keeps going up at the rate of about 10%/year. No deflation here, except in real estate.
Is this true? In deflation, the price of gold keeps dropping. Debts become more expensive to pay back, and when defaults occur, the amount of money in circulation drops.
Eh, there might be something to this, but I don't see it happening now. Check out M2. It keeps going up at the rate of about 10%/year. No deflation here, except in real estate.
Friday, June 22, 2012
The Trillion Dollar Coin, Part II
An alternative strategy thatsounds much more ridiculous but is arguably on firmer legal footing refers to 31 USC § 5112 - Denominations, specifications, and design of coins.
Section (k) of this statute states that the secretary of the Treasury "may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time." The intention here is to have the mint make a small number of platinum collector coins as a minor giveaway to platinum interests. But the plain text of the law appears to indicate that Secretary Geithner can mint a $2 trillion platinum coin, give it to the Federal Reserve, and then use that deposit as the backing to finance government operations.
--http://www.slate.com/blogs/moneybox/2012/06/20/pelosi_says_14th_amendment_makes_the_debt_ceiling_unconstitutional.html
--http://www.slate.com/blogs/moneybox/2012/06/20/pelosi_says_14th_amendment_makes_the_debt_ceiling_unconstitutional.html
Recession Watch
Recessions are officially defined by the National Bureau of Economic Research; however, they will wait 1 to 2 years after events to see all the data before they make announcements. The Economic Cycle Research Institute produces indexes weekly and monthly; however, they don't call recessions.
By combining the two, we can see when a recession starts in almost real time. The last three recessions were July 1990-March 1991, March 2001-Nov 2001, and Dec 2007-June 2009. Looking at just these two periods, were there any data that signaled the start of the recession?
Yes, first the coincident monthly index growth rate. When this drops below 0, we are in a recession. This was below zero during Oct. 1990 to Jun. 1991, so this matched the recession with a 3 month lag. It was also below zero during April 2001-Mar 2002, so it matched the recession is a 1 to 4 month lag. It was below zero during May 2008 to Dec. 2009, so it had a lag of 6 months. So it is safe to say that if the monthly growth rate is below zero then we are in a recession, with a possible lag of up to 6 months (i.e. the recession could have started up to 6 months earlier).
Looking at the weekly leading index growth rate, it was below 1 in April 1990 and stayed there until Feb 1991. So this match the recession exactly except was early by 3 months. It dropped below zero again in Dec 1991 (2 weeks), Nov 1994-April 1995 (20 weeks), Aug 1998 (23 weeks). In May 2000, it dropped below 1.0 and stayed there until Jan 2002. So again this matched except it was 11 months early on starting and 2 months early on ending. It next dropped below 1 in Aug 2002 (37 weeks), July 2004 (20 weeks), Jan 2005 (5 weeks), May 2005 (6 weeks), June 2006 (21 weeks). In Aug 2007 it dropped below 1 and stayed there until June 2009. So this was 4 months early. Since then the growth rate was below 1 in May 2010 (30 weeks), Aug 2011 (32 weeks) and April 2012 (9 weeks so far).
So I think any period where the weekly growth rate is below 1 for more than 6 weeks is what I call a mini-recession. A mini-recession may or may not turn into a recession. Since January 1990 these are:
April 20, 1990-March 1, 1991
Nov 25, 1994-April 7, 1995
Aug 21, 1998-Mar 12, 1999
May 12, 2000-Dec 28, 2001
Aug 2, 2002-Apr 4, 2003
July 16, 2004-Nov 26, 2004
Jun 23, 2006-Nov 10, 2006
Aug 7, 2007-June 12, 2009
May 28, 2010-Dec 17, 2010
Aug 19, 2011-Mar 23, 2012
April 20, 2012-current
So there were 11 mini-recessions, of which only 3 turned into recessions.
What separates a recession from a mini-recession? If the coincedent growth rate is negative at the same time. So what are we to conclude? That we are in a mini-recession, but we are not in a recession at this point.
One more question is, what is the maximum negative weekly growth there has been without being in a recession? On 7/23/2010, the weekly growth rate was -10.9, but we were not in a recession.
