Category Archives: Money

A Bite Out of the Apple

Are you chuckling as much as I am about the European Union socking it to Apple for unpaid/back taxes on its European operations?

It couldn’t happen to a more politically correct liberal poster child than Apple.

Instead of saying, “Oops, our bad. We’re good liberals so we’ll just reach into our pocket and happily pony up the amount…,” Apple squealed like a stuck pig.

Don’tcha luv it when liberals are hoist by their own petard?

Hey, Timmy! You’re a big-time supporter of every liberal cause that rolls down the hill. You’re a supporter of Hillary Clinton, the Democratic Party and probably Bernie Sanders too. You wanted these things like big taxes and governmental micromanagement, but are they just for other people or are you willing to live by them?

Apparently not…

Now, are you a liberal who’s being mugged by reality? Are you going to learn the lesson? Do you understand that the Eurocrats view you and your company as little more than a servant of their enterprise. You are a sheep to be shorn and provide them with wool. It might be really cool wool but you’re still a sheep in their eyes. Baaaaaah!

Are you going to join us or is your liberal fealty, possibly driven by your boastful homosexuality, your greatest concern? Is your sexual upside-down cake so important to you that you’d piss away $13 billion of other people’s money (and much more year after year if you knuckle under to the Eurofascists)?



The federal debt sits around $19 trillion and continues to grow. A sane person would worry about such a large number but Washington, D.C., does not contain a majority of sane people. Many in government think debt is a good thing and more debt would be a better thing.

Witness a June 3, Wall Street Journal letter to the editor by one Francis X. Cavanaugh, “the founding chief executive of the Federal Retirement Thrift Investment Board, 1986-1993.” He complains that a recent column worrying about the debt, especially in the light of the trillions of dollars in unfunded obligations to retired and retiring federal workers (which it totaled up to $118 trillion).

Cavanaugh says, “Mr. Melloan’s concern that ‘we have borrowed so heavily from future generations’ is baseless. Future generations will indeed inherit the liability of the debt but they will also inherit the offsetting asset of the Treasury securities issued to finance the debt. So the net impact of the debt on future generations is zero.”

Whew! That’s a load off my mind.

In case you didn’t follow that, Mr. Cavanaugh is saying that we can’t owe money to ourselves. All those T-Bills bought by American investors (including retirees), don’t have to be paid off; or rather the Treasury can just crank out more debt to pay them off. In fact, the debt is turned magically into an asset!

Don’t you wish you could do that with your mortgage debt; your credit card debts; any student loans?  They aren’t debts, they are assets. take that mortgage debt and use it to buy a car!

Even more good news from Cavanaugh, the feds in Washington can keep spending like drunken sailors because there really is no such things as a yearly “budget deficit” pumping up those federal accumulated budget deficit numbers. He says, “The maturing debt and the interest on it are effectively paid off by issuing new Treasury securities. So the controllable budget has been balanced on average over the past 70 years.”

He even quotes Abe Lincoln, “Men can readily perceive that they cannot be much oppressed by a debt they owe to themselves.”

It’s just that simple.

Except it’s not.

Like a lot of Lincoln’s quotes, the quote can be “perceived” two ways. Anyone can “perceive” the Earth is flat. You can “perceive” you don’t owe a debt. That doesn’t make it so. It doesn’t mean that the person who originally loaned the money is happy to wave goodbye to it.

As anyone who has paid off a debt with a credit card knows, that debt doesn’t actually go away. Rolling over debt eventually catches up with you. Admittedly, the awesome power of the U.S. government means that it can get away with things that you and I can’t get away with but it eventually will catch up.

Real people own that debt. They payed their money fairly and legally on the promise that the U.S. federal government was good for the debt. People like Cavanaugh think, SUCKERS!

Cavanaugh is typical of so many people in government. Their knowledge of economics is horrific, actually downright dangerous. Many of them, like Cavanaugh, seem to be of the mind that a future miracle is going to happen, perhaps finding a winning trillion-dollar Lotto ticket under one of the government’s many couches. The other group, socialists that are growing in power within the Democrat party (and hence the U.S. government), will simply cancel the debt just as they wish to cancel the now trillion-dollar student debt morass and are beginning to look at the mortgage market to patronize their supporters with repudiations and write-offs.

