Blog 38 Of Divided Families
Religion divides.
It was a terrorist episode. It happened in Northern Ireland in 1976.
The terrorist was shot and killed by police, but then crashed his car over the curb, killing three young children. Their mother, Anne Maguire, survived, but later committed suicide. Who suffered most from this stupid violence?
When the children's aunt, Mairead Corrigan, spoke on television that evening, another Irish woman, Betty Williams, who had witnessed the episode, began collecting signatures to stop this stupid violence.
What was it all about? Briefly, certain patriotic Catholic Irishmen lived for the day they would see North and South united into "One Ireland".
On the other hand, certain Northern Island, Protestant, Irishmen feared that their own particular version of Christian worship would be swamped by the Catholic majority version if "One Ireland, ever came to be. (As history, that is grossly oversimplified. Forgive me.) I will conclude only that I think "Jesus wept" at this stupid violence.)
So Williams' and Corrigan's work to stop the stupid violence in Ireland by organizing Mothers' Marches resulted first in their being co-recipients of the Nobel Peace Prize, and, recently, being credited in this blog (#37), as the sharpeners of the turning-point that ended the stupid violence of the Northern Ireland "Troubles."
Do you detect a theme in those last six paragraphs? Good! Let's carry that to the next topic.
"Law and Order" Divides.
It should not be so. Law and order - to be a little more subtle, let's call it the ideal of justice - this ideal is one of the great inventions of the human brain. Every sensible body is in favor of it. In practice, it usually requires a force to thwart or apprehend clearly defined disturbers of the peace. Ideally, a clear definition of what is disturbing can be found in a written law. One mark of a democratic society is that most of the people have agreed to these written laws. Peace, law, public agreement.
In modern times, the credit for creating a body of civil servants whose job is to maintain law and order, usually goes to Sir Robert Peel, a British politician. In 1829 Peel established the London Metropolitan Constabulary of 1000 men. The English called them "bobbies" or "peelers", after Sir Robert. The idea was copied around the world.
The bobbies walked their beats in the city wearing high hard hats with chin straps, and enforcing the agreed-upon laws with their billy-clubs. They looked the law-breakers in the eye, and only if necessary bopped them. Policeman and suspect sometimes knew each other by name. Today, in certain places, they prefer to know only the colour of the skin.
We don't see the bobbies walking the streets much anymore. Where do you look for bobbies now? Pat your back with both hands if you said, "In cop cars," and blame Henry Ford for some of the increase in stupid violence in our cities today. It's always so satisfying to find some one to blame, isn't it?
The automobile has always been a marker of social division. Now it separates the police from the people. Armed with their automobiles instead of billy-clubs, urban policemen have lost touch with their people. That's not to deny other factors to explain the citizen/policeman fatality stories crowding the good news out of our media. But it a good point to start looking for a process to get them both back peaceably on the same side of the street.
To be continued... with a return to the law of money.
Thursday, 25 August 2016
Friday, 22 July 2016
Blog 37 A Little Blob of Black History
Blog 37 A Little Blob of Black History ...
In the streets of our town there are dozens of pickup trucks. By a rough count, 4 out of 10 are black. So I wonder, what's the big deal with black in 2016?
Most of the trucks are driven by men. Is that significant? Maybe it's the daily news that drives buyers to black. Draped caskets, it seems, day after day, and worse - on the streets of nations that are not at war
In the "war" zones - Syria, South Sudan, Yemen, just to start the list - there may be a shortage of caskets. Bring in more bulldozers.
What's the meaning of black in 2016. Any connection with 1916? my historical persona asks. It was certainly black then. Europe a witless killing stalemate. Weapons equal on both sides: rifles with bayonets and a man attached to each one; machine guns and cannons, equal on either side of no-man's-land.
In 1916, another war was raging in Ireland. The enemy was England. Ireland was finally subdivided in 1921; the South became an Independent republic. But the war between North and South continued. For the Irish, the period came to be referred to as "The Troubles". The most prominent Protestant cleric in Ulster (Northern Ireland) was preaching that "Ulster will fight, and Ulster will be right." You don't need to be too bright to note that that sounds illogical. "Ulster will be right. Therefore Ulster will fight." I'll grant that as logic. But put backward, the Rev. Ian Paisley's words are a marvellously appropriate symbol for the perverse insanity of that whole period in Irish history.
