1/24/26: Odds, Ends, and Musings

These are very interesting times we are living in.  I could go on about what's been happening in Minneapolis recently, but I am not.  Anything I could say about it has already been duplicated many times over on social media platforms and comments sections of news sites that choose to have them.  And as it is, this really isn't something I feel like discussing, thus this post will be odds, ends, and random musings.  So here we go.

As of the past couple of months I have developed an appreciation for hot sauces like never before.  This started some six months ago when I started putting some on some of the food that I eat, and bolstered more by that trip to New Mexico last November.  I have since broken open those bottles that I've brought back.  I've since discovered that most of the brands I got over there can be gotten over here, with one exception, and that being the La Anita red sauce that I got in a four ounce bottle.  That was one of my favorites of that bunch, with El Yucatero being almost rocket fuel and is used somewhat sparingly.

Of the major brands, my favorite are the Cholula sauces, with their red sauce and their chili garlic sauce being the favorites there.  Zing, but not rocket fuel.  I still have those chili pods that I brought back from Silver City and yes, I really need to get off my sitting end and make some from scratch.  I have found that adding sauce has helped some with my digestive tract.  The issues I had been having have since passed with using sauces.  I am convinced that there are health benefits to these sauces.  I don't usually add them though when we're out to eat at any Mexican place, since the local favorite dishes don't need any additional ingredients.

Also over the past couple of months, I've been very busy in ham radio.  The thinking is that the solar peak has passed, and the we're in the downward slope of the solar cycle.  I am trying to make the most of these conditions while we have them.  I'm up to 159 countries worked already.  I've also made some good friends via the local ham radio club scene, as that I'm active in two clubs and I've learned a lot.

Over in the precious metals market, I'm amazed at what gold and silver has done, especially silver.  I have kicked myself many times over for not buying more gold back when it was $310 an ounce or so, but I did stock up on silver coins when silver was $4.50 an ounce.  I wanted to get some dates/mints that I didn't have, and the side benefit was that I regarded it as a long term investment.  I could sell off 10% of what I bought and recover the dollars that I put into it, but it goes without saying that the dollars I recover are worth less than what I spent back in the day.  I can make the argument that I should have bought more silver, but I stopped when I felt like I had had enough, aside from the one ounce bullion coins that some countries have issued.  Now that silver's broken the $100 an ounce barrier, I don't see myself buying any.  I'm wondering if we have a bubble here that's getting ready to burst.  My gut tells me there's still some upside potential, but I'm also old enough to remember silver breaking the $50 an ounce barrier back in 1980 and how far it fell from that level before it picked up again.

As for retirement, I'll admit that I've toyed with the idea of coming out of it and returning to one of my former employers as a consultant, but that won't be happening until April at the earliest if I do.  If the work is interesting I could see doing some.  Thing of it is, I have given myself too much to do, some of it fun, some of it necessary, and things aren't where I want them to be.  My problem is that if I get too close to the goalposts then I move them further back.  Maybe deep down inside there's this fear of not having enough to do.  I have changed jobs on the grounds that there wasn't enough to do.  I am busier now than I was a year ago, and yes, I sometimes joke about going back to the workforce so that I can get some rest.

Yes, there's more to do.  More recipes to try out.  More books to read.  Some foreign languages to study.  Some things to sort out.  Some guns to shoot.  Some fish to catch.  Some places to visit.  And some family history to research.

And speaking of which, there is an unverified trace to William the Conqueror, as well as an unverified trace to Charlemagne.  I have read where ole William is the ancestor to quite a percentage of those of British blood, and I've got at least a pint of British blood flowing thru my veins.  I probably ought to go ahead and pop for one of those DNA tests.  

With that I'm going to call this one a wrap, and maybe in the next entry or two I'll do some musing about Star Trek.  

Cheers, beers, and don't forget to pet a dog or a cat!

