A Living Magazine - Day 155 - Filthy Rich Rant Part 2

At about 12:00 am I woke up. I was warm in the sleeping bag, but my feet were cold. The tent has a screen near the bottom on either side. Also the bag's shape (mummy style) is quite small at the foot end. This is good for warmer weather, and to keep the bag's volume down in the backpack, but it doesn't allow the heat of my breath and body heat to make it down that far. I did the putting-each-foot-up-on-the-calf-of-the-other-leg thing, alternating, but my toes would just get cold soon afterwards.

Remembering that I still had two foot warmers that I lugged around ever since leaving Maine - purchased at Reny's in Portland - I decided to see if one actually worked as advertised. I was a bit dubious as to whether they might have been too old. I reached into the outside pocket of the pack and retrieved the two, cutting them apart (and being careful not to puncture the one I wasn't going to use).

I cut opened the plastic bag, and took out the small packet, which looked like a large tea bag. The instructions said that it is air activated. All I had to do was shake it. So, I shook it. I didn't feel much change in it initially. But, over the next ten minutes, it kept warming up to a higher and higher temperature. The instructions said that it could reach a maximum temperature of 127° F. And, after some time, I believed them! The thing really pounded out the heat. 

I experimented with putting it on the backpack to see if the radiant heat might actually raise the temperature of the tent itself (which is a great reflector of heat energy back down), but the effect was so negligible as to be absent. It works best when surrounded by other materials. Knowing I had accidentally dried my sleeping bag on "high" once, and that the drier was running at about 150° F, I knew I could toss the heating foot warmer into the base of the sleeping bag and should derive some amount of heat from it without harming the bag. The packet said it would last up to six hours--which was very encouraging.

Within about fifteen minutes I felt a real difference as my feet warmed up considerably. I fell back asleep and awoke at daybreak to this... 

Birmingham's first frost.

It was a one bag night.

Bouquet for a missing bride. 

I worked at Starbucks until about 12:00 pm, then walked to the post office to see if a care package from my friend in New Hampshire had arrived. We didn't have a tracking number, so I could not check in on the situation before going. But, I didn't mind.

When I got to the post office, I asked the very kind woman behind the counter if they had received a general delivery package for me, and handed her my license. She disappeared into the back room for quite a while. I took this as a good sign. Yet, when she returned empty-handed it was a bummer. I resolved to go back the next day, and delayed buying my bus ticket just in case it didn't arrive then either. If I had to leave on Thursday (which happened to be Thanksgiving) instead of Wednesday I would just continue my cycle of travel, using Thursdays instead. If Greyhound gouged for Thanksgiving travel, I'd wait until Friday--but I would still adjust the cycle to Thursday bus travel, and spend less time in Montgomery (my next destination).

I figured that since I was near the library anyway, I might as well go there to work, rather than walk all the way back to Starbucks. Entering the library (a place I'd been to twice with no hassles), the security guy - David Connor - told me he'd have to search my pack. Naturally, I would never consent to a search of my belongs by anyone, especially a library cop. It is the only time I've ever been to a library (and I've been to over fifty around the country) that bags required being searched. I asked him why I was able to go in twice before. He wouldn't look me in the eye, and just said, "I don't know." Disgusted, I turned around and walked back to Starbucks. There, I finished my post.

I'd been thinking a lot about the Donald Trump comment about requiring Muslims to register as such in this country. Of course, that is the most retarded thing any Presidential candidate has ever said. That his party still keeps him as a front-runner shows just how out of touch they truly are. I'm no lover of the Democratic party either (remember, I despise all ideology), but at least they fit somewhere into the borders of reality--this time around. My suggestion is that, instead, we should force all billionaires to register and carry a card that they must present at all airports, train stations, limo companies, hotels and four star restaurants that says, in Trump's case: "Name: Donald Trump" "Occupation: World Ruiner", with "Expiration date: ASAP". Back in Milwaukee I began a rant about the filthy rich (please see: the "Filthy Rich Rant Part 1" on "For Art's Sake).