==================
Update 11/9/12: the last mini-recession ended on 8/24/12.
By combining the two, we can see when a recession starts in almost real time. The last three recessions were July 1990-March 1991, March 2001-Nov 2001, and Dec 2007-June 2009. Looking at just these two periods, were there any data that signaled the start of the recession?
Yes, first the coincident monthly index growth rate. When this drops below 0, we are in a recession. This was below zero during Oct. 1990 to Jun. 1991, so this matched the recession with a 3 month lag. It was also below zero during April 2001-Mar 2002, so it matched the recession is a 1 to 4 month lag. It was below zero during May 2008 to Dec. 2009, so it had a lag of 6 months. So it is safe to say that if the monthly growth rate is below zero then we are in a recession, with a possible lag of up to 6 months (i.e. the recession could have started up to 6 months earlier).
Looking at the weekly leading index growth rate, it was below 1 in April 1990 and stayed there until Feb 1991. So this match the recession exactly except was early by 3 months. It dropped below zero again in Dec 1991 (2 weeks), Nov 1994-April 1995 (20 weeks), Aug 1998 (23 weeks). In May 2000, it dropped below 1.0 and stayed there until Jan 2002. So again this matched except it was 11 months early on starting and 2 months early on ending. It next dropped below 1 in Aug 2002 (37 weeks), July 2004 (20 weeks), Jan 2005 (5 weeks), May 2005 (6 weeks), June 2006 (21 weeks). In Aug 2007 it dropped below 1 and stayed there until June 2009. So this was 4 months early. Since then the growth rate was below 1 in May 2010 (30 weeks), Aug 2011 (32 weeks) and April 2012 (9 weeks so far).
So I think any period where the weekly growth rate is below 1 for more than 6 weeks is what I call a mini-recession. A mini-recession may or may not turn into a recession. Since January 1990 these are:
April 20, 1990-March 1, 1991
Nov 25, 1994-April 7, 1995
Aug 21, 1998-Mar 12, 1999
May 12, 2000-Dec 28, 2001
Aug 2, 2002-Apr 4, 2003
July 16, 2004-Nov 26, 2004
Jun 23, 2006-Nov 10, 2006
Aug 7, 2007-June 12, 2009
May 28, 2010-Dec 17, 2010
Aug 19, 2011-Mar 23, 2012
April 20, 2012-current
So there were 11 mini-recessions, of which only 3 turned into recessions.
What separates a recession from a mini-recession? If the coincedent growth rate is negative at the same time. So what are we to conclude? That we are in a mini-recession, but we are not in a recession at this point.
One more question is, what is the maximum negative weekly growth there has been without being in a recession? On 7/23/2010, the weekly growth rate was -10.9, but we were not in a recession.
==================
Update 11/9/12: the last mini-recession ended on 8/24/12.
It's stupid to borrow money
Credit does not bring prosperity. It is a ponzi scheme.
Only economic surplus -- that is, savings -- produces prosperity. It does so through capital formation which has as its predicate savings.
Borrowing is a short-term elixer that has its place, but it requires more surplus to pay back borrowing than to simply save in the first place, as you must pay both the original borrowed funds and the interest. This in turn means that when you borrow you are not only time-shifting your requirement for surplus to tomorrow you are amplifying it at the same time.
If there is no surplus with which to pay the borrowing back then borrowed funds are a ponzi scheme that can only lead to bankruptcy unless a "greater fool" appears to take whatever you bought off your hands at a higher price.
Further, very low interest rates are a signal from The Fed that they expect crap economic performance. The rational person who has access to cheap credit but doubts their ability to generate economic surplus in the future is a fool to borrow as they are simply generating their future bankruptcy by doing so irrespective of interest rate! When you have a bunch of academics saying through their policy pronouncements that the economy will be crappy and the government will be handing out borrowed money through a fire hose, thereby destroying the purchasing power of surplus capital, you are sending a strong signal to the market that it's stupid to borrow money.