Living in California? I Don't Think So

Today was a busy day as far as my email inbox went on one of my three accounts.  I use one for "social', one for "business", and one for ham radio.  The inbox for the business account brings in emails every day for recruiters looking to fill engineering positions, but one recruiter found a way to my personal inbox to ask me to apply for an engineering position in California.....Northridge, to be exact.  That employer has a presence in several states (including Arizona) but they, like a lot of employers in California, are hurting for engineers.

I'm somewhat tempted to troll for some information (I've been known to do that), but I don't see myself doing that this time.  One, I already know of the incentives they are offering.  A $20,000 signing bonus.  Relocation assistance.  Buying your house out from under you.  A one week househunting trip.

Although I could use twenty thousand smackers, I'm not biting.  One, the job is in California.  Two, 20K doesn't go very far in California.  Three, California has some serious problems and I believe it will get much worse there.

Now some Californians will brag online about how great their state is.  World's 5th largest economy.  Great weather.  Great places to visit.  Beaches.  Mountains.  Sand dunes.  Redwoods.  Wine.  Skiing.

I can't argue about the weather and most of what I listed.  But world's 5th largest economy?  It appears that way, when you look at it strictly in the volume of dollars that are spent there, but does that mean things are golden in the Golden State?

Prices and cost of living are MUCH higher there than elsewhere.  The dollar volume, in my estimation, is inflated due to dollars not being worth as much there as they are elsewhere.  Sure, I can get a higher salary there, and I might even realize a 30% raise, but what good is that going to do if I don't get to keep it?

I am paying less on a monthly mortgage for a nice house in Tucson than what I would spend on a third rate one bedroom apartment in the Los Angeles basin.  I pay anywhere from $1.50 to $2.00 less for a gallon of gas here in Arizona.  My property tax bill is about 25% of what that would be for a similar house in CA, I would be in much worse traffic, and I would be in a higher tax bracket.  In a per capita sense there might be more dollars available, but what good is it if you have a lower standard of living?

There's more.

I've read where California now has one third of the nation's homeless and one fourth of the nation's illegal aliens.  This thing called Proposition 47 has sent property crime through the roof.  Photos that I see on the net's top news sites depict rows of tents along the sidewalks of Los Angeles, and I've seen those rows of tents in San Jose.

The state also has trouble keeping their lights on.  PG&E has cut off power to tens of thousands of customers so as to prevent their aging infrastructure from setting off more wildfires.  There is a convincing argument that they can't replace that infrastructure since the environmentalists won't let them.  (There is also an equally convincing argument that PG&E has some corruption amongst their top management).  If you do get electricity, you're going to pay a lot more for it.

I will be responding to that email with a thanks, but I will be declining invitations for discussions.

I may not be living in the world's 5th largest economy, but I am living very well.

Universal Basic Income

Universal Basic Income found its way into the news again today.  The city of Chicago is considering legislation to give 1000 families a stipend of $500 per month, no questions asked.  As far as I know, the bankrupt city of Stockton, California has a similar program, and I've heard that San Francisco gives out $300 per month to the homeless with no questions asked.  Finland is said to have been experimenting with this.  I believe it's only a matter of time before the state of California tries to get a program going too (I'm surprised I haven't heard of them talking about it yet......but give them time!).

Universal Basic Income is not exactly a new idea.  I first heard about it in 1980 while attending a political science class at San Jose State University.  The instructor, who I will state was fair and lectured from the center, mentioned this.  He pointed out results from a survey that had once been taken of legislators.  United States Senators were more likely to favor this than United States Representatives.  It should be pointed out that in 1980, the Democrats were in power, and had owned both houses since the 1954 elections.  That was the first I heard of that idea, and I never heard of it again until two years ago.

The 1980 version of UBI that I heard about was everyone getting a guaranteed minimum income.  It wasn't stated in the lecture that the "rich" would be ineligible for it, but it was implied that they wouldn't get a payout.  If for some reason your income fell below a certain threshold, that the government would send you a check to bring you up to that minimum level that would somehow be what you needed to survive.  If you couldn't find work, or didn't want to find work, you would be brought up to that level.

