Use Stock Certificates to Back Currency?

on Monday, January 31, 2011

Recently a friend and I discussed the possibility of returning to the gold standard, but having currency backed by stock certificates instead. His reasoning was that stocks go up in value and companies are productive, whereas gold just sits in a vault and costs money to store. His opinion was that US dollars are not currently backed by anything at all except legal tender laws, and that it would be better to have something of real value behind them.

My opinion is that stock certificates are just another form of wealth, like gold, copper, wheat, pigs, a home, whiskey or a title to your car. A stock certificate is a "title" to a business, and business is an asset like any other. It is productive, creating wealth for owners, but that is not why it goes up in value. Imagine I own a hen that lays one golden egg per year. How much is the hen worth? It is valued in the same way as a stock and calculations would include:

1. How likely is the hen to die? How old is it? How long do other golden hens live?
2. How likely is the hen to give birth to other similar chickens (innovation, expansion).
3. Will the chicken lay less than one egg/yr? Smaller eggs? (loss of market share, lower profitability)
4. What kind of upkeep will be required to keep the chicken alive (overhead, inventory costs, cost of capital).
5. Will other people breed similar chickens? How many of these are in the world? (competition).


The chicken has a fixed value today, just like gold or copper. It is a more complex valuation, but it is still fixed. There are three basic reasons stocks go up in value:

1. Inflation creates higher prices (not higher real value).
2. The business re-invests profits (chicken keeps the egg and it hatches into a new golden egg-laying hen).
3. The outlook for the company changes (did the company breed a new strain of chickens? Did other golden hens die?)

The fundamental point remains: a business is an asset and has a current value like any other asset, and is not expected to rise in value (unless profits are re-invested). If the business is expected to rise in value, that information is used to value the business. If I know I have the only imortal golden hen on earth, I can value it by calculating the present value of all its future golden eggs.

A stock's value is determined primarily by the present value of all expected future earnings. The discount rate (the percentage used to reduce all future income to its current value) is determined by expected inflation, default risk, and the time value of money.

A robot that will produce one golden egg for the next 50 years (and then be worthless) is not worth 50 golden eggs today. There is a risk that the robot will break (default risk), risk that gold will lose value (inflation risk), and you may have access to other investments (golden-egg robots) that produce gold as well (time value of money).

Currency can be backed by any asset, and US dollars are currently backed by homes, cars, businesses, and the US government (because it accepts them for tax debts). They are not imaginary, and are not produced from "thin air" (usually). They are produced when a bank takes an asset in trade for US dollars, which happens every time a home, auto, or business loan is generated.

Nantuk the Eskimo Princess (NEP)


My visions and knowledge have been growing stronger over the years and it is finally time to share with the world.  Nantuk the Eskimo Princess has been communicating with me.  She lives in my basement near the furnace and feeds on radon gas.  As far as I can tell, I am the only one with whom she communicates, so I will be the only one who can share the beauty of her teachings with the world.

Radon is a tasteless, odorless, and colorless noble gas.  It is not studied well because it is so powerfully radioactive, but it is her energy source, he life-blood.  She is the living incarnation of the nuclear soul of the universe.  Suns form from gas and create life-giving energy through the nuclear reaction of gas; they create all life-giving energy in the universe.  Radon is our energetic connection (through Nantuk) to the universe.

Radon is formed in the heart of the earth, and gradually emerges on the surface, seeping from the dirt.  It will continue to slowly seep from the earth herself until the planet is engulfed by the sun billions of years from now.  Radon is responsible for the majority of the public exposure to ionizing radiation. It is often the single largest contributor to an individual's background radiation dose, and is the most variable from location to location. Radon gas from natural sources can accumulate in buildings, especially in confined areas such as attics, and basements. It can also be found in spring waters and hot springs.