My recommendation, avoid federal government debt instruments. They might be repudiated in a future Democrat administration populated by in-debt Millennials.

Here Comes the Tubbie!

I agree with John Hinderaker (with a minor quibble or two) on the Harriet Tubman on the $20 debate.

She seems to have been a fine person and did some things many find very worthy of notice. But there have been many that have done that. So I’m not supportive of a change.

Initially money, coinage that is, utilized a symbol of its issuer — a city or state (e.g. kingdom), leader or a favored deity. One could easily argue that coinage has always had some manner of political element to it. When money was made of small pieces of precious metals the ability to tell much of a story was limited. The advent of paper currencies changed that by providing a larger tableau and better surface, though the stories were, by and large, limited to famous politicians or military leaders, significant events, symbols of industry or national import.

Picking an “activist” such as a Harriet Tubman smacks far more of a left-wing foreign regime. Yet an argument could be made for her as some kind of representative of a political movement.

My big complaint is two-fold — staples of exchange should stay stable; and this smacks of political correctness and the left’s never-ending attack on American history.

The first argument should be self-explanatory though I’m afraid it isn’t in these days of tear-away history and currency manipulation by national governments and central banks. The monetary unit should have a feeling of being rooted in time, a sense solidness and permanence. Changing the face of a currency, making it the tool of transient political regimes, is a little too reminiscent of banana republics, socialist regimes and tyrants. The Wall Street Journal noted on Thursday, this is just the beginning of Obama administration machinations, “The backs of the $5 and $10 bills will also be redesigned over time to tell the story of civil rights for women and African-Americans, a marked departure from the current lineup of presidents and founding fathers — unchanged since 1928.” They are even lining up Marian Anderson singing in Washington, D.C. for a spot on a bill.

You can imagine that redesigning, AKA messaging and branding, will not stop there. These are people who put political messages, their political messages, their propaganda, on everything. To them everything serves the message: what we eat, energy sources, modes of transportation, museums, sports, arts, so much more; and even money.

And this is where the more disturbing angle comes in. It is political correctness. It is identity politics. This isn’t about what Harriet Tubman did but rather her skin color and her sex. Those are the criteria that liberals make their judgments of worth by. This will just be the beginning of politicizing our money.

Mark my words — Wounded Knee, small pox blankets, Haymarket riots, Pullman porters, Manzanar, Malcolm X, grape boycotts, Cesar Chavez, Miranda, Stonewall riot, Berkeley protests, Roe v Wade, Harvey Milk, et al, all the fodder that fuels the left’s culture wars will be pitched now. Who knows, maybe Susan B. Anthony will be trotted out yet again. Third time’s a charm, right!?! They are going to force a woman down our throats, no matter what (even if they have to put women on every mode of transaction in America, including mandating a woman on all checks and credit cards).

The tearing down of Andrew Jackson (and so many others) is just a part of the left’s war on history and another instance of their Year Zero mentality. Destroying history is an attempt to unmoore us from our foundations so that they can be rewritten and sculpted into the left’s dreamed of utopia.

The WSJ story devoted two whole paragraphs (Woo! That’s some big effort there Nick Timiraos!) in a half-hearted explication of the other side of the debate. He pointed out that Jackson is often mentioned only for his conduct with Indians. If anything else is mentioned it is his irascibility. Hinderaker surmises, and I agree, that Ol’ Hickory is probably a bit too much of a hyper-Alpha Male for today’s special snowflakes. I suspect most of them would wet their pants or faint in his presence.

Howard Kittell, president of the Hermitage, Jackson’s home, complains (as we all do) that it makes no sense to sit in judgment of people from the past without understanding the past. But that’s one of the left’s favorite activities. (Though strangely the left/socialists’ centuries of failure, oppression and mass murder somehow remain buried in the sands of time or quickly excused as products and exceptions of the local conditions.)

As Churchill noted, “If the present tries to sit in judgment of the past it will lose the future.”