Now today's version of UBI isn't quite that way, which begs the question of why this is called "Universal", but I'm sure of the reason for this.  For this idea to gain mainstream acceptance, it's brought in incrementally.  Baby steps at first.  Find 1000 families that are about to get their electricity cut off or something like that, come to their rescue, and manufacture some success stories.  Those at the edge of skepticism will climb on board for the idea, after which the proponents then look to run the number up to 5000 families......10,000 families.....keep expanding it until it's too big to be legislated out of existence.

So what do we have here, really?  First of all, it's a vote-buying scheme.  You get a monthly check, no questions asked, and you vote back in the politician who helped legislate this for  you.  In other words, that politician is trying to bribe some folks into voting for him while simultaneously guilting the more well-off constituents into voting for him too.

Second, it's a means of dividing people.  If you create a welfare class that's separate from the working class, you have driven that wedge between them.  The welfare class will think they're entitled to what the working class earns, and the working class resents the welfare class.  The elite class who created that wedge remains in power, fostering dependency and division in order to remain in power.

This suggests that an equilibrium of sorts is reached, and it is, but that point of equilibrium doesn't remain fixed.  It floats.  The welfare class will incrementally expand.  The working class will incrementally contract.  Eventually a tipping point is reached.  The tax users will outnumber the tax payers, and then there isn't enough money to go around.  Sure, the elite class can manufacture money out of thin air, but that inflates the currency.  You get more money that is worth less and you're no better off.

It can be surmised that I am extremely critical of this idea.  Yes, I know of the "tax the rich" argument, but if you tax the rich in your city more they're going to get up and leave.  Yes, I know that the State of Alaska pays residents revenue of oil money, but that's intended to keep people in the state, and the money is coming out of the ground.  I think if implemented, it will fail if it doesn't destroy society first.

That said, in one way, I want to see Chicago do this.  Let's go ahead and have that experiment.  My prediction is that the proponents will within a year or so will say that it's working, but we need to expand this to work out the bugs in the system.  At that point Chicago starts losing corporations and rich folks, and they'll have to abandon it.

I sure would rather have it happen there than here in Tucson.

The Winds of Change, or, Politicians At War with Their Own Country

The winds of change obviously blew hard for me this year, and from the looks of things I am not the only one being affected by them. 

I forgot to pass along that they are now blowing for Mark back in San Jose. 

First, the backstory.

For over 20 years Mark has worked for a firm based in Campbell, CA.  This firm was acquired some years back by a company in Tennessee, and the parent company, aside from some interventions, left his acquired company pretty much alone.  This company has operated in a tech park within the city of Campbell, providing jobs for engineers, technicians, machinists, scientists, and the like.

About eight months ago the City of Campbell decided that they didn't like the industries there who are renting it out.  They didn't want microwave tubes, specialized materials, and prosthetics being built there anymore.  They instead wanted "green" industries.  You know, those industries that build solar panels or batteries for electric cars.  The city told them to either change their product lines or pay higher fees.  Mark's parent company decided to do neither.  They instead are responding by closing the plant and laying off some 200 people.  I'm sure other folks are being laid off. 

Yes, you read that right.  The City of Campbell is forcing companies to lay off hundreds of workers since the companies there aren't building the "right" products.

Mark and his wife are one of the few lucky ones.  As I type this, they are preparing to respond to a job offer that they got from Tennessee.  They will keep their salaries and will get a generous relocation package.  I told Mark he's doing the right thing though he may not know it for six months or so.  So sometime next year, I'm guessing March, they are headed to some beautiful country in a state populated by some of the nicest people in the country.

Meanwhile, you have to wonder what the City of Campbell is thinking.  Do they think Tesla's going to move in there to build a plant?  (Last I heard, their next expansion is in Reno).  Do they think Solyndra is going to come back, and this time make it?  Have they any idea about what kinds of hazardous materials are going to used in this facility for "green" industry? 