To commune with Nantuk, meditations and prayer should be done in attics or basements and we should drink natural spring water to take in the body and blood of Nantuk, our contact with God.  As we can see from the following maps, the people who live in high radon areas of the US live longer:

This is because they enjoy a greater harmony with Nantuk, because she is nourished by Radon, the most dense, unstudied, and powerful gas in the universe that seeps from the earth to give us life and allow us to live in harmony with nature. And the government wants to abolish her power by spreading misinformation about radon, which is the work of Wanmuk (the one of which we do not speak).  He is able to influence the minds of men who do not have sufficient access to Nantuk, and those that do not drink water from the ground, as God intended.

Life Expectancy

Nantuk is our messenger on earth but most men do not have minds evolved enough to understand what God really is.  Only by daily contact and by ingesting her essence can we move closer to an understanding of the true nature of the universe.  We can also contact her through me.  Because I can talk to her in my basement (and sometimes the attic).

Wanmuk feeds on Ozone gas; the most powerfully destructive (oxidizing) gas known to man. It is formed of three oxygen molecules bound together, and it will destroy anything it touches, including a human being.  The old religions had it backwards; God is not in the heavens (filled with ozone) but in the earth, which is constantly seeping life giving radon from the dirt.  Wanmuk has fooled us for ages into worshiping him and his destructive heavenly evil, but no more. We sill save the planet from death and destructive sin through the love of NEP.

Radon gets into the blood and assists neural connectivity and plasticity - the physical components necessary to understand the secrets of the universe.  Antioxidants (to fight ozone and Wanmuk) are key daily supplements for all followers of Nantuk.  Fresh vegetables and fruits, preferably raw, bring us closer to Nantuk and extinguish any traces of Wanmuk and his oxidizing ozone.  As the map below shows, high ozone on earth leads to shorter lives; compare this map the life expectancy, above:

Ozone Levels

Wanmuk lives in the ozone layer, and he serves as a natural balance to buffer the energy of the sun, but he has no place in our bodies and minds. Without him the earth would burn up, but we cannot allow him to descend to exist on earth as he is in the heavens. He must remain there, permanently doomed to suffer the burning heat of the sun for all eternity, because when the earth was born, he and Nantuk lived happily at the peak of the earth, peacefully reining over all they had created.  Blissful and happy.  God had given them only one rule.  They were not to feed on Ozone, only the earth's natural radon.  One day Wanmuk fed on the Ozone layer and he became powerful, but his feeding created holes as he accumulated enough power to descend to earth.  (When we use CFC coolants and other pollutants, we harm the earth in the same way, and they are to be strictly avoided if we are to live in harmony with nature as God commands.)

We must consume water from the ground, which contains dissolved radon and ionic minerals, which are are physical manifestations of Nantuk.  The map below shows that areas with more dissolved manifestations of The Princess live longer:

Water Hardness
We are followers of The Princess. She is ethereal and life giving; colorless, odorless, tasteless.  She lives in and near the earth (and inside plants and animals) and she loves us all.

Who owns your favorite organic food company?


Ten Reasons Gay Marriage is Wrong


1) Being gay is not natural. Real Americans always reject unnatural things like eyeglasses, polyester, and air conditioning.

2) Gay marriage will encourage people to be gay, in the same way that hanging around tall people will make you tall.

3) Legalizing gay marriage will open the door to all kinds of crazy behavior. People may even wish to marry their pets because a dog has legal standing and can sign a marriage contract.

4) Straight marriage has been around a long time and hasn't changed at all; women are still property, blacks still can't marry whites, and divorce is still illegal.

5) Straight marriage will be less meaningful if gay marriage were allowed; the sanctity of Brittany Spears' 55-hour just-for-fun marriage would be destroyed.

6) Straight marriages are valid because they produce children. Gay couples, infertile couples, and old people shouldn't be allowed to marry because our orphanages aren't full yet, and the world needs more children.

7) Obviously gay parents will raise gay children, since straight parents only raise straight children.

