Despite my many concerns about the state of the world in general and the dog's breakfast which makes up the moral and legal cesspool of much of the financial industry I have been coaxed out of retirement by an offer to build a Fixed Income business for a newcomer to the European markets.
I will admit I was somewhat ambivalent given that I am throughly enjoying myself and the freedoms granted me by retirement so the decision was not an easy one.
That being said being retired put me essentially in the position of being in the "Opposition". Now I will be "back in power" as it were which will bring more opportunities, and of course challenges.
I will endeavour to write albeit most likely less frequently in the first instance. In any event I will certainly bring a closer focus to the markets while trying to maintain a socio-political perspective, so please do keep reading.
Saturday, 19 March 2011
Friday, 18 March 2011
The Chickens Come Home to Roost. Part III: Self Determination, Religion and Energy.
While in Cuba the Middle East decided to try and overthrow their governments. Tunisia succeeded with the result that there are now more Tunisian immigrants trying to enter Europe than ever before. The Egyptians got rid of Mubarak only to replace him with a group of military officers so no real change there. The Libyan "rebels" suddenly find themselves hung out to dry as Qaddafi's military is finally unleashed and the West realises that it doesn't really want to get drawn into a civil war.
But the real battle is in Bahrain. Iran and Saudi Arabia find themselves in their own proxy war. The conflict between Shia and Sunni, between Iran and the Saudis is reaching the critical stage. Back in the UK I read reports comparing the uprisings in the Middle East with the "Velvet Revolutions" of 1989 as the Eastern Bloc came unravelled. Personally they smell much more like 1936/7 in continental Europe.
And then the earthquake in Japan, the Tsunami, and the nuclear crisis. Without any question the physical destruction in Japan has been made significantly worse by the damage to the reactors at Fukishima. The combination of a massive earthquake and a Tsunami-they were called tidal waves when I was a kid and we all thought they were specific to Japan-obviously wasn't in the calculations of the nuclear plant security planners and that can be seriously questioned.
But the furore which has broken out in many western countries, most specifically Germany is reaching the heights of hysteria.
The reactors at Fukishima withstood an earthquake even stronger than the worst-case scenario for which they were designed. They did not survive the Tsunami. As mentioned, why you would build a reactor on the coast in a region known for earthquakes and Tsunamis without planning for the latter is beyond me. But that is not the discussion in Germany.
The risk of earthquakes in Germany is significantly lower than in Japan. None of the German reactors are in coastal regions which alleviates the risk of Tsunamis. Some are built close to earthquake faults, but the Japanese experience shows that that can be planned for.
No, the discussion in Germany is that some of the reactors were built before the risk of terrorists using airplanes as "flying bombs" was recognised and so they are not safe against crashing airplanes!
So Frau Merkel suggests that the 7 oldest nuclear facilities in Germany should be taken off the grid while safety checks are carried out given the new concerns of reactor safety following the Japanese crisis.
The opposition screams that she is doing this because of the regional elections currently taken place although it is what they have been clamouring for. Three months ago after much rancour all the parties agreed that over time Germany would exit from nuclear energy but because there is a law blocking the construction of new plants-the last German Nuclear Plant was built in 1989-the current plants operational lifespans would be extended 8 to 14 years depending on their age.
Now Merkel is hounded for deciding to review the 7 oldest plants. The opposition has even accused her of acting illegally in this decision as a means of trying to force her to resign.
Regardless of one's view on nuclear energy I am astonished at the hypocrisy of the political classes and the ignorance of the electorate.
Everyone gives lip-service to the needs of the environment but few actually are willing to accept the short to medium-term sacrifices that will be required before we can truly rely on renewable energy sources.
In the interim in addition to worries about nuclear energy no one wants coal-fired plants; no one wants next-generation high tension electrical lines or storage stations near their homes; no one wants windmill farms near them; no one wants new hydroelectric dams; and no one wants to remain dependent on oil.