It is a shame that politicians are waging war against our personal freedoms by telling us what kind of light bulbs to use, what kind of food we should eat, that we can't be trusted with arming ourselves, and that we should gleefully welcome the confiscation of what we have earned so that it can be re-distributed to people who are in the country illegally.  It's bad enough that they're doing this as it is. 

Now the politicians are waging war against employment.

The Invention of Counterfeiting

(This is part III of a series I'm doing on money)

It is safe to say that shortly after the Lydians began making the world's first coins, that some enterprising fraudsters got into counterfeiting.  These were very likely practicing criminals who were adept at fraud and innovative in discovering new ways to commit it, and once money in the form of coins began to circulate it undoubtedly had to occur to them that a means of fleecing the honest folks had appeared and they were determined to take advantage of it.  For their product, they would have had to use some amounts of gold and silver, which were used to plate the base metals making up the bulk weight of the counterfeit coins. 

To get the gold and silver that they needed, they would shave the edges of the real coins.  This had two effects on their criminal enterprise.  One, they were able to get the raw material that they needed, but two, if the person that they were passing off the shaved coin to was not aware that the coin was not a full coin, that coin became accepted as such and thus any merchant who accepted the coin at its stated face value was defrauded. 

Coin clipping became prevalent in the early years of coinage and persisted for centuries.  Not only was it practiced by criminals, but kings themselves practiced it in order to increase their own wealth.  This would have course, introduced inflation, as that once the public became aware of this debasement then prices would rise.  That one gold coin that might have purchased twelve sheep would then purchase eleven as that a clipped coin wasn't really worth what the king said it was worth.  And even if the king wasn't debasing currency, counterfeiting would and could introduce inflation depending on its prevalence.

Coins of course, were not the only money that was counterfeited.  Once paper money began to circulate, it also became a target of counterfeiting.  Counterfeiting banknotes was an easier endeavor than striking a fake coin in the sense that the raw materials for this type of forgery were more readily available.  I think that's one reason why counterfeiting for many centuries was an act punishable by death, and that death penalty was meted out when counterfeiters were caught.  Banknotes printed by Founding Father Benjamin Franklin had the warning "To counterfeit is death".  That kind of penalty for counterfeiting might seem harsh by today's standards, but let's look at it from the viewpoint of medieval authority for a moment.

Say that you're a king.  Your government is issuing money to be used as a means of commerce.  You want strict control over the treasury and you want your people to have confidence in the money that they're using as that confidence in your currency is a form of confidence in your rule.  After all, your portrait is on that coin.  That money that is issued by your state has your guarantee that it is going to be worth a set value, and not only do you want your money being used by your people, you also want that money to have the reputation such that it can be accepted by those foreign merchants you're dealing with.  If your money is more widely accepted than that of your rival kingdom, then you have a wider influence.  You wouldn't want anyone messing around with debasing your money (unless you're the one doing the debasing, which I will cover in a future posting).  You want anyone who does it to be caught, and to be put to death. 

Likewise if you're a king, you might want to employ counterfeiting your enemy's currency if you're at war with that enemy.  During the Revolutionary War, Great Britain was counterfeiting colonial currency in an effort to destabilize the Continental Currency that was issued by the Continental Congress.  The Union government counterfeited Confederate banknotes in order to destabilize the South.  Adolf Hitler's regime was working on a plan to counterfeit the currency of the Allies in 1944.  And in more modern times, North Korea is reported to be counterfeiting American hundred dollar bills ("superdollars") in large quantities.  One pound coins issued by the United Kingdom are also being counterfeited, and from the images of those that I've seen they're really good fakes.

Counterfeiting is going to be with us as long as there's a human race.  It's no longer confined to money, as that there are vast amounts of fake consumer goods being counterfeited.  I can walk across the border into Nogales and locate fake Rolex watches rather easily.  My employer has to worry about being stuck with counterfeit computer chips. 

