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Michael O’Brien and Moral Values

My reading, lately, has branched afield. I came across the terms Moral Relativism and Moral Absolutism and that led to the writings of Michael O’Brien. I read, first, The Plague Journal and just finished Father Elijah. What brought this to mind was the Drudge headline Netherlands Hospital Euthanizes Babies. O’Brien argues from a Catholic perspective that the West is being propagandized to give up its values of right and wrong given to us by God and, consequently, is declining; values embodied in the Ten Commandments and The Seven Deadly Sins. Two things are especially repugnant to O’Brien, abortion (over 1.4 million babies are killed each year in this country) and euthanazia. What we have is a cultural divide in this country and this may be one reason for so much hate for President Bush and so much controversy about his faith.
Mover Mike

Ted Kooser, Poet Laureate

I started writing poetry in 1991. I thought my beginning poems were pretty good and I was amazed what effect the words I had written had on my reader’s emotions. I took several classes at Mountain Writers from Doug Marx, who was a poetry critic for The Oregonian and now writes his own poetry, so I have heard. I would haunt Powell’s poetry section, and poetry on the web, and buy anthologies to expose myself to poets and their techniques. Marx asked his students to memorize a poem each week for class. In an anthology called Poetspeak, A selection by Paul B. Janeczko written originally in 1983, I became acquainted with poets like Rutsala (The War of the Worlds), Stanley Kunitz (The Portrait), Frank Steele (Greener Grass),and a poet named Ted Kooser. I chose IN JANUARY, 1962 to memorize that week, and as I did adding each line to the lines already remembered and then repeating the whole thing from the first word, I started to cry. I was sobbing by the time I memorized that poem.

IN JANUARY, 1962

With his hat on the table before him,
my grandfather waited until it was time
to go to my grandmother’s funeral.
Beyond the window, his eighty-eighth winter
lay white in its furrows. The little creek
which cut through his cornfield was frozen.
Past the creek and the broken, brown stubble,
on a hill which thirty years before
he’d given the town, a green tent flapped
under the cedars. Throughout the day before,
he’d stayed there at the window watching
the blue woodsmoke from the thawing-barrels
catch in the bitter wind and vanish,
and had seen, so small in the distance,
a man breaking the earth with a pick.
I suppose he could feel that faraway work
in his hands–the steel-smooth, cold oak handle,
the thick, dull shock at the wrists–
for the following morning, as we waited,
it was as if it hurt him to move them,
those hard old hands which lay curled and still
near the soft gray felt hat on the table.

It was hard to find much on Kooser at the time. There weren’t many poetry books at Powell’s or Barnes and Noble. I would search through anthologies hoping to find another Kooser poem. I guess I identified with him. He was a retired vice president of Lincoln Benefit Life insurance company in Nebraska. I was a vice president of a stock brokerage company and we both were writing poetry. Poets, I thought didn’t generally come from the business community. Imagine my surprise when I read recently that Ted Kooser was now the Poet Laureate of the US for the next year! Here’s another I like a lot:

At the Office Early

Rain has beaded the panes
of my office windows,
and in each little lens
the bank at the corner
hangs upside down.
What wonderful music
this rain must have made
in the night, a thousand banks
turned over, the change
crashing out of the drawers
and bouncing upstairs
to the roof, the soft
percussion of ferns
dropping out of their pots,
the ballpoint pens
popping out of their sockets
in a fluffy snow
of deposit slips.
Now all day long,
as the sun dries the glass,
I’ll hear the soft piano
of banks righting themselves,
the underpaid tellers
counting their nickels and dimes.

A belated congratulations to you Ted Kooser. Thank you for all your poems and good health to you.
Mover Mike

Don’t Fight The Market

Here’s an interesting take on the USD weakness from Institutional ECONOMICS

Asian Central Banks Face Reality. Stephen Ceccehtti (of The FT) highlights the realities facing Asian central banks:

We can start to see why governments with large dollar reserves would be concerned about both keeping the dollar from depreciating and ensuring that US treasury bond interest rates do not go up. Both of these would result in capital losses for the entities holding the foreign exchange reserves. Given that these reserves are huge – more than $800bn in Japan and more than $500bn in China – the potential losses are big, as is the potential embarrassment. A 10 per cent appreciation of the renminbi means a capital loss of $50bn for Chinese authorities. Assuming the duration of their bond portfolio is three to five years, a 2 percentage point increase in US interest rates means another loss of $30bn-$50bn.