I think everyone wants to go to heaven, and nobody wants to die.
But the real battle is in Bahrain. Iran and Saudi Arabia find themselves in their own proxy war. The conflict between Shia and Sunni, between Iran and the Saudis is reaching the critical stage. Back in the UK I read reports comparing the uprisings in the Middle East with the "Velvet Revolutions" of 1989 as the Eastern Bloc came unravelled. Personally they smell much more like 1936/7 in continental Europe.
And then the earthquake in Japan, the Tsunami, and the nuclear crisis. Without any question the physical destruction in Japan has been made significantly worse by the damage to the reactors at Fukishima. The combination of a massive earthquake and a Tsunami-they were called tidal waves when I was a kid and we all thought they were specific to Japan-obviously wasn't in the calculations of the nuclear plant security planners and that can be seriously questioned.
But the furore which has broken out in many western countries, most specifically Germany is reaching the heights of hysteria.
The reactors at Fukishima withstood an earthquake even stronger than the worst-case scenario for which they were designed. They did not survive the Tsunami. As mentioned, why you would build a reactor on the coast in a region known for earthquakes and Tsunamis without planning for the latter is beyond me. But that is not the discussion in Germany.
The risk of earthquakes in Germany is significantly lower than in Japan. None of the German reactors are in coastal regions which alleviates the risk of Tsunamis. Some are built close to earthquake faults, but the Japanese experience shows that that can be planned for.
No, the discussion in Germany is that some of the reactors were built before the risk of terrorists using airplanes as "flying bombs" was recognised and so they are not safe against crashing airplanes!
So Frau Merkel suggests that the 7 oldest nuclear facilities in Germany should be taken off the grid while safety checks are carried out given the new concerns of reactor safety following the Japanese crisis.
The opposition screams that she is doing this because of the regional elections currently taken place although it is what they have been clamouring for. Three months ago after much rancour all the parties agreed that over time Germany would exit from nuclear energy but because there is a law blocking the construction of new plants-the last German Nuclear Plant was built in 1989-the current plants operational lifespans would be extended 8 to 14 years depending on their age.
Now Merkel is hounded for deciding to review the 7 oldest plants. The opposition has even accused her of acting illegally in this decision as a means of trying to force her to resign.
Regardless of one's view on nuclear energy I am astonished at the hypocrisy of the political classes and the ignorance of the electorate.
Everyone gives lip-service to the needs of the environment but few actually are willing to accept the short to medium-term sacrifices that will be required before we can truly rely on renewable energy sources.
In the interim in addition to worries about nuclear energy no one wants coal-fired plants; no one wants next-generation high tension electrical lines or storage stations near their homes; no one wants windmill farms near them; no one wants new hydroelectric dams; and no one wants to remain dependent on oil.
I think everyone wants to go to heaven, and nobody wants to die.
Thursday, 17 March 2011
The Chickens Come Home to Roost. Part II: The Need For Social Democracy
After a week in Cuba we flew to California. We have a German friend there who we join on an early morning walk in the foothills of the Santa Monica Mountains. The walk is with an eclectic group of anthropology, sociology and psychology professors who were all very interested in our trip to Cuba.
In trying to put my impressions into context I described myself as a Social-Democrat. When pressed to define what that was I explained that it meant that although I was a capitalist economically I believed in democracy politically, and more specifically in the need for (relatively) high taxes and the need for regulation in almost every facit of life.
There are more people in the Greater Los Angles area than in Cuba. In California even the riverbeds are covered with concrete. The amount of traffic is overwhelming, as is the number of homeless people. Driving from Central LA to Pacific Palisades on Sunset Boulevard the chasm between rich and poor is breathtaking, and this doesn't even take into account truly depressed areas of the city.