One last note, I think the whole “She’s a pistol-packin’ Republican mama!” argument, trotted out by some conservatives and Republicans as some kind of “gotcha!” is too clever by a half. Only a handful of people know this or will ever know this. Those facts are never going to be printed on the bill and the mainstream media will bury those facts in favor of the politically correct angle so our famously ignorant kids, and those following behind them, will never know that. After all, the “Tet Offensive” was a military disaster for the Viet Cong and their North Vietnamese masters yet thanks to spin by Walter Cronkite and other anti-war types, it has gone into many history and the public conscience as a victory for the invading northerners and the beginning of the (“inevitable”) end of South Vietnam. As the Clintons made clear — perception is reality.

Ironically, the Clintons were also big on redesigning money as well. They are the originators of the Monopoly-style money we have now.

The War on Cash

My post, “Whither the $100 Bill?,” was well-timed.

The Wednesday Wall Street Journal had a lengthy story spinning off of Larry Summers’s proposal to eliminate the $100 bill (and the €100 note too), “Is Now the Time to Kill the $100 Bill?” by John Carney and Joshua Zumbrun. It followed that up with an editorial on Thursday, “The Political War on Cash.” (I’d link to both but they are gated behind the WSJ pay wall.)

Both hit the points that I made and dig deeper into the negative interest rate angle.

A money quote from the article: “Many economists believe the ability of central banks to implement negative interest rate policies is hampered by the ability to hold cash.” Much of this impetus to do away with cash is centered on turning an unusual financial position, negative interest rates, into some kind of permanent situation. The article continues, “Even in places like Switzerland, where rates have gone negative on government bonds, banks don’t pass on negative rates to retail depositors for fear depositors will withdraw their cash.”

Why this sudden infatuation with negative interest rates and enabling them? It seems to be pretty much centered on central banks. From there it filters downward to retail banks and certain investors. Central bankers would love to enable a negative interest rate regime, make it an acceptable alternative and then a permanent scenario.

Imagine, if you are a banker, you get people to pay YOU to hold their money rather than you pay them (the traditional interest rate relationship). And if you can eliminate the depositor’s alternative, stuffing their cash under a mattress by eliminating most cash, essentially forcing them to keep their money in banks, you’ll be assured of guaranteed income.

To give you the reverse, imagine forcing banks to pay you to take out a loan. The more you take the more they pay you each month, rather than you paying them an interest rate. Wouldn’t that be grand? Absurd, but grand. It’d be better than successfully puling off the carry trade. Well, that’s how a negative interest rate regime works in the opposite direction (i.e. favorable to you).

The article also notes that most $100 bills are not involved in criminal conduct. It needs to be understood that in the three decades since the fall of communism, many countries have essentially dollarized their economies. The dollar is the lingua franca of the world economy. Even third world America-hating hellholes have to use the dollar for international trade. This is even more important since tradable high-value commodities, notably gold and platinum, have been undermined by essentially valueless financial paper instruments. This revolution has only increased since the troubles of 2008.

The crush on oil has also exacerbated the effect lately for several countries as well (though the fall in oil prices is a legitimate supply-demand equation not a financial shenanigan).

When physical items lose their inherent value to electronic blips and paper instruments such as futures, puts, calls, options, swaps, etc., the atmosphere is optimal for things like negative interest rates.

The article also summarizes the tax angles on the war on cash. Taxing authorities throughout the world are as dogged as Inspector Javert. They want your money! But make no mistake, the heart of this movement is really about control. All these points are merely tentacles of that octopus.

That is what the editorial focuses upon. It says, “The enemies of cash claim that only crooks and cranks need large-denomination bills. They want large transactions to be made electronically so government can follow them.”

It notes that in Italy and France it is illegal to use cash for any purchase over €1,000 and British businessmen have to register with tax authorities if they might handle cash transactions greater than €15,000.

The point, as if it needs to be made again, “The real reason the war on cash is gearing up now is political: Politicians and central bankers fear that holders of currency could undermine their brave new world of negative interest rates.”

Money quote: “By all means people should be able to go cashless if they like. But it’s hard to avoid the conclusion that the politicians want to bar cash as one more infringement on economic liberty. They may go after the big bills now, but does anyone think they’d stop there? Why wouldn’t they eventually ban all cash transactions much as they banned gold and silver as mediums of exchange?”

Politicians seek to control money and people. If your money is held hostage in a bank, banks under the thumb of governmental “regulators,” then you are controlled. But if you have your money in your hands, you can maintain a high degree of independence. Modern governments do not like that.

