Here's a beautiful shot of the moon coming over the Tetons on a June evening. This picture was taken from a spot just south of the Mesa falls between Island Park and Ashton.
Wednesday, July 9, 2008
Tetons In the Evening
Here's a beautiful shot of the moon coming over the Tetons on a June evening. This picture was taken from a spot just south of the Mesa falls between Island Park and Ashton.
Commodity Speculators and Inflation
Let's think this through.
Why is gold worth $900 today when it was only worth $300 just 7 years ago.
Was gold really worth $850 in 1979 and then only $300 in 1982?
Is crude oil really worth $140 per barrel today when it was trading for $20 per barrel less than 10 years ago?
Why were the analysts incorrect a year ago when they predicted that oil would average about $70 per barrel this year?
Real estate prices changed dramatically over the past several years. Should the exact same piece of real estate, with no improvements, be worth 2 times or 3 or even more than it was several years ago?
Well, the answers are pretty simple.
As a people, we waste a lot of time and energy speculating, gambling, etc. We call it price discovery and entertainment, respectively.
First of all the dollar has depreciated by 100% (depending upon the currency in question and how you define percentages) over the past 8 years.
Second, the self-fulfilling prophecies of mass psychology contribute to the extraordinary movements in prices and production.
When self interests motivate price discovery, energy and production, volatility in price, energy and production are magnified in the directions of those movements.
It doesn't seem too unusual to expect what has befallen us.
The question now is where the next movements of self-interest, energy and production will take place?
Well, with interest rates low, borrowers will be able to reignite the acceleration of credit creation, thus causing prices to increase in about everything again, causing an increase in energy and production. It should be good for the economy. It should initially bring prices down.
Hopefully the central bankers will be able to successfully manipulate our psychology, so that we will mitigate the inflationary consequences of speculation and self-interest.
If we as a world population will put our focus, energy and production on things like education, healthcare, work and wellness, good things will happen, and speculation and inflation will moderate.
Why is gold worth $900 today when it was only worth $300 just 7 years ago.
Was gold really worth $850 in 1979 and then only $300 in 1982?
Is crude oil really worth $140 per barrel today when it was trading for $20 per barrel less than 10 years ago?
Why were the analysts incorrect a year ago when they predicted that oil would average about $70 per barrel this year?
Real estate prices changed dramatically over the past several years. Should the exact same piece of real estate, with no improvements, be worth 2 times or 3 or even more than it was several years ago?
Well, the answers are pretty simple.
As a people, we waste a lot of time and energy speculating, gambling, etc. We call it price discovery and entertainment, respectively.
First of all the dollar has depreciated by 100% (depending upon the currency in question and how you define percentages) over the past 8 years.
Second, the self-fulfilling prophecies of mass psychology contribute to the extraordinary movements in prices and production.
When self interests motivate price discovery, energy and production, volatility in price, energy and production are magnified in the directions of those movements.
It doesn't seem too unusual to expect what has befallen us.
The question now is where the next movements of self-interest, energy and production will take place?
Well, with interest rates low, borrowers will be able to reignite the acceleration of credit creation, thus causing prices to increase in about everything again, causing an increase in energy and production. It should be good for the economy. It should initially bring prices down.
Hopefully the central bankers will be able to successfully manipulate our psychology, so that we will mitigate the inflationary consequences of speculation and self-interest.
If we as a world population will put our focus, energy and production on things like education, healthcare, work and wellness, good things will happen, and speculation and inflation will moderate.
Thursday, July 3, 2008
The ECB hikes interest rates
So, let's think this through. The ECB hiked interest rates today to curb inflation. This will shrink demand, but it will also shrink supply. Unemployment should go up. Productivity should stagnate because fewer people are being incentivized to work.
When Ronald Reagan was President, his philosophy was "supply-side" economics. In other words, President Ronald Reagan would have decreased interest rates to stimulate excess supply, thus decreasing inflation.
I guess that I am disagreeing with the move by the ECB. The good thing about the ECB or the FED raising interest rates at this point in time, is that we will all be less well off and more miserable. Theoretically, anxiety, fear and misery will motivate us to go back to work more effectively, thus keeping inflation low. Then we will all be better off.