Cuba has free health care for all. And free education. The literacy rate is 90%. In California the literacy rate is 75% and the poverty rate is over 15%. Travel to Montecito, one of the most expensive towns in America, and then to its neighbour Santa Barbara which just suffered it's seventh homeless death in 2011.
Cuba is ranked 117th in the world economically. California is 8th.
But again I get ahead of myself.
As much as I appreciated what Castro had achieved-if nothing else he rid Cuba of a brutal and corrupt military dictatorship intimately interwoven with organised crime-he demonstrated that even under a somewhat benevolent and honest communist dictatorship it was still a dictatorship. The flip side of the social welfare provided by the communist state is that there is essentially no ambition, no real progress, and no growth. This is not paradise.
And yet when compared to California, that part of the USA which epitomizes the American Dream, when confronted by the blight of an incongruent mishmash of gated communities and abject poverty as the result of unregulated captialism and failed social policies, I am left nostalgic for the mythical past of my childhood as presented by the Cuba of today.
In trying to put my impressions into context I described myself as a Social-Democrat. When pressed to define what that was I explained that it meant that although I was a capitalist economically I believed in democracy politically, and more specifically in the need for (relatively) high taxes and the need for regulation in almost every facit of life.
There are more people in the Greater Los Angles area than in Cuba. In California even the riverbeds are covered with concrete. The amount of traffic is overwhelming, as is the number of homeless people. Driving from Central LA to Pacific Palisades on Sunset Boulevard the chasm between rich and poor is breathtaking, and this doesn't even take into account truly depressed areas of the city.
Cuba has free health care for all. And free education. The literacy rate is 90%. In California the literacy rate is 75% and the poverty rate is over 15%. Travel to Montecito, one of the most expensive towns in America, and then to its neighbour Santa Barbara which just suffered it's seventh homeless death in 2011.
Cuba is ranked 117th in the world economically. California is 8th.
But again I get ahead of myself.
As much as I appreciated what Castro had achieved-if nothing else he rid Cuba of a brutal and corrupt military dictatorship intimately interwoven with organised crime-he demonstrated that even under a somewhat benevolent and honest communist dictatorship it was still a dictatorship. The flip side of the social welfare provided by the communist state is that there is essentially no ambition, no real progress, and no growth. This is not paradise.
And yet when compared to California, that part of the USA which epitomizes the American Dream, when confronted by the blight of an incongruent mishmash of gated communities and abject poverty as the result of unregulated captialism and failed social policies, I am left nostalgic for the mythical past of my childhood as presented by the Cuba of today.
Wednesday, 16 March 2011
The Chickens Come Home to Roost. Part I: Der Klassenfeind
I apologise for my negligence in writing recently but I was overwhelmed by a number of circumstances which made it almost impossible to sit down and coherently put my thoughts together.
To begin with, in addition to my trip to California which I mentioned in my previous post, my wife son and I also visited the last remaining Worker's and Farmer's Paradise of Cuba. I was torn as to how to address it in the first place and I will admit it was very disconcerting to be in a country where you have no consular support-but that is a different story.
To get the timing right, on the second or third day there we woke to the earthquake in New Zealand. Cuba and New Zealand are about the same size and surprisingly (to me) there are more Cubans (~11 million) than there are New Zealanders (~4 million).
But I get ahead of myself.
My son is a student of Political Science who has moved around quite a bit on the left-right axis. He has somewhat followed Mark Twain's axiom that if you aren't a communist by the time you are sixteen you have no heart, and if you aren't a capitalist by the time you are 25 you have no brain.
I say somewhat because his path has not been so straight forward. A staunch Republican at the age of 12, as a 20 year old he spent last summer going door-to-door raising funds and garnering signatures for the American Family Workers Party in the harsh environs of Bridgeport, Connecticut, so I'm not sure where he is on the spectrum currently although he is definitely leaning towards capitalism.
