Special Edition Five Things: The US Dollar
By Kevin Depew Jun 16, 2009 1:15 pm
Dollars to donuts? We're almost there.
Every day brings yet one more story about the US dollar. Will the greenback crash? Will it lose its status as reserve currency? What is a dollar? And if we're here in the states, why do we care whether it goes up or down in value against other currencies? Let's take a look at some answers to these questions.
1. What is a dollar anyway? What does it mean?
The dollar is simply a banknote issued by the U.S. government that is mandated by law to be used as legal tender for all transactions. - Although the dollar used to be backed by gold, today it is backed simply by the promise of the government that it will be convertible in an exchange.
- Got faith? Good, you'll need it, because faith is the only thing standing between a dollar bill as exchangeable for say, a banana, and just a blank sheet of paper.
2. OK, OK, I got faith aplenty, but where do all our dollars come from and why can't the Fed just print more money?
- The Fed can print money.
- And in the wake of the debt crisis and the collapse in real estate values, they are doing so... a lot.
- Theoretically, every dollar created dilutes the value of a dollar already in circulation, causing it to weaken.
- But this is only the case if the dollars created go from the Federal Reserve's credit creation mechanism and into the economy.
- Instead, what is happening now is these dollars created by Fed credit mechanisms are either being horded by banks in anticipation of higher losses, or being used to pay down existing debt, which destroys debt and runs counter to the intentions of making more credit available.
3. OK, so, we're spending more than we're making, and the Fed is printing money to make up the difference. How does the Fed do it?
-
The Fed "prints" money through three mechanisms. The easiest way is through the Fed's Open Market Operations. Through open market operations, the Fed buys and sells, literally, Treasuries that are trading in the "open market." If the Fed buys Treasuries, then the dollars it uses to buy them become available to banks to lend. If it sells Treasuries, the dollars get taken back.
- The second mechanism is lowering the percent of deposits banks are required to have on hand - thereby increasing the pool of available money to lend.
- The third is through their "discount policy." The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility. The Fed can grow money by reducing the discount rate.
- Dollars are literally printed by the Bureau of Engraving and Printing.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2009 Minyanville Media, Inc. All Rights Reserved.
(30)
Reply
2009-06-16 10:10:47
Woe to all if the velocity picks up on the $. Actually that would prove that the Fed has succeeded in snatching us from the jaws of deflation.
2009-06-16 13:30:47
Top Five Uses for the Dollar
1. Replace lost notes from my Monopoly game.
2. Wallpaper.
3. Paper airplanes.
4. Fabric for the "money coat" I always wanted.
5. Punch line for jokes at comedy clubs in China.
2. Wallpaper.
3. Paper airplanes.
4. Fabric for the "money coat" I always wanted.
5. Punch line for jokes at comedy clubs in China.
2009-06-16 13:46:46
banks hoarding money
So if the banks are hoarding money (which seems to be the case) -- what happens when they decide to lend again? Will they flood the market with cheap credit?
Will there be takers? Maybe we'll have some sort of credit score forgiveness program so people can walk away from their old debt and take on new debt w/ a clean slate.
And start the cycle all over again.
Will there be takers? Maybe we'll have some sort of credit score forgiveness program so people can walk away from their old debt and take on new debt w/ a clean slate.
And start the cycle all over again.
2009-06-16 14:13:19
I have been thinking about the deflation/inflation debate.
On one side you have deflation. Banks have money, but are hoarding it. People are saving rather than spending. Jobs are being lost. PPI, industrial production and capacity utilization are all falling. These factors all lead to the velocity of money slowing and create deflationary pressures.
On the other side, you have the printing presses running rampid, creating an everlasting flow of dollars. I heard James Grant speak last week and he basically comes from the inflationary camp that says the mere fact that dollars are being printed is inflationary. They don't have to actually make their way into the "system" for inflation to occur. The fact that these dollars have been created out of nowhere means that they have to be allocated somewhere and this will lead to a rise in prices.
Would just like to see any comments/ideas/thoughts on this debate. Thanks in advance.
On one side you have deflation. Banks have money, but are hoarding it. People are saving rather than spending. Jobs are being lost. PPI, industrial production and capacity utilization are all falling. These factors all lead to the velocity of money slowing and create deflationary pressures.
