Every so often you run across the phrase "clipping coupons" as in "His widow lived out her remaining years clipping coupons." I've known what the phrase meant; but until today I've never seen a picture of an actual bond with coupons to be clipped.
Here's a picture of a ten year One Million dollar U.S. Treasury bearer bond with some of the coupons still on it. As each interest coupon comes due it becomes just like cash since anyone can take it to a Federal Reserve Bank to redeem it for cash. Then at the end of the term the owner (or anyone who has the bond) can return it to the treasury for the million bucks that the bond itself is worth.
It's called a "bearer bond" because the treasury will pay out the interest and the principal to whoever comes in bearing the coupons and the bond when they're mature.
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYPhrEVoUFhuuCAmL2rVtv6aQ5XxF3-lQ4u6bJFwAGeHSWS3ye_uqlbor83zrafS70SvXcVIw5KetjWd8RdZ5t0G51oAZo6G_QyXHPuzbwdO63_u2BsRHAI9JzFHshKWb4phPbpnY7zns/s1600-h/bond1small.jpg
On a related note, yesterday I had reason to check out the rate of inflation over the past thirty years and also over a variety of prior thirty years periods. Inflation ran at a 4.4% rate from 1975 to 2005. There is a useful mental tool called the Rule of 72. If you divide the interest rate into 72 the answer tells you how fast money doubles if invested at a certain percentage interest rate or how fast its value is cut in half at a certain inflation rate. The Rule of 72 says a dollar lost approximately half of its value every 16 years from 1975 to 2005. A 1975 dollar is worth a bit less than 25 cents in real purchasing power today since it's been 34 years since then. Put another way, if your house was worth $50,000 in 1975 and it's worth $200,000 today its real value hasn't changed.
The worst thirty year period in the recent past for inflation was the period from 1965 to 1995 when inflation ran at an average rate of 5.4%. During that period a dollar lost half of its value every 13.3 years. It's purchasing power was reduced by 75% in about 27 years during that time period.
I think what's been happening down in Washington is setting the country up for an inflation rate even higher than the 5.4% average rate that prevailed from 1965 to 1995.
If I'm right that means a lunchtime can of catfood that costs an old lady $2 today will cost her daughter more than $8 twenty six years years from now in 2035, perhaps much more, and it will cost her granddaughter $32 in 2051. The same thing goes for Depends, Fixodent, Prunes and all the other necessities of old age.
Just so you know, I found the inflation rates I used at the site link below. Other sites give different and somewhat lower inflati0on rates. I was looking for a worst case estimate, so I purposely looked for the inflation calculator that showed the worst picture of what's happened on the inflation front over the last 100 years.
http://www.measuringworth.com/inflation/?redirurl=calculators/inflation/
Showing posts with label inflation. Show all posts
Showing posts with label inflation. Show all posts
Friday, June 12, 2009
Tuesday, May 12, 2009
A trillion here a trillion there
First a warning. The five minute video at the post below is about a very boring subject and your share of the loot they're talking about is only $30,000, so it may not be worth your time.
I'm not the most careful person in the world about balancing our checkbook; and I'm even less careful about doing anything that can be called budgeting; but it's just a little shocking to find out the the Federal Reserve doesn't regularly balance its multi-trillion dollar checkbook. And it's even more shocking that the Federal Reserve doesn't keep track on who it sends the trillions to and how much it gets paid back.
http://zerohedge.blogspot.com/2009/05/federal-reserve-can-not-account-for-9.html
And, in lighter news: The Wall Street Journal has an interesting article about Italian bicycle racing, which, unsurprisingly, is far more manly and authentic than the sissified French variety.
http://online.wsj.com/article/SB124209602462609577.html#mod%3Darticle-outset-box%26articleTabs%3Dcomments
I'm not the most careful person in the world about balancing our checkbook; and I'm even less careful about doing anything that can be called budgeting; but it's just a little shocking to find out the the Federal Reserve doesn't regularly balance its multi-trillion dollar checkbook. And it's even more shocking that the Federal Reserve doesn't keep track on who it sends the trillions to and how much it gets paid back.
http://zerohedge.blogspot.com/2009/05/federal-reserve-can-not-account-for-9.html
And, in lighter news: The Wall Street Journal has an interesting article about Italian bicycle racing, which, unsurprisingly, is far more manly and authentic than the sissified French variety.
http://online.wsj.com/article/SB124209602462609577.html#mod%3Darticle-outset-box%26articleTabs%3Dcomments
Wednesday, February 11, 2009
Throw another shrimp on the barbie
Back in the old, old, days the big men of the tribe used to react to problems by placating the gods. When the rains failed, or when there was too much rain, or when the tribe was faced with some other sort of disaster the big men would have their goons grab a virgin, or two or three, and throw them into the volcano where they believed, or professed to believe, that the gods lived. They did this to soothe the worries of the tribe. And, of course, they did it to preserve their own positions of power and prestige.
