Ricco's World

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This is just a test to see that I can post as my RICCO user, instead of the WEBULITE admin account.

for all good men

Hey Steve,

I notice in your blog post below you said the author of the article said that Canada has no central bank. But Bank of Canada, set up in 1934 is Canada's Central Bank.

Also, Bank of Scotland is an odd example, because Scotland is part of the United Kingdom and it's relationship with England, Northern Ireland, Scotland, and Wales is so interrelated, that using it as a independent nation example, certainly presents problems.

Do you know of any nations that DON'T have a Central bank? I was looking at this List of central banks, and didn't notice any big nations missing. Do you know of any?

It seems that all nations now have central banks. They are part of our world. Just like nations evolved to eliminate slavery, to create time off on weekends, to create manditory education, etc... Our world progresses and as discoveries are made and our understanding increases we create new institutions. Sometimes, one nation may try something, and it may not catch on. But something like central banking does not seem to be one of these things. It seems that ever nation in the world now has a central bank. That is is something that is part of our world.

One thing I notice about libertarian types is that they seem to want to bring back the past. you mentioned the author talking about 1893 proposed law changes that could have helped. Think about it our Federal Reserve was created back in 1913. It was part of the progress of the world. Now, as I understand it, every nation in the world has a central bank. Yet this author wants to turn back the clock. It's like the Luddites that talk about the great old days before cars.

I have noticed this as a common recurring theme in libertarian thinking. the constant desire to go back to some set of things that existed 100+ years ago or more. It definately seems that libertarians are fighting a war against time.

Cheers!

/////

Do We Really Need a Central Bank?

I recently listened to this lecture given by Steve Horowitz at the Future of Freedom Foundation. In it, he gives a brief history of banking in the US, describing how and why the Federal Reserve was created. He then explains the concept of free banking, which he offers as a superior alternative to our current system.

If you have the time, I highly recommend you give it a listen. I'll just share a few points and observations:

First, he warns that economic critics of the Federal Reserve have some unsavory company. Critiques of the Fed are often filled with what he refers to as "wingnuttery." All manner of conspiracies seem to be believed by anti-Fed folks, ranging from the Illuminati, One World Order types, to rich banking families. Horowitz laments this situation, because it allows critics of the Fed to be dismissed as nut jobs.

The asserts that the simple fact of the matter is that there were some government interventions in the banking system that had unintended and undesirable side effects. These were bond collateralization requirements and restrictions on nationwide branches. These laws created resulted in bank panics. Having become aware of the problems, from 1893 through 1907, there were proposals change the law, which would have gone a long way toward solving the problem, but the proposals could not get traction. Small town bankers were adamantly opposed.

Because the removal of the problematic laws was off the table, talk then turned to the idea of a central bank. Again, he claims that there was no conspiracy. The idea of a central bank was just another Progressive Era solution, where government appointed experts using "scientific methods" were entrusted to solve our nations problems.

In the second half of the lecture, Horowitz proposes an alternative to central banking. He describes a system called "free banking". In such a system, individual banks issue not only deposits, but paper currency. This paper currency would be redeemable in some form of "outside money" It's likely that this would be some commodity, most likely, but not necessarily, gold.

He also points out that this system would be a fractional reserve one. While many Austrian economists believe fractional reserve banking causes credit bubbles, Horowitz contends that this is only true when fractional reserve banking is combined with a central bank. The problems, he contends, are not because of the fractional reserve part but because of the central banking part.

Free banking would operate just as any other business, no special banking laws. Banks would compete to supply the amount of money that customers wish to hold. Banks would optimize profits by issuing the "right" amount of money. Too much, and they suffer liquidity problems. Too little and they suffer opportunity costs.

Horowitz cites the banking systems of Scotland and Canada as actual working examples of this sort of banking. He also mentions that, while the idea of bank issued currency is strange to those who have lived under a central bank for so long, a debit card is in fact a form of bank issued currency. He notes that the increasing use of debit cards will make such a free banking model increasingly easier to implement.

Overall, a good talk, which I highly recommend.

