Friday, August 27, 2010

Potpourri For a Friday

1. On all prior trips to China, I tried to find something to buy with my renminbi (RMB) bank notes, lest I return home with “funny money.” That appears to have been a mistake. I should have kept them for future use. RMB notes will steadily increase in value against the dollar and become more widely used as a means of payment around the globe.

2. Economists and government officials are in a tizzy about the unwillingness of banks to lend money to small businesses that are the engine of job creation in America. (Large corporations are flush with cash and don’t need to borrow.) The September 2010 “Monetary Trends” newsletter of the St. Louis Fed is titled “The Monetary Base and Bank Lending: You Can Lead a Horse to Water...” A better characterization might be that lecturing banks on the need to lend money to jump start the economy is akin to lecturing rats about the benefits of proper hygiene to prevent plague.

3. The federal government has heavily involved itself in the U.S. economy during the past decade. Its interventions includes banks, vehicles, health care, financial regulation, and so on. This represents a creeping (accelerating) collectivization of society. Star Trek devotees would say that we are becoming Borg, being assimilated into the collective. Resistance is futile. The Borg does not allow for individual identity.

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