Institutional ECONOMICS goes on to say

The massive foreign exchange reserves of East Asia are a sign of economic weakness, not strength. The mercantilist mindset that thinks it can buy its way into world markets through manipulating exchange rates is about to face a massive reality check care of flexible exchange rates.

The East Asian countries have made a massive bet that is counter to market forces which seek equilibrium. Greenspan warned of this, first, that the “game” can’t go on forever and second, anyone who is still long bonds has a death wish. We will soon see the giant compressed coiled spring that is the pegged currencies market explode. Once again, it will not pay to fight the market.

The Gold price is another case of forces fighting equilibrium. They, also, will find the market, ultimately, works as it should.
Mover Mike

Fiat Currency

Glenn Reynolds at Instapundit on November 27th when asked about why he doesn’t blog more about “disastrous economic news” says

I don’t blog much about the economy (except on the micro, things-I’ve-noticed Andy Rooney level) because I don’t think I know enough.

I’m not going to quote the rest of his statement, because I don’t think he will want that part remembered. Generally, as David Tice of The Prudent Bear says, there is a complacency about the USD. We’ve been through these ups and downs before, why in 1995, the USD was this low and then went up 50%. We’ve been through the crash of the Ruble, the Peso and most recently the Asian currency crisis and we’ve muddled through (I’m paraphrasing). So what is different this time? Tice says:

But I fear the worst: the Fed is immersed in a trap of runaway Credit and asset inflation. Global players – including central banks – are coming to recognize there is no way out. Almost anything non-dollar is viewed as a superior store of value to investors and the massive speculating community. And perhaps others see dollar vulnerability as a potential countervailing force to aggressive U.S. foreign policies. Things don’t look good Mr. Dollar. Confidence is faltering, financial fragilities provide little room for error, and I fear we have passed the point where a dollar crisis is unavoidable.

I wish you the best in what will likely be a difficult and tumultuous period. And I do sincerely hope you can muster all your strength and surprise us with your resiliency. It certainly didn’t have to be this way. I hope the Greenspan Fed (and the “inflationists”) will be held accountable. Too much lunacy has been spoken and written, while the scourge of financial folly worked furtively to destroy you. The world’s preeminent currency was a terrible, terrible thing to waste. There will be huge costs to pay, and I’m saddened and sorry it happened.

And you say, Mover Mike why do you blog about these things? Few read them, fewer comment! Someday, there will be a lot of finger pointing, and blame shifting, and we will be required to build a new currency. We can’t make the same mistakes again. Our Founding Fathers warned us about fiat currencies and our Constitution prohibited these practices, yet we allowed it to happen, anyway. Our progeny deserve better.
Mover Mike

Richard Russell’s Lesson

I subscribe to Richard Russell’s Dow Theory Letters Inc. and today he wrote about the Constitution and our currency. I noted Section 8 – Powers of Congress, The Congress shall have the power

5. To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures:

6. To provide for the punishment of counterfeiting the securities and current coin of the United States:

and this

Section 10 – States prohibited from the exercise of certain powers.
1. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make any thing but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

The Founding Fathers knew the history of paper money (fiat) and specifically prohibited paper money that was not backed by Gold and Silver. Russell writes about our history with paper: Congress printed Continentals during Washington’s time and they became worthless; “not worth a continental”. During the Civil war the South printed Confederate Paper, which is worthless, except for it being collectible, but you certainly can’t buy anything with it. The North printed Greebacks which became worthless. So now we have the USD!

I was looking at Kitco and there is an interesting chart of exchange rates. One of the things I noticed is that Gold is different prices depending on the currency. For example, in USD Gold is $451.70 an ounce, in Euros Gold is 339.70, in Pounds Gold is 238.40, and in Yen it is 46337.64. How could Gold be 46337.64 in Yen? In 2001 the USD was 120 and Gold was $250, today the USD went to a new low of 81.53 and Gold was $451.70. Clearly, it seems if the USD goes down, then Gold goes up. But, how could Gold be 46337.64 in a currency?

I would guess with the Continentals, Greenbacks and Confederates that gold went up and up and the currencies went down and down to the point that you did not have enough currencies to buy an ounce of Gold. If the USD declined another 50%, I would guess that Gold would go up 50%; if the USD went down 90% that Gold would be up at least 90%; if the USD went to zero and that is our history with fiat currencies, then no amount of USD would buy an ounce of Gold.

