Sunday, February 16, 2003

How Money Works. Below is an article I wrote a number of years ago about how the money system works and what is wrong with it. Maybe I'd put more nuances in it today, but I still believe it is basically correct. Most people don't really have any clue about money and think it is being 'made' by doing good work. It isn't. It is being made by borrowing it from somebody who doesn't have it, but who invents it out of thin air. Which I think is alarming. I'm no economist, but I haven't heard anybody educated in economics challenge this. The feedback I've mostly gotten from experts is that it all doesn't really matter. Anyway, read on..."Some of the problems with our prevalent economic system as I understand it is this:Money is created by banks. In part by central banks who can make up amounts and lend them out, mainly to central governments, but also to regular banks.The worst problem is not that the central banks are mostly outside the control of any elected representatives of the population, even though that is certain cause for some suspicion and alarm. In some areas, such as the U.S., the central bank is a completely privately owned institution, owned by its member banks. The central bank of central banks, the Bank of International Settlements in Basel Switzerland, is also not controlled or owned by any government, but is a corporation with stocks. It is located on land that is not considered part of Switzerland or any other country, it is not answerable to any public body, and it does its business in secret.However, the worst problem is that interest is being charged for the money that is lent out. It might well be a good idea to use fiat money, that is, money that doesn't have any inherent value, but is only valuable because we trust that it is. All currencies on the planet are, as far as I know, fiat money. However, the problem is the interest. more > [Ming the Mechanic] 8:35:31 PM    comment []

Bank for International Settlements. Few people seem to be aware of the existence of the Bank for International Settlements, also known as the BIS Bank. It is the central bank of central banks, located in Basel, Switzerland. It is no longer quite as unknown and hidden as it was. It has its own website now. When I last searched on the web there were only a couple of thousand entries, but now there's a lot more. The article below, 'Ruling the World of Money' which you also find here, is 20 years old, but gives a good overview of what the BIS bank is about. The membership of this club is restricted to a handful of powerful men who determine daily the interest rate, the availability of credit, and the money supply of the banks in their own countries. They include the governors of the U.S. Federal Reserve, the Bank of England, the Bank of Japan, the Swiss National Bank, and the German Bundesbank. The club controls a bank with a $40 billion kitty in cash, government securities, and gold that constitutes about one tenth of the world's available foreign exchange. The profits earned just from renting out its hoard of gold (second only to that of Fort Knox in value) are more than sufficient to pay for the expenses of the entire organization. And the unabashed purpose of its elite monthly meetings is to coordinate and, if possible, to control all monetary activities in the industrialized world. more > [Ming the Mechanic] 8:32:44 PM    comment []

An interesting email I received today.  A different concept, but I really wonder how effective it would really be.  I also don't know how people could put this into practice without help.  For instance, where do the Mom and Pop's get their gas?  What about chains like Super America, Casey's, Tom thumb etc get their gas?  This is an interesting email I received today that really got me thinking!! Where to buy Gas   Why didn't George W. think of this? Gas rationing in the 80's worked even though we grumbled about it. It might even be good for us! The Saudis are boycotting American goods. We should return the favor. An interesting thought it to boycott their GAS. Every time you fill up the car, you can avoid putting more money into the coffers of Saudi Arabia. Just buy from gas companies that don't import their oil from the Saudis. Nothing is more frustrating than the feeling that every time I fill-up the tank, I am sending my money to people who are trying to kill me, my family, and my friends. I thought it might be interesting for you to know which oil companies are the best to buy gas from and which major companies import Middle Eastern oil (for the period 9/1/00 - 8/31/01): Import from Middle Easted Shell.........................205,742,000 barrels Chevron/Texaco.........144,332,000 barrels Exxon /Mobil..............130,082,000 barrels Marathon/Speedway...117,740,000 barrels Amoco......................62,231,000 barrels If you do the math at $30/barrel, these imports amount to over $18 BILLION! Here are some large companies that DO NOT import Middle Eastern oil: Citgo....................0 barrels Sunoco............. ..0 barrels Conoco............. . 0 barrels Sinclair............... 0 barrels BP/Phillips.......... 0 barrels Hess...................0 barrels All of this information is available from the Department of Energy and each is required to state where they get their oil and how much they are importing. They report on a monthly basis. Keep this list in your car; share it with friends. Stop paying for terrorism............. But to have an impact, we need to reach literally millions of gas buyers. It's really simple to do. Now, don't wimp out at this point...keep reading and I'll explain how simple it is to reach millions of people!! I'm sending this note to about thirty people. If each of you send it to at least ten more (30 x 10 = 300) ... and those 300 send it to at least ten more (300 x 10 = 3,000) ... and so on, by the time the message reaches the sixth generation of people, we will have reached over THREE MILLION consumers! If those three million get excited and pass this on to ten friends each, then 30 million people will have been contacted! If it goes one level further, you guessed it..... THREE HUNDRED MILLION PEOPLE!!! Again, all you have to do is send this to 10 people. How would all that take? If each of us sends this e-mail out to ten more people within one day all 300 MILLION people could conceivably be contacted within the next eight days! 8:38:26 AM    comment []

