Prices have gone to rents. As rent is a long term contract, that is a floor providing the upward spiral. https://www.yahoo.com/finance/news/rents-haircuts-americans-start-feel-165500571.html
Adding some thoughts:
Rent is a long-term contract, so when that goes up, it affects the CPI permanently.
Wages are a long-term contract, so when that goes to $15/hour, it affects the CPI permanently.
The stage has been set for a hyper-inflationary upward spiral. I do not think the Fed can stop it, despite their enormous creativity.
FYI, I think the gold market's recent turmoil is due to a difference between paper and physical. Note Bullion Direct's recent bankruptcy.
Tuesday, July 28, 2015
Friday, July 24, 2015
"Program" trading in action
One might notice the extreme similarity between the market action of the EUR/USD and the SPX500. Start from the steep drop off, notice the precise ups and downs. One is 5 minute, and one is 15 minute. This is due to volume differences between the two markets at that time of day. However, it is proof of computer control over price action.
How does that occur?
How does that occur?
Tuesday, July 21, 2015
Monday, July 20, 2015
Market players in the EUR/USD in the aftermath of gold's plunge
Note the Blue-circled area. Do we note the dramatic "character-change" of the market between the hours of 10am sharp and 1pm?
Who do you think that was?
Wednesday, July 15, 2015
A stock exchange in each state
Is it possible to sell shares in a corporation to residents domiciled in the state of incorporation without SEC regulatory oversight? Yes.
What does that do for a state's economy?
As I was raised in Texas, the best place for that stock exchange in Texas is San Antonio. With rememberances to the Alamo, it would be the most secure. That brings high-paying jobs to the area.
What does that do for a state's economy?
As I was raised in Texas, the best place for that stock exchange in Texas is San Antonio. With rememberances to the Alamo, it would be the most secure. That brings high-paying jobs to the area.
Monday, July 6, 2015
Promise Language - technical specifications, version 1.
Audit trail.
Real-time exchange.
Works for any transaction in any currency, language, or culture.
Tuesday, June 16, 2015
$15 hour minimum wage
As low-wage workers' income rises, so will their spending. This is going to affect the CPI.
The end-game of the USD is quickly upon us. The USA needs to do something drastic to restore trust in the system or the USD will hyperinflate. Right now, they have many existing long-term contracts denominated in USD, and that is preventing inflation, but it won’t last forever.
My suggestion has been, and will continue to be: a standard language to describe transactions between institutions: Promise Language. Once those long-term contracts adjust to a rising CPI, the potential of the USD remaining the “denominating currency” of the world diminishes.
The ONLY way out of this is to "de-clip the coinage". What I mean by that, is to maintain the value while providing capital improvements to grow the real economy to handle the excess money supply. Then you can raise taxes and pay back the debt. Simultaneously, the Fed will also have to change their accounting rules to back the currency with something tangible (not purchasable assets). I have the full plan. Will they do it?
The hyper-inflation has begun!
Sunday, May 31, 2015
A ledger to describe any financial transaction
The following will work for any transaction, meet regulatory approval, and provide any imaginable functionality. Stock market to grocery stores, retail and wholesale.
Stock Exchange example:
My offer 100 IBM. Offer 100 IBM at $10/share.
My terms $1000.
His counter $970. Bid 100 IBM at $9.70/share.
My counter $980. Offer 100 IBM at $9.80/share.
He accepts. Buyer hit the offer.
Example: I have 11 oranges and want 10 apples
My Offer 11 oranges
My Terms 10 apples
His Terms-escrow AAA Escrow Co.
His Terms-value 10 oranges
His Counter-value 9 apples
His Counter [computer-generated contract]
My Terms-escrow ABC Escrow Co.
My Terms-value 9 apples, 1 soda
My Counter-value 10 oranges
My Counter [computer-generated contract]
His Terms-value 8 oranges
His Counter-value 2 sodas
His Counter-value 9 apples
His Counter [computer-generated contract]
I Accept
Computer-generated contract:
He owes 9 apples, 2 sodas
I owe 8 oranges
Terms: ABC Escrow Co.
Database columns
EventID
TransactionID
CommerceID
EventType
Description
TimeStamp
Event Types
Offer
Terms (value, escrow)
Accept
Counter (offer, value)
Notice
Complete
Cancel
Deliver?
Receipt?
The above provides a full audit trail. All data is stored in text format. "Relational" data is stored in ancillary tables with the EventID for reference.
The above works intra-firm as well as inter-firm. It is an EDI format that operates on an event-basis, so it works the same on paper. The protocol allows flexibility in mode of transfer and security, without changing the structure.