Imagine you own a general store. Canadian touists come into your store and buy from you. Their currency is going lower against the USD. First, you mark up your goods to Canadians, because you take their paper to the bank and the bank doesn’t credit your account with as much as fFace value. At some point you can’t keep track of the decline and you refuse altogether to accept Canadian currency. No amount of Canadian currency would you take to pay for an item in your store. I saw this happen in the 50’s and 60’s. The Canadian dollar would buy more here than a USD. In the 80’s and 90’s only 65 Canadian dollars would equal a 100 USD, and stores refused to take Canadian dollars, anymore.
Richard Russell’s lesson:

Lesson — Gold is money, I know it, Greenspan knows it, the Fed knows it, and the US government knows it. But the lie that gold is a commodity lives on. Ultimately every lie is exposed and every truth comes to life. As for gold, it’s only a matter of time before the central banks of the world are forced to admit that GOLD IS MONEY.

Why will the truth be forced upon them? Because as the price of gold in terms of central bank paper rises, the desire for central bank paper will decline. Even an idiot will draw correct conclusion from that action.

Mover Mike

The US Dollar Part II

Bloomberg announces Dollar Heads for Longest Losing Streak Versus Yen in Nine Years In the article by John Brinsley quotes projections of the four banks, which account for 34 percent of the $1.9 trillion-a- day currency market

UBS, the world’s largest currency trader, lowered its three- month dollar projections to 103 yen from 107, and to $1.36 per euro from $1.30. Deutsche Bank expects the dollar to weaken to $1.43 per euro and to 93 yen by the end of 2005, from previous forecasts of $1.37 and 99 respectively.

Merrill cut its March forecasts for the dollar to 96 yen and $1.39 from 100 and $1.33. JPMorgan cut its estimates to 96 yen and $1.37 per euro in March, from 100 and $1.30 before.

Mover Mike

The US Dollar

Over at Tech Central Station the word is getting out. In a piece titled Washington Fiddles While the Dollar Falls, Desmond Lachman writes

Contrary to what the Treasury would have us believe, the US external payment imbalance is not a reflection of foreigners’ hunger to invest in US companies and in the US stock market. Alas, those days went with the bursting of the equity bubble in March 2000. Instead, the main factor now holding up the dollar is the massive purchases of US Treasury paper by foreign central banks, which now finance an unprecedented 50 percent of the US external deficit. They do so not because they believe that the US is an attractive place in which to invest. Rather, they do so as a means to keep their currencies cheap in relation to the dollar so as favor their export sectors.

Maybe the word is getting around that we have a dire dollar crisis pending. You would not know it looking at the stock market averages or the bond market, but today the CRB went to a record high, the dollar to a new low vs the Euro (1.3266 to 1.00), and Gold climbed to a new high at $452.30 USD per ounce. Let’s be careful out there!
Mover Mike

Now This Is Just Wrong!

Via The Drudge Report
From Reuters by Dan Whitcomb

A California teacher has been barred by his school from giving students documents from American history that refer to God — including the Declaration of Independence.

Here’s the contact information, if you want to register your outrage.

Patricia Vidmar – Principal

Telephone Numbers:
Office – (408) 245-3312

Email:
block_leann@Cupertino.k12.ca.us

Fax:
(408) 245-7484

Address:
Stevens Creek Elementary School
10300 Ainsworth Drive, Cupertino, CA 95014

Mover Mike

Revisit Peter Ames Carlin

I like Peter Ames Carlin’s column in The Oregonian. For the most part, I find his insight on TV land very interesting. When it comes to Dan Rather, as I’ve posted in the past we disagree and this morning’s column is no exception.

Love him or hate him. But in a medium defined increasingly by the sleek and the corporate, Rather is the last of a rare breed. He’s a human being, as passionate, flawed and emotional as they come. And, as Rather’s ratings seem to attest these days, that sort of thing doesn’t cut it on network TV anymore.

Peter, the plummeting ratings are not about his flamboyance and his passion, but his bias. He has proved time after time that his paradigm of what is mainstream does not align with the majority, and so they desert his show.
Mover Mike

This Is War!

John E. Tamny at NRO writes Don’t Float the Yuan
De-linking our currency with China’s is bad economic policy.

For the above to make sense, it has to be remembered that trade is decidedly not war. Just as it is with individuals, when countries exchange with each other, they exchange what they do best in return for what they do least well. As Bastiat wrote, “In war, the stronger overcomes the weaker. In business, the stronger imparts strength to the weaker.”

I totally disagree with Tamny. This is war, Economic War. We have the strongest military in the world, but economically we are vulnerable and “they” know it. It reminds me of the the time I “shot-the-moon” playing Hearts. Most everyone saves hearts and if they have the Ace or King of hearts assumes they have a stopper. However, I ran the table by being void hearts and long spades. It is a classic case of fighting the wrong war.
Mover Mike

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