In these more enlightened times the big men no longer throw virgins on the barbie. Instead they burn great quantities of your money as their answer to worries on the part of the great herd of the common people. Deep down almost everybody knows that burning great quantities of money will have no more effect on the problems than burning virgins would; but it makes people feel better to see the government "doing something." And, of course, it dampens down the urge on the part of the common people to put the blame for problems where it belongs.
Last fall fifty plus percent of the American people very properly rose up and kicked out the tired old Republican administration that dithered while our current economic problems developed. But they failed to toss out the Congressional Democrats who were every bit as responsible, and perhaps even more responsible, for the problems.
In October, to placate the economic gods, the then Republican President and the Democratic Congress made a midnight rush deal to burn 700 Billion Dollars. Half of that money has already been burnt up with virtually nothing to show for it except for allowing incompetent bankers to party on for a few more months. Ironically, the very same politicians who voted to burn up that money are now the loudest in complaining that the money is going to banks that were and are run by incompetents. The other day the President proposed that the incompetent executives who ran their banks into the ground should be limited to no more than $500,000 a year in compensation. That, of course, begged the question of why those incompetent executives are still in charge of the banks.
And now, the new Democratic President and those same Democratic Congressmen who voted for the last big virgin burning are running around saying that it's urgent that they act quickly to burn up another 900 Billion Dollars. The Democrats in Congress who are fueling up the great big barbie on which to burn the $900 Billion are the very same Democrats who did a very great deal toward creating the economic problems by fueling Fannie Mae and Freddie Mac with unlimited money to pour into the mortgage markets and by requiring Fannie and Freddie and the other banks to make loans to people who could not afford to repay those loans.
So, thus far they've burned up about $700 Billion, and shortly they will start burning up another $900 Billion. By the time they're done these two rounds of virgin sacrifices they will have burned up about $5,300 for every man, woman and child in the country. Think about that, they could have sent out checks for over $5,000 to you and every other person in the country. They could have sent $20,000 to every family of four; but instead they decided to burn the money.
They will tell you that "The Treasury" is providing the money they've been burning and the further money they plan to burn; but there are only two ways "the Treasury" can lay its hands on Benjamins to throw onto the barbie. It has to borrow the money, in which case somewhere down the road you're going to be taxed to pay that money back. Or it can print the money, in which case somewhere not very far down the road you're going to find out that inflation has reduced even further the value of your retirement money.
Once the Benjamins are burned up they're gone, just like those virgins.
In these more enlightened times the big men no longer throw virgins on the barbie. Instead they burn great quantities of your money as their answer to worries on the part of the great herd of the common people. Deep down almost everybody knows that burning great quantities of money will have no more effect on the problems than burning virgins would; but it makes people feel better to see the government "doing something." And, of course, it dampens down the urge on the part of the common people to put the blame for problems where it belongs.
Last fall fifty plus percent of the American people very properly rose up and kicked out the tired old Republican administration that dithered while our current economic problems developed. But they failed to toss out the Congressional Democrats who were every bit as responsible, and perhaps even more responsible, for the problems.
In October, to placate the economic gods, the then Republican President and the Democratic Congress made a midnight rush deal to burn 700 Billion Dollars. Half of that money has already been burnt up with virtually nothing to show for it except for allowing incompetent bankers to party on for a few more months. Ironically, the very same politicians who voted to burn up that money are now the loudest in complaining that the money is going to banks that were and are run by incompetents. The other day the President proposed that the incompetent executives who ran their banks into the ground should be limited to no more than $500,000 a year in compensation. That, of course, begged the question of why those incompetent executives are still in charge of the banks.
And now, the new Democratic President and those same Democratic Congressmen who voted for the last big virgin burning are running around saying that it's urgent that they act quickly to burn up another 900 Billion Dollars. The Democrats in Congress who are fueling up the great big barbie on which to burn the $900 Billion are the very same Democrats who did a very great deal toward creating the economic problems by fueling Fannie Mae and Freddie Mac with unlimited money to pour into the mortgage markets and by requiring Fannie and Freddie and the other banks to make loans to people who could not afford to repay those loans.
So, thus far they've burned up about $700 Billion, and shortly they will start burning up another $900 Billion. By the time they're done these two rounds of virgin sacrifices they will have burned up about $5,300 for every man, woman and child in the country. Think about that, they could have sent out checks for over $5,000 to you and every other person in the country. They could have sent $20,000 to every family of four; but instead they decided to burn the money.