Back in July 2008, the government of the Czech Republic signed an agreement with Washington allowing the construction of a U.S. radar station on Czech territory, part of then-President George W. Bush's missile-defense plans. The very next day, the Russian energy giant Gazprom cut off natural gas supplies to the Czechs, who depend on Russia for 84 percent of their gas. The Kremlin had already stated its opposition to U.S. anti-missile installations in Central and Eastern Europe in no uncertain terms, but Gazprom's move put economic bite behind the bark.

It's stories like this one that have made many in the West wary of Gazprom, the so-called "national champion" of Russia's natural gas sector. Ever since the collapse of the Soviet Union, the Kremlin has increasingly relied on energy as a card in its foreign-policy hand. You can hardly blame it -- especially when it comes to gas. Russia owns 25.2 percent of the world's proven reserves, and virtually all of those resources are concentrated under the aegis of Gazprom, making it the world's largest producer of natural gas. Although private shareholders own big chunks of the company, the Russian state holds a controlling stake of just over half the shares, and no one has ever doubted that Gazprom's managers are happy to follow government orders. No less than Prime Minister Vladimir Putin argued in his dissertation that state control of natural-resource companies (if not necessarily outright ownership) could be used to "restore [Russia's] former might." When Gazprom execs declare, as they've been known to do, that "what's good for Gazprom is good for Russia," they aren't just blowing smoke. Gazprom is the country's biggest taxpayer, accounting for a quarter of Russia's national budget.

Western worries about Gazprom's political power have been, ahem, fueled by the fact that the corporation not only supplies the lion's share of Europe's natural gas, but also controls the all-important pipelines that bring the strategic commodity to consumers. When Gazprom turns off the spigot, entire countries go dark. That happened to hapless Bulgaria, for example, during one of Gazprom's recent pricing disputes with Ukraine. (Bulgaria is 99 percent dependent

on Russia for natural gas, and inordinately dependent on natural gas for home heating. When the conflict between Kiev and Moscow shut down the east-west pipeline to punish Ukraine, Bulgarians ended up freezing.)

And that was only logical, says Harvard University professor and long-time Russia-watcher Marshall Goldman: "Gas is not as fungible as oil. With gas you're limited to the pipeline. And the owner of the pipeline has a monopoly along the route." In Central and Eastern Europe, more often than not, the owner is Gazprom. The company boasts a network of 95,000 miles of pipelines -- enough to circle the globe four times -- that it runs from a huge control room in its headquarters in southwest Moscow.

Small wonder that, during the years of high energy prices, Gazprom became a world-beater. In 2008, its market capitalization ballooned to $300 billion, making it the third-largest company on the planet, bigger than Shell, Microsoft, or General Electric. Gazprom used its economic muscle and its control of Eastern European pipeline networks to embark on a shopping spree, snapping up chunks of energy companies around Europe. Former German Chancellor Gerhard Schroeder signed up to run a Gazprom-affiliated company soon after leaving office. And Gazprom execs touted grandiose plans to push into far-away markets in the Americas and Southeast Asia.

What a difference a year makes. The global economic downturn has hit Gazprom shockingly hard. Not only did the worldwide demand for energy crater, but doubts about market turbulence in Russia also spooked investors. The two trends have put the gazmeny in a bind. Whereas more diversified energy corporations have managed to weather the storm, Gazprom's market valuation dropped to just $90 billion, and its global rank in terms of size dropped from third to somewhere in the low 30s. Some analysts compare its slide to the popping of the dot-com bubble at the turn of the century.

Now, Gazprom has had to scale back some of its more ambitious plans -- even as the company acknowledges that it urgently needs to upgrade aging infrastructure and develop new sources of production. "At least until 2013 things are going to be tough," says Jonathan Stern, a leading Gazprom expert at the Oxford Institute for Energy Studies. European demand has collapsed to such an extent that some customers aren't even taking the amounts stipulated in their contracts with the Russians -- raising the prospect that Gazprom might need to try to fine them for not filling their orders. It has served as a salutary reminder that Gazprom is just as dependent on those pipelines as its customers are. In the past, the company has depended on sales in Western Europe for some 60 percent of its revenues. Without them it suddenly doesn't look quite so strong.