Whither the $100 Bill?

Larry Summers, big international bank guy that he is, is for eliminating the $100 bill (along with the €500 [euro] note and I guess the €100 note as well).

Why? You ask. Because, in Larry’s eyes, only criminals use those bills. Ipso facto, remove that cash and you remove the criminals. Remember, from my post, “Whither the $1,000 Bill?,” Nixon thought the same thing in removing $1,000 and higher denomination bills. It was so wonderful when all crime just disappeared in 1969 after those bills were removed from circulation.

Oh, wait, crime didn’t go away. Hmmmmmm. I’m sure all the eggheads who thought up that plan are still scratching their heads on what the flaw in the plan was. Not surprisingly, Larry’s a grad of MIT and Harvard.

He probably also thinks that only revenuer-dodging hillbillies and other cretins use cash at all. Larry probably hasn’t used cash at all in his adult life. People who travel in his rarefied elite political, educational and financial circles rarely do.

But let’s dig a little deeper. Why would a banker want to eliminate major cash tools? Vehicles that actually move money very efficiently in many circumstances.

You see, cash is actually a hindrance to governmental control. It’s difficult to control people who make use of cash. It’s extremely difficult to trace. Credit cards and online accounts, on the other hand — banks and governments know everything. Cash transaction, not so much. In a world where the government increasingly seeks to insert itself into every nook and cranny, every interaction and transaction of our lives, electronic money is a leash, cash is more like an invisibility cloak.

Imagine when the government has full control of, for example, the health sector. You decide to buy some pork chops or some other “unhealthy” item at the store. Perhaps a government watchdog has decided that with your bad heart, you shouldn’t have chops or any pork products. It monitors your transaction because you are paying with a credit card or waving your smartphone at a terminal. It decides to cancel the purchase. Take chops back and buy that endive a little message pops up on your phone or the credit card terminal. Or you could whip out that cash and take those bad boys home and barbecue them!

With a credit card or online payment system nothing is private. Your life is no longer just your business.

Interestingly, a lot of banks wouldn’t mind this because, many will tell you, frankly, dealing with cash is a hassle for them. They have to hire people to deal with it. It takes up space and costs money to transport. It’s so much easier to deal with a lot of electronic blips. Also, most people are used to dealing with fees for using credit cards and online banking so the bank gets away with nickel and diming its clients. No one ever sees the blips that disappear into the banks’ and card processors’ pockets.

Try to charge for cash and people walk. However, eliminate much of that cash and where can they go?

Additionally, when cash becomes an afterthought currency manipulation becomes much easier. Electronic blips do not appear to have as much of a value as something you can hold and feel. It’s no accident that the great inflation happened when Nixon broke the gold standard. I think we need to be moving in the opposite direction and moving more towards a cash economy. I’m for making the gold coins that are minted more accurately reflective of their true value. Make that one-ounce coin worth $1,000, not $20.

A final note. Seriously, Larry Summers is a very smart guy. He’s been at the World Bank. He was a Harvard professor before he was 30. He’s been involved in major financial institutions and legislation. He’s a liberal Democrat and was the head of Harvard but said some politically correct things and was forced out by the SJWs of the day. Not everything that comes out of the mouths of smart people is smart.

Wall Street Support for Hillary Clinton

There’s an ancient political adage that business supports Republicans. Of course anyone even remotely familiar with political campaign contributions knows this is amazingly untrue (and one of the most misreported items imaginable).

Friday’s Wall Street Journal had a piece in its Money and Investing section on Wall Street support for Hillary, “Buffett Goes to Bat for Clinton.” (Or go here if it’s gated.)

Yes, there is such a thing as Wall Street support for Democratic candidates. In fact, at the end of the day you’ll find the supposedly capitalist, free-market, businesses on Wall Street will pony up more money for the socialist party than the party that putatively supports the free market. If we had a functioning media (and savvier Republicans) this would be a widely known fact…

The story notes that Warren Buffett is a big supporter of Clinton and is working with other Wall Street tycoons to raise money for her. Now, if you have followed big money politics for a while you’ll recall that Buffett is usually described as a “registered Republican.” That’s just a bit of disinformation peddled by the Democrat-Media complex to mislead the voters. Buffett hasn’t been a “Republican” in decades.