In the divided Irelands. Republicans continued killing Protestant Ulstermen, and women and children. And Ulstermen killed Catholic men, and women and children. And ranted and raved as they did so.
But they're not doing it anymore. How come?
Well, in short, one woman saw that nobody wins in a war. Let me say that again. Nobody wins in a war. There are only losses for humanity. So in 1976 one woman decided to do something to stop the killing.
One woman began organizing what came to be called the "March of Mothers" - a whole series of demonstrations by women, Catholic and Protestant, who said, in effect, Stop the Stupidity.
Now it has always seemed to me that the Marches of the Mothers were the turning-point in the "Troubles". Common sense re-asserting itself, from, maybe, where it ultimately resides, the common people, initiated by one sensible, brave, individual woman.
Fast forward again to 2016. But I'll save that for the next blog, tentatively titled Of Divided Families.
But let me conclude with some glad tidings - from Iceland. No, not Ireland, Iceland. though a lot of Irish folk have migrated to that cool island over the centuries since the first settlement.
It is today a marvellous place to visit, especially if you stretch for the nine-day tour of the whole island. Take in waterfalls, lots of 'em, and some more impressive than Niagara Falls (not just because they are not lined on both sides of the rivers with dense tourist traps.) They are located out in sparsely settled beautiful countryside, and you have to walk to get to see them. You can also bathe in hot springs, boat around among icebergs which have fallen off glaciers, watch cavorting whales (even more impressive are the life-size models in the Whale Museum in Reykjavik. And if it is not the time of year for the best display of northern lights, the modest entry fee to the Aurora museum will give you a spectacular very-wide wide-screen movie of them for as long as you want to watch.
If you book a bus tour with Guthmundur Jonasson Travel, try to get Bjorn ("Call me 'Erik'.") as on-board guide. He is something different - knowledgeable on geology, history, art, botany - and genuinely interested, flexible, and patiently careful to leave no one behind.
Or you could rent a small camper or car, please not black, and travel the same roads. Iceland drivers drive on the left side of the road. Usually.
In the streets of our town there are dozens of pickup trucks. By a rough count, 4 out of 10 are black. So I wonder, what's the big deal with black in 2016?
Most of the trucks are driven by men. Is that significant? Maybe it's the daily news that drives buyers to black. Draped caskets, it seems, day after day, and worse - on the streets of nations that are not at war
In the "war" zones - Syria, South Sudan, Yemen, just to start the list - there may be a shortage of caskets. Bring in more bulldozers.
What's the meaning of black in 2016. Any connection with 1916? my historical persona asks. It was certainly black then. Europe a witless killing stalemate. Weapons equal on both sides: rifles with bayonets and a man attached to each one; machine guns and cannons, equal on either side of no-man's-land.
In 1916, another war was raging in Ireland. The enemy was England. Ireland was finally subdivided in 1921; the South became an Independent republic. But the war between North and South continued. For the Irish, the period came to be referred to as "The Troubles". The most prominent Protestant cleric in Ulster (Northern Ireland) was preaching that "Ulster will fight, and Ulster will be right." You don't need to be too bright to note that that sounds illogical. "Ulster will be right. Therefore Ulster will fight." I'll grant that as logic. But put backward, the Rev. Ian Paisley's words are a marvellously appropriate symbol for the perverse insanity of that whole period in Irish history.
In the divided Irelands. Republicans continued killing Protestant Ulstermen, and women and children. And Ulstermen killed Catholic men, and women and children. And ranted and raved as they did so.
But they're not doing it anymore. How come?
Well, in short, one woman saw that nobody wins in a war. Let me say that again. Nobody wins in a war. There are only losses for humanity. So in 1976 one woman decided to do something to stop the killing.
One woman began organizing what came to be called the "March of Mothers" - a whole series of demonstrations by women, Catholic and Protestant, who said, in effect, Stop the Stupidity.