Is there a better way? Anxiety, fear and misery motivate me, but it also makes me mad. It definitely makes others mad. Anger is definitely a motivating force. Some exibit their rage on the roads by driving recklessly; in the factory they throw wrenches into the systems; some take drugs, gamble, overeat and cheat to overcome these circumstances. At some point we will all go back to work to overcome our problems, but at what price?
Fear, anxiety, anger and misery are definitely motivating forces. So is greed. So is military force.
Why not try a new world experiment; the experiment that began with the Declaration of Independence. The motivating forces of life, liberty, the pursuit of happiness, freedom, kindness, love, hope, faith and charity are potentially the greatest motivating forces in the Universe.
Consequences still need to follow societal goals, but why not make those goals positive and good, instead of miserable and anxious.
I don't know who the author is, but the story is told of an old Cheorkee Indian Chief who was teaching his children about life. He gathered his children around him, at the campfire one night, and said, "There is a terrible fight raging within each one of us; a fight between two wolves."
"One wolf is evil," said the Chief. "He is fear, anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, idleness, competition, superiority, selfishness and ego."
"The other wolf," said the Chief, "is good." "He is joy, peace, love, hope, sharing, serenity, synergy, teamwork, humility, kindness, benevolence, friendship, empathy, generosity, truth, work, compassion and faith."
The children listened carefully and thought about what the old Chief had said. One of the children raised his hand and asked, "Which wolf will win?"
"The one you feed," the old Chief replied.
As a world economy, let's try a new experiment: Let's feed hope, faith, love, charity, sharing, peace, joy, kindness, generosity, empathy, truth, work, humility, benevolence, serenity, synergy, teamwork and compassion.
Providing veterans with an education meets all of those criteria.
Lotteries to raise dollars for municipalities does not.
Veterans were more motivated to fight for their "comrad in arms" than for any other reason. "Naechstenliebe" is one of the most powerful forces in the Universe.
What about the Olympics. I love watching the best athletes in the world compete. The Olympics in China will highlight the best that the world has to offer. It provides a measuring stick for each of each to compare our efforts to others. Competition is good when it takes place in a spirit of hope, sharing and betterment for all of us. It is an opportunity for the world to be good to each other. It is bad when it causes evil.
Dear Chairman Bernanke:
I think that you are doing a wonderful job. It is my opinion that you should not be persuaded by the world stage to raise interest rates yet. Inflation can be evil. But, as you have eloquently explained, some inflation can be good. It can cover a multitude of sins, but it can also cause horrible disruptions to the well-being of people, as the world economy is currently experiencing. The inflation of the past several years has created a lot of evil; a lot of greed, fear, anxiety, and anger. By holding interest rates steady today, with a goal of keeping inflation at 1-2%, and by targeting the 10 year treasury rates at a level that will strengthen the dollar, hopefully the world economy will work together to provide good for everyone.
Thanks for your good work. Best wishes to you always.
Thanks to all of those who have gone before us as we again celebrate the Independence of this wonderful country.
When Ronald Reagan was President, his philosophy was "supply-side" economics. In other words, President Ronald Reagan would have decreased interest rates to stimulate excess supply, thus decreasing inflation.
I guess that I am disagreeing with the move by the ECB. The good thing about the ECB or the FED raising interest rates at this point in time, is that we will all be less well off and more miserable. Theoretically, anxiety, fear and misery will motivate us to go back to work more effectively, thus keeping inflation low. Then we will all be better off.
Is there a better way? Anxiety, fear and misery motivate me, but it also makes me mad. It definitely makes others mad. Anger is definitely a motivating force. Some exibit their rage on the roads by driving recklessly; in the factory they throw wrenches into the systems; some take drugs, gamble, overeat and cheat to overcome these circumstances. At some point we will all go back to work to overcome our problems, but at what price?
Fear, anxiety, anger and misery are definitely motivating forces. So is greed. So is military force.
Why not try a new world experiment; the experiment that began with the Declaration of Independence. The motivating forces of life, liberty, the pursuit of happiness, freedom, kindness, love, hope, faith and charity are potentially the greatest motivating forces in the Universe.
Consequences still need to follow societal goals, but why not make those goals positive and good, instead of miserable and anxious.