But he is not the real focus here other than it was his burning desire to see how Communism/Socialism works in practice which took us to Cuba in the first place. We supported his interest. My wife and I fit Mark Twain's view of human evolution so we were especially interested to see how Socialism worked in a warm climate given that our previous exposure was to East-Bloc Socialist States.
This last point is important. A lot of recent anthropology discussions have revisited the ideas of the energy and determination of those inhabitants of the northern climes in contrast to the relative indolence and lack of ambition of those in southern climes.
So there we were suddenly in Cuba. For me it was a weird mixture of my childhood in eastern Tennessee in the Fifties and of trips to Spain, southern Italy and Yugoslavia in the Sixties. For my wife it was post-war Germany followed by similar reminiscences of southern Europe in the late Sixties and early Seventies. The cars were from my youth, as was the (lack of)traffic density. The horse and ox-carts in the city as well as on the major highway were straight from a bygone era in our western culture, albeit 90 miles from the US mainland.
It was a land stuck in time, or perhaps better said, stuck in various times. Arriving at Jose Marti Airport my son and I were singled out for an interview by some immigration officers. It was uncomfortable, unorganised and somehow what I expected/feared from a communist state.
But then you get into a cab to Old Havana, and as you dodge potholes, street sellers, dogs and the ever present throngs of people looking for a ride the backdrop of Cuban music starts to take over and you just sit back and take it all in.
Our expectations were unclear for although we had done a reasonable amount of research beforehand about the only thing friends had told us who had been (almost uniformly) was how bad the food was. As part of our preparation we read "The Old Man and the Sea" and "Our Man in Havana" so we were prepared for the old cars, rum, cigars and unfortunately prostitution. We were not however prepared for the crumbling infrastructure, nor however, the calm almost tranquil feel which either despite or perhaps because of the organised chaos pervaded the place.
Havana is amazing. First it is much larger than I imagined. Our hotel had a rooftop terrace where we sat looking out over the cityscape drinking the first of many daiquiris. There are few streetlights and no advertising so as the sun settled over the bay the city slowly darkened but for the headlights of cars and buses.
This too is important. Cuba's demand for energy is quite low. They drill their own oil which is apparently not of good enough quality to sell profitably on the open market but sufficient for their needs.
In every neighbourhood there is a state store where Cubans go to get their basic foodstuffs. Either everyone, relatively speaking, or no one goes hungry. After 1989 and the collapse of the Soviet Union malnutrition had stalked the land as the loss of Soviet support in conjunction with the ongoing embargo by the United States was devastating. The economy didn't really stabilise until the turn of the century. Since then it has bounced along above a subsistence level but not overwhelmingly so. Housing, food, education and health are all provided by the state.
This has the benefit that although no one appeared to be wealthy, in a week I only saw 1 or 2 apparently destitute people, and they were in Havana. It also has the disadvantage that there was no room for ambition and growth reflecting some grafitti I once saw in Leipzig proclaiming that security and comfort makes one fat and lazy. I didn't see many signs of obesity, but there was a distinct lack of drive which translated into a very slow orderliness.
The tool of choice in the countryside was the machete be it in a sheath on a saddle or just stuck in someones belt. But in 7 days I never felt threatened despite getting lost many times in back alleyways or country roads.
I mention this only in passing as a week later we were driving in Palm Springs one night after dinner and inadvertently crossed a border into a part of town where I felt extremely uncomfortable.
But far more important was the contrast encountered when I left Cuba and entered that other paradise, California, but that is for Part II.
To begin with, in addition to my trip to California which I mentioned in my previous post, my wife son and I also visited the last remaining Worker's and Farmer's Paradise of Cuba. I was torn as to how to address it in the first place and I will admit it was very disconcerting to be in a country where you have no consular support-but that is a different story.
To get the timing right, on the second or third day there we woke to the earthquake in New Zealand. Cuba and New Zealand are about the same size and surprisingly (to me) there are more Cubans (~11 million) than there are New Zealanders (~4 million).
But I get ahead of myself.