Now it has always seemed to me that the Marches of the Mothers were the turning-point in the "Troubles". Common sense re-asserting itself, from, maybe, where it ultimately resides, the common people, initiated by one sensible, brave, individual woman.
Fast forward again to 2016. But I'll save that for the next blog, tentatively titled Of Divided Families.
But let me conclude with some glad tidings - from Iceland. No, not Ireland, Iceland. though a lot of Irish folk have migrated to that cool island over the centuries since the first settlement.
It is today a marvellous place to visit, especially if you stretch for the nine-day tour of the whole island. Take in waterfalls, lots of 'em, and some more impressive than Niagara Falls (not just because they are not lined on both sides of the rivers with dense tourist traps.) They are located out in sparsely settled beautiful countryside, and you have to walk to get to see them. You can also bathe in hot springs, boat around among icebergs which have fallen off glaciers, watch cavorting whales (even more impressive are the life-size models in the Whale Museum in Reykjavik. And if it is not the time of year for the best display of northern lights, the modest entry fee to the Aurora museum will give you a spectacular very-wide wide-screen movie of them for as long as you want to watch.
If you book a bus tour with Guthmundur Jonasson Travel, try to get Bjorn ("Call me 'Erik'.") as on-board guide. He is something different - knowledgeable on geology, history, art, botany - and genuinely interested, flexible, and patiently careful to leave no one behind.
Or you could rent a small camper or car, please not black, and travel the same roads. Iceland drivers drive on the left side of the road. Usually.
Monday, 4 July 2016
Blog 36 Tipping Point
Blog 36 Tipping Point
The practice of "tipping", or to use its more grandiloquent format, leaving a "gratuity", is it worth a blog comment? Well, you judge.
In Iceland (of recent soccer fame. Note they spell it "Island"), and in Australia and New Zealand I have encountered a resistance to tipping. An Australian friend put it to me this way. "Employers ought to be paying a decent regular wage. Tipping encourages them to pay lower wages.
In North America, however, some of the hotel chains, when quoting for a conference or wedding reception will include the phrase, ("Gratuity included," or even "15% gratuity included.")
I have two questions about that. First, what is the intended message
in that little tag?
"You won't have to worry about how much to tip."
Or "You won't have to worry that you will face hidden costs."
Or "You don't have to make a donation of satisfaction to our staff. We take care of everything for you"?
Or all of the above?
Second question. Does all (or any) of that 15% go to the employees who perform the actual customer service? There would certainly be a corporate cost to calculating and handing out the appropriate tip to each employee. So does the employer levy a "handling fee"? In a well-run company the chief accountant could easily calculate the approximate cost of that "service to their employees".
But then there is the less measurable question: does the employer decide what is the "appropriate" amount to be handed on to each employee?
Why do I not like the answers to these questions?
What does it matter how the employees are paid - all salary, or a mix of salary and tips, or all tips? I hear a company CFO saying, "It's the bottom line that counts for the employee. So what's your beef?"
Well, let me change disciplines and point to another factor at work here, a factor which would be hard to capture with econometrics.
Tipping has been, and still is,
a mark of class distinction.
Tipping says, I am richer. (and therefore better), than you. Or in a more modern phrase, "It sucks to be you." That message is conveyed in the act of tipping, no matter how philanthropic the intent of the tipper. ("Philanthropic," by the way, is a Greek-based word meaning something like "love of one's fellow man.")
So, to history. Many of the first English settlers in New Zealand and, especially, in Australia, had good reason to be resent class distinctions. English prison sentences supplied the first immigrant of many Australian families. Some at least of the new New Zealanders must have risked the long sea voyage and the hazards of their faraway destination because they wanted to escape being in the "sucks to be you" class in England.
These were people who knew what it was to be a member of the underclass in a rigidly stratified society. So their new home was to be a different kind of country. It was not by chance that Australia is credited with the invention of the secret ballot. Note, too, that in an Australian election, failure to vote has been illegal and carries a penalty.
And what about Iceland? That country got its independence in 1944. But it had been a part of the Kingdom of Denmark for a century, during the time when European colonialism operated on the principle that "Colonies exist to enrich the motherland."
Since independence, its small population has developed an extremely democratic society. Tipping - sign of class distinction - seems to have had no part in it.