On the other side, you have the printing presses running rampid, creating an everlasting flow of dollars. I heard James Grant speak last week and he basically comes from the inflationary camp that says the mere fact that dollars are being printed is inflationary. They don't have to actually make their way into the "system" for inflation to occur. The fact that these dollars have been created out of nowhere means that they have to be allocated somewhere and this will lead to a rise in prices.
Would just like to see any comments/ideas/thoughts on this debate. Thanks in advance.
2009-06-16 14:27:58
Inflation is a monetary issue and if the banks don't lend, the money is not in ciculation. Hence, we do not have more money (or credit) chasing the same or fewer goods and services.The consumer is overleveraged and starting to save to make up for investment losses. The consumer doesn't want more credit, small business doesn't want more credit (in the aggregate) due to slowing consumer demand. The real risk is deflation and government printing is not making up for all the debt destruction out htere in the form of defaulted debt, shrinking credit card balances, etc. Wages are stagnant.
The economy will enter a slow multi year recovery by 2011 and we will get comfortable with a lower standard of living because that will be the new reality. The so-called higher standard was fueled by credit over the last ten years and now that volume of credit is constantly reducing. Government interference will slow the recovery yet help minimize the short term pain. As to the endless jokes about the "useless" U.S. dollar, I have one comment. Yes, it will slowly decline as we inflate our way out of the excessive debt, but we will remain the world's reserve currency because there is not a currency to replace it. Not the Yen, not the Pound, not the Euro. Why? The reserve currency is backed by the world's biggest economy, most stable political system and biggest military. Period.
The economy will enter a slow multi year recovery by 2011 and we will get comfortable with a lower standard of living because that will be the new reality. The so-called higher standard was fueled by credit over the last ten years and now that volume of credit is constantly reducing. Government interference will slow the recovery yet help minimize the short term pain. As to the endless jokes about the "useless" U.S. dollar, I have one comment. Yes, it will slowly decline as we inflate our way out of the excessive debt, but we will remain the world's reserve currency because there is not a currency to replace it. Not the Yen, not the Pound, not the Euro. Why? The reserve currency is backed by the world's biggest economy, most stable political system and biggest military. Period.
2009-06-16 14:48:38
@ Ed G
That sounds like the best case scenario amid all the Inflation/Deflation. I have gleaned the theory of ongoing deflation until the money starts to flow and then inflation from the discussions here. I am "wishful" that it happens this easy. I am concerned what happens if/when somebody makes a gold standard like Russia/India/Arabs are talking. Game Over?
2009-06-16 15:12:43
We are in a deflationary cycle now but the fact that there are more dollars "out there" means we will eventually have inflation. The newly printed dollars are not being physically destroyed. Granted, inflation may not be as severe as some predict because memories of the deflationary period will cause people to spend wisely save more.
2009-06-16 15:23:43
other ways
There are other ways for money to enter the system besides bank loans; Uncle Sugar being the obvious conduit. Whether through stimulus package, or Treasury sales, the amount of money in the system increases.
Never tell the government it is powerless in the face of whatever; it tends to get annoyed,and act - to prove you wrong - however ill-conceived the action.
Never tell the government it is powerless in the face of whatever; it tends to get annoyed,and act - to prove you wrong - however ill-conceived the action.
2009-06-16 15:24:20
banks hoarding money
All this talk about the banks hoarding money I believe misses the point. The banks would love to lend out all this virtually free money but they are afraid they won't get paid back.
You see, the dirty little secret is that most of the people who want loans are the bad credit risks. The people the banks (and the government) want to take out loans are the sensible people who HAVE been living within their means and because they are sensible they don't need or want a bigger house or a shinier car with all those nasty monthly payments...especially since most of them (being sensible) see that the 'green shoots' represent a con game. They are busy paying down their debt, NOT acquiring more, in anticipation of the even worse economic difficulties to come
The charade of supposed positive economic indicators trumpeted in the headlines of newspapers and web sites around the world is meant to persuade sensible people to behave in an unsensible way.