My son is a student of Political Science who has moved around quite a bit on the left-right axis. He has somewhat followed Mark Twain's axiom that if you aren't a communist by the time you are sixteen you have no heart, and if you aren't a capitalist by the time you are 25 you have no brain.
I say somewhat because his path has not been so straight forward. A staunch Republican at the age of 12, as a 20 year old he spent last summer going door-to-door raising funds and garnering signatures for the American Family Workers Party in the harsh environs of Bridgeport, Connecticut, so I'm not sure where he is on the spectrum currently although he is definitely leaning towards capitalism.
But he is not the real focus here other than it was his burning desire to see how Communism/Socialism works in practice which took us to Cuba in the first place. We supported his interest. My wife and I fit Mark Twain's view of human evolution so we were especially interested to see how Socialism worked in a warm climate given that our previous exposure was to East-Bloc Socialist States.
This last point is important. A lot of recent anthropology discussions have revisited the ideas of the energy and determination of those inhabitants of the northern climes in contrast to the relative indolence and lack of ambition of those in southern climes.
So there we were suddenly in Cuba. For me it was a weird mixture of my childhood in eastern Tennessee in the Fifties and of trips to Spain, southern Italy and Yugoslavia in the Sixties. For my wife it was post-war Germany followed by similar reminiscences of southern Europe in the late Sixties and early Seventies. The cars were from my youth, as was the (lack of)traffic density. The horse and ox-carts in the city as well as on the major highway were straight from a bygone era in our western culture, albeit 90 miles from the US mainland.
It was a land stuck in time, or perhaps better said, stuck in various times. Arriving at Jose Marti Airport my son and I were singled out for an interview by some immigration officers. It was uncomfortable, unorganised and somehow what I expected/feared from a communist state.
But then you get into a cab to Old Havana, and as you dodge potholes, street sellers, dogs and the ever present throngs of people looking for a ride the backdrop of Cuban music starts to take over and you just sit back and take it all in.
Our expectations were unclear for although we had done a reasonable amount of research beforehand about the only thing friends had told us who had been (almost uniformly) was how bad the food was. As part of our preparation we read "The Old Man and the Sea" and "Our Man in Havana" so we were prepared for the old cars, rum, cigars and unfortunately prostitution. We were not however prepared for the crumbling infrastructure, nor however, the calm almost tranquil feel which either despite or perhaps because of the organised chaos pervaded the place.
Havana is amazing. First it is much larger than I imagined. Our hotel had a rooftop terrace where we sat looking out over the cityscape drinking the first of many daiquiris. There are few streetlights and no advertising so as the sun settled over the bay the city slowly darkened but for the headlights of cars and buses.
This too is important. Cuba's demand for energy is quite low. They drill their own oil which is apparently not of good enough quality to sell profitably on the open market but sufficient for their needs.
In every neighbourhood there is a state store where Cubans go to get their basic foodstuffs. Either everyone, relatively speaking, or no one goes hungry. After 1989 and the collapse of the Soviet Union malnutrition had stalked the land as the loss of Soviet support in conjunction with the ongoing embargo by the United States was devastating. The economy didn't really stabilise until the turn of the century. Since then it has bounced along above a subsistence level but not overwhelmingly so. Housing, food, education and health are all provided by the state.
This has the benefit that although no one appeared to be wealthy, in a week I only saw 1 or 2 apparently destitute people, and they were in Havana. It also has the disadvantage that there was no room for ambition and growth reflecting some grafitti I once saw in Leipzig proclaiming that security and comfort makes one fat and lazy. I didn't see many signs of obesity, but there was a distinct lack of drive which translated into a very slow orderliness.
The tool of choice in the countryside was the machete be it in a sheath on a saddle or just stuck in someones belt. But in 7 days I never felt threatened despite getting lost many times in back alleyways or country roads.