Let me finish with a little anecdote from R. L. Stevenson's novel, Kidnapped. I summarize from memory:
A Scottish lord, who was without two shillings to spare was honoured for his military service by an audience with the King of England. The King also gave him a little bag of gold coins. As he left the palace the Scot threw the bag of money to the doorman, and strode on, head high. Pride? Yes. Or self-respect?
So here's a question for you, dear readers. How is the Scottish lord's act relevant to our topic of tipping?
The practice of "tipping", or to use its more grandiloquent format, leaving a "gratuity", is it worth a blog comment? Well, you judge.
In Iceland (of recent soccer fame. Note they spell it "Island"), and in Australia and New Zealand I have encountered a resistance to tipping. An Australian friend put it to me this way. "Employers ought to be paying a decent regular wage. Tipping encourages them to pay lower wages.
In North America, however, some of the hotel chains, when quoting for a conference or wedding reception will include the phrase, ("Gratuity included," or even "15% gratuity included.")
I have two questions about that. First, what is the intended message
in that little tag?
"You won't have to worry about how much to tip."
Or "You won't have to worry that you will face hidden costs."
Or "You don't have to make a donation of satisfaction to our staff. We take care of everything for you"?
Or all of the above?
Second question. Does all (or any) of that 15% go to the employees who perform the actual customer service? There would certainly be a corporate cost to calculating and handing out the appropriate tip to each employee. So does the employer levy a "handling fee"? In a well-run company the chief accountant could easily calculate the approximate cost of that "service to their employees".
But then there is the less measurable question: does the employer decide what is the "appropriate" amount to be handed on to each employee?
Why do I not like the answers to these questions?
What does it matter how the employees are paid - all salary, or a mix of salary and tips, or all tips? I hear a company CFO saying, "It's the bottom line that counts for the employee. So what's your beef?"
Well, let me change disciplines and point to another factor at work here, a factor which would be hard to capture with econometrics.
Tipping has been, and still is,
a mark of class distinction.
Tipping says, I am richer. (and therefore better), than you. Or in a more modern phrase, "It sucks to be you." That message is conveyed in the act of tipping, no matter how philanthropic the intent of the tipper. ("Philanthropic," by the way, is a Greek-based word meaning something like "love of one's fellow man.")
So, to history. Many of the first English settlers in New Zealand and, especially, in Australia, had good reason to be resent class distinctions. English prison sentences supplied the first immigrant of many Australian families. Some at least of the new New Zealanders must have risked the long sea voyage and the hazards of their faraway destination because they wanted to escape being in the "sucks to be you" class in England.
These were people who knew what it was to be a member of the underclass in a rigidly stratified society. So their new home was to be a different kind of country. It was not by chance that Australia is credited with the invention of the secret ballot. Note, too, that in an Australian election, failure to vote has been illegal and carries a penalty.
And what about Iceland? That country got its independence in 1944. But it had been a part of the Kingdom of Denmark for a century, during the time when European colonialism operated on the principle that "Colonies exist to enrich the motherland."
Since independence, its small population has developed an extremely democratic society. Tipping - sign of class distinction - seems to have had no part in it.
Let me finish with a little anecdote from R. L. Stevenson's novel, Kidnapped. I summarize from memory:
A Scottish lord, who was without two shillings to spare was honoured for his military service by an audience with the King of England. The King also gave him a little bag of gold coins. As he left the palace the Scot threw the bag of money to the doorman, and strode on, head high. Pride? Yes. Or self-respect?
So here's a question for you, dear readers. How is the Scottish lord's act relevant to our topic of tipping?
Wednesday, 15 June 2016
A Policeman's Lot is not a Happy One
Blog 35 A Policeman's Lot is not a Happy One
There have long been two types of police force. 1. what we might call "democratic police" to protect the demos, the people, from the law-breakers, and 2. what we should call "political police", to protect governments from their people.
Democratic police. Political police.
In the increasingly divided societies we are seeing in the daily news this century (Syria, Egypt, America, are examples), the second function - protecting the government from the people - sometimes looks like the more important one
Governments representing a minority set of their people have gained power and claimed the "mandate" to implement a program representing only their minority constituency. Examples are the Muslim Brotherhood in Egypt, the Harper Conservatives in Canada, and possibly a deeply divided America after the current election. This is not democracy.