Now some of these previously sensible people do appear to be buying into all the forclosure deals, zero percent down car deals and other assorted stimuli induced fluff but most still are suffering from this deep down gut feeling that you can't resolve a problem of too much debt with more debt. Ultimately the main problem facing the government, in the short run, is that most of these sensible people have too much sense to fall for this pathetic excuse for a solution.
The government's problem in the long run is that the sensible people are right...and it will become more apparent with each passing month as the unemployment rate rises, tax revenues and GDP fall and the dollar devalues.
2009-06-16 16:31:18
Ed G and David
Agree totally, as does Irving Fisher and a host of other well-known economists. Fisher studied 3 US depressions caused by "debt and price distubances"( 1837; 1873; 1929 ), and concluded there was virtually nothing to be done; fiscal and monetary policy becomes impotent.Friedman ( and bernanke ) thought expanding the money supply during such times might work, if anf only velocity remains steady. Thus the "great experiment" we see unfolding. Fisher was right so far; velocity has fallen down and can't get up.
Fisher goes on to say velocity increases when leverage increases, decreases during the unwind. ( I know, well duh ).
In all three cases mentioned, only time ( and a lot of it ) cured the excessive debt problem. The best we can hope for is a slow slog through, accept the new normal, and live our lives less obsesssed with possessions etc.
And all this talk of anything replacing the dollar is silly, for the reasons Ed mentioned. At least for some time. For all our problems, don't forget our economy is still larget than thr next 4 combined, and China has plenty of problems of their own, as does the rest of the world.
Fisher goes on to say velocity increases when leverage increases, decreases during the unwind. ( I know, well duh ).
In all three cases mentioned, only time ( and a lot of it ) cured the excessive debt problem. The best we can hope for is a slow slog through, accept the new normal, and live our lives less obsesssed with possessions etc.
And all this talk of anything replacing the dollar is silly, for the reasons Ed mentioned. At least for some time. For all our problems, don't forget our economy is still larget than thr next 4 combined, and China has plenty of problems of their own, as does the rest of the world.
2009-06-16 18:20:15
The scale of the problem to come
Is easily grasped when you look at these charts from New Scientist:
No commentary is necessary, but there is a lot.
http://www.planetthoughts.org/?pg=pt/Whole&qid=2923
No commentary is necessary, but there is a lot.
http://www.planetthoughts.org/?pg=pt/Whole&qid=2923
2009-06-16 18:23:09
banks hoarding money
" They are busy paying down their debt, NOT acquiring more, in anticipation of the even worse economic difficulties to come"
This problem was name succinctly elsewhere on the net as "pushing on a string".
String pushing is really only what the Fed can do. They can't force the banks to lend and even if they could, they can't force people in a free country to borrow. They can print money, but not too fast or it's end game on the currency and therefore themselves. (You can at least trust large systems to work in their perceived best interest.)
All they do in the face of unwilling parties can really do is legitimatize past inflation of asset prices by debasing the currency. (IE, make housing prices "real" because my $10 bill is now worth what my $1 was worth)
But with the excess labor supply around the globe, how do wages creep up to legitimize the inflation? Do we all stagnate and sit around in the same house for the next 10 years while 2% wage increases (if you aren't being laid off) catch up with housing prices? Maybe, but I'm thinking people are going to want to move in between here and there.
That's why I never saw the Fed as in control or any other choice but near term deflation. The force of the money printing will have an effect in the long term, but I don't get how in the near future.
This problem was name succinctly elsewhere on the net as "pushing on a string".
String pushing is really only what the Fed can do. They can't force the banks to lend and even if they could, they can't force people in a free country to borrow. They can print money, but not too fast or it's end game on the currency and therefore themselves. (You can at least trust large systems to work in their perceived best interest.)
All they do in the face of unwilling parties can really do is legitimatize past inflation of asset prices by debasing the currency. (IE, make housing prices "real" because my $10 bill is now worth what my $1 was worth)
But with the excess labor supply around the globe, how do wages creep up to legitimize the inflation? Do we all stagnate and sit around in the same house for the next 10 years while 2% wage increases (if you aren't being laid off) catch up with housing prices? Maybe, but I'm thinking people are going to want to move in between here and there.
That's why I never saw the Fed as in control or any other choice but near term deflation. The force of the money printing will have an effect in the long term, but I don't get how in the near future.