Counterfeiting is not the only means of debasing currency.  I will discuss this more in a future posting, but I think I'm also going to post a story about a guy in New Jersey who counterfeited nickels.  Stay tuned.



The Invention of Money

When The Man With the Money made his appearance, we not only did not know his name, we also did not know where the money came from.  We didn't at that time care where the money was coming from, as that it was being handed out to us free of charge.  I think even in the realm of the conscious we don't care where the money we get comes from, as long as it comes out of someone else's pocket and finds its way into ours.

Have you ever stopped to consider where money comes from?  Well, some of you will tell me that it comes from the mint, and/or the Bureau of Engraving and Printing if you're resident stateside.  Others are aware that it is issued by banks, and others will say that you get it by working.  There are all sorts of answers to the question "Where does money come from?" and I think that you will also get several answers if you ask the question "Just exactly what is money, anyway?".  I think in order to get a grasp on how to answer these two questions, we need to examine just how it was that money came to be invented.

It is commonly accepted that as of this writing, we have had 5000 years of civilization.....maybe 6000.  Well, let's split the difference and say that civilization itself was invented 5500 years ago, OK?  I think it's safe to say that 5500 years ago the human species were speaking languages, organized into families and tribes, and that the prime function of your average human being was day to day survival.  Survival would have come from learning how to harvest food, learning how to hunt for it, and also in the domestication of livestock in order to get food and clothing.  Somewhere along the way some trades emerged, as that people were figuring out how to make bricks and cut wood.  They were figuring out how to dig ore out of the ground and to convert it into metal.  Various occupations were beginning to emerge.

The thing of it is about specializing in an occupation, is that if you're a builder, what you build isn't something that you can eat.  So what you do is you build a house for somebody, and that somebody gives you some food, or maybe some livestock with which to turn into food.  What you have now is trade.  In this simple example, trade is done by the barter system.  There isn't any money involved since no one commodity has yet emerged as a common commodity to trade or to use as a reference in fixing a value onto something or some other commodity.

About 3000 BC or thereabouts, the Egyptians were aware of gold.  It was first used as a form of adornment but it also emerged as a measure of wealth.  It wasn't the only measure of wealth.  In the Book of Genesis, Chapter 13, Old Testament patriarch Abram, as he was then know, is described as being very wealthy in livestock, silver, and gold.  What this is telling us is that wealth, at that time, was viewed in terms of two precious metals and livestock.  Any one of these commodities could be traded for any of the other two commodities, as well as for any other commodity.  Thus, we already have a system of economics in place, and although it was still based on barter, gold and silver start to emerge as a convenient medium of exchange. I guess that you could call this "money" in a somewhat loose sense, but if you're defining money as "coins" of a uniform standard or of a common currency (cigarettes and whiskey have been known to function as money) we're not quite there yet as far as money being invented.

Around 600 BC, that began to change.  The historian Heredotus credits the Lydians of Asia Minor as being the world's first producer of coins.  They were made out of electrum, a gold-silver alloy that flowed to them out of a nearby alluvial plain.  They found that these were convenient units of exchange, and they also found that those they traded with to obtain their goods also liked these units of exchange.  Coins quickly spread to being used by the Greeks, and later on, the Romans, as well as other kingdoms.

With the invention of coins, some other things were invented too.

That will be the subject of my next entry.

The Man With the Money

Way back when I was in the fifth grade, the 1968-1969 timeframe, I had a dream one night that I remember well to this very day.  There are a few others from my childhood that I could reminisce about, but this particular one seems to stand out from the rest, and also seems to have a relevance to our current events that no other dream from that time period has.  It might have inspired an episode for the Twilight Zone, or a short story, but it did neither of those.  As that I have been thinking on and off about that dream a lot lately, it is inspiring a blog post.  I'm even going to give this dream a title.  The title of this dream is "The Man With the Money".