Stock Exchange example:
My offer 100 IBM. Offer 100 IBM at $10/share.
My terms $1000.
His counter $970. Bid 100 IBM at $9.70/share.
My counter $980. Offer 100 IBM at $9.80/share.
He accepts. Buyer hit the offer.
Example: I have 11 oranges and want 10 apples
My Offer 11 oranges
My Terms 10 apples
His Terms-escrow AAA Escrow Co.
His Terms-value 10 oranges
His Counter-value 9 apples
His Counter [computer-generated contract]
My Terms-escrow ABC Escrow Co.
My Terms-value 9 apples, 1 soda
My Counter-value 10 oranges
My Counter [computer-generated contract]
His Terms-value 8 oranges
His Counter-value 2 sodas
His Counter-value 9 apples
His Counter [computer-generated contract]
I Accept
Computer-generated contract:
He owes 9 apples, 2 sodas
I owe 8 oranges
Terms: ABC Escrow Co.
Database columns
EventID
TransactionID
CommerceID
EventType
Description
TimeStamp
Event Types
Offer
Terms (value, escrow)
Accept
Counter (offer, value)
Notice
Complete
Cancel
Deliver?
Receipt?
The above provides a full audit trail. All data is stored in text format. "Relational" data is stored in ancillary tables with the EventID for reference.
The above works intra-firm as well as inter-firm. It is an EDI format that operates on an event-basis, so it works the same on paper. The protocol allows flexibility in mode of transfer and security, without changing the structure.
Friday, May 15, 2015
The Constitution of the United States and 16 to 1
The legal construct between gold and silver is a part of the monetary system's problems. There are two ways to handle this:
1. an amendment specifically rewriting that section of the Constitution to eliminate the gold/silver tender problems.
2. rewrite the Constitution in the language of 2015 and update the grammar. This would require re-ratification by all 50 states.
The point being, as the Federal Reserve Note has apparently lost its original connection with gold and silver coin, all payments of debts in Federal Reserve Notes could be declared unconstitutional.
Specifically, Article 1 Section 10:
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.
1. an amendment specifically rewriting that section of the Constitution to eliminate the gold/silver tender problems.
2. rewrite the Constitution in the language of 2015 and update the grammar. This would require re-ratification by all 50 states.
The point being, as the Federal Reserve Note has apparently lost its original connection with gold and silver coin, all payments of debts in Federal Reserve Notes could be declared unconstitutional.
Specifically, Article 1 Section 10:
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.
Tuesday, May 5, 2015
How to restore confidence in the banking system?
The National Institute of Standards and Measures was created by the US Treasury to define the gold and silver weight standards. Today, money is based on databases and contracts, so is it time for a standard?
A public standard describing monetary transactions defines the security and integrity of the information. It allows an audit trail that can be compiled between institutions.
From a monetary science perspective, the standard encourages liquidity and velocity of money. The cost of transactions decreases, due to its efficiency and removal of ambiguity (intentional or otherwise). With greater efficiency and transparency, trust can be restored.
The basic format of the proposed standard handles any type of financial transaction, conforms to contract law in all countries, and is readable by anyone.
A public standard describing monetary transactions defines the security and integrity of the information. It allows an audit trail that can be compiled between institutions.
From a monetary science perspective, the standard encourages liquidity and velocity of money. The cost of transactions decreases, due to its efficiency and removal of ambiguity (intentional or otherwise). With greater efficiency and transparency, trust can be restored.
The basic format of the proposed standard handles any type of financial transaction, conforms to contract law in all countries, and is readable by anyone.
Monday, April 27, 2015
How do you "steal" money from a bank?
The most effective way is to add 0's to a database record. No one loses any money, so it is easier to hide.
Depending on your access to the database (and resulting reports), an explanation for the source of money will have to be faked. Faking incoming transfers might be as simple as creating a record in the incoming wire or ACH credit transactions. The amount and frequency should not raise any red flags.
Auditors do not normally check deposits against the sourcing bank or entity. For example, you might have a deposit appear to come from Paypal on an ACH credit. It is highly doubtful the auditor would contact Paypal to verify the deposit.
This could be set up as an automated procedure to simulate an ongoing business of some kind. Be sure to pay your taxes on the "profits".
From the bank's perspective, they are not losing any money and in fact, will see your bank account as beneficial to their "reserves". Assuming you have thought through all relevant possible auditing checks, you could simply spend the account directly and not worry about "laundering" it. Alternatively, you could transfer it slowly into gold or out of the country and retire.
A public specification to describe financial transactions goes a long way to solving this problem.