One might reasonably object that Gazprom's fortunes will revive once a global economic recovery spurs renewed demand for energy. Yet some experts argue that something fundamental has changed. "[T]he global gas market has steadily moved from a seller's to a buyer's market," writes analyst Roderick Kefferpütz in a recent report for the Centre for European Studies. The pre-crisis era of high energy prices spurred a worldwide investment boom in expensive liquefied natural gas infrastructure, and in 2009, some experts say, those investments helped create something that didn't really exist before: a truly global market for natural gas, independent of pipelines.

"Ten years ago no one could suggest that Australia could sell gas to Europe or the United States," says one analyst at a Western investment bank whose company didn't authorize him to speak on the record. "Back in 2000, gas was not a globally traded commodity. This is the year that changed." The trend has also been driven, he says, by an enormous boom in the extraction of natural gas from shale in the United States and Canada. "Gazprom executives call shale gas production a 'myth,'" the analyst says. "I don't think they realize how dramatically the gas market has been transformed."

The result, as the International Energy Agency's latest World Energy Outlook report puts it, is a "looming gas glut" that "could have far-reaching consequences for the structure of gas markets and for the way gas is priced in Europe and Asia-Pacific." Europe, meanwhile, has been pushing ahead with the liberalization of its energy markets, quietly providing for greater competition in the once-stolid sector. The Europeans have started building pipelines to "energy island" countries, like Bulgaria and Hungary, which were previously dependent solely on Gazprom. The Europeans are also pushing ahead with long-term plans for the Nabucco pipeline, which aims to widen European market access to suppliers in the Caspian Sea region (who currently pay to use Gazprom's pipelines) and the Middle East. That wouldn't obviate the need for Russian gas, but would certainly help reduce the dependency.

None of this, of course, means that Gazprom is sliding into insignificance. The sheer immensity of its existing reserves will see to that. "If you want to be a player in the gas business, you'd better make sure you have some sort of relationship with Gazprom," says Stern, who remains decidedly bullish about the company's medium- to long-term prospects. What it does mean, though, is that Russia's national champion will find itself facing an increasingly unpredictable energy environment. Natalia Milchakova, senior oil and gas analyst at the Otkritie Financial Corporation, sees the biggest risk for Gazprom in coming years in its own domestic market, where government regulations have long kept prices artificially low for Russian consumers. Gazprom has been pushing for years to have domestic prices raised to market levels. But the Kremlin, clearly fearing the likely effects on social stability, has kept postponing the sort of major liberalization that would really boost the company's bottom line.

In any case, the apparent trend toward a more global market for natural gas should be good for Gazprom. Over the long run, anything that gets Gazprom behaving more like a normal, commercially oriented energy company, and less like the Kremlin's favorite political proxy, is probably good news for Gazprom shareholders. And maybe, just maybe, that wouldn't be so bad for Russia, either.

Ok folks,

I think I got a handle on things. I don't think I can make the "from" be webulite.com, unless I have people login with their twitter id. And that defeats the whole point that I went through in the last week or so, of allowing people login to my system itself. I think I can make the from "The Web" though, instead of "Drupal". But that is not a HUGE deal.

The next step is to once again, reconfigure my twitter interface so that it recognizes my API credentials, and does not make all posts "from Drupal", but instead, from webulite.com. This might require, if I remember right, me finding the next version of the twitter modules. But let's see.

Ok... believe it or not I an not upgrading, but degrading. I know that at one time, I had the ability to update my twitter account from my blog entries. And, after I made a bunch of changes, I upgraded to the latest and greatest twitter interface module. Well... it didn't work.

So I thought... let me find the oldest copies of the modules I can find on my local machine, and install them. Since, back when I began, I think the module worked right out of the box. Well... with a bit of tweaking. So, I found some old code, and am trying that.

The good news is that it seems to identify my account better than the new code, so I actually have hopes that this blog entry WILL get posted to twitter. If that happens then I can rethink how I tailored the twitter post content, and how to re-change that again.