On the way back to my sleep spot I thought much about it. So, here is the continuation...

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FILTHY RICH RANT PART 2

So, why won't the economy fall apart if you don't buy stuff you don't need? There are many reasons. I can't cover them all. And, some of them are simply common sense. Maybe we can at least scratch the surface? Let's start back in the 1970's. 

Once upon a time, this county based the value of its money on something tangible: gold and silver. Our favorite President, Richard Nixon, switched over from the "gold standard" to what is known as "fiat currency". As you probably know, the gold standard based paper money and coinage upon a limited amount of gold (or silver earlier last century). As the commodity in question was acquired by the US, the associated value of the dollar changed, and was adjusted and balanced proportional to inflation. Some may remember when money was printed with a statement that actually showed the standard-base (silver in this case)...

Just under Mr. Washington, we see...

"ONE DOLLAR IN SILVER PAYABLE TO THE BEARER ON DEMAND"

As with many of the other things that Tricky Dick did to manipulate people and situations in order to get to and retain power (the War of Drugs kept scrutiny and attention off his carpet bombing campaigns and troop deployments in Southeast Asia, and of course there was number one hit: the Watergate scandal, as two examples), the change over to fiat money was thought to be an effective means of quickly reducing unemployment at a time when reducing unemployment would help him get reelected...

For instance, despite calling himself a Keynesian, he was also a monetarist — at least to the extent he thought it might help him get elected in 1972. He believed that easy monetary policy could reduce unemployment in the short run and knew that presidents have a hard time getting reelected when unemployment is high. On 26 July 1971, Nixon was captured on tape stating, “I’ve never seen anybody beaten on inflation in the United States. I’ve seen many people beaten on unemployment.” When Nixon took office, unemployment was only 3.4%, but after the recession in 1969–1970, unemployment rose to 6%, where it remained. Given that Nixon had publicly stated that he would improve employment, he was committed to getting the number down by election time. Even the great Milton Friedman, who is on tape urging caution to the president over his desire for easy money, couldn’t persuade him. The tapes further reveal that Nixon arranged credible threats to the then-Fed Chairman Arthur Burns’ power as head of the Federal Reserve, including: adverse leaks about Burns to the public; the appointment of easy-money, pro-Nixon doves to the Fed board; and threats of Burns not being reappointed at the end of his term.

CFA Institute 

Nixon was a president who cared a bit about the American people, but that concern paled compared with how much he cared about Richard Nixon.

As with the complete disaster caused by his drug policy, his policies on changing the monetary system stuck around, and we are the unfortunate inheritors of it. Fiat money bases its value upon federal law--only. To simplify things a bit for brevity, this simply means that the government can now control the printing of money; as much or as little as it wants. Unfortunately, it is influenced by the Federal Reserve (often called, "The Fed", which isn't even a "federal" institution, and has no direct representative oversight by the American people). Still, it is the center and regulator of all banks in the US, and decides what interest rates will be, among many other things. 

Many people think The Fed prints money. But this isn't the case. Printing money is overseen by the Treasury Department (which IS a federal institution). All the while, these agencies are all in bed with each other, and The Fed is heavily lobbied by the banking industry. By default, banks own EVERYTHING, not just in the US, but all around the world. You may say, "No! Rich people can own things free and clear without getting loans." But you should pause to remember that rich people don't keep their money under pillows. They keep it in banks. And, often they also OWN those banks by being major investors.

Now the cute thing about all this is that banks themselves create money out of thin air. They don't need the Fed to approve it, nor the Treasury Department to print it. When you get a mortgage, the bank lends you the money to buy your house. But, simultaneously with that, a separate and equal amount of money is then created in parallel with the actual money you received. This second stack of money exists exclusively in a computer. But it is still REAL money (because it has the same value as money). This second stack is the security counterpoint to your mortgage. The only thing that ever happens to the second stack is that it is added to, by the extra interest you pay each month for the privilege of borrowing money that is in fact not yours.