I don't know who the author is, but the story is told of an old Cheorkee Indian Chief who was teaching his children about life. He gathered his children around him, at the campfire one night, and said, "There is a terrible fight raging within each one of us; a fight between two wolves."
"One wolf is evil," said the Chief. "He is fear, anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, idleness, competition, superiority, selfishness and ego."
"The other wolf," said the Chief, "is good." "He is joy, peace, love, hope, sharing, serenity, synergy, teamwork, humility, kindness, benevolence, friendship, empathy, generosity, truth, work, compassion and faith."
The children listened carefully and thought about what the old Chief had said. One of the children raised his hand and asked, "Which wolf will win?"
"The one you feed," the old Chief replied.
As a world economy, let's try a new experiment: Let's feed hope, faith, love, charity, sharing, peace, joy, kindness, generosity, empathy, truth, work, humility, benevolence, serenity, synergy, teamwork and compassion.
Providing veterans with an education meets all of those criteria.
Lotteries to raise dollars for municipalities does not.
Veterans were more motivated to fight for their "comrad in arms" than for any other reason. "Naechstenliebe" is one of the most powerful forces in the Universe.
What about the Olympics. I love watching the best athletes in the world compete. The Olympics in China will highlight the best that the world has to offer. It provides a measuring stick for each of each to compare our efforts to others. Competition is good when it takes place in a spirit of hope, sharing and betterment for all of us. It is an opportunity for the world to be good to each other. It is bad when it causes evil.
Dear Chairman Bernanke:
I think that you are doing a wonderful job. It is my opinion that you should not be persuaded by the world stage to raise interest rates yet. Inflation can be evil. But, as you have eloquently explained, some inflation can be good. It can cover a multitude of sins, but it can also cause horrible disruptions to the well-being of people, as the world economy is currently experiencing. The inflation of the past several years has created a lot of evil; a lot of greed, fear, anxiety, and anger. By holding interest rates steady today, with a goal of keeping inflation at 1-2%, and by targeting the 10 year treasury rates at a level that will strengthen the dollar, hopefully the world economy will work together to provide good for everyone.
Thanks for your good work. Best wishes to you always.
Thanks to all of those who have gone before us as we again celebrate the Independence of this wonderful country.
Wednesday, April 30, 2008
The Economy today
This week, President Bush solicited Congress to accept his economic plan.
I have listened with interest as the many economists and politicians around the country have offered their solutions to our economic ills.
What is great about America is the resiliency of the American people.
The issues that impact our prosperity are rather complicated and interrelated. Whether Congress accepts President Bush's Plan or not is probably not the most important issue. What is important is the way that the American people continue to be resilient and whether or not the morality of the American people will keep us strong and prosperous.
It seems to me that the debate needs to focus on the age old argument of capital versus labor.
President Lincoln focused on this issue as did President Theodore Roosevelt.
The concept is simply one of the propensity to consume, to save, to invest and to make wise economic decisions.
A lot of economic decisions are not wise. But they are made as a result of current economic policies, conditions and expectations. These three items change as a basis of the choices that individuals, corporations, and government make under the existing conditions.
I applaud those in government who work hard for us, hopefully to create the propensity for us to make the best decisions possible.
I would recommend that we first and foremost focus on a strong and stable dollar; secondly, a proactive energy policy; thirdly, a more equitable and less costly healthcare policy; and fourthly, a strong American balance sheet.
If we will then wrap this with honesty and morality, we are going to be fine and good things will happen.
I have listened with interest as the many economists and politicians around the country have offered their solutions to our economic ills.
What is great about America is the resiliency of the American people.
The issues that impact our prosperity are rather complicated and interrelated. Whether Congress accepts President Bush's Plan or not is probably not the most important issue. What is important is the way that the American people continue to be resilient and whether or not the morality of the American people will keep us strong and prosperous.
It seems to me that the debate needs to focus on the age old argument of capital versus labor.
President Lincoln focused on this issue as did President Theodore Roosevelt.
The concept is simply one of the propensity to consume, to save, to invest and to make wise economic decisions.
A lot of economic decisions are not wise. But they are made as a result of current economic policies, conditions and expectations. These three items change as a basis of the choices that individuals, corporations, and government make under the existing conditions.