In this dream, The Man With the Money came to our fifth grade class.  He was wearing a short sleeve blue shirt, red bow tie, white pants, a straw hat, and he wore a smile that would have caused the CrackerJack Man some intense jealousy.  He was in his mid 50s or something like that, cleanshaven, white/gray short hair, with radiant blue eyes to match his smile.  The Man With the Money didn't tell us his name.  We never knew what it was nor did any of us ask.  It didn't seem to matter.  He was The Man With the Money.  The Man With the Money seemed to have an unlimited supply of money, and he was giving it to us.

The Man With the Money gave me a fifty dollar bill.  He also gave me a few twenties, tens, fives, and ones.  He handed me a half dollar, which was also neat because when I was a kid you just couldn't get a Kennedy half dollar.  The Man With the Money not only gave me a shiny new half dollar with Kennedy on, he also gave me some quarters and some other change.

The Man With the Money also gave away money to the other kids.  He had a lot of it.  It seemed that once you got done looking at the money that he gave you, that you could go back to him and he would give you even more money.  It wasn't like anything I had ever seen before.  The Man With the Money had this endless supply of the dough and he was willing to give it away!  And more importantly, he wasn't going to run out of it either. 

Needless to say, The Man With the Money was very popular with us.  We loved him.  We were glad that he came to us!  I mean, this guy was better than Santa Claus.  Forget about the toys or our other wants.  Forget about what we needed.  The Man With the Money was visiting our school, and he was going to make sure that we had all the money that we wanted!

As what happens with all dreams of this nature, it came to an abrupt end.  I found myself in my bed.  I was so sure that I had some money that I looked under the covers for it.  I asked, "where did my money go?"  It was gone!  It had disappeared!

I remember feeling cheated.  I had had, in my possession, a whole lot of money that had been freely given to me, and all of a sudden, it was gone.

OK.  So why did I post this?  Where am I going with this?

Stay tuned.

Where Are We Going, And Why Are We in This Handbasket?

One of the more pressing challenges these days to is be reading the news headlines on a daily basis and to not feel depressed.  As I write this, the Drudge Report is saying that oil went up 2% today.  A check of the precious metals markets shows gold at a record high and silver is over $40 an ounce for the first time since 1980.  Higher energy prices translates to higher food costs, and in an economy where no one is getting a pay raise of any significance (if they get one at all) I can sense that a lot of people are feeling squeezed right now.

I have one close friend who is thinking about pulling funds out of his 401K and paying off his house.  He knows he'll be penalized for an early withdrawal but his thinking is that the money that's in his 401K right now will not be worth anything when he retires and so he may as well spend it while he can and not have to worry about a house payment.  I have to add that there seems to be some rationale to that thinking; if my house were paid off all I'd have to worry about is the property tax and medical.  However, that of course does not mitigate any concerns about inflation, and the question I wonder about the most as far as inflation goes is, are we headed for a Zimbabwe type of situation?

There are some cold harsh realities to contend with.  The entire global economy, when you stop to think about it, is nothing but a big giant numbers game.  That's all it is.  I don't know of anyone who is being paid in gold and silver, which at one time functioned as money.  For several years of our nation's existence the dollar was pegged to gold and the rate was $20.67 per ounce.  FDR changed that in the 1930s with a devaluation that resulted in $35 per ounce, and private citizens were no longer allowed to own gold.  I realize that there are some who will make the argument that this was a necessary step in a series of steps to save the economy, but I'm not sure that this really did anything but to help get us in the mess we are in today.  The instant creation of more dollars can give the illusion of a stronger economy, but if the dollars aren't worth as much as they used to be then all you've done is change the numbers.

Still not convinced it's a numbers game?  Then ponder this.

In 1972 the Dow Jones Industrial Average broke the 1000 barrier for the first time in history.  I remember that day; I was in junior high school and I remember it being the lead news story for that day.  My recollection is that the economists and politicians were happy about that.....I mean that barrier had been broken, and that meant that things were good, right?