2009-06-16 18:30:47
Future value of promises
The value of the dollars created by banks lies in the ability of those who borrow to pay back the money in the future. That is what determines the actual value. If banks print lots of money, it's ok if there are lots of resources for people to use to create jobs and throw things away while moving around truckloads of green pieces of paper.
We don't have those resources anymore. We burned them up CREATING the debt. There isn't enough planet to burn up to pay back the debt.
Things have to change so that people only use resources that they actually need, regardless of what the little green pieces of paper are doing. It's called "relocalization", and it's what happens when people stop listening to the king who dreams up crusades with his buddies during drunken parties.
Food, tools, seeds. Medical care is a luxury in the New Economy.
We don't have those resources anymore. We burned them up CREATING the debt. There isn't enough planet to burn up to pay back the debt.
Things have to change so that people only use resources that they actually need, regardless of what the little green pieces of paper are doing. It's called "relocalization", and it's what happens when people stop listening to the king who dreams up crusades with his buddies during drunken parties.
Food, tools, seeds. Medical care is a luxury in the New Economy.
2009-06-16 18:35:32
I put this on the thread in a different spot and it somewhat repeats Ed G's excellent post. (sorry folks..)
"I heard James Grant speak last week and he basically comes from the inflationary camp that says the mere fact that dollars are being printed is inflationary. They don't have to actually make their way into the "system" for inflation to occur. The fact that these dollars have been created out of nowhere means that they have to be allocated somewhere and this will lead to a rise in prices. "
IM(very humble), printing dollars right now only legitimizes the last decade worth of housing inflation. (Earth to Main Stream Media, Come in MSM - 100% increase in median prices in a decade is out of control inflation and not a good thing - where were you???)
It wasn't "official" inflation (ie government created) that everyone panics about because private entities created the money through fractional reserve lending. However it had the exact effect Mr. Grant spoke of. Asset prices went crazy but not because the Fed was printing money directly. Once the system started to cave the Fed started to give banks the "real" *ahem* dollars they thought they had on their balance sheets.
"I heard James Grant speak last week and he basically comes from the inflationary camp that says the mere fact that dollars are being printed is inflationary. They don't have to actually make their way into the "system" for inflation to occur. The fact that these dollars have been created out of nowhere means that they have to be allocated somewhere and this will lead to a rise in prices. "
IM(very humble), printing dollars right now only legitimizes the last decade worth of housing inflation. (Earth to Main Stream Media, Come in MSM - 100% increase in median prices in a decade is out of control inflation and not a good thing - where were you???)
It wasn't "official" inflation (ie government created) that everyone panics about because private entities created the money through fractional reserve lending. However it had the exact effect Mr. Grant spoke of. Asset prices went crazy but not because the Fed was printing money directly. Once the system started to cave the Fed started to give banks the "real" *ahem* dollars they thought they had on their balance sheets.
2009-06-16 18:37:39
The scale of the problem to come
I did cut and paste it - it's giving me a weird error. Very strange.
2009-06-16 18:39:41
The scale of the problem to come
I didn't put it in html code, so you have to cut and paste it. Sorry.
<i>http://www.planetthoughts.org/?pg=pt/Whole&qid=2923</i>
<i>http://www.planetthoughts.org/?pg=pt/Whole&qid=2923</i>
2009-06-16 18:44:27
The scale of the problem to come
Must be those goldarn amateurs in the greenwashing movement again. Always bugs in their gardens.
2009-06-16 19:10:46
stability
Historically, it doesn't make much difference whether the dollar is relatively strong or weak; what matters is that it is stable. For example, if businesses see a likelihood of the weak dollar depreciating rapidly, they will be reluctant to accept dollars, and will charge premiums for dollar transactions. Further, a weakening dollar will spur speculation, as it did under Carter and after the Civil War, ultimately leading to a bond collapse and high inflation.
2009-06-16 21:35:16
stronger dollar advantage...
i know it's not very nice, nor politically correct, but...
we could buy foreign assets, and investments, cheaper?
hey....
;-)
we could buy foreign assets, and investments, cheaper?
hey....