I applaud those in government who work hard for us, hopefully to create the propensity for us to make the best decisions possible.
I would recommend that we first and foremost focus on a strong and stable dollar; secondly, a proactive energy policy; thirdly, a more equitable and less costly healthcare policy; and fourthly, a strong American balance sheet.
If we will then wrap this with honesty and morality, we are going to be fine and good things will happen.
Allergies
What do you do to alleviate allergies?
From April to June, my allergies are terrible. The complications resulting from these allergies can become quite severe. They often lead to colds and infections. I avoid antihistamines because the side-affects seem to be as bad as the cure.
Here are some things that help me. What helps you?
1. A humidifier. It filters the air and alleviates sinus irritations.
2. Shower. It washes off the pollens, dirt, etc., adds humidity to the air and helps drainage in the head.
3. Taking Excedrin, Anacin, Aspirin. These seem to help open the air passages in the head without drying them up too much. The antihistamines create too much dryness in the naval passages for me. The combination of aspirin and caffeine seems to work the best for me.
4. Adrenalin. Being active seems to help. Exercise is a natural source of adrenalin. I've had adrenalin shots when my asthma has been too severe, and that helped.
5. Drinking fluids. Water seems to be the best. The mist from a hot drink seems to help (I believe it acts like a very small humidifier), and drinks with caffeine seem to help. It soothes the throat and creates a natural drainage of the nasal passages.
6. Cough drops. I like the ones with vitamin C only. I'll use the others only if I have a cold and I need a little extra help. But the dryness they create in the naval passages seems to delay the recovery.
7. Wearing a mask when I'm outside mowing the lawns or working in the yard. It creates a little humidity and acts as a filter.
8. I've been blessed to work in nice air-conditioned offices. Staying indoors is not my first choice, but working indoors definitely helps.
The air passages to my ears get blocked easily during the allergy season. I have not found a consistent solution to this problem. This blockage often leads to colds and infections. It has also created a problem for me when I scuba dive. It is nearly impossible for me to dive without taking an antihistamine, anacin or excedrin. These three medications seem to work well for me. But I'd like to find a better and more consistent solution.
I would like your suggestions. What works for you to mitigate allergic reactions to pollens, dust, etc?
From April to June, my allergies are terrible. The complications resulting from these allergies can become quite severe. They often lead to colds and infections. I avoid antihistamines because the side-affects seem to be as bad as the cure.
Here are some things that help me. What helps you?
1. A humidifier. It filters the air and alleviates sinus irritations.
2. Shower. It washes off the pollens, dirt, etc., adds humidity to the air and helps drainage in the head.
3. Taking Excedrin, Anacin, Aspirin. These seem to help open the air passages in the head without drying them up too much. The antihistamines create too much dryness in the naval passages for me. The combination of aspirin and caffeine seems to work the best for me.
4. Adrenalin. Being active seems to help. Exercise is a natural source of adrenalin. I've had adrenalin shots when my asthma has been too severe, and that helped.
5. Drinking fluids. Water seems to be the best. The mist from a hot drink seems to help (I believe it acts like a very small humidifier), and drinks with caffeine seem to help. It soothes the throat and creates a natural drainage of the nasal passages.
6. Cough drops. I like the ones with vitamin C only. I'll use the others only if I have a cold and I need a little extra help. But the dryness they create in the naval passages seems to delay the recovery.
7. Wearing a mask when I'm outside mowing the lawns or working in the yard. It creates a little humidity and acts as a filter.
8. I've been blessed to work in nice air-conditioned offices. Staying indoors is not my first choice, but working indoors definitely helps.
The air passages to my ears get blocked easily during the allergy season. I have not found a consistent solution to this problem. This blockage often leads to colds and infections. It has also created a problem for me when I scuba dive. It is nearly impossible for me to dive without taking an antihistamine, anacin or excedrin. These three medications seem to work well for me. But I'd like to find a better and more consistent solution.
I would like your suggestions. What works for you to mitigate allergic reactions to pollens, dust, etc?
Friday, March 28, 2008
And Good Things Happen
Have you ever had a time when it seemed that the forces of the Universe were lined up in your favor?