Well what do you think the sense would be right now if the Dow was at 1000?  It's at 12380 as I write this.  The economists aren't going to like it if it's below 10000, which is ten times the amount of the 1972 barrier.  We have this number and we want it to go up.  It makes us all feel good and rich and we think we'll be on Easy Street when we retire.  We cheer when the 10000 barrier is broken going up, and get upset when it is breached going down.  Hello?  That wealth was on paper all the time in the first place.  It's an illusion.

The problem with the illusion is, is that once it's recognized for what it was, panic and chaos can set in.  The dollar is accepted as payment because it is legal tender and the most convenient medium of exchange in a transaction.  It is worth something as long as the buyer and seller think it's worth something, and how much commodity it can purchase is again driven by the perception of how much that commodity is worth.  With record deficits and the debt ceiling about to be hit again, and a government that's promised everything to everybody without having figured out how to pay for it, the perception on the world financial markets is that the dollar is deteriorating into Monopoly Money, when it's been Monopoly Money since it was decoupled from gold.

How much longer can the illusion go unrecognized?

I don't know.  The collapse of the economy has been predicted by the doom-and-gloomers for decades now.    I'm sure that when President Nixon severed the link between the dollar and gold, that set off a lot of Chicken Littles and created some survivalists.

One thing I have observed.

If there's a sense of optimism, then the economy picks up, people go back to work, and life goes on.  I don't sense a whole lot of optimism out there and that has me concerned about the future.  My own job situation is not resolved and I'm now talking to hiring managers in Colorado where I'm told there is some work in my field.  You're not going to see me running out to a car dealer anytime soon to buy a new truck.

Even if we do regain optimism, some other harsh realities have to be dealt with.  We can't keep printing money like we have been.  The government has to stop its drunken spending spree.  We can't provide state of the art health care to everyone who wants it.  We can't have 12 million illegal aliens here straining the fiscal infrastructure.  We can't be fighting three wars at once.

The entitlement mentality that many of our politicians have foisted upon us can not be sustained for very much longer.

Some Interesting Reading

I stumbled across this link earlier today. It's provided by http://www.kitco.com/, a website from a precious metals firm headquartered in Montréal.

I've been a fan of the precious metals for years when it comes to long-term investments. The only mistake that I made in that regard was not buying more gold back when it was $300 an ounce.

At least I acquired plenty of silver, mostly in the form of pre-1965 U.S. coins, when the spot silver price was $4.50 per troy ounce. I've since seen it breach $20, and although silver took a hit today it closed at $16.21.

Of course, a website dealing in precious metals is going to have commentaries that are favorable towards gold and silver. Regardless of how you feel about the precious metals and/or stocks and bonds, I think this one's worth reading.

TANSTAAFL

Back in 1982 when I was an electrical engineering major at San Jose State University, one of the better professors there was illustrating the application of an operational amplifier in an amplifier circuit that was connected to a network of capacitors and inductors. Then he pointed out something that had to be given up in order to increase the gain out of that circuit. If you wanted more gain, you had to give up frequency response, and if you wanted more of a frequency range that the circuit would operate in, you had to give up gain.

At that point he brought up a word that I hadn't heard of before that time: TANSTAAFL. He explained that it came out of a Robert Heinlein novel called "The Moon is a Harsh Mistress", which I went on to read shortly after that lecture. TANSTAAFL stands for "There Ain't No Such Thing As A Free Lunch". Sure, you could have an amplifier with all the gain that you wanted if you were willing to give up frequency response. (You could also change the values of the capacitors and inductors, but that in itself would have some other implications).

Now it's August of 2009, and the debate on health coverage in the United States is raging. There seems to be a mentality amongst the "single payer" proponents that if the government's paying for it, that it's a good thing, and it won't hit your average Joe or Jane in the pocketbook.

The thing of it is, is that this kind of system isn't really "free". The money has to come from somewhere. Think about it. Several billion dollars has to be raised to set up the infrastructure to deliver this kind of health care system. Where does that money come from?

