Whereas O’Donnell laudably tried to concentrate the audience’s interest onand hopefully previous, Charlie Sheen trainwreck interview, courtesy of the tragic undertow that threatens to pull Sheen below for good, I used to be overtaken, not by the pulling on the thread, plus the voracious audience he serves. It did not make me depressing, it built me angry.
Regarding celebrities, we can be considered a heartless nation, basking within their misfortunes like nude sunbathers at Schadenfreude Beach. The impulse is understandable, to some degree. It may be grating to listen to complaints from persons who take pleasure in privileges that many of us cannot even imagine. If you happen to can’t muster up some compassion for Charlie Sheen, who helps make additional cash for any day’s give good results than many of us will make in the decade’s time, I guess I can’t blame you.
With the quick tempo of events on the net as well as the information and facts revolution sparked through the World wide web, it’s really quick for the know-how community to presume it is exceptional: regularly breaking new ground and undertaking details that nobody has at any time finished before.
But you can get other sorts of business enterprise that have currently undergone several of the similar radical shifts, and also have just as awesome a stake inside the future.
Get healthcare, as an illustration.
We usually imagine of it like a enormous, lumbering beast, but in fact, medicine has undergone a series of revolutions from the past 200 years that are at the least equal to people we see in technological innovation and details.
Less understandable, but however inside of the norms of human nature, would be the impulse to rubberneck, to slow down and find out more about the carnage of Charlie spectacle of Sheen’s unraveling, but with the blithe interviewer Sheen’s lifestyle as we pass it inside the right lane of our each day lives. To become straightforward, it may possibly be difficult for individuals to discern the difference between a run-of-the-mill consideration whore, and an honest-to-goodness, circling the drain tragedy-to-be. On its individual merits, a quote like “I Am On the Drug. It’s Identified as Charlie Sheen” is sheer genius, and we cannot all be expected to take the complete measure of someone’s daily life each individual time we hear anything funny.
Speedy ahead to 2011 and I am wanting to take a look at suggests of getting a bit more business-like about my hobbies (largely songs). Through the stop of January I had manned up and commenced to advertise my weblogs. I had created a variety of unique weblogs, which were contributed to by acquaintances and colleagues. I promoted these routines due to Facebook and Twitter.
Second: the tiny abomination that the Gang of Five around the Supream Court gave us a 12 months or so back (Citizens Inebriated) truly features just a little bouncing betty of its own that may pretty very well go off while in the faces of Govs Wanker, Sacitch, Krysty, and J.O. Daniels. Seeing that this ruling prolonged the notion of “personhood” to both equally firms and unions, to test to deny them any correct to operate within the legal framework that they were organized underneath deprives these “persons” from the freedoms of speech, association and movement. Which means (as soon as yet again, quoting law college educated loved ones) that either the courts have to uphold these rights for the unions (as person “persons” as assured from the Federal (and most state) constitutions, or they've to declare that these attempts at stripping or limiting union rights have to apply to main businesses, also.
I didn’t come up with the phrase, “when money dies,” though I like it a lot. The phrase captures an important idea. It is that money – I refer to that paper kind issued by governments – has a finite life. At some point, it becomes worthless, or dies.
The death of a currency is often a protracted affair. It often takes decades. And as it unfolds, the people who experience it hardly believe it. That is the tale told by Adam Fergusson in his book When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany.
First published in 1975, it had been out-of-print for years and much sought after. A used copy on Amazon cost $300 recently.
The book is a history of the death of the German mark in the 1920s. It is also a scary reminder of the devastating effects of inflation and, therefore, a cautionary tale for US central bankers and politicians who play so fast and loose with US Dollar.
If you don’t know what happened to the German mark, here’s what you need to know from When Money Dies: “In 1913, the German mark, the British shilling, the French franc and the Italian lira were all worth about the same. Four or five of any of these would buy you a US Dollar.”
By 1923, you could exchange one shilling, franc or lira for up to 1 billion marks. “Although,” Fergusson writes, “in practice, by then, no one was willing to take marks in return for anything. The mark was dead, one million-millionth of its former self. It had taken 10 years to die.”
How did that happen?
The short answer is that post-Imperial Germany found itself with a crushing load of debt. Raising taxes or cutting spending is politically difficult in any age. And so it was in Germany. To deal with these debts, Germany chose the path of least resistance. It printed lots and lots of money.
Sounds like the fiscal position the US government finds itself in today. Bleeding deficits with no end in sight. Piling on debt and entitlements with no end in sight. The solution so far? Why, “quantitative easing.” In a new introduction, Fergusson writes:
“Money may no longer be physically printed and distributed in the voluminous quantities of 1923. However, ‘quantitative easing,’ that modern euphemism for surreptitious deficit financing in an electronic era, can no less become an assault on monetary discipline.”
But back to Germany…
Eventually, prices started to rise as the mark lost purchasing power. One of the great strengths of the book is the on-the-ground view you get from the people who lived through it. It gives you an unsettling look at German society as it starts to dissolve and as inflation starts to wreak havoc.
It started slowly, with commodity prices starting to rise everywhere. But as the years wore on, prices kept going up in big steps. Soon the damage was remarkable.
In just eight years since 1913, the price of rye bread rose 13-fold. Beef rose 17-fold. Sugar, milk, pork and potatoes went up 23-28-fold. Butter went up 33-fold! And these were official prices. As a practical matter, real prices were often a third higher. It’s hard to fathom.