Such regimes are prone to expanding their Type 2 police power.
But figures from the US also tell of the rise of a third kind of police - police who are hired by private individuals and corporations to protect them, presumably from both governments and people. These private or contract police now outnumber public police in America.
We are not surprised, believing as The Cogs Blog does, that power draws money, and money buys power, and power draws...
power
money
The most significant division in many nations and across the globe today is the division between the rich ("the 1%") and the rest of the eight billion earthlings. A recent column by an investment commentator, using not the 1%, but the .01%, for the very, very rich, observed that "the billionaires are now drawing their wealth from the millionaires."
Seems like the wealth distribution is so lop-sided that the great majority of mere "people" aren't worth exploiting. But, of course, you still need your own police force to protect you from -- well, just in case.
(Pssst - an aware, enraged population, or a pesky tax-collecting government?
The columnist also noted that the current wealth inequity is now. greater than it was in 1929 (before the Crash). So?
But, let US conclude more brightly, with
WHEN A FELON'S NOT ENGAGED IN HIS EMPLOYMENT (his employment)
OR MATURING HIS FELONIOUS LITTLE PLANS
(little plans)
HIS CAPACITY FOR INNOCENT ENJOYMENT
(-cent enjoyment)
IS JUST AS GREAT AS ANY HONEST MAN'S
(honest man's.)
OUR FEELINGS WE WITH DIFFICULTY SMOTHER
(-culty smother)
WHEN CONSTABULARY DUTY'S TO BE DONE
(to be done)
AH, TAKE ONE CONSIDERATION WITH ANOTHER
(with another)
A POLICEMAN'S LOT IS NOT A HAPPY ONE.
From The Pirates of Penzance W.S. Gilbert, 1879
for more verses go to lyricsplayground.com/alpha/p/policemanssong.shtmi
There have long been two types of police force. 1. what we might call "democratic police" to protect the demos, the people, from the law-breakers, and 2. what we should call "political police", to protect governments from their people.
Democratic police. Political police.
In the increasingly divided societies we are seeing in the daily news this century (Syria, Egypt, America, are examples), the second function - protecting the government from the people - sometimes looks like the more important one
Governments representing a minority set of their people have gained power and claimed the "mandate" to implement a program representing only their minority constituency. Examples are the Muslim Brotherhood in Egypt, the Harper Conservatives in Canada, and possibly a deeply divided America after the current election. This is not democracy.
Such regimes are prone to expanding their Type 2 police power.
But figures from the US also tell of the rise of a third kind of police - police who are hired by private individuals and corporations to protect them, presumably from both governments and people. These private or contract police now outnumber public police in America.
We are not surprised, believing as The Cogs Blog does, that power draws money, and money buys power, and power draws...
power
money
The most significant division in many nations and across the globe today is the division between the rich ("the 1%") and the rest of the eight billion earthlings. A recent column by an investment commentator, using not the 1%, but the .01%, for the very, very rich, observed that "the billionaires are now drawing their wealth from the millionaires."
Seems like the wealth distribution is so lop-sided that the great majority of mere "people" aren't worth exploiting. But, of course, you still need your own police force to protect you from -- well, just in case.
(Pssst - an aware, enraged population, or a pesky tax-collecting government?
The columnist also noted that the current wealth inequity is now. greater than it was in 1929 (before the Crash). So?
But, let US conclude more brightly, with
"The Policemen's Song"
WHEN A FELON'S NOT ENGAGED IN HIS EMPLOYMENT (his employment)
OR MATURING HIS FELONIOUS LITTLE PLANS
(little plans)
HIS CAPACITY FOR INNOCENT ENJOYMENT
(-cent enjoyment)
IS JUST AS GREAT AS ANY HONEST MAN'S
(honest man's.)
OUR FEELINGS WE WITH DIFFICULTY SMOTHER
(-culty smother)
WHEN CONSTABULARY DUTY'S TO BE DONE
(to be done)
AH, TAKE ONE CONSIDERATION WITH ANOTHER
(with another)
A POLICEMAN'S LOT IS NOT A HAPPY ONE.