;-)
2009-06-16 23:38:11
The scale of the problem to come
Dan C
The article on the link was quite interesting. (I had not problem reaching it) However, 250 years worth of data is statistically insignificant in comparison to the time frame of human existence. When the data is weather related data it becomes even more insignificant in relation to the age on the earth. A 1000, 5000, or 10000 year sample would be more meaningful for weather data and 1000 and 2500 year samples would be more accurate for human existence. It does show over the short term of less than 3 centuries a rapid increase (rising slope) in the data elements depicted. We don't really know how meaningful it is though. Further and more detailed study is needed.
Dan S
The article on the link was quite interesting. (I had not problem reaching it) However, 250 years worth of data is statistically insignificant in comparison to the time frame of human existence. When the data is weather related data it becomes even more insignificant in relation to the age on the earth. A 1000, 5000, or 10000 year sample would be more meaningful for weather data and 1000 and 2500 year samples would be more accurate for human existence. It does show over the short term of less than 3 centuries a rapid increase (rising slope) in the data elements depicted. We don't really know how meaningful it is though. Further and more detailed study is needed.
Dan S
2009-06-17 08:24:11
The scale of the problem to come
You are correct when dealing with pure mathematical chart analysis, and if you consider the age of the Earth as your diluting scale instead of say, the Common Era of relatively stable climate. However, the ice core data and other correlated factors (tree rings, sediments, etc) provide us with more than a 200 year sample of climate, and the real reason we don't want to do anything about it is not because we need more studies, but because we don't want to face the reality and admit that we are killing ourselves.
Heck, we can't even get the simple mistakes like fluoride in the water or mercury in our teeth changed, how can we expect to do anything about thousands of years of the merchant-madness paradigm?
Meanwhile, as people argue against the climate data as insignificant sample size, they use the same sampling of economic data to project that we can pay back trillions of dollars of destructive debts by utilizing resources at increasing rates based on the last 50 years of continuous growth of oil, coal, and fossil aquifer water extraction, (etc.).
Your insignificant data argument is apparently not a useful argument when it comes to real estate development plans (see recent bubble), government bailouts, or missions to Mars, but it is apparently useful for disbelieving that we have a consumption problem.
This is called "denial".
Congratulations for reaching the first stage of awareness of terminal illness.
Heck, we can't even get the simple mistakes like fluoride in the water or mercury in our teeth changed, how can we expect to do anything about thousands of years of the merchant-madness paradigm?
Meanwhile, as people argue against the climate data as insignificant sample size, they use the same sampling of economic data to project that we can pay back trillions of dollars of destructive debts by utilizing resources at increasing rates based on the last 50 years of continuous growth of oil, coal, and fossil aquifer water extraction, (etc.).
Your insignificant data argument is apparently not a useful argument when it comes to real estate development plans (see recent bubble), government bailouts, or missions to Mars, but it is apparently useful for disbelieving that we have a consumption problem.
This is called "denial".
Congratulations for reaching the first stage of awareness of terminal illness.
2009-06-17 10:36:20
The scale of the problem to come
Amy, the problem with the link is the html code for italics --- <i> and </i>
Here is the link without this code:
http://www.planetthoughts.org/?pg=pt/Whole&qid=2923
That should work.
2009-06-17 11:22:45
The scale of the problem to come
The Earth is 4.5 billion years old. 200 years worth of mostly inferred climate data is nothing in comparison of the timespan of human history. We can study it, model it, make pretty graphs but in the end any prediction will only be a WAG.
I have no doubt we are over consuming. However, It doesn't change the fact that the dire predictions of global warming is bad science. (So too, is the craziness that we'll be paying back the national debt somehow as well.)
If you'd like a real mind blower of an argument, I think burning fossil fuels will ultimately lead to a renewal of life on planet Earth. That doesn't mean we, the humans will be around to see it, but there is a lot of reason to think that reintroducing buried carbon to the planet surface is a good thing.
I have no doubt we are over consuming. However, It doesn't change the fact that the dire predictions of global warming is bad science. (So too, is the craziness that we'll be paying back the national debt somehow as well.)
If you'd like a real mind blower of an argument, I think burning fossil fuels will ultimately lead to a renewal of life on planet Earth. That doesn't mean we, the humans will be around to see it, but there is a lot of reason to think that reintroducing buried carbon to the planet surface is a good thing.