All this brought out the worst in people. Germany became an ugly society, looking for blame. As Fergusson writes: “They picked upon other classes, other races, other political parties, other nations.” There was a long list of villains: “the greed of tourists, or the peasants, or the wage demands of labor, or the selfishness of industrialists and profiteers, or the sharpness of Jews or the speculators making fortunes in the money markets.”
Erna von Pustau, who lived through it, described what it was like:
“My allowance and all the money I earned were not worth one cup of coffee. You could go to the baker in the morning and buy two rolls for 20 marks; but go there in the afternoon and the same two rolls were 25 marks. The baker didn’t know how it happened… His customers didn’t know… It had somehow to do with the dollar, somehow to do with the stock exchange – and somehow, maybe, to do with the Jews.”
As we know what would happen later in Germany, her comments are particularly chilling.
Each year, people thought it couldn’t get worse. “And yet things always did, from bad to worse, to worse, to worse,” Fergusson writes. “It was unimaginable in 1921 that 1922 could hold any more terrors. They came, sure enough, and were in due course more than eclipsed, with the turn of the following year.”
Germany plunged into hyperinflation. The price changes get ridiculous to talk about – the numbers so large that they are practically meaningless. Who can imagine paying 500 billion marks for a dozen eggs? It’s also interesting to see how society dealt with this breakdown in the currency. The idea of real wealth became very important. Not the kind of wealth denominated in abstract printed marks, but real wealth that one could use.
People bought things. Hugo Stinnes, an industrialist, bought factories, mines, newspapers. The man on the street bought what he could trade. Fergusson ends with a powerful observation:
“In war, boots; in flight, a place in a boat or a seat on a lorry may be the most vital thing in the world, more desirable than untold millions. In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than the grand piano.”
Despite the awful experience of the 1920s, Germany would repeat its errors again and again. In the 1930s, Hitler would crank up the money presses. By 1948, the reichsmark (which replaced the old mark) died. So Germany created the deutsche mark. Yet it wasn’t much better. It lost two-thirds of its purchasing power by 1975.
Such is the fate of all paper money.
I will leave it to you to decide how much relevance Germany’s experience has to the US today. I find many alarming parallels.
I would point out, too, that the US dollar has lost 95% of its purchasing power since 1913. And the US dollar is among the best currencies of the last hundred years. That says something about paper currencies, doesn’t it?
It’s also why staying ahead of inflation is one of the chief tasks of investing.
The monetary puppet-masters at the Fed will have you believe inflationary pressures are inconsequential or a far off mirage.
Don’t believe it for a second…
QE2 is humming along with the prospects of a QE3 right around the corner ready to pump untold billions into an already cash-flush banking system.
Now is the time for investors to take action and protect capital from the inflationary pressures building up in our economy.
Regards,
Chris Mayer,
for The Daily Reckoning
“When Money Dies” originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.
That was quick! Barely had my NYT op-ed on the decline of public stock exchanges hit the web this evening than Ira Stoll was ready with a trenchant reply.
Stoll is sanguine about the fact that the number of companies listed on U.S. exchanges has declined from 7,000 in 1997 to 4,000 today. “Suppose that the number went to 4,000 from 7,000 because many of the 7,000 companies merged with each other to become even larger and more dominant,” he writes, “and that the current 4,000 listed companies have three times the sales and three times the market capitalization they did in 1997.”
Actually, let’s not suppose that and instead let’s look at some numbers. I don’t have sales numbers, but I do have market capitalization numbers, from the World Federation of Exchanges. At the end of 1997, U.S. exchanges had a total market capitalization of $13 trillion; by the end of 2010, that had risen by about 24% to $17 trillion. Which in real terms actually works out as a slight decline in market cap. Meanwhile, GDP grew from $8.3 trillion in 1997 to $14.7 trillion in 2010 — that’s an increase of 76% in nominal terms, three times the rate of growth of U.S. stock market capitalization.
But more broadly, Stoll is making my point for me — that the U.S. stock market is increasingly made up of enormous and dominant companies and features ever fewer of the smaller, fast-growing companies which really drive the economy. When public companies are acquired or delisted or go bankrupt, there’s not nearly enough in the IPO pipeline to replace them. The result is a market of dinosaurs.
I also claim that the market is doing a bad job at allocating capital efficiently — after all, the market hasn’t allocated any capital to Apple since 1981. I don’t for a minute think I have a better idea than Steve Jobs what to do with Apple’s cash pile and in fact have said quite explicitly that it shouldn’t be paid out in dividends. But when investors buy Apple stock, their money doesn’t go to Apple, but rather to the other investors that they’re buying the stock from. The stock market becomes a money-go-round for speculators, rather than a way of directing capital at companies.
Finally, the “ultra-rich elite” I’m talking about is not the broad universe of people who are considered accredited investors by the SEC, but rather the tiny group of individuals who are given the opportunity to invest in private companies. If you’re well connected in Silicon Valley — if your name is Ron Conway or Vinod Khosla — then you have loads of such opportunities. But the rest of us don’t, whether we’re formally accredited investors or not.
I’m not making any policy recommendations in this piece — I don’t think that the rules about accredited investors should be weakened further, or that all Americans have some kind of automatic right to be able to buy a piece of Facebook. But I do think that the public stock market is less important now than it was in the past and that its decline is going to continue in future decades just as it has done since 1997.
Source: http://removeripoffreports.net/ online reputation management
Fix your company's bad reputation today!
No comments:
Post a Comment