They will tell you that "The Treasury" is providing the money they've been burning and the further money they plan to burn; but there are only two ways "the Treasury" can lay its hands on Benjamins to throw onto the barbie. It has to borrow the money, in which case somewhere down the road you're going to be taxed to pay that money back. Or it can print the money, in which case somewhere not very far down the road you're going to find out that inflation has reduced even further the value of your retirement money.
Once the Benjamins are burned up they're gone, just like those virgins.
Thursday, November 6, 2008
Quit the whining
Lately it seems everybody I talk with wants to whine about higher food prices. And they're right; in the past few years it's been getting outrageously expensive to go to the market and buy ripe mangos air freighted from Brazil and fresh lettuce from Mexico and hot chutney from East Africa which sometimes I can't even get; so I have to be satisfied with the inferior stuff from India.
And don't even get me started on how expensive it's getting to top off the shopping cart with those little frozen creampuffs and cashew nuts and seedless cucumbers from England and that breakfast cereal with the crunchy freeze dried strawberry slices that are so delicious they're probably harvested exclusively by virgins working under the light of the new moon.
Then there are the Costa Rican plutocrats who must think their Hearts of Palm are made of solid silver. Madonna! I just want the things to fancy up a salad, for God's sake. And the Sicilians - just how much more do they think I'm going to pay for their fattening damn Caponata in the little cans. The Chinese are a bit more reasonable with their Mandarin Orange segments; but even they're getting greedy.
So this week Linda and I stepped back into the past. We stepped back to simple, healthful, slow food, you might say. Slow, economical food, if I may say so myself.
Early in the afternoon on Sunday I started a pot of Goya Great Northern Beans. Ignoring the ridiculous recipe on the label, I rapid boiled a pound of beans in eight cups of water. Mexicans have a lot of guts even proposing a recipe for Pasta e' Fagioli, if you ask me, even if Mexicans are a tiny bit Italian, being diluted Spaniards who are basicly diluted Romans.
After about an hour, I drained and rinsed the beans with cold water so I could rough them up a bit by rubbing them between my hands to loosen the skins and float them away. Then I put the beans on the stove again with eight cups of water, a couple of teaspoons of salt and about half a cup of olive oil to slow simmer for a few hours until they pretty much disintegrated. That's the way Pop liked them, the way his mom made them, more like bean sauce with little broken up soft chunks than like intact beans in liquid.
A couple of hours before I shut off the heat under the pot I broke up a bulb of garlic and peeled and sliced the cloves. Like Mom and Aunt Mary R, I carefully sliced the first few cloves nice and thin; and then the slices might have gotten a bit thicker and less regular as I got tired of the task. I threw the garlic into the pot to simmer with the beans and then turned off the pot at about ten to cool down a bit so I could put it into the refrigerator at about midnight.
It was then a simple matter to come home on Monday at about 5:15, start a pot of water with a half a handful of salt in it for the Ditalini, dip about a third of the bean sauce into a saucepan to heat up, dump in a box of ditalini once the salted water was boiling, let the Ditalini boil for precisely the eight minute minimum for al dente specified on the package, poured off as much of the cooking water as I could without letting any of the Ditalini escape from the pot, poured in the now just boiling bean sauce to join the remaining water in with the Ditalini, and ladled the completed Pasta e' Fagioli into shallow bowls by 5:35.
Between us, Linda and I ate about one-third of the Pasta e' Fagioli for dinner, so the pot contained about six meals. There were also two more potfuls worth of bean sauce that I froze later. Figure two bucks for the beans and two bucks each for three boxes of Ditalini. Add in about three bucks for a cup and a half of olive oil and a buck for three bulbs of garlic. Total cost of eighteen meals? About twelve smackeroos. Sixty-six cents per meal.
And. . . I defy anyone to make a better meal, both from the perspective of health and from the perspective of taste, if taken with fresh Corropolese bread and a nice salad dressed with extra virgin olive oil and balsamic vinegar. Plus the garlic will keep away vampires and other pests.
So quit your whining about the cost of food.
Food is costing us more because we're eating like decadent Roman aristocrats. No, that's not right. We're eating far better than pampered Roman aristocrats because we also get to enjoy Hearts of Palm from Costa Rica which add a nice crunch and flavor to our salads. And we have Cheetos and Mountain Dew, which are lots better tasting than flamingo tongues and sour wine.
Lucullus would have swooned with pleasure if given access to the foods we consider common; but they wouldn't have made him any happier.
I'll let Epicurus explain; "If thou wilt make a man happy, add not unto his riches but take away from his desires."
Update: I forgot to say that I added a can of diced tomatoes to the pot early on in the process. I did that because I didn't have a little can of tomato paste or a medium can of tomato sauce. It's mostly for color anyway. Without something to make it a little bit red this soup looks pretty sickly. I'm too lazy to update the cost information above but a can of something tomato-ey costs about 60 or 80 cents, trivial.
