Free Competition in Currency Act of 2007

I posted this elsewhere, but copied it here as it combines thoughts from previous entries into one semi-cogent post:

Last year Ron Paul introduced the Free Competition in Currency Act of 2007 which would make alternate currencies legal, though not change other aspects of what you can do with currencies (e.g. money laundering would still be illegal).

Few young people realize that until the 1964-1968 time period it was possible to bring your dollars to the government and get precious metal on demand. This gave the dollar real worth. Since that time, the government has found that it can simply make more money out of thin air and spend it on government programs to generate votes. As with any supply and demand equation, when they start running the printing presses to make more dollars, the dollars you have in your bank account become worth less. You’re losing money value and the government is gaining money value, but your ‘taxes’ are low. One can see this in inflation charts which start to skyrocket in the 1970’s, relative to decades previous. Interesting note: if we measured inflation today the way we used to back then, our inflation rate would be 11%.

The Wall Street Journal recently ran a graph showing the value of the dollar vs. gold vs. oil. If we look at the start of the decade until now, if we were holding euros instead of dollars, gas would only be about $2.70 at the pump – that extra $1.30 can be viewed as lost power of the dollar. But, the euro is no panacea either – if you compare the price of gas to the price of gold, it’s nearly flat. How about $1.20 gas? I actually saw $5 diesel in CT last weekend.

Not surprisingly, the government decided to stop keeping track of ‘M3’, or the money supply of the dollar recently. Private economists have continued the calculations and it’s easy to see why the government doesn’t want to talk about it.

So, back to the beginning, the government has taken irresponsible action with the way it manages the value of its currency, and they have laws preventing people from opting out of their mismanagement. Afraid of a little competition, are they? Experience shows that the most likely effect of competing currencies, even ones that mimic the way the government operated in your parents’ generation, would be to pressure the government to exercise some restraint. Of course, if this competition is illegal, they’ll continue with their outrageous devaluation.

Folks who think a little competition helps to keep markets fair, and monopolies hurt them, would do well to contact their representatives in government about the aforementioned bill.

Baby Boomers to Crush US Economy

There’s a new study out that says that three out of five baby boomers will outlive their retirement savings, due to inflationary pressures and too high a standard of living. For the first, precious metals would be a good answer, and if that road is taken, the second problem may just solve itself.

But the problem with the study is it only looks at baby boomers living to be 90-100 years old. With practical gene therapy, telomere extension technology, and perhaps even nanobot reconstruction, a significant number of baby boomers could live to be 120-130 instead. This is nothing that was planned for, and our social welfare programs cannot support it. We may very well see people who have been on the dole longer than they’ve been productive workers.

Are you willing to bet against advances in medical technology and Moore’s law? Boom, indeed.

Penny Stocks for Fun and Profit

I bought 2900 shares of Sustainable Power Corp stock for just over 3 cents a share the other day, on a whim. I had a tiny bit of cash in my trading account that was getting dangerously close to earning enough interest such that I’d have to file Interests & Dividends paperwork with the State of NH, and I’ve never owned a penny stock before. Some of my other stocks are expensive enough I can’t even afford more than one share, so I thought it would be fun to own 2900 shares of something. I know, that’s silly.

However, if what these guys say is true (I give it at least roulette wheel odds) then they should be able to command $10 a share pretty quickly. That would sure help me retire some debt.

Oh, yeah, their business plan is to replace nearly all oil supplies by disposing of agriculural waste. Using less than 1/5 of the US agricultural waste would supposedly break even, and produce a salable fertilizer as a by-product. Reportedly they have a big reactor in operation and have little ones to bring around to show investors that their claims are tue. They’re planning to have 400 reactors built by the end of next year. Whether they achieve this will be a good measure of how real they are. They have a video showing a production facility, and it appears they’ve at least put quite a bit of metal together with welders, and their presentation is so not slick that they’re either brilliant con guys or real. If it’s staged, the prop man gets high marks for hiding gear from NAPA and True Value within camera shot to convince us it’s a real small business.

I looked up the diplomat they have speaking in the video, and he appears to be the real deal, at least if Wikipedia’s link to the group can be trusted. I also looked up the guy named as the inventor of the technology and didn’t find any academic information on him, but there are several articles written wondering if this is real. One cited testing done by an independent lab which appears to confirm the product, or at least their sample (though the sample differed from other types of fuel in its BTU count and freezing point).

Yeah, it seems too good to be true, but I’m going to chose to believe them for now. It may be a pipe dream, but I have to admit it’s a beautiful dream.

Trains Like Europe

I’ve frequently heard about how great the trains are on the other side of the pond, so when I had lunch with a fellow from outside Manchester, UK recently, I asked him how many people take the train to London as a commute.

“Oh, plenty, but not me,” was his answer. Probing further, I found the reason was he couldn’t afford it.

The trains are apparently so popular and the roads so congested, that simple supply and demand have driven the fares sky-high. He told me that commuting to London, a bit less than a 2 hour trip, would run about a thousand dollars a week. Some big firms cover these costs for their day-trippers.

Half-disbelieving, I figured I’d run the numbers myself. I searched for that trip, on a weekday, commuting hours, and asked for the cheapest fare, steerage class. Turns out the cheapest round-trip fare is £230. Google says that’s about $455.

While granting that there is probably a frequent-traveler discount, I can take a 2-hour commuter bus round-trip from here to Boston for $40 as the posted rate. $32 is the ‘monthly’ rate.

So, I’ll assume my lunch partner’s numbers were a bit old, or at least his exchange rate. Taking the train in the UK like this is in all likelihood $1600 per week affair, or about 10 times the cost of commuting in the US.

Consider this the next time you hear we ought to have commuter trains like they do in Europe.