Some of you will say "that's no problem, we can raise taxes on the rich". That sounds logical except that the wealth of the rich are in the forms of stocks, bonds and other investments, and do not become cash until these assets are liquidated. If you kick them into a higher tax bracket, you are removing liquid assets that are converted into consumption, investments, or venture capital.

What about taxing their wealth and not their income? Liquidating a large block of stock in a corporation can raise cash but this will cause the stock price to go down, thus impacting the market capitalization of that corporation....thus causing a decrease in the "wealth" of that corporation. This can only be avoided if a buyer can be found who will buy out that block of stock, but where are you going to find such a buyer? There are only a finite amount of people or institutional investors in the world who could buy that stock and keeps its price up. Even if you do find such a buyer, what's to stop the other investors into not panicking and selling? Mutual funds who have also invested will take a hit, and this in turn will impact the retirement savings of millions of Americans.

OK, so what's another option? How about raising taxes on cigarettes? After all, cigarette smokers are in the minority, and they can't very well stop us from taxing them, can they?

Here is where the Law of Unintended Consequences comes in. Let's say that you slap a $5 tax per pack of cigarettes to raise money for universal health care. In order for this to work, you are going to have to make sure that the taxes are collected in the first place, which means that you will need lot of people to smoke cigarettes. I think a great many smokers will give up the habit in that kind of situation, which means that the revenue stream that you were counting on isn't there any more, at which point you raise the tax to $10 per pack, which in turn gets more people to quit since they can't afford the tax or don't want to pay it.......you see where this is going? If you tax fast food, you're going to have the same issue....and you would with any other "sin" tax.

There's one more option. Print the money. Just turn on those presses, get them chucking out $1000 bills 24/7/365, and print what you need. You're not raising taxes and you're not depending on a revenue stream from a sin tax.

The problem here is, is that if you create money out of thin air, you're inflating the currency. There's no getting around that. If say, there is in existence 5 trillion dollars out there, and you print 5 trillion more, then guess what? You now have 10 trillion dollars in existence, with no commensurate increase in the amount of goods and services that will be bought with those 10 trillion dollars. In this simplistic example, you've doubled the price of every commodity. If your income is also doubled to cover this, what you get is twice as many dollars that are only worth half as much as they were when you started out. And if your income isn't doubled -- say that your pay went up by 40% in this example -- then five per cent of your income has been confiscated from you and you won't even know about it!

What I'm saying here, is that you can't get away from TANSTAAFL when it comes to government-run health care. Even if you balance all three of these options, providing that such a balance that satisfies all concerned can be found in the first place, the amount of health care available is still a finite fixed quantity. It's going to have to be rationed. There's no getting around that either.

I'll grant that health care is expensive. That's because the system for getting the product of health care to the end consumer is extremely complicated. Pharmaceutical companies spend millions of dollars researching treatments. Research and development costs are no doubt a huge factor, but you also have product liablity issues to contend with. How often do you hear of a new wonder drug that comes out, gets approved by the FDA, but then gets banned when it's learned that this new wonder drug causes liver damage or cancer or something else that's bad? You now have a pharmaceutical company facing a class action lawsuit. That company has to prepare for those suits, and the costs that they face absolutely positively will be recovered and that recovery will come in the form of expensive drugs.

Likewise, you have thousands of medical professionals paying millions (if not billions) of dollars in the form of malpractice insurance. I'm not saying that quack doctors should be immune to lawsuits....what I'm saying is that their mistakes are being paid for by competent doctors who really have no choice but to pass those costs on to the insurance companies, who in turn pass that on to the consumer or the corporation that provides that health plan to their employees.

The bottom line is that we have a complex problem that is going to defy every simple solution that's thrown at it. I don't think that an 1100 page long piece of legislation is going to fix this, but neither is a simple approach like "single payer" that can be written up twenty pages.

TANSTAAFL certainly does indeed apply here, and we should realize that if we decide to take it upon ourselves to "fix" this problem.