What does this mean? Primarily it means that the bank never actually loses money by giving it to you. It is extending you "credit". Yes, you might end up with an "equity loan" for example and be able to actually spend cash from it. But that cash is not the bank's cash. It is "fiat" cash, given power, by the laws of the government. You can obtain things by using it, but it was never lost by the bank, nor is the bank at risk of losing it. Why? Because it has the second stack, plus your interest to keep its own assets in the black. In this way, dollar bills are only worth something because the law says they are. And, because of the dabbling of The Fed with interest rates (recall that you have no control as a citizen to what those rates are), your dollar can be worth less or more tomorrow than is was worth today, or yesterday.

What this has meant is that - due to the self interest of the banking industry, and the "need" for businesses (mostly big corporations--ever tried to get a small business loan; it aint easy?) to have easy access to startup and expansion capital - the economy is now entirely DEBT BASED. The more debt that is built up (read as: all those second stacks being created by banks), the more interest snowballs in upon itself, and the more short-term profits are acquired by those same banks. 

Now, big businesses (national and multinational corporations) also rake in profits, since they are the one's setting prices for your retail items, according to how much they pay in interest to the banks. So, you MUST be in debt in order to have a house, a car, an education, etc. The days of saving up and buying any of these things are LONG gone. A few years before my grandmother passed, she bragged that she had never ever taken out a loan! And, she was pretty well off. Her strategy (having grown up during the depression), would be impossible to accomplish in 2015.

With all of this in mind, hundreds of millions of Americans now owe money to banks that never lost it in the first place by lending it! How can this economic system be maintained? Simple! Create a dirty little back room called the "National Debt". Kick the can of debt down the road, so that you can still artificially adjust the value of money, print it for the masses so they can feel like it actually IS still money, and allow other nations to buy your assets, then borrow them back ALSO, then, paying THEM interest, which further adds to the National Debt.

There is nothing stable about the US economy, and therefore the world economy, since it originally had to compete with the massive industrial might of the US. It's a freakin mess, folks!

All the while that you might feel guilty for missing a mortgage or car payment, be harassed by collection agencies, and maybe even have to go through bankruptcy, to be "forgiven" for this "awful" thing you've done, by "defaulting" on your "obligation", your own country's debt is growing faster that the economy itself! And, because of this wishy-washy fiat system, you are taken out of the loop of control. There is absolutely nothing you can do to keep the US from exponentially owing more than it can ever make. You just have control over your own finances - if you're lucky - but, no matter whether you are good at it or bad at it, you are still liable to the owners of the your country, while they are not liable to ANYONE.

I have very seriously simplified all of this and may have some inconsistencies in my interpretation, but basically this is the REAL deal. It is a monster that even the people who are in control over everything else have no control over anymore. There is no mechanism invented by humanity to tame it. The only option now is to starve it. And, the billionaires will NEVER do that on their own. The one and only thing left in the toolbox happens to belong to you and me. What is it? Our spending habits.

HUGE amounts of natural resources are being extracted from the world to build things you don't need, but are told you need, by the commercials repeating in front of your eyes as you sit in front of the TV, or listen to the radio, or use Google's search engine, or just walk down the street. And you LITERALLY buy into it all, by shopping for no reason. Yes, as one person, you have very little effect by choosing to stay home on Black Friday. But if a hundred million Americans did that this year, the monster would notice.

Because so few individuals exist at the top of the pyramid, it is quite easy for them to agree to clamp down here, or raise prices there, and begin feeding the monster again. Their very lives depend of this feeding. Not being able to feed this beast is the only thing they fear. 

So, again, wouldn't the "economy" suffer if we didn't buy our salad shooters? No. And, here's why. The so-called economy has a rating of its health. We hear from the talking head's that "the economy grew this quarter" or "the economy shrank this quarter", but what they don't talk about is the ratio of growth or shrinkage to the amount of debt owed. Why? Because the mass media is owned by the same corporations that are headed by the billionaire club. And, all these guys want to keep debt out of your mind.