Happening. Yesterday we held the second Happening on the topic of Emergent Democracy formed by Joi Ito.  There were 23 participants from Asia, Europe and the US in an 1 1/2 hour event.  This post discusses the modes and means of the Happening, not the topic or content -- with an aim to discover productive patterns of use. A Happening is an ad hoc multi-modal group event.    Three modes were used actively during the event for different means: Mode 1: Conference Call 17 participants (some elected not to participate because of the cost of international calls) Mean: moderated turn-taking discussion Mode 2: Chat 23 participants Mean: moderating turn-taking for the call Mean: backchannel open discussion Mean: signalling and voting Mean: whispered one-to-one communication Mode 3: Wiki 23 participants Mean: open note-taking Mean: linking to resources Mean: forming creative network action groups Mean: a place for continuity By using multiple modes of communication simultaneously to foster group collaboration the bandwidth of conversation is increased.  As was the case with Clay Shirky's social software summit that used In-Room Chat as a Social Tool, similar patterns were observed with social software in distributed use.  Clay's central observation, that "under certain conditions, groups can find value in participating in two simultaneous conversation spaces, one real and one virtual" was confirmed by a vote of participants.  In this case, the real conversation space was the conference call and the virtual was chat and wiki.  The first Happening, which had 7 participants, used the conference call and the wiki as the modes of communication.  This conversation bandwidth was sufficient to be productive and the wiki captured relevant notes and resources.  It also provided continuity for the next Happening, including serving as a launching point for a Topic Exchange that aggregated disparate posts on the topic, and coordinating logistics. The second Happening scaled out of the limits of a creative network (12) into a social network (12-150) {there is a big assumption here, that conversation patterns can be mapped to relationship patterns}.  With 17 participants it would have been impossible to have an unmoderated call to regulate signal to noise.  The addition of chat as a mode allowed the conversation space to scale.  Joi to moderated turn-taking using "HAND" and "NEXT" signals.  The use of green, yellow and red signal cards embedded in chat provided additional signals for the moderator.  While the call was the primary conversation, chat also provided a useful backchannel that did not rely on moderation and turn-taking.  The moderator would often turn to the content of the chat session to pick up on issues for discussion during the call, particularly when the chat diverged from the call in numbers of messages or topic.  The use of multiple modes takes some adjustment, in dealing with interruptions, multi-tasking and loci of attention.  Dan pointed out that younger generations who grow up with IM may not have this problem.  My suggestion is that for each participant they are going to have their own balance in how they observe and communicate and they budget their attention from mode 1 to 3 in descending order.  The call is the primary mode and if you miss something in the chat or wiki during the session you can return to it later. One of the weaknesses of a call or chat by themselves is that conversations are lost when they end.  The use of a wiki lets the conversation continue and gives it focus.  Chat sessions are logged as wiki pages.  Wiki note pages record the points from the call as well as the wiki.  Multiple wiki note pages provide different perspectives on what occured.  And the ability to easily edit wiki pages allow corrections and additions.  Similarly, blog-based conversations have a tendency to end when they are "below the fold," or off the homepage of a weblog.  This can be offset through categories or metablogs approaches like Topic Exchange that aggregate conversations.  Wiki pages provide persistent focus for conversations.  Often times ad hoc groups form around an issue and gather to communicate.  Talk is cheap and transforming it into action is one of the greatest challenges.  Transforming a social network conversation into a creative network action is best supported by a wiki pledge page for collaboration.  Individuals can easily refactor and organize personal views of creative and social network resources for their own productivity. Joi rightly determined that Happenings should be kept ad-hoc, when issues discussed by wiki and blog reached an "escape velocity" that required a high bandwidth conversation to advance.  We are also delaying the explicit definition of the ends of this conversation to allow the modes and means to be further explored.  As patterns emerge from this topic and the tools are formed, they could support goals consistent with the topic such as supporting New England style town hall meetings... but it begins with evolving the tools and testing uses. [Ross Mayfield's Weblog] 8:31:53 AM    comment []