--http://market-ticker.org/akcs-www?blog=Market-Ticker&page=2
My comments: I agree exactly. To restate the key points:
1. Only savings produces prosperity.
2. Borrowing should be done only if the money can be used to create economic surplus in the future.
3. This future economic surplus is not possible right now.
4. Therefore it is stupid to borrow money right now irrespective of interest rate.
The only way to get the economy going again is a) raise interest rates to encourage savings, and b) let the chips fall where they may on bad debts. Instead the Fed is prolonging the misery.
Debt is not the solution, it is the problem.
Only economic surplus -- that is, savings -- produces prosperity. It does so through capital formation which has as its predicate savings.
Borrowing is a short-term elixer that has its place, but it requires more surplus to pay back borrowing than to simply save in the first place, as you must pay both the original borrowed funds and the interest. This in turn means that when you borrow you are not only time-shifting your requirement for surplus to tomorrow you are amplifying it at the same time.
If there is no surplus with which to pay the borrowing back then borrowed funds are a ponzi scheme that can only lead to bankruptcy unless a "greater fool" appears to take whatever you bought off your hands at a higher price.
Further, very low interest rates are a signal from The Fed that they expect crap economic performance. The rational person who has access to cheap credit but doubts their ability to generate economic surplus in the future is a fool to borrow as they are simply generating their future bankruptcy by doing so irrespective of interest rate! When you have a bunch of academics saying through their policy pronouncements that the economy will be crappy and the government will be handing out borrowed money through a fire hose, thereby destroying the purchasing power of surplus capital, you are sending a strong signal to the market that it's stupid to borrow money.
--http://market-ticker.org/akcs-www?blog=Market-Ticker&page=2
My comments: I agree exactly. To restate the key points:
1. Only savings produces prosperity.
2. Borrowing should be done only if the money can be used to create economic surplus in the future.
3. This future economic surplus is not possible right now.
4. Therefore it is stupid to borrow money right now irrespective of interest rate.
The only way to get the economy going again is a) raise interest rates to encourage savings, and b) let the chips fall where they may on bad debts. Instead the Fed is prolonging the misery.
Debt is not the solution, it is the problem.
Thursday, June 21, 2012
Interest rates explode after 2029
This is a very simple model, probably flawed. If interest rates ever exceed 5% of GDP then we have a serious problem. At this point, at least 25% of revenues would go just to pay interest. After this point, the situation deteriorates rapidly.
I got the numbers through 2022 from the official OMB budget FY2013 proposal. After that, I assume that GDP increases 4.5%/year. For interest, I assume that it increases 10%/year after 2022.
Interest rates really have nowhere to go but up, and on a skyrocketing base.
This is model L-1.
Update: 6/25/2012. This is similar to Model G-1, which saw danger in gross interest paid exceeding 40% of revenue. Net interest seems to be about half of gross interest.
I got the numbers through 2022 from the official OMB budget FY2013 proposal. After that, I assume that GDP increases 4.5%/year. For interest, I assume that it increases 10%/year after 2022.
Interest rates really have nowhere to go but up, and on a skyrocketing base.
| Year | GDP (trillions) | Interest (trillions) | Int % of GDP |
| 2011 | 15.1 | 0.23 | 1.52% |
| 2012 | 15.8 | 0.22 | 1.39% |
| 2013 | 16.5 | 0.25 | 1.51% |
| 2014 | 17.4 | 0.31 | 1.78% |
| 2015 | 18.4 | 0.39 | 2.11% |
| 2016 | 19.5 | 0.48 | 2.46% |
| 2017 | 20.7 | 0.57 | 2.76% |
| 2018 | 21.7 | 0.65 | 2.97% |
| 2019 | 22.7 | 0.72 | 3.16% |
| 2020 | 23.7 | 0.78 | 3.31% |
| 2021 | 24.7 | 0.85 | 3.43% |
| 2022 | 25.8 | 0.92 | 3.55% |
| 2023 | 26.9 | 1.01 | 3.74% |
| 2024 | 28.1 | 1.11 | 3.94% |
| 2025 | 29.4 | 1.22 | 4.14% |
| 2026 | 30.7 | 1.34 | 4.36% |
| 2027 | 32.1 | 1.47 | 4.59% |
| 2028 | 33.5 | 1.62 | 4.83% |
| 2029 | 35.1 | 1.78 | 5.09% |
Update: 6/25/2012. This is similar to Model G-1, which saw danger in gross interest paid exceeding 40% of revenue. Net interest seems to be about half of gross interest.