When you talk about Wall Street support for liberals and socialists usually the first name that comes to mind is Goldman Sachs. It operates as a feeder school/halfway house/retirement home for Democrats and has for decades. It also keeps a few pet Republicans in “Break Glass In Case Of Emergency” cases.

However, the story also provides the names of other Wall Street sellouts. Ringleader is Blackstone Group President and COO Hamilton “Tony” James, who is apparently eager for a Hillary administration (he’s also a major supporter for Obama), as is one of his colleagues, Byron Wien.

Co-conspirators include: “Among those in attendance were Blair Effron, the co-founder of boutique advisory firm Centerview Partners; Byron Wien, a vice chairman at Blackstone; Dick Cashin, the founder of One Equity Partners; Cliff Robbins, CEO of Blue Harbour Group; Wesley Edens, the co-founder of Fortress Investment Group [a company supportive of Al Gore]; and Dermot Dunphy, a retired executive and former CEO of Sealed Air, according to people familiar with the matter. ”

Mark all of these gentleman and their companies on your boycott list. They do not mean this country well.

And Blackstone investors, shareholders and officers, please pay attention and discipline these destructive men.

So why would these businessmen be supportive of candidates and a party that does not mean them well?

It’s a complicated story and the motivations can vary — from pure greed to strategizing that you can use the government to increase your position and cripple your competitors to a desire to be “liked” to guilt of success. But make no mistake, these men are in it for the money and power, they couldn’t care less about the Constitution, free markets or other businesses beyond their parochial interests. Somehow they think that if they burn the house down they’ll still have some place to sleep and keep out of the weather.

Whither the $1,000 Bill?

Why aren’t there any $1,000 bills in circulation? I wondered that recently as I’ve become a fan of Pres. Grover Cleveland and he’s on the $1,000 bill so I thought it would be fun to have a $1,000 bill to frame.

But there aren’t any at the bank. And though there are a few around in private collections, they cost a lot more than $1,000.

It turns out that in 1969 Pres. Nixon issued an executive order to remove them, and any remaining “high-denomination” bills (i.e. $500 and above), from circulation in an attempt to “curb” crime. Whether one can consider that order a success I know not. We still seem to have crime…

However, the $1,000 bill remains legal tender (though you’d be a fool to use it for $1,000 – see above).

Increasingly I am against laws that exist for nothing more than to make it easier for police to do their job or pretend to do their job — all the while making the lives of law-abiding citizens more difficult (see gun control).

Thousand dollar bills weren’t harming anyone in of themselves (no moreso than the existence of money itself). The United States used to circulate $500, $1,000, $5,000 and $10,000 bills, but no more. Gold Certificates of $100, $1,000, $10,000 and $100,000 were eliminated in the 1930s courtesy of Roosevelt’s gold seizure. Free the gold! I say.

I think that $1,000 bills (along with $500 and maybe $5,000 and $10,000) should be brought back. I bet if they offered to put a politically correct chick on one of those suddenly a lot more of our liberal cultural superiors would be for it!

But seriously, I think making the economy more cash-based would help revive our increasingly sclerotic economy. Cash gives a visceral sense of value to money. I think that’s been lost. The creditization of the economy has spurred inflation as people become detached from the value of money. Don’t even get me started on “quantitative easing.”

Think about it. When you go to the store with only cash, you tend to watch your spending. You have to watch your spending lest you try to buy more than you have cash for. But with that magic credit card, suddenly that impulse item — a coconut crème pie! — is within reach! Suddenly a treat, something to be saved for, becomes, for all practical purposes, an everyday item. I do this all the time myself. Cash makes people spend wisely (usually).

When money is just a bunch of blips, bright numbers on a screen, or something to be handled later, it loses some of its value.

Don’t get me wrong — credit is a wonderful thing. And checks and credit cards are vital tools for survival and even thriving in the modern world (really, who would want to push a wheelbarrow of cash to a house settlement?). But they’ve done some harm by pushing cash out of many transactions. We’ve lost a sense of value with them. I feel we need to bring that value back so we can understand that things just aren’t “free” because we don’t see their immediate cost (this could lead into a long disquisition on our ‘entitlement” mentality but I’ll save that for another day).

Oh, yes, I am becoming a hard money person. I shall return to this subject.