2009-06-17 11:24:17
The scale of the problem to come
Thanks! I think the problem is I'm using a Mac. The browsers are weirding out the URL on me.
2009-06-17 11:51:32
The scale of the problem to come
Good points. However, the 4.5 billion years is irrelevant. What is relevant is the time period from which the current configuration of continents has established the ocean currents as they are. That's about 65 million years, as compared to ice core data dating back about 160,000 years, and correlated sediment data which covers the full range beyond the Cenezoic. Not so insignificant.
Making a definite, precise prediction of what will happen with tomorrow or next year's weather is, yes, foolhardy, but we can extrapolate what IS happening in general based upon real data and with our own eyes in places like Greenland, Alaska, Kilimanjaro and Peru.
If anything, the point is that while we see some of the limits of science, that same science that we have used to justify massive consumption that we like should not be denied when it tells us things we don't like.
Making a definite, precise prediction of what will happen with tomorrow or next year's weather is, yes, foolhardy, but we can extrapolate what IS happening in general based upon real data and with our own eyes in places like Greenland, Alaska, Kilimanjaro and Peru.
If anything, the point is that while we see some of the limits of science, that same science that we have used to justify massive consumption that we like should not be denied when it tells us things we don't like.
2009-06-17 12:32:03
The scale of the problem to come
I have done geologic field work in a past life. Collecting information from the field is very difficult and subjective. Every single data point I collected was an interpretation, and sometimes it was a huge struggle. It's really a miracle that we pulled all the data together ti get tothe idea of plates tectonics, if we're right. So I don't believe we have nearly as much clear data as you think we do.
But for arguments sake, let's assume that you are right and we've got 160,000 years or a whooping 0.2% of the 65 million year time frame you mention. All the data is backloaded at the end of time era and is not random. We have no way of knowing if the 0.2% of the time we have information for is an aberration or "normal" in terms earth climate because we have nothing beyond that. What if we're making predictions based on data from some weird hiccup in the climate? There is simply not enough high quality data to warrant any predictions about *anything* related to the Earth's climate. (Other than that scientists will attempt to get more grants to study the problem.)
We can see and measure that the ice caps are melting. But that's all we know. Have we the humans changed it? Maybe. Of course, the population of cattle on the planet has also skyrocketed along with us. Maybe it's all the cows??? (Methane is much worse green house gas than CO2...) And even if it was us, can we even change it at this point? Have we already done too much and reached a critical mass?
And even if we caused the effects we can measure, is it a bad thing? Ice caps and glaciers are very bad news - they lock up fresh water and cause the death of all life in their immediate area. Tropical areas support an amazing amount of life, the arctic regions next to none.
I agree with you that we do have an over consumption problem. However, to scale back consumption has a singular purpose: save the humans. My gut says the Earth will be fine. I think the jury is still out on the people. :(
But for arguments sake, let's assume that you are right and we've got 160,000 years or a whooping 0.2% of the 65 million year time frame you mention. All the data is backloaded at the end of time era and is not random. We have no way of knowing if the 0.2% of the time we have information for is an aberration or "normal" in terms earth climate because we have nothing beyond that. What if we're making predictions based on data from some weird hiccup in the climate? There is simply not enough high quality data to warrant any predictions about *anything* related to the Earth's climate. (Other than that scientists will attempt to get more grants to study the problem.)
We can see and measure that the ice caps are melting. But that's all we know. Have we the humans changed it? Maybe. Of course, the population of cattle on the planet has also skyrocketed along with us. Maybe it's all the cows??? (Methane is much worse green house gas than CO2...) And even if it was us, can we even change it at this point? Have we already done too much and reached a critical mass?
And even if we caused the effects we can measure, is it a bad thing? Ice caps and glaciers are very bad news - they lock up fresh water and cause the death of all life in their immediate area. Tropical areas support an amazing amount of life, the arctic regions next to none.
I agree with you that we do have an over consumption problem. However, to scale back consumption has a singular purpose: save the humans. My gut says the Earth will be fine. I think the jury is still out on the people. :(
2009-06-20 19:39:05
The scale of the problem to come
"Making a definite, precise prediction of what will happen with tomorrow or next year's weather is, yes, foolhardy, but we can extrapolate what IS happening in general based upon real data and with our own eyes in places like Greenland, Alaska, Kilimanjaro and Peru."