Organized Crime
Here is a fascinating website on organized crime: http://www.reportingproject.net/occrp/. Also see:
http://www.reportingproject.net/offshore/
http://www.reportingproject.net/proxy/en/
http://www.secrecyjurisdictions.com/
http://www.reportingproject.net/offshore/
http://www.reportingproject.net/proxy/en/
http://www.secrecyjurisdictions.com/
Wednesday, June 20, 2012
The Ruins of New York
It’s only a short ferry ride from the
bustle of city life, but the small island a half mile south of
Manhattan is worlds away from the chaos of New York City.
While most New Yorkers think of Governor’s Island as a concert venue, an outdoor haven, or simply a respite from endless blocks of skyscrapers and concrete, a crumbling portion of the island reveals a very different history.
Stairwells strewn with debris and walls crumbling slowly to dust, it is the island that New York forgot for 50 years. Now, in a series of extraordinarily eerie pictures, the lost world of North Brother - quarantine zone, leper colony and centre for drug addicts - has been brought back to life.
It is hard to believe that these echoing corridors and abandoned halls were home to hundreds of patients - or that a criss-cross of tree-lined avenues were once roads.
But the haunting quality of these pictures makes it easy to imagine that it was a place of indescribable misery, which one inmate compared to the notorious black hole of Calcutta.
Read more: http://www.dailymail.co.uk/news/article-2094823/North-Brother-Island-Eerie-pictures-abandoned-New-York-leper-colony.html#ixzz1yNqBM2D5
Read more: http://io9.com/5917104/a-womens-asylum-rots-on-an-abandoned-new-york-island
What's more intriguing than an abandoned island with a rotting castle sitting just north of New York City? Bannerman's Island sits in the Hudson, just about 50 miles north of here, and American Heritage explains "this island fortress was once the private arsenal of the world's largest arms dealer," Frank "Francis" Bannerman.
--http://gothamist.com/2008/10/14/bannerman_island.php#photo-1
The woods in this part of Staten Island grow dense, thicketed with thorny branches and barbed plants. Emerging from them, a large brick building looms, crumbling from years of disuse. Entering through a graffiti-covered archway, you find a sizable hallway lined with dilapidated concrete cubicles. This is the abandoned Sea View Hospital, a forgotten relic of the days when mental illness lead to being locked away and forgotten.
In its heyday, Sea View Hospital doubled as a tuberculosis treatment facility, although given the lack of a proper cure, it was more hospice than hospital. When the TB vaccine came along in 1946, the clinic was shuttered, but never demolished. Now it sits in the woodlands across the street from the new and improved Sea View, developed out of the half of the original facility that was not closed down. My roommate, an avid urban explorer, took me to visit the ruins of the sanatorium.
While most New Yorkers think of Governor’s Island as a concert venue, an outdoor haven, or simply a respite from endless blocks of skyscrapers and concrete, a crumbling portion of the island reveals a very different history.
Stairwells strewn with debris and walls crumbling slowly to dust, it is the island that New York forgot for 50 years. Now, in a series of extraordinarily eerie pictures, the lost world of North Brother - quarantine zone, leper colony and centre for drug addicts - has been brought back to life.
It is hard to believe that these echoing corridors and abandoned halls were home to hundreds of patients - or that a criss-cross of tree-lined avenues were once roads.
But the haunting quality of these pictures makes it easy to imagine that it was a place of indescribable misery, which one inmate compared to the notorious black hole of Calcutta.
Read more: http://www.dailymail.co.uk/news/article-2094823/North-Brother-Island-Eerie-pictures-abandoned-New-York-leper-colony.html#ixzz1yNqBM2D5
A women’s asylum rots on an abandoned New York island
Hart Island, which sits at the western end of New York's
Long Island Sound, boasts more than 850,000 residents - all of them
dead. The island is now used primarily as a potter's field, but in its
past it has housed a POW camp, a rehab facility, and a women's insane
asylum.Read more: http://io9.com/5917104/a-womens-asylum-rots-on-an-abandoned-new-york-island
What's more intriguing than an abandoned island with a rotting castle sitting just north of New York City? Bannerman's Island sits in the Hudson, just about 50 miles north of here, and American Heritage explains "this island fortress was once the private arsenal of the world's largest arms dealer," Frank "Francis" Bannerman.