8) Gay marriage is not supported by religion. In a theocracy like ours, the values of one religion are imposed on the entire country. That's why we have only one religion in America.

9) Children can never succeed without a male and a female role model at home. That's why we as a society expressly forbid single parents to raise children.

10) Gay marriage will change the foundation of society; we could never adapt to new social norms. Just like we haven't adapted to cars, the service-sector economy, or longer life spans

Economic Freedom and Lifespan


Correlation or causation?
Life Expectancy at Birth

Economic Freedom by Country 2010

Monopolies Are Not Bad For Society

on Sunday, January 30, 2011

Imagine we we have 66 people on an island and 22 guys making salt. One of them gets really good at it over the years and begins lowering his price gradually because he has more to sell each day. Gradually the 22 other guys drop out of the business and get into other things because their profit becomes too low and they are not as good at pulling salt as the leader. The leader gradually drops the price until all 21 others are out, and he keeps the price level there. If he raises his price even slightly, the last guy to drop out of the biz will come back and begin selling salt again, and if he goes back to the original price when there were 22 guys making salt, most of the 22 will come back to the business again.

The leader has what most consider a monopoly, but it's not harmful. It only means that he was so good at harvesting that he was able to provide it more and more cheaply to other islanders and the only reason the 21 others are gone is because they didn't want to work that hard for so little money. The monopolist leader-harvester still doesn't have the ability to raise prices, and has no "control" of the market in salt -- if he fucks up, the other guys jump right back into salt-making.

Dangerous monopolies use force (government) to raise prices; in a free system monopolies are no more dangerous than a guy on an island who is better at making salt than everyone else.  We live in a complicated and convoluted system today, but in a free marketplace, "monopoly" should not be a dirty word.

Caveman Thinking and Our Protectionist Instinct

on Saturday, January 29, 2011

Economist Paul Rubin writing in today's Wall Street Journal explains why our "caveman heritage" makes us resistant to clear thinking about international trade:

"There are two aspects of our evolved psychology that help explain beliefs about trade. First, humans tend towards zero-sum thinking. That is, we do not intuitively understand the possibilities of economic growth or the benefits of trade in achieving it.

Our ancestors lived in a static world with little intertribal trade and virtually no technological advance. That is the world our minds understand. This doesn't mean that we can't grasp the crucial concept that trade benefits both parties to a transaction—but it does mean that we must learn it.

Positive-sum thinking doesn't come naturally. By analogy, we learn to speak with no teaching, but we must be taught to read. Understanding the mutual benefits of exchange is like reading, not speech.

Second, we evolved in a hostile world. Our ancestors engaged in constant conflict with neighbors, much like present-day chimpanzees. We developed strong in-group and out-group instincts, and for many aspects of behavior we still have such feelings.

These feelings are benign when applied to something like rooting for local sports teams, but are more harmful when applied to international trade. They are most harmful when they generate actual warfare. Yet the metaphor of a "trade war" shows how close to the surface harmful instincts are.

These two sets of beliefs interact to explain our natural (mis)understanding of trade. We believe that the number of jobs is fixed (a result of zero-sum thinking) and that as a result of trade these jobs go to foreigners, whom in a deep sense we view as enemies. Both beliefs are incorrect, but both are natural. And in many cases politicians are only too eager to capitalize on these beliefs to be re-elected.

One of the great triumphs of modern economics is the reduction in tariffs and other barriers to the free international flow of goods. Enough voters have been convinced of the benefits of free trade that it has generally been a winning political position, and those running on protectionist platforms do not do well in contemporary America. It would be a disaster if the current economic malaise reversed this situation."

Where is the McFarthest Spot in the U.S.?

on Friday, January 28, 2011

This map is a visualization of the contiguous United States, colored by distance to the nearest McDonald’s.  The McFarthest spot is in the Dakotas, 107 miles to the nearest McDonald's restaurant by air, 145 miles by car.