I mention this only in passing as a week later we were driving in Palm Springs one night after dinner and inadvertently crossed a border into a part of town where I felt extremely uncomfortable.
But far more important was the contrast encountered when I left Cuba and entered that other paradise, California, but that is for Part II.
Wednesday, 16 February 2011
More Dumbing Down....
Yesterday I complained about the dumbing down of America through the conservative media. I take it back. Depressingly Ms Zito must represent the intellectuals of the right wing media. This morning while flipping through various news agencies I came across the Fox Nation website with Rush Limbaugh's response to a caller on his talk show about the recent elections.
Now I don't think Rush Limbaugh is actually as stupid as he sounds so I have to assume that his suggestion that if the Health Care Reform isn't repealed then "We go Egypt on Obama" is insinuating running street battles with the police until Obama resigns?
Is he serious? I will be travelling to California for the next couple of weeks-should I be worried? Jesting aside, just what is Mr Limbaugh suggesting. He goes on to say "And, by the way, Obama can't complain if we go Egypt on him because he said that's how democracy works, that's what he said on Friday. This is the way real democracy works, so he can't complain if it happens to him, and it will."
We are a democracy. Egypt wasn't, and still isn't. But then if I look at the Fox Nation website I get a pretty good idea of their idea of democracy. They are "opposed to intolerance, excessive government control of our lives and attempts to monopolize opinion..." Really?
Sounds more like do what we say, or prepare to do battle.
Now I don't think Rush Limbaugh is actually as stupid as he sounds so I have to assume that his suggestion that if the Health Care Reform isn't repealed then "We go Egypt on Obama" is insinuating running street battles with the police until Obama resigns?
Is he serious? I will be travelling to California for the next couple of weeks-should I be worried? Jesting aside, just what is Mr Limbaugh suggesting. He goes on to say "And, by the way, Obama can't complain if we go Egypt on him because he said that's how democracy works, that's what he said on Friday. This is the way real democracy works, so he can't complain if it happens to him, and it will."
We are a democracy. Egypt wasn't, and still isn't. But then if I look at the Fox Nation website I get a pretty good idea of their idea of democracy. They are "opposed to intolerance, excessive government control of our lives and attempts to monopolize opinion..." Really?
Sounds more like do what we say, or prepare to do battle.
Tuesday, 15 February 2011
It's called Feudal Modernity
I just read an article by a Ms Salena Zito of the Pittsburgh Tribune-Review entitled "Our New Jeffersonian Era".
It was an attempt to explain the success of the Republicans in the last election. To me it clearly illustrated the dumbing-down of American history by the conservative press in their attempts to define modern America.
She quotes a Dr Lara Brown, I think, as her prose is unclear, whose focus is on the fact that Jefferson's clothes were slightly worn-ignoring the fact that this was a deliberate move by Jefferson. He came from Virginia, a rural slave-owning state, and took great pains to position himself, scion of a planter's family, as the champion of the yeoman farmer distrusting cities and financiers.
She goes on to say that this anti-elitist pose by Jefferson is the source of fast food, plaid shirts, cowboy boots and jeans. That is one way to describe a cultural wasteland. Actually sounds suspiciously like GW?
Ms Zito goes on to explain how the Tea Party is a return to a Jeffersonian vision of an agrarian nation. Who is she kidding? Jefferson's agrarian ideal included plantations with hundreds of slaves and the forced removal and extermination of Native Americans.
But that is not my theme today. No, I want to focus on the manipulation of the populist dream of an agrarian utopia that never existed, except for the elite few. There is an air of the Luddites in her message. Granted, she has exchanged a Washington-centric government for a revolt against the advent of industrialism, but the two are intimately connected.
The rise of National Socialism was also carried on a wave of nostalgia for an agrarian past equally mired in a feudalistic society. The reality was an incestuous relationship with big business/industrialists, although there was a place for the little man to live out his agrarian fantasy as a soldier-farmer on the edges of the empire.
