Morton Fox (mortonfox) wrote,
Morton Fox

It must be Fall because that's what the Dollar is doing

Firefighters' Memorial

This afternoon, I went to Quiznos in Ramsey to get my free birthday chocolate chip cookie. I also got a baja chicken sub to go with it. I have more birthday coupons from local merchants, but in truth, not all those coupons are worth redeeming. I'll use the ones that are worthwhile. A funny thought occurred to me: The word "baja" in Bahasa Malaysia means fertilizer. Since many American restaurant chains have expanded overseas, I wonder if any of them are offering baja chicken or baja anything, for that matter, back in the old country.

I have to seriously consider transferring my account out of Ameritrade Izone. A few days ago, I received a letter from them saying that they recently discovered unauthorized code -- a security breach allowing an outsider to retrieve certain customer information -- in their systems. However, it turns out that an IT security expert warned them about the problem as far back as January 2006, which is not what I would call "recent". (thanks to Consumerist for the link) Whether TD Ameritrade was attempting to cover up the security breach or just exceptionally tardy at alerting its clients, it does not look good for them. Early 2006 was also when I started receiving stock scam spam on the email address I was using at Izone. Fortunately, it was a disposable email address, so I merely disabled it and started using a different one. Anyway, where do we go from here? I wonder if Zecco has gotten past its growing pains yet.

Looks like this was the headline of the day: Canadian Dollar Reaches Parity With U.S.

I would express surprise at the dramatic drop in the US dollar, but in truth, I would've been quite remiss if I hadn't seen this coming and started preparing for it as far back as February 2006, when Bernanke was sworn in as Federal Reserve chairman. In a speech titled "Deflation: Making Sure 'It' Doesn't Happen Here", which he delivered in November of 2002, he said that:
"... the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
He went on to detail the various ways in which the Federal Reserve could increase money supply. And yes, that's also where the "Helicopter Ben" name, as the hard money / goldbug community likes to call him, came from. So, although Bernanke may have pretended to be an inflation hawk at the beginning of his term and actually fooled some precious metals and commodity traders in mid-2006, he's as dovish and monetarily loose as they come. The sad part is he already caved into the demands of big banks and hedge funds even while we're still a year away from seeing the light at the end of the tunnel of ARM resets. Watch out for more crises and market-soothing Fed actions to follow.

If you think the Canadian Dollar and the Euro are getting stronger, you've gotten the wrong impression. In reality, all fiat currencies eventually arrive at their fundamental value, which is zero. What distinguishes one currency from another is the rate at which it falls. This video, Money As Debt, explains how fiat currencies work better than I could. (Well, at this time of night anyway. :) Props to Mogambo Guru.) Keep watching until at least three-quarters into the video to learn why we're having such problems with debt and unbounded monetary expansion. I disagree with the video where the narrator dismisses the idea of a return to the gold standard because I don't think he gave it much of a chance, but apart from that, it's quite informative and entertaining, and you won't look at money the same way again.

As an aside, looks like I'll soon get to exchange all those Canadian coins that people have slipped to me in change over the years and not lose money. (well, okay, in USD terms anyway)
Tags: baja chicken, brokerage, computer security, dollar devaluation, economics, inflation, izone, monetary policy, quiznos
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