From The Pirates of Penzance W.S. Gilbert, 1879
for more verses go to lyricsplayground.com/alpha/p/policemanssong.shtmi
Wednesday, 1 June 2016
Blog 34 Fred and Franny, Inflation and the Price of Toothbrushes
Blog 34 Fred and Franny, Inflation and the Price of Toothbrushes
Your blogger re-read Blog 33 and thought it was not only unfunny, but, as an explantation of lenders' and borrowers' different attitudes towards inflation, it was somewhat thickish reading. (He might add, he was not the only reader who expressed that thought.) But that is not why you have had no postings for a month. Not sulking, just resting.
So, let me introduce you to - well let's just call him Mr. Fred Fewster. Mr Fewster is a nice guy. He lends his friends money. But he gets a little obsessive over bargains. For instance, when he saw his brand of fancy toothbrush - regular price, $4.89, on sale for $4.29, he bought 10 of them. On second thought, he went back and bought 6 more. Got a feel for Fred?
The same week, he loaned a young friend, a struggling student, $10,000 to pay for her last year at college. He did not charge any interest. Franny was the daughter of a friend. She was effusively grateful. Got a feel for Fred?
So Fred brushed his teeth, and Fanny finished college, got married, had children, and a career. Fred used up his sixteen toothbrushes at the rate of one a year.
Only then, did something remind Franny of the debt. She paid it off at once, with appropriate apologies.
Fred himself had also forgotten the loan. But it was time to buy some new toothbrushes. This time it cost him, with 16 years of inflation averaging 3% a year, exactly $6.89 per toothbrush. That was a sale price, of course.
So for lender Fred, toothbrushes were $2.60 more expensive than the last time he bought some. At the latest price he could get only 10 for the price he had paid for 16, sixteen years previously. If Fred had been a banker, that would not have been good business. Interest foregone on $10,000 for 16 years at say 3%, and an equal percentage of inflation loss on the toothbrushes..
Fortunately, friendly Freddy was not a bank. Just a generous friend of the family.
Who liked to book his dental care well in advance.
Your blogger re-read Blog 33 and thought it was not only unfunny, but, as an explantation of lenders' and borrowers' different attitudes towards inflation, it was somewhat thickish reading. (He might add, he was not the only reader who expressed that thought.) But that is not why you have had no postings for a month. Not sulking, just resting.
So, let me introduce you to - well let's just call him Mr. Fred Fewster. Mr Fewster is a nice guy. He lends his friends money. But he gets a little obsessive over bargains. For instance, when he saw his brand of fancy toothbrush - regular price, $4.89, on sale for $4.29, he bought 10 of them. On second thought, he went back and bought 6 more. Got a feel for Fred?
The same week, he loaned a young friend, a struggling student, $10,000 to pay for her last year at college. He did not charge any interest. Franny was the daughter of a friend. She was effusively grateful. Got a feel for Fred?
So Fred brushed his teeth, and Fanny finished college, got married, had children, and a career. Fred used up his sixteen toothbrushes at the rate of one a year.
Only then, did something remind Franny of the debt. She paid it off at once, with appropriate apologies.
Fred himself had also forgotten the loan. But it was time to buy some new toothbrushes. This time it cost him, with 16 years of inflation averaging 3% a year, exactly $6.89 per toothbrush. That was a sale price, of course.
So for lender Fred, toothbrushes were $2.60 more expensive than the last time he bought some. At the latest price he could get only 10 for the price he had paid for 16, sixteen years previously. If Fred had been a banker, that would not have been good business. Interest foregone on $10,000 for 16 years at say 3%, and an equal percentage of inflation loss on the toothbrushes..
Fortunately, friendly Freddy was not a bank. Just a generous friend of the family.
Who liked to book his dental care well in advance.
Dad, why does Mr. Banks complain of inflation?
He doesn't want to lend out "good money" and be paid back in "cheap money".
I still don't get it
Oh, well.
Wednesday, 4 May 2016
33 Will That Be Cash or Credit ? Part 2
BLOG 33 Will that be Cash of Credit? Part 2
Some thoughts on the disappearance of cash. Random order.