Depending on your access to the database (and resulting reports), an explanation for the source of money will have to be faked. Faking incoming transfers might be as simple as creating a record in the incoming wire or ACH credit transactions. The amount and frequency should not raise any red flags.
Auditors do not normally check deposits against the sourcing bank or entity. For example, you might have a deposit appear to come from Paypal on an ACH credit. It is highly doubtful the auditor would contact Paypal to verify the deposit.
This could be set up as an automated procedure to simulate an ongoing business of some kind. Be sure to pay your taxes on the "profits".
From the bank's perspective, they are not losing any money and in fact, will see your bank account as beneficial to their "reserves". Assuming you have thought through all relevant possible auditing checks, you could simply spend the account directly and not worry about "laundering" it. Alternatively, you could transfer it slowly into gold or out of the country and retire.
A public specification to describe financial transactions goes a long way to solving this problem.
Wednesday, April 8, 2015
What if?
The Bank of Thailand stopped accepting digital baht as settlement internationally?
That could lead to an "external currency" and an "internal currency". The neighboring countries might handle the "exchanges".
If prices are stable internally, how do you make sure the rice farmer receives the same price on exports?
That could lead to an "external currency" and an "internal currency". The neighboring countries might handle the "exchanges".
If prices are stable internally, how do you make sure the rice farmer receives the same price on exports?
Sunday, February 15, 2015
How do you get employees to work hard for you?
Pay them as little as possible while promising a long term escape.
If you pay them too much, they will retire and stop working.
If you pay them to the point of comfortable, they won't work as hard.
(Note: the above is not my idea, it is how the world works today.)
If you pay them too much, they will retire and stop working.
If you pay them to the point of comfortable, they won't work as hard.
(Note: the above is not my idea, it is how the world works today.)
Sunday, January 4, 2015
Open letter to the board members of the Federal Reserve
Current policy is a step in the right direction but will lead to hyperinflation in the next few years.
Maturing bonds are apparently $3.5 billion this year. Replacing them with created cash will place $3.5 billion in the hands of bond holders who will spend it. That is inflation, but not a whole lot.
In a few years, maturing bonds will become much more significant. With $18 trillion outstanding, when will the first $1 trillion maturing occur? You have that data.
THE POINT:
You need an accounting rule or legislation that will stop the cash creation. The Fed can borrow from another institution against its assets OR they can sell assets and purchase bonds.
So, when the Fed replaces the bonds that reach maturity they have 3 choices:
1. use the proceeds from the maturing bond
2. borrow against other assets
3. sell other assets for dollars
If you'd like more solutions, let me know.
Sincerely,
Andrew Bransford Brown
PS. the number of Wall Street firms with fees on top of fees and selling forward every penny on the anticipated transactions is incredible. Get back to basics, toss out the middle man, and the Treasury and Federal Reserve would reap a windfall.
Maturing bonds are apparently $3.5 billion this year. Replacing them with created cash will place $3.5 billion in the hands of bond holders who will spend it. That is inflation, but not a whole lot.
In a few years, maturing bonds will become much more significant. With $18 trillion outstanding, when will the first $1 trillion maturing occur? You have that data.
THE POINT:
You need an accounting rule or legislation that will stop the cash creation. The Fed can borrow from another institution against its assets OR they can sell assets and purchase bonds.
So, when the Fed replaces the bonds that reach maturity they have 3 choices:
1. use the proceeds from the maturing bond
2. borrow against other assets
3. sell other assets for dollars
If you'd like more solutions, let me know.
Sincerely,
Andrew Bransford Brown
PS. the number of Wall Street firms with fees on top of fees and selling forward every penny on the anticipated transactions is incredible. Get back to basics, toss out the middle man, and the Treasury and Federal Reserve would reap a windfall.
Friday, January 2, 2015
Ending quantitative easing
It appears that the new Fed policy is to end the purchase of new bonds. So, they are not printing money any more. As long as that policy holds tight.
As the Treasury has a $1 trillion shortfall in revenue, they will be forced to sell new bonds to the general market. Hopefully, the market will place pressure on Congress to balance their budget.
That might lead to a strong dollar.
As the Fed appears to be maintaining static balances of T-bonds, I hope they aren't creating cash to replace the bonds as they mature. If the Treasury pays the principal, the Fed can use the proceeds to replace it.
As the Treasury has a $1 trillion shortfall in revenue, they will be forced to sell new bonds to the general market. Hopefully, the market will place pressure on Congress to balance their budget.
That might lead to a strong dollar.
As the Fed appears to be maintaining static balances of T-bonds, I hope they aren't creating cash to replace the bonds as they mature. If the Treasury pays the principal, the Fed can use the proceeds to replace it.
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