Is the US economically motivated to fight a war in Iraq?  I have pointed out lots of information on this weblog that has supported this conclusion.  However, on closer inspection it clearly doesn't hold water.  A simple balance sheet of costs vs. benefits is in order. Costs: Direct costs of the military operation.  CBO estimates imply that a 3 month war and 5 year occupation would cost as much as ~$300 billion.  Unlike the previous Gulf war, where the US received underwriting from allies, the US taxpayer will likely pay all these costs (in 1991 the US taxpayer only paid 12% of the cost of the war). Direct costs of the peacekeeping operation.  I haven't see a full accounting of the costs anticipated in rebuilding Iraq.  A "from the ground up" estimate of the costs of rebuilding the oil industry alone (if destroyed) is estimated to be $10 billion.  It could easily cost $30 b or more to rebuild after the war and repair infrastructure that has deteriorated during the years of sanctions. Lost economic opportunity.  By far, the greatest potential cost is indirect economic impact.  The economic overhang caused by the impending war has been terrible.  These costs are incurred via a variety of sources.  Higher oil prices in the short term due to fears of potential or actual disruption in supplies.  A depressed stock market.  Lower economic growth as businesses halt investment and consumers put off purchases.  Economic dislocation as companies, that would be healthy otherwise, go bankrupt as the result of global turmoil (the airlines, etc.).  Even if we restrict this to the impact of higher oil prices (on average $5 higher per barrel last year than would be otherwise expected) and lower economic growth (1-3% less growth last year on a $10 T economy) we have already spent as much as $335 b so far on this war.  It is likely we will see a similar impact on economic opportunity over the next year or two. The Benefits: Sale of Iraqi Oil.  Iraq is producing 2 m barrels a day currently.  It is expected that it could, if the technology was improved, produce as much as 8 m barrels a day in ten years.  Assuming that there is only moderate destruction of the oil fields, Iraq may be able to produce, on average 4m barrels a day over the next 5 years.  At $25 a barrel, that is ~$175 b or so of revenue for Iraq (much less if production costs are deducted).  My guess that these production costs would reduce the potential revenue to ~$100 b or so. Lower Oil prices.  Given that Iraq will be unable to produce much more incremental oil in the near term, it is unlikely that we will see any major impact on global oil prices.  Over the longer term, Iraq's incresed potential to produce oil will lessen potential oil shocks and may lower prices (however, given the calls on Iraqi's revenues, don't expect radically lower revenue). It is pretty clear that total costs of this war are much more that the potential economic benefits to the US.  [John Robb's Radio Weblog]   8:24:54 AM    comment []

Slashdot | Crack Windows XP With... Windows 2000. An anonymous reader writes "According to this story seen on Brian's Buzz on Windows, access to a Windows 2000 CD is all that is needed to bypass all (well, most) Windows XP security features. An attacker can boot up XP and start the Windows 2000 Recovery Console which allows them to operate as any user, even Administrator, without requiring them to enter a password. This method even allows someone to copy files to removable media, something which normally the Administrator can't even do in the Recovery Console." [Privacy Digest] 8:13:57 AM    comment []

Gestures For The Linux Desktop [Slashdot] This sounds interesting, not being a Linux user I'll have to wait for the Windows version.  The main point I got out of the story was that we need to have some common Gestures that everyone agrees on otherwise it will lead to chaos, which will make it less useful. It also reminded me of the Pocket PC world(and Palm).  The QuickWrite(?) system used a looping gesture for keyboard input that I always found very cool.  I've also seen password entry systems that used a very similar concept, you would draw a diagram on the screen to enter your password.  It would take line breaks, order etc. into account.  That way you could even have your "password" in clear view.  It would still be missing the order and line breaks that are used to make it actually work.  It is still a better idea to not leave something like that out in the open, but I think you get the idea.   8:00:17 AM    comment []

The Mishnah. "Say not, when I have leisure I will study; you may not have leisure." 7:51:28 AM    comment []