With all of the challenges around us, it is nice sometimes to have the forces of the Universe line up just right.
Well, it is time for me to take a moment to reflect on the good things that are happening and thank God for my wonderful blessings.
Here are some of the great blessings that have blessed our family of late.
My youngest son, Jeff, proposed to a wonderful young lady. Her name is Sarah. We like her a lot, and they are planning a July wedding.
Two days before the proposal, Sarah got a new job, Jeff got an EMT job interview and later a new job, and a group of workers knocked on my door to help me remove some trees that needed to be cut down. This all happened simultaneously.
A son-in-law received a teaching position at BYU. Their family has been in Georgia for the past seven years. We'll now have them close to home for a while. It'll be nice to have the grandchildren within 50 miles of our home.
My youngest daughter performed in a musical recital last night at Weber State University. She sang "Defying Gravity" from the play Wicked by Schwartz. I know that I am biased, because she is my daughter, but she was spectacular. The entire show was wonderful and we were blessed to have been there.
Several other little miracles have taken place of late and it is a continuing testimony to me that God is involved in the details of our lives.
With all of the challenges around us, it is nice sometimes to have the forces of the Universe line up just right.
Well, it is time for me to take a moment to reflect on the good things that are happening and thank God for my wonderful blessings.
Here are some of the great blessings that have blessed our family of late.
My youngest son, Jeff, proposed to a wonderful young lady. Her name is Sarah. We like her a lot, and they are planning a July wedding.
Two days before the proposal, Sarah got a new job, Jeff got an EMT job interview and later a new job, and a group of workers knocked on my door to help me remove some trees that needed to be cut down. This all happened simultaneously.
A son-in-law received a teaching position at BYU. Their family has been in Georgia for the past seven years. We'll now have them close to home for a while. It'll be nice to have the grandchildren within 50 miles of our home.
My youngest daughter performed in a musical recital last night at Weber State University. She sang "Defying Gravity" from the play Wicked by Schwartz. I know that I am biased, because she is my daughter, but she was spectacular. The entire show was wonderful and we were blessed to have been there.
Several other little miracles have taken place of late and it is a continuing testimony to me that God is involved in the details of our lives.
Monday, March 10, 2008
Oil pricing
As I watch crude oil prices move above $107 per barrel, I can't help but wonder if the government shouldn't intervene. What if the US had a Sovereign Wealth Fund, that competed with the major oil producers of the world, and benefited every American as the price of oil skyrocketed? This could be a US financed Sovereign Wealth Fund, with a motive of minimizing costs and maximizing benefits to all Americans. It would have the best interests of all Americans at heart. This Sovereign Wealth Fund would be a resource to support universal health care, medicare, medicaid, education and all other hoped for rights.
This could improve competition towards alternative energy sources and help promote increased productivity and improvement in all aspects of the economy. It could eliminate some of the greed and speculation that may be driving asset pricing higher than it should be. It could help mitigate the bubbles and the volatility that we see around us in asset pricing and in currency trading.
It seems to me that the concentration of wealth in the world needs to be mitigated. Since I believe that there is a tendency by everyone to protect their wealth, there is an inherent conflict of interest between those that have the wealth and those that need the wealth. The natural tendency of people is to hoard and protect their wealth and their security.
By placing the assets of a Sovereign Wealth Fund in the hands of the best managers in the world, would this increased competition benefit all? Would it help mitigate the pricing bubbles and speculation that seems to be inherent in our current system?
This could improve competition towards alternative energy sources and help promote increased productivity and improvement in all aspects of the economy. It could eliminate some of the greed and speculation that may be driving asset pricing higher than it should be. It could help mitigate the bubbles and the volatility that we see around us in asset pricing and in currency trading.
It seems to me that the concentration of wealth in the world needs to be mitigated. Since I believe that there is a tendency by everyone to protect their wealth, there is an inherent conflict of interest between those that have the wealth and those that need the wealth. The natural tendency of people is to hoard and protect their wealth and their security.
By placing the assets of a Sovereign Wealth Fund in the hands of the best managers in the world, would this increased competition benefit all? Would it help mitigate the pricing bubbles and speculation that seems to be inherent in our current system?
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