Posts Tagged ‘money’

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If half of the world has less money than less than ten people, something is either wrong or rigged. There is no middle ground or shade of gray. Either we are living in a world of kings and peasants or we are living in a world where all people are created equal. The very idea that there will always be poverty at a time of mega yachts, vacation homes, million dollar cars, Botox and private islands is to spit in the face of reason.

A very real present day consequence of this growing, institutional, massive wealth disparity is seen in the rise of populism politics in the industrialized world. Brexit, Donald Trump in America, the growing  Made in France movement, and so on. It has finally caught on that globalism doesn’t work for the common man, because it wasn’t designed or put in place by the common man. It was put in place by the elite, to benefit the elite. The manual labor workers of the first world have been forgotten and left behind. Whether on purpose or on accident no longer matters, they have made their voice heard by organizing and getting behind far right political parties and candidates.

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The political consequences of the wave of populism that we are currently in the beginning of, are just now starting to take shape. But politics is just the tip of what is going on. Follow the money, because neither political populism nor big philanthropy will be enough to stem the tide of the rising groups of people with no jobs, no homes, nothing to lose but debt.

They are going to the voting booth for now, protesting in mass on the streets for now. But the history of the world shows that concentrated wealth and power are the planted seeds for rebellion.  And unless the elite share the love as well as their wealth, it is not a question of if but when their favorable debt to liquidity ratio can no longer save them from the ratio of have-nots to haves that are past the point of no return.

Eight men possess more wealth than half the world combined? That doesn’t happen on accident. This has been done on purpose. This is long-term, purposeful, monetary migration. The problem is known. The solution is known. But the money keeps going the same direction, up. These super charged capitalists have certainly skirted some laws to amass their obscene wealth concentration. But nothing skirts Newton’s Third Law of Motion. What goes up, must come down.

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by @anarchyroll
10/15/2014

It turns out Apple is worth more than a lot of things. A lot of things and a lot of other companies.

The company is valued at over half a trillion dollars and at any one time, has around $160 billion of liquid assets on hand.

The US government for instance, has less than 1/3 of that on hand. Although, as the Forbes article linked above makes sure to note, the US Treasury can at any time print more money and invest it into treasury notes.

What does it mean when a company has more than three times the amount of money as the government  of the country it operates in? Does that tremendous gift on incredible wealth come with added responsibility? A responsibility not just to employees and shareholders, but to cities, cultures, and societies?

Apple hoards so much cash, that Carl Ichan, the man who the lead character in the movie Wall Street is based on, thinks Apple is being too greedy with their profits. That takes a whole lotta greed. Ichan is as ruthless of a capitalist as it gets. If someone who makes his living using money to make money thinks Apple owes something to other people, that puts Apple in a different light than the idolatry bestowed upon their founder and products.

Apple already deserves some scorn for their notorious tax dodging/avoidance practices. They dodge taxes and hoard cash from even their own stockholders. What about the societies that have enabled the company to become richer than governments? What about the roads, schools, bridges, farms, poverty, intelligence, and morale of the places and people Apple has made their billions in? Do they owe something? Should they bear more responsibility to the public than slightly newer, slightly modified consumer electronic gadgets a few times per year?

With great power comes great responsibility. Money equals power in the world we live in. No one person, government, or corporation in the world has more money than Apple. Where does responsibility come in?

 

eanda logoby @anarchyroll
2/20/2014

What is money velocity? It is the speed at which the M2 money supply moves from one transaction to another.  What is the M2 money supply? It is all the liquid cash assets in the country from cash, savings accounts, mutual funds, certificate of deposits (CDs), checking deposits, or basically any kind of money stored in any kind of account, or mattress if you’re old and senile.

How can money velocity be used to gauge economic strength? Because money velocity ends up being the ratio of the size of a country’s economy to the size of the money supply. So there shouldn’t be more cash than there is gross domestic product (GDP) or less than. If there is more/less, then inflation/deflation occurs as a market correction.

I may sound very smart with the above explanation, but a recent article in Bloomberg Businessweek did all the heavy lifting for me. The article is short, quick, to the point, and keeps everything in plain language, as I try to do with this blog.

The concept of money velocity fascinated me because; I had never even heard or come across the term before, was unaware it is a relatively accurate economic indicator, and was surprised that the slower money moves the safer we are from inflation or another recession. Why is that? Hasn’t the Fed been flooding the markets with freshly printed money for over three years? They have, but people and businesses aren’t spending it, they’re saving it. Which is good for now because inflation could stop the economic recovery in its tracks.

But the money will have to start flowing sooner than later. Especially as QE gets tapered off over the next 18 months. Fading out QE and fading in inflation wouldn’t do much damage to the economy. It would be like getting autumn before winter or spring before summer, our bodies acclimate to the changing weather because of a gradual transition. This could be the case with money velocity. It was refreshing to learn that the low money velocity we are seeing now is historically normal, and has in the 60s and 80s preceded boom periods.

But those booms were just bubbles. We all must keep one eye on Wall Street to make sure that our country isn’t held hostage by a bursting bubble again. That is why they teach consumer ed in high schools folks, it’s not just to give an elective teacher a pay bump.

So now you know what money velocity and M2 money supply are. It’s used as an economic indicator because of its ratio to GDP. Lower velocity means lower prices and deflation while higher velocity means higher prices and inflation. Drop those in conversation at the cocktail lounge but not the night club, depending on how fast you want to move the cash in your wallet to keep the other parties interested…