The move to a cashless society world-wide is an offensive by the global banking system to take the power of creating money totally away from national governments.
The lending class, fronted by the banks, have long argued that governments cannot be trusted to control the issuance of money, even the minuscule percentage remaining to them (estimates set that at "probably less than 2%" of the total money in use in the world. Governments - the shrill voices of the fearful bankers insist - will create more money than is needed and the value of the nation's/world's money will collapse. That would be a terrible catastrophe. It would unleash a monster -- H.I.D.!
OK. I give up. Why can't I get that funny cartoon of Humpty Inflation Dumpty falling off the wall to upload?
Oh, there you are. Not very clear, though.
Well, read on.
So what's really wrong with inflation? Maybe we should first ask that cutting question, quo bene? who benefits? No, let's first ask who has most to lose. That answer is easy: those who have the most of the world's money.
So it depends on who you are. Different people are affected differently by inflation.
In fact, it depends on two things. 1. How much money/wealth you have. If you have a lot, you may still be able to pay more for rent, restaurant meals, and your tailor, and rise above it all.
But if you have very little money/wealth - like most of the world's people - inflation may mean you have to do without food, or a roof, or (you middle class guys and gals) without private schools for your children, and a Fiat instead of a Ferrari.
2. Secondly, it depends on whether you are a lender or a borrower, because that brings interest rates into the picture.
So which do you prefer, high interest rates or low interest rates? (Think about that now. Your answer may certify which class or age group you belong to.) If you are a young working couple, looking to rising income, you may want to borrow money now. You grandfather, however, who has spent his lifetime saving for retirement at an expected return on savings of 6%, probably does not appreciate the current 2%. So if he does give or lend you a down payment, gush a little.
To summarize all that in a diagram:
Preferred by Preferred by
LENDERS 0 BORROWERS
0
0
0
HIGH INTEREST 0 LOW INTEREST
0
0
000000000000000000000000000000000000
0
0 ,
LOW INFLATION 0 HIGH INFLATION
0
0
Lenders prefer high interest rates, of course. Lenders also prefer low inflation, because inflation erodes buying power. They do not want to be paid back money that buys less than the money they lent. Makes sense.
So write down: "Lenders like higher interest rates, and lower inflation ."
For Borrowers, on the other hand, a little inflation is a good thing, especially if it means their wages increase. It could be significant, for instance, if wages have risen with inflation during the 25-year term of their mortgage.
So write down, "Borrowers like lower interest rates and higher inflation.
OThat is, if they are as smart as you are, and have learned today's rambling Cogs Blog lesson.
One final point: governments can and usually do create the money to keep their economies stable -- without inflation. So don't believe all you hear about the benefits of the cashless society.
Some thoughts on the disappearance of cash. Random order.
The move to a cashless society world-wide is an offensive by the global banking system to take the power of creating money totally away from national governments.
The lending class, fronted by the banks, have long argued that governments cannot be trusted to control the issuance of money, even the minuscule percentage remaining to them (estimates set that at "probably less than 2%" of the total money in use in the world. Governments - the shrill voices of the fearful bankers insist - will create more money than is needed and the value of the nation's/world's money will collapse. That would be a terrible catastrophe. It would unleash a monster -- H.I.D.!
OK. I give up. Why can't I get that funny cartoon of Humpty Inflation Dumpty falling off the wall to upload?
Oh, there you are. Not very clear, though.
Well, read on.
So what's really wrong with inflation? Maybe we should first ask that cutting question, quo bene? who benefits? No, let's first ask who has most to lose. That answer is easy: those who have the most of the world's money.
So it depends on who you are. Different people are affected differently by inflation.
In fact, it depends on two things. 1. How much money/wealth you have. If you have a lot, you may still be able to pay more for rent, restaurant meals, and your tailor, and rise above it all.
But if you have very little money/wealth - like most of the world's people - inflation may mean you have to do without food, or a roof, or (you middle class guys and gals) without private schools for your children, and a Fiat instead of a Ferrari.