--http://gothamist.com/2008/10/14/bannerman_island.php#photo-1
The woods in this part of Staten Island grow dense, thicketed with thorny branches and barbed plants. Emerging from them, a large brick building looms, crumbling from years of disuse. Entering through a graffiti-covered archway, you find a sizable hallway lined with dilapidated concrete cubicles. This is the abandoned Sea View Hospital, a forgotten relic of the days when mental illness lead to being locked away and forgotten.
In its heyday, Sea View Hospital doubled as a tuberculosis treatment facility, although given the lack of a proper cure, it was more hospice than hospital. When the TB vaccine came along in 1946, the clinic was shuttered, but never demolished. Now it sits in the woodlands across the street from the new and improved Sea View, developed out of the half of the original facility that was not closed down. My roommate, an avid urban explorer, took me to visit the ruins of the sanatorium.
The Village Idiot Speaks
"Economist Paul Krugman has a simple solution to America's economic woes: Prepare for an alien invasion. Arguing that the United States successfully ended the Great
Depression with government spending, he provided an interesting idea
about how to replicate that economic feat on Tuesday at the Take Back
the American Dream conference in Washington, D.C.
"If you actually look at what took us out of the Great Depression," the Princeton University professor said in an interview with Chris Hayes of MSNBC. "It was Europe's entry into World War II and the U.S. buildup that began in advance."
"So if we could get something that could cause the government to say, ‘Oh, never mind those budget things; let’s just spend and do a bunch of stuff.' So my fake threat from space aliens is the other route,” Krugman said before a laughing crowd. “I’ve been proposing that.”
--http://www.huffingtonpost.com/2012/06/19/paul-krugman-alien-invasion_n_1609805.html
Krugman, you just want to spend more money. How about pay one guy to dig holes and pay another guy to fill them back in again? As for the idea of war to get us out of a depression, what do you think we are doing in Afghanistan? What do you think Homeland Security is?
"If you actually look at what took us out of the Great Depression," the Princeton University professor said in an interview with Chris Hayes of MSNBC. "It was Europe's entry into World War II and the U.S. buildup that began in advance."
"So if we could get something that could cause the government to say, ‘Oh, never mind those budget things; let’s just spend and do a bunch of stuff.' So my fake threat from space aliens is the other route,” Krugman said before a laughing crowd. “I’ve been proposing that.”
--http://www.huffingtonpost.com/2012/06/19/paul-krugman-alien-invasion_n_1609805.html
Krugman, you just want to spend more money. How about pay one guy to dig holes and pay another guy to fill them back in again? As for the idea of war to get us out of a depression, what do you think we are doing in Afghanistan? What do you think Homeland Security is?
Tuesday, June 19, 2012
The US is the only country to which MMT applies
" Today, the US Dollar is the international reserve currency—making
the US special. … the two main reasons why the US can run persistent
current account deficits are: a) virtually all its foreign-held debt is
in Dollars; and b) external demand for Dollar-denominated assets is
high—for a variety of reasons.
The main reason seems that the U.S. issues the main reserve currency
and you issue a liability (so to speak, it’s fiat money) internationally
fully accepted even without a commitment to convert it in something
else."
--http://www.concertedaction.com/2012/05/06/born-in-the-u-s-a-mmt-and-monetary-sovereignty/
Everybody wants dollars, and the only way to make more dollars (as opposed to borrowing them), is for the US to run a deficit. The whole world finances the deficit by using dollars.
--http://www.concertedaction.com/2012/05/06/born-in-the-u-s-a-mmt-and-monetary-sovereignty/
Everybody wants dollars, and the only way to make more dollars (as opposed to borrowing them), is for the US to run a deficit. The whole world finances the deficit by using dollars.