Sound familiar?
What I find most striking is Ms Zito's closing quote of the inscription on Jefferson's statue in Washington.* It is the most rational statement one could wish for, proclaiming an understanding of progress, enlightenment and cultural evolution. I would have thought it anathema to the Tea Party and its supporters. But then again it might be too long a quote.
*"I am not an advocate for frequent changes in laws and constitutions. But laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times."
It was an attempt to explain the success of the Republicans in the last election. To me it clearly illustrated the dumbing-down of American history by the conservative press in their attempts to define modern America.
She quotes a Dr Lara Brown, I think, as her prose is unclear, whose focus is on the fact that Jefferson's clothes were slightly worn-ignoring the fact that this was a deliberate move by Jefferson. He came from Virginia, a rural slave-owning state, and took great pains to position himself, scion of a planter's family, as the champion of the yeoman farmer distrusting cities and financiers.
She goes on to say that this anti-elitist pose by Jefferson is the source of fast food, plaid shirts, cowboy boots and jeans. That is one way to describe a cultural wasteland. Actually sounds suspiciously like GW?
Ms Zito goes on to explain how the Tea Party is a return to a Jeffersonian vision of an agrarian nation. Who is she kidding? Jefferson's agrarian ideal included plantations with hundreds of slaves and the forced removal and extermination of Native Americans.
But that is not my theme today. No, I want to focus on the manipulation of the populist dream of an agrarian utopia that never existed, except for the elite few. There is an air of the Luddites in her message. Granted, she has exchanged a Washington-centric government for a revolt against the advent of industrialism, but the two are intimately connected.
The rise of National Socialism was also carried on a wave of nostalgia for an agrarian past equally mired in a feudalistic society. The reality was an incestuous relationship with big business/industrialists, although there was a place for the little man to live out his agrarian fantasy as a soldier-farmer on the edges of the empire.
Sound familiar?
What I find most striking is Ms Zito's closing quote of the inscription on Jefferson's statue in Washington.* It is the most rational statement one could wish for, proclaiming an understanding of progress, enlightenment and cultural evolution. I would have thought it anathema to the Tea Party and its supporters. But then again it might be too long a quote.
*"I am not an advocate for frequent changes in laws and constitutions. But laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times."
Monday, 14 February 2011
And a Penny's not a Penny
This morning there was a discussion about the introduction of the decimal system to Britain. I lived in England during the 60's as a schoolboy and not only did we have Shillings and Pence, we still had talked about Guineas-equal to 21 Schillings, and actually had half-penny coins.
What was actually more interesting however was the discussion of the metallurgical value of the coinage. According to the US Mint, it currently costs almost twice as much to produce and ship a penny then its face value.
As of January 14, 2011, the pre-1982 penny which is made of 95% copper has a metallurgical value 289.56% of its face value. 1982–present US pennies, which weigh 2.5 grams, are 97.5% zinc and 2.5% copper (coated over the zinc) by weight and have a metallurgical value of 64.376% of the face value.
I guess it's something I should have thought about previously but I am still surprised to find out that not only is the value of our paper money predicated on a willingness to accept a piece of paper as a medium of exchange, but our coins are also part of this belief system.
I guess alchemy does work.
What was actually more interesting however was the discussion of the metallurgical value of the coinage. According to the US Mint, it currently costs almost twice as much to produce and ship a penny then its face value.
As of January 14, 2011, the pre-1982 penny which is made of 95% copper has a metallurgical value 289.56% of its face value. 1982–present US pennies, which weigh 2.5 grams, are 97.5% zinc and 2.5% copper (coated over the zinc) by weight and have a metallurgical value of 64.376% of the face value.
I guess it's something I should have thought about previously but I am still surprised to find out that not only is the value of our paper money predicated on a willingness to accept a piece of paper as a medium of exchange, but our coins are also part of this belief system.
I guess alchemy does work.
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