2. Secondly, it depends on whether you are a lender or a borrower, because that brings interest rates into the picture.
So which do you prefer, high interest rates or low interest rates? (Think about that now. Your answer may certify which class or age group you belong to.) If you are a young working couple, looking to rising income, you may want to borrow money now. You grandfather, however, who has spent his lifetime saving for retirement at an expected return on savings of 6%, probably does not appreciate the current 2%. So if he does give or lend you a down payment, gush a little.
To summarize all that in a diagram:
Preferred by Preferred by
LENDERS 0 BORROWERS
0
0
0
HIGH INTEREST 0 LOW INTEREST
0
0
000000000000000000000000000000000000
0
0 ,
LOW INFLATION 0 HIGH INFLATION
0
0
Lenders prefer high interest rates, of course. Lenders also prefer low inflation, because inflation erodes buying power. They do not want to be paid back money that buys less than the money they lent. Makes sense.
So write down: "Lenders like higher interest rates, and lower inflation ."
For Borrowers, on the other hand, a little inflation is a good thing, especially if it means their wages increase. It could be significant, for instance, if wages have risen with inflation during the 25-year term of their mortgage.
So write down, "Borrowers like lower interest rates and higher inflation.
OThat is, if they are as smart as you are, and have learned today's rambling Cogs Blog lesson.
One final point: governments can and usually do create the money to keep their economies stable -- without inflation. So don't believe all you hear about the benefits of the cashless society.
Sunday, 10 April 2016
Blog 32 "Will That Be Cash or Credit?
Recent news item. Denmark is proposing to rule that cash is no longer legal tender for retail purchases. Norway and Finland are also discussing the idea. Sounds as if that great bankers' dream - the cashless society - is just around the corner. And in three nations with a reputation for being social democracies, no less. Maybe Denmark is to be another Greece. "You have to pick off the little ones first."
The measure could be sad news for democrats around the world who have been watching the world-wide struggle between national states and global corporations for the world's wealth/power.
Or maybe the lining is silver. I'll save that for the next blog..
If implemented the measure would mean citizens will have no cash money in their pockets. But they will have that little card (or maybe a mere blink into an eye-scanner will do it) to provide them with purchasing power - in bank-created rental money.
So no matter how much cash you have socked away, if cash is on its way out, you will have to use credit money, that unavoidable tax on economies, personal and national. There will probably be a reasonable time period in which you can spend your cash before your government declares it worthless. After that, everybody will be a total borrower - for every cup of coffee or package of peppermints.
So what about the bigger picture? It could be that the cashless society is inevitable. Statements of the merits of it have been popping up like a barrage of trial balloons across the world. They say:
1. It will provide savings to merchants - in the costs of handling cash. Just swipe, and walk away with your bag of groceries. (They'll have to speed up that credit card transaction at the checkout. But that's a "mere technicality"). Importance rating on a scale of 1-5 0.9
2, It will prevent tax evasion, With everybody's income and money assets recorded in banks somewhere and accessible to government law enforcers, tax evasion will be a thing of the past! Just think of all those celebrity tax-evaders we keep uncovering! And how many more there must be!! Importance rating (if it works out that way) 4
3. It will be good for government budgets, Less spent on items like policing and courts and jails. So there will be more resources to spend on other public goods, like pensions, healthcare, free education. U know, the usual public values everywhere. Or on reducing taxes, or (reach for this one) reducing the national debt! Importance rating 3.5
Summing up: the absence of cash will reduce crime. There will be fewer robberies when people have nothing to steal but the clothes on their backs. And it will be easier to identify "proceeds of crime". and to track and prosecute vicious money-laundresses, terrorists and other base criminals, and - need I repeat - tax evaders!
Cogs Blog Prediction: You are going to hear more and more of these arguments on talk shows, newscasts, from political spokesfolk, financial advisors and indentured economists. Be sure to watch which way your politicians sway.
So, unless..
Unless what?
Unless the new credit money-mechanism is controlled by government-owned banks!
I have more to learn, but I believe Denmark already has a public bank, which lends to citizens. Still, Danes carry the highest level of private debt among 24 OECD countries. Maybe that is why they have been a target for this cashless economy move.
All this bears looking at further. Next blog maybe.
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