Update 2: 80 86 64 88 :<(
And don't even get me started on how expensive it's getting to top off the shopping cart with those little frozen creampuffs and cashew nuts and seedless cucumbers from England and that breakfast cereal with the crunchy freeze dried strawberry slices that are so delicious they're probably harvested exclusively by virgins working under the light of the new moon.
Then there are the Costa Rican plutocrats who must think their Hearts of Palm are made of solid silver. Madonna! I just want the things to fancy up a salad, for God's sake. And the Sicilians - just how much more do they think I'm going to pay for their fattening damn Caponata in the little cans. The Chinese are a bit more reasonable with their Mandarin Orange segments; but even they're getting greedy.
So this week Linda and I stepped back into the past. We stepped back to simple, healthful, slow food, you might say. Slow, economical food, if I may say so myself.
Early in the afternoon on Sunday I started a pot of Goya Great Northern Beans. Ignoring the ridiculous recipe on the label, I rapid boiled a pound of beans in eight cups of water. Mexicans have a lot of guts even proposing a recipe for Pasta e' Fagioli, if you ask me, even if Mexicans are a tiny bit Italian, being diluted Spaniards who are basicly diluted Romans.
After about an hour, I drained and rinsed the beans with cold water so I could rough them up a bit by rubbing them between my hands to loosen the skins and float them away. Then I put the beans on the stove again with eight cups of water, a couple of teaspoons of salt and about half a cup of olive oil to slow simmer for a few hours until they pretty much disintegrated. That's the way Pop liked them, the way his mom made them, more like bean sauce with little broken up soft chunks than like intact beans in liquid.
A couple of hours before I shut off the heat under the pot I broke up a bulb of garlic and peeled and sliced the cloves. Like Mom and Aunt Mary R, I carefully sliced the first few cloves nice and thin; and then the slices might have gotten a bit thicker and less regular as I got tired of the task. I threw the garlic into the pot to simmer with the beans and then turned off the pot at about ten to cool down a bit so I could put it into the refrigerator at about midnight.
It was then a simple matter to come home on Monday at about 5:15, start a pot of water with a half a handful of salt in it for the Ditalini, dip about a third of the bean sauce into a saucepan to heat up, dump in a box of ditalini once the salted water was boiling, let the Ditalini boil for precisely the eight minute minimum for al dente specified on the package, poured off as much of the cooking water as I could without letting any of the Ditalini escape from the pot, poured in the now just boiling bean sauce to join the remaining water in with the Ditalini, and ladled the completed Pasta e' Fagioli into shallow bowls by 5:35.
Between us, Linda and I ate about one-third of the Pasta e' Fagioli for dinner, so the pot contained about six meals. There were also two more potfuls worth of bean sauce that I froze later. Figure two bucks for the beans and two bucks each for three boxes of Ditalini. Add in about three bucks for a cup and a half of olive oil and a buck for three bulbs of garlic. Total cost of eighteen meals? About twelve smackeroos. Sixty-six cents per meal.
And. . . I defy anyone to make a better meal, both from the perspective of health and from the perspective of taste, if taken with fresh Corropolese bread and a nice salad dressed with extra virgin olive oil and balsamic vinegar. Plus the garlic will keep away vampires and other pests.
So quit your whining about the cost of food.
Food is costing us more because we're eating like decadent Roman aristocrats. No, that's not right. We're eating far better than pampered Roman aristocrats because we also get to enjoy Hearts of Palm from Costa Rica which add a nice crunch and flavor to our salads. And we have Cheetos and Mountain Dew, which are lots better tasting than flamingo tongues and sour wine.
Lucullus would have swooned with pleasure if given access to the foods we consider common; but they wouldn't have made him any happier.
I'll let Epicurus explain; "If thou wilt make a man happy, add not unto his riches but take away from his desires."
Update: I forgot to say that I added a can of diced tomatoes to the pot early on in the process. I did that because I didn't have a little can of tomato paste or a medium can of tomato sauce. It's mostly for color anyway. Without something to make it a little bit red this soup looks pretty sickly. I'm too lazy to update the cost information above but a can of something tomato-ey costs about 60 or 80 cents, trivial.
Update 2: 80 86 64 88 :<(
Tuesday, July 29, 2008
Here's your chance to be a genuine billionaire
Everybody complains about not having enough money. Here's an article that explains where you can pick up enough loot to become the first billionaire on your block. We should import a few trillion dollars and use them to buy back all of the government bonds the Chinese have been buying with the dollars we send them in exchange for happy meal toys and other necessities.
http://edition.cnn.com/2008/WORLD/africa/07/19/zimbabwe.banknotes/index.html
http://edition.cnn.com/2008/WORLD/africa/07/19/zimbabwe.banknotes/index.html
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