Agreed. The key, of course, is REAL DATA. Consider the faulty data promulgated for the UN Climate Change reports (source NOAA) which included temperature measurements from numerous stupid stations, one of which was placed adjacent to the exhaust from an industrial-scale air conditioner heat exchanger. The NOAA had to publicly retract its claim that 1998 was the warmest year on record due to their careless, agenda-driven methods.
"NOAA proclaimed May 2009 to be the 4th warmest for the globe in 130 years of record keeping. Meanwhile NASA UAH MSU satellite assessment showed it was the 15th coldest May in the 31 years of its record. This divergence is not new and has been growing. Just a year ago, NOAA proclaimed June 2008 to be the 8th warmest for the globe in 129 years of record keeping. Meanwhile NASA satellites showed it was the 9th coldest June in the 30 years of its record." http://www.icecap.us/
Contrary to the GW predictions and in accord with predictions based on solid science and carefully-gathered data (as opposed to the careless data of the NOAA), the extreme-weather events of the last several years have been remarkably well-predicted. They just don't conform to the alarmist GW religionistas.
All of us care about our planet and especially about conservation and proper husbandry. Peddling End of the World scenarios based on agenda and faith, rather than good science, is counterproductive.
Agreed. The key, of course, is REAL DATA. Consider the faulty data promulgated for the UN Climate Change reports (source NOAA) which included temperature measurements from numerous stupid stations, one of which was placed adjacent to the exhaust from an industrial-scale air conditioner heat exchanger. The NOAA had to publicly retract its claim that 1998 was the warmest year on record due to their careless, agenda-driven methods.
"NOAA proclaimed May 2009 to be the 4th warmest for the globe in 130 years of record keeping. Meanwhile NASA UAH MSU satellite assessment showed it was the 15th coldest May in the 31 years of its record. This divergence is not new and has been growing. Just a year ago, NOAA proclaimed June 2008 to be the 8th warmest for the globe in 129 years of record keeping. Meanwhile NASA satellites showed it was the 9th coldest June in the 30 years of its record." http://www.icecap.us/
Contrary to the GW predictions and in accord with predictions based on solid science and carefully-gathered data (as opposed to the careless data of the NOAA), the extreme-weather events of the last several years have been remarkably well-predicted. They just don't conform to the alarmist GW religionistas.
All of us care about our planet and especially about conservation and proper husbandry. Peddling End of the World scenarios based on agenda and faith, rather than good science, is counterproductive.
2009-06-21 13:18:19
The scale of the problem to come
Agreed. Having worked with NASA's engineers in the past, I wouldn't lean toward their data, though.
My first impression of the overall picture is that there is a serious lack of synergistic work by the various agencies involved, as well as a lack of knowledgeable leadership in this country to understand when they are being lied to, and to understand when they should get out of the way of the right things, while getting involved in other things. The sheer volume of legislative distractions clutters the world's ability to acquire gainful knowledge.
Some things are obvious: Life doesn't survive because of profits. Humans invent ways to justify behaviors that exploit everything but themselves. Groups cannot make decisions based on projected data unless it is within comfortable territory.
Nothing will change until it does, and then we will respond. The 'choices' we think we make are merely post-justified hormonal responses to our animal desires.
My first impression of the overall picture is that there is a serious lack of synergistic work by the various agencies involved, as well as a lack of knowledgeable leadership in this country to understand when they are being lied to, and to understand when they should get out of the way of the right things, while getting involved in other things. The sheer volume of legislative distractions clutters the world's ability to acquire gainful knowledge.
Some things are obvious: Life doesn't survive because of profits. Humans invent ways to justify behaviors that exploit everything but themselves. Groups cannot make decisions based on projected data unless it is within comfortable territory.
Nothing will change until it does, and then we will respond. The 'choices' we think we make are merely post-justified hormonal responses to our animal desires.
Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options. Click here for a free 14 day trial to OptionSmith by Steve Smith.
Copyright 2009 Minyanville Media, Inc. All Rights Reserved