Cheers! Ricco

Made lots of changes to the system in the last week, and today, I have even gone back and updated the Twitter update module. I have made some changes to how it works, and I am really curious of it's going to work. Often it takes me two or three (really 93) tries to get things working right.

Well... welcome me back to twitter... if this ever gets there.

Cheers! Ricco

Ricco wonders... The article below from get-your-pitchforks, talks about recommending going to a gold standard. Are there any countries that are on the gold standard? I thought the gold standard was abandoned. I did a quick Google search, and no nations popped out, but i thought I would just make a note here, and look a bit more another time. wikipedia's article on Gold standard doesn't seem to list any nations on it either. Are there any countries in the world on the gold standard? The below article got me thinking.

External content added below : link to original source

I recently came across a Wall Street journal article by James Grant discussing the impending demise of the dollar. I strongly suggest that you go read the whole thing. Now.

Grant provides an interesting insight on how a commodity money ensures a system of international self-regulation in trade. He observes that What should have been happening over the last few decades, as we spent more than we produced, is that interest rates would rise in the USA, a market signal that would encourage consumers to save more. This would simultaneously stem the outflow of money from the country and rebuild the stock of loanable funds to allow business to increase productivity.

To understand the scrape we are in, it may help, a little, to understand the system we left behind. A proper gold standard was a well-oiled machine. The metal actually moved and, so moving, checked what are politely known today as "imbalances." Say a certain baseball-loving North American country were running a persistent trade deficit. Under the monetary system we don't have and which only a few are yet even talking about instituting, the deficit country would remit to its creditors not pieces of easily duplicable paper but scarce gold bars. Gold was money—is, in fact, still money—and the loss would set in train a series of painful but necessary adjustments in the country that had been watching baseball instead of making things to sell. Interest rates would rise in that deficit country. Its prices would fall, its credit would be curtailed, its exports would increase and its imports decrease. At length, the deficit country would be restored to something like competitive trim. The gold would come sailing back to where it started. As it is today, dollars are piled higher and higher in the vaults of America's Asian creditors. There's no adjustment mechanism, only recriminations and the first suggestion that, from the creditors' point of view, enough is enough.

Another important insight he provides is one I've discussed before. Under a paper money regime, citizens quickly learn that holding on to dollars is a fool's game. Along with jettisoning "old fashioned gold", they also jettison time-tested behaviors, such as saving money for a rainy day. Instead they become a nation of overspenders. When the Fed keeps interest rates a near zero, it forces people to speculate with their money rather than put it in the bank. In what do they speculate? Anything. Most recently, real estate.

Let me interrupt myself to say that I am not now making a bullish investment case for gold (I happen to be bullish, but it's only an opinion). The trouble with 0% interest rates is that they instigate speculation in almost every asset that moves (and when such an immense market as that in Treasury securities isn't allowed to move, the suppressed volatility finds different outlets). By practicing price, or interest-rate, control, the Bank of Bernanke fosters a kind of alternative financial reality. Let the buyer beware—of just about everything.

I'm glad to see a mainstream financial paper like the Wall Street Journal discussing this topic. Hopefully, it won't be a case of too little too late.

Currently trying to figure out why all the articles being imported by the feedapi are loosing their html P tag or paragraph end.

It gets completely lost. have tried adjusting both the feed content types and the feeditem content types, and played around with mediawiki, full html, and filtered html (including escaping and filtering tags). Without the new paragraph markers, these stories are going to be really annoying to read.

I'm also unhappy with the format of the source on the new items list. Having to have http://... waste's a great deal of space. I actually want to blog name not even it's URL. Perhaps I can find the code to the view in the cpanel, and simply hack it to change the variable? Would actually have to change the SQL select and all, but it would be worth it if it cannot be done with the form interface. I will not be able to take looking at that page for too long.

Oh well... the struggle goes on

... @3.55, ok, I fixed the P thing. Adjusted the feedapi admin setting to allow html, then I directed new feed items to be created as filtered html, and I added P and BR to the allowed tags in that filter.

ok... on to the view issue.