WW3 about to begin in Syria
On the one side, Russia, China, Iran, Syria, Hezbollah/Lebanon. These are the Shia Muslims.
"Beijing is reported to have asked Egyptian authorities to permit the passage through the Suez Canal in late June of 12 naval ships heading for the Syrian port of Tartus, where Moscow maintains a naval and marine base."
-- http://www.debka.com/article/22094/Russia-China-Iran-plan-to-stage-in-Syria-%E2%80%9Cbiggest-Mid-East-maneuver%E2%80%9D-
On the other side, the US, NATO/G-20, Turkey, Jordan, Israel, Saudi Arabia and the Syrian Rebels. The Arabs involved are the Sunni Muslims.
The UN is ineffective is stopping this, just like the League of Nations was ineffective in stopping WW2.
"Moscow, by sending troops to Syria without UN Security Council approval, has set a precedent for the United States, the European Union and Arab governments to follow. They all held back from sending troops to Syria because all motions to apply force for halting the bloodshed in Syria were blocked in the UN body by Russia and China."
--http://www.debka.com/article/22088/US-military-intervention-in-Syria-%E2%80%93-%E2%80%9CNot-if-but-when%E2%80%9D
"The President Bashar al-Assad, retains the support of his armed forces because the officer class, and many of the troops, belong to his own Alawite sect. The Alawites, an offshoot of Shia Islam, are a minority in Syria, but they have governed the country for almost half a century.
Without foreign intervention on the side of the rebels, it is likely that Assad would have crushed the revolt by now, doubtless brutally. But the Syrian civil war has been fomented by outside interests. Saudi Arabia and other Sunni states have been backing the rebels, supplying them with money and arms. So has Turkey and so, crucially, has the USA. Assad, however, is backed by Russia, the long time ally of the regime which provides Russia with a Mediterranean port. Iran also supports Assad and it is the link between Iran and Syria, rather than humanitarian impulses, which accounts for American support of the rebellion."
--http://www.scotsman.com/news/allan-massie-syria-remains-mired-in-conflict-as-egypt-evolves-1-2364074
The Suez Canal is open to warships of all countries, in time of war or peace.
"Beijing is reported to have asked Egyptian authorities to permit the passage through the Suez Canal in late June of 12 naval ships heading for the Syrian port of Tartus, where Moscow maintains a naval and marine base."
-- http://www.debka.com/article/22094/Russia-China-Iran-plan-to-stage-in-Syria-%E2%80%9Cbiggest-Mid-East-maneuver%E2%80%9D-
On the other side, the US, NATO/G-20, Turkey, Jordan, Israel, Saudi Arabia and the Syrian Rebels. The Arabs involved are the Sunni Muslims.
The UN is ineffective is stopping this, just like the League of Nations was ineffective in stopping WW2.
"Moscow, by sending troops to Syria without UN Security Council approval, has set a precedent for the United States, the European Union and Arab governments to follow. They all held back from sending troops to Syria because all motions to apply force for halting the bloodshed in Syria were blocked in the UN body by Russia and China."
--http://www.debka.com/article/22088/US-military-intervention-in-Syria-%E2%80%93-%E2%80%9CNot-if-but-when%E2%80%9D
"The President Bashar al-Assad, retains the support of his armed forces because the officer class, and many of the troops, belong to his own Alawite sect. The Alawites, an offshoot of Shia Islam, are a minority in Syria, but they have governed the country for almost half a century.
Without foreign intervention on the side of the rebels, it is likely that Assad would have crushed the revolt by now, doubtless brutally. But the Syrian civil war has been fomented by outside interests. Saudi Arabia and other Sunni states have been backing the rebels, supplying them with money and arms. So has Turkey and so, crucially, has the USA. Assad, however, is backed by Russia, the long time ally of the regime which provides Russia with a Mediterranean port. Iran also supports Assad and it is the link between Iran and Syria, rather than humanitarian impulses, which accounts for American support of the rebellion."
--http://www.scotsman.com/news/allan-massie-syria-remains-mired-in-conflict-as-egypt-evolves-1-2364074
The Suez Canal is open to warships of all countries, in time of war or peace.