There are just over 1,600 billionaires (as of 2014). Most have resided in the US, until this very year, when our country lost that ignoble distinction. Still, compared to a planetary population well over seven billion people, 1,600 aint very many. All together they have 228 TRILLION dollars in assets. To give some perspective here. The entire US budget is only about 4 trillion dollars. And to give more perspective, we think our neighbor is doing pretty well if he/she has a million dollars. But to be the poorest billionaire, with a measly 1 billion dollars, one must appreciate that that is a THOUSAND times a million!

By not buying things we don't need, in FORCE, the billionaires would have to make up the difference in order to still employ us all, AND feed the monster. If this process is rinsed and repeated over and over again, and we instead gave each other some of what we're not spending on crap anymore, the dollar bills would remain as part of the economy. Over time, yes, the economy would shrink, but the pressure of the world's national debts (specifically the money they owe each other) would HAVE to be reformed, probably under the guise of "forgiving debt". So, that unspoken ratio I spoke of above between economic growth and debt would also shrink. Less money would be owed all across the board. Why? Because, necessarily, banks who hold mortgages would be put into a position where their second stacks of created money would begin to be depleted, and they would have to then rely on real in-circulation money to make up for it, while also reducing interest rates on their own, independent of The Fed's desires. Consumers would pay less on their loans, the national debt would shrink, people would remain employed.

This idea does not come without some stark changes to the American lifestyle of the upper middle class, using 800 times more per capita than a citizen of Ethiopia (for example). However, who would want to be a billionaire, if billionaires were suffering under the rage of the starving monster. Having enough, living within our means, saving again instead of borrowing, would keep US - the little people - within a standard of living that is quite comfortable. The sharing of money, instead of the mindless spending of it, would also raise the poorest people up to the middle class. ONLY the highest levels of income would suffer. 

But wouldn't Wal-Mart then have to cut jobs, as their shelves ran out of salad shooters? Maybe. But, don't overlook the fact that the loss of a low paying job, would be met by the opportunity for more entrepreneurialism. Whenever certain items have gone out of fashion (say horse-drawn buggies), new and more timely items have filled the void (cars, for example). And someone would have invent, design, produce and sell those new items--while employing a bunch of new former Wal-Mart employees in each of those steps.

Now, integrate the fact that resource depletion would slow considerably, this would be an environmental boon. New industries based on preservation, organic food production, citywide gardening projects, and renewable energy research and development (since all those super tankers, trucks, trains, and planes will no longer be forcing the same amount of fuel extraction processes to be used searching for and extracting fossil fuels), just to name a few.

As I project positive consequences into the future my estimates of the actual systems that will be developed becomes much less certain. In my opinion though, going back to the idea of starving the monster cannot have a worse outcome than feeding it, growing it, indefinitely. I am not an economist, but ever since my early days in banking, have closely studied these things, and I don't believe I am far off with this rant. Other, better educated economists, were they to also admit (and getting them to admit that any of this would work will be a major challenge) will have to figure out the details. But, again, this will require FORCING them through popular action.

One thing I would truly like to see happen is (as I mentioned in "A New Age of Heroes") that the extreme pressure of such a popular form of consumerist activism as refusing to buy things we don't need, be taken voluntarily by the world's masses, that the people who approach the billionaire level of assets, will in a similar way, voluntarily cap their fortunes at 1 billion. If they lose money, they can choose to replace it, back up to that level. But, they - through popular pressure - should find that making more than their cap will be seen as patently greedy. I know how ridiculously unrealistic this sounds at this time in history, especially with filthy rich, ignorant and irresponsibly-spoken Donald Trump vying to lead the "free" world. But, something needs to change. The suffering of billions of human beings is not worth the hoarding of 228,000 billion dollars (!) by one city block's worth of individuals.

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Okay, rant over for today.

When I got to the field on Golden Flake Drive, I searched around and found a much better and more private place to spend the last two nights in Birmingham. Of course, I wished I'd discovered it when I first arrived, but being able to use it now was good enough for me.

I set up the tent, climbed in and settled down for a very nice sleep.