Spacefaring
Excalibur Almaz will charge wannabe astronauts an average of £100m for a six-eight month journey exploring deep space.
See http://www.ft.com/cms/s/0/f5af9e2a-ba21-11e1-aa8d-00144feabdc0.html
=================
Art Dula, who founded the company in 2005, announced a plan to carry out the first test flight in 2014 and the first civilian voyage a year later in a speech at the Royal Aeronautical Society in London yesterday. He later told the Daily Telegraph: "This is not space tourism, it is real scientific expedition – they would go further than anybody has gone before in space. "We want to have the same kind of tradition that Britain had in the 16th and 17th centuries when its explorers went to the ends of the earth seeking knowledge and information and bringing back wealth."I don't know how much wealth they will bring back, but the first person to fly it will earn a place in the history books."
Crew members, numbering up to three per shuttle, would spend a year in training before launching the shuttle from a base in Kazakhstan and docking with a space station, which would then use thrusters to ferry passengers through space. The slow speed of the thrusters, compared with more expensive rockets, would mean a mission to the moon and back would take four months to complete, with the craft spiralling through space "like an etch-a-sketch", Mr Dula explained.
He said: "The engines are very low-thrust, they are very dependable but they run on electricity. This kind of technology has been used before but never for a big habitation module like ours.
"We are probably not going to have a professional astronaut because frankly, this type of space flight is so different to anything that has been before that there is no advantage in having someone what has a steely eye and can make a decision in half a second. With the kind of equipment we have you could make a decision overnight and sleep on it."
From the space station the crew would be able to carry out any scientific experiments they wished, using equipment ferried with them on the shuttle, and later missions could potentially even orbit the moon, he added.
Excalibur Almaz acquired its fleet from NPO Mashinostroyenia, the Russian company which designed the Almaz space programme, and refitted the six craft with "off the shelf" modern systems.On its website the company says: "Each EA space station boasts 90 cubic metres of pressurised volume, which is plenty for a crew to survive in relative comfort for months at a time. The fleet is at a very high level of space readiness and, crucially, has a proven emergency-escape system."
Mr Dula admitted his plan sounded "somewhat unbelievable" but insisted he would have no shortage of takers.He said: "A sovereign government could certainly afford it, it is not anywhere near what an Apollo mission would cost because we have well over £1 billion of costs that the Soviets have sunk into it. But this have to be a government body.
"There have always been very wealthy individuals who have sponsored scientific missions ... we simply do not know who is going to do it, who since childhood has desperately wanted to go into space, but I expect we will have a lot of interested people."Dr Dave Parker of the UK Space Agency said the move was part of a "whole new world" of private space travel but added that he was "pretty sceptical" that a civilian could be trained to fly a spacecraft in the space of a year.He said: "What they are doing is trying to put together some pieces of existing technology from Russia with a few bits of new technology so that they can re-use it and they have been trying to develop this idea for a good few years now.
"Obviously the reality is they do not have the investment to do any of this at the moment. But good luck to them, people have got to try things like this."
--http://www.telegraph.co.uk/science/space/9342210/Fly-to-the-moon-for-100m.html
See http://www.ft.com/cms/s/0/f5af9e2a-ba21-11e1-aa8d-00144feabdc0.html
=================
Excalibur Almaz, a British space company based on the Isle of Man, has
announced plans to make the first trip to the moon since the Apollo 17
mission of 1972. The company has acquired a fleet of former Soviet shuttles and space stations
and is planning the mission in three years time. The flight, which would last four months and fly past the moon at a distance
of 1000km, is open to anyone who can finance it including
government-sponsored researchers, space agency scientists or even
billionaires with money to burn. But any space enthusiast wishing to make the trip would have to be willing to
fly the craft themself because no trained astronauts would accompany them on
their odyssey, the company said.
Art Dula, who founded the company in 2005, announced a plan to carry out the first test flight in 2014 and the first civilian voyage a year later in a speech at the Royal Aeronautical Society in London yesterday. He later told the Daily Telegraph: "This is not space tourism, it is real scientific expedition – they would go further than anybody has gone before in space. "We want to have the same kind of tradition that Britain had in the 16th and 17th centuries when its explorers went to the ends of the earth seeking knowledge and information and bringing back wealth."I don't know how much wealth they will bring back, but the first person to fly it will earn a place in the history books."
Crew members, numbering up to three per shuttle, would spend a year in training before launching the shuttle from a base in Kazakhstan and docking with a space station, which would then use thrusters to ferry passengers through space. The slow speed of the thrusters, compared with more expensive rockets, would mean a mission to the moon and back would take four months to complete, with the craft spiralling through space "like an etch-a-sketch", Mr Dula explained.
He said: "The engines are very low-thrust, they are very dependable but they run on electricity. This kind of technology has been used before but never for a big habitation module like ours.
"We are probably not going to have a professional astronaut because frankly, this type of space flight is so different to anything that has been before that there is no advantage in having someone what has a steely eye and can make a decision in half a second. With the kind of equipment we have you could make a decision overnight and sleep on it."
From the space station the crew would be able to carry out any scientific experiments they wished, using equipment ferried with them on the shuttle, and later missions could potentially even orbit the moon, he added.
Excalibur Almaz acquired its fleet from NPO Mashinostroyenia, the Russian company which designed the Almaz space programme, and refitted the six craft with "off the shelf" modern systems.On its website the company says: "Each EA space station boasts 90 cubic metres of pressurised volume, which is plenty for a crew to survive in relative comfort for months at a time. The fleet is at a very high level of space readiness and, crucially, has a proven emergency-escape system."
Mr Dula admitted his plan sounded "somewhat unbelievable" but insisted he would have no shortage of takers.He said: "A sovereign government could certainly afford it, it is not anywhere near what an Apollo mission would cost because we have well over £1 billion of costs that the Soviets have sunk into it. But this have to be a government body.
"There have always been very wealthy individuals who have sponsored scientific missions ... we simply do not know who is going to do it, who since childhood has desperately wanted to go into space, but I expect we will have a lot of interested people."Dr Dave Parker of the UK Space Agency said the move was part of a "whole new world" of private space travel but added that he was "pretty sceptical" that a civilian could be trained to fly a spacecraft in the space of a year.He said: "What they are doing is trying to put together some pieces of existing technology from Russia with a few bits of new technology so that they can re-use it and they have been trying to develop this idea for a good few years now.
"Obviously the reality is they do not have the investment to do any of this at the moment. But good luck to them, people have got to try things like this."
--http://www.telegraph.co.uk/science/space/9342210/Fly-to-the-moon-for-100m.html
New Projection: 2024
I've been going through some past models and predictions I made to see if any still have validity, and I have classified them according to model type. Model D is interesting. It looks at the average increase in the debt to project forward, and then looks for a breaking point when the debt exceeds 10 times revenues. It ignores GDP entirely. So this is an update in the D series, and I call this model D-4.
1. Look at the average increase in the debt. From 3/31/10 to 3/31/12, the average increase in the gross national debt per quarter has been 2.52%. On an annualized basis, this is 10.4%. I think using 10% growth on an annualized basis is a very reasonable, even slightly conservative assumption. Start with 9/30/2012 when the debt will be about $16.35 trillion (just below the debt limit), and project forward at the rate of 10%/year.
2. Project revenue. This is difficult, but I choose to start with 4200 in the year 2020 and see growth of 5%/year.
3. Now look for when debt exceed 10 times revenue.
The tipping point is in 2024 when revenues are 5100 and the debt is 51300.
1. Look at the average increase in the debt. From 3/31/10 to 3/31/12, the average increase in the gross national debt per quarter has been 2.52%. On an annualized basis, this is 10.4%. I think using 10% growth on an annualized basis is a very reasonable, even slightly conservative assumption. Start with 9/30/2012 when the debt will be about $16.35 trillion (just below the debt limit), and project forward at the rate of 10%/year.
2. Project revenue. This is difficult, but I choose to start with 4200 in the year 2020 and see growth of 5%/year.
3. Now look for when debt exceed 10 times revenue.
The tipping point is in 2024 when revenues are 5100 and the debt is 51300.
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