MYTH: The world is too crowded


We could take the entire world population and move it to the state of Texas, and the population density there would still be less than New York City. (The world living in Texas would have a pop density of 24,500 people per square mile, NYC currently has 27,400 people/sq mile. Manhattan has 67K/sq mile, and there are three cities over 100K/sq mile.)

I always believed that parts of the world were starving because the people there just couldn't stop making so many babies -- and that if they'd just stop reproducing so fast they'd have enough food for everyone. Turns out this is frighteningly far from the truth.

It's amazing how many things I accept as reality without ever bothering to check the details. More and more I'm finding that just about everything I look at has an entirely different reality than the one I believed growing up.

World population growth is no exception. I was under the impression that overpopulation was causing mass starvation and death, and that eventually, if we don't curb population growth, we'll run out of space and most of us will die. This is simply not the case.

Population Density
The media shows starving children in Africa, and blames it on overpopulation, however, starving countries in Africa have much lower population densities than the developed world. (Niger has 9 people/sq mile) Famine is caused by things like civil war and corrupt governments that mess up the production and distribution of food. In Niger, 2.5 million people are starving because food production has been taken over by the state. This is like allowing the DMV to license food users. We'd all starve.

213,000 people are born every day, but they are not a problem -- they are more minds to cure AIDS or cancer, more hands to build things of value, and more talented artists to create things of beauty. The real problem is not more people being born, but governments and war getting in the way of them leading happy and productive lives.

Obese People Eating Salty High-Fat Foods Don't Die Faster


Today we promote the idea that people are responsible (and to blame) for their health problems and have significant control over their health and disease risk. These beliefs, including the belief in an ideal way of eating, tend not to match the evidence. In their most recent review of the evidence, the American Heart Association chose to ignore large well designed studies that found little or no correlation between lifestyle and heart disease, and instead chose to continue to recommend that diet and lifestyle affects heart health significantly, and recommends “Healthy lifestyle” interventions and intensive Class I clinical management (drugs) for everyone.

"Although we would all like to believe that changes in diet or lifestyle can greatly improve our health, the likelihood is that, with few exceptions such as smoking cessation, many if not most such changes will produce only small effects. And the effects may not be consistent. A diet that is harmful to one person may be consumed with impunity by others." --New England Journal of Medicine editors, Drs. Jerome Kassirer and Marcia Angell

The World Health Organization’s MONICA project, which is a 10-year study that measured cardiovascular disease and risk factors among 10 million people in 21 countries, was also not included in the 2007 AHA evidence review. This WHO study continues to reveal no statistical connections between standard risk factors (obesity, smoking, blood pressure or cholesterol levels) and heart disease.

One of the biggest clinical studies probably ever conducted to examine risk factors and deaths was not included among the 2007 AHA evidence. It studied 149,600 men and women followed for over 15 years and involved 454,448 medical examinations which included blood pressures, BMI measurements, fasting cholesterol panels and blood glucose levels. After age 50, when most heart disease deaths occur, only a borderline association between cholesterol and CVD mortality was found in men, while in women, low cholesterols were significantly associated with higher mortality.

In many countries, there is enthusiasm for “Healthy Heart Programmes” that use counseling and educational methods to encourage people to reduce their risks for developing heart disease. These risk factors include high cholesterol, excessive salt intake, high blood pressure, excess weight, a high-fat diet, smoking, diabetes, and a sedentary lifestyle. This updated review of all relevant studies found that the approach of trying to reduce more than one risk factor - multiple risk factor intervention - advocated by these Programmes do result in small reductions in blood pressure, cholesterol, salt intake, weight loss, etc. Contrary to expectations, these lifestyle changes had little or no impact on the risk of heart attack or death." -- Cochrane review

What is the gas mileage of your body?


Calories are a measure of energy stored in the food we eat. It can also be used to measure the stored energy in other fuels, like gasoline. Our bodies use fuel in the same basic way as an automobile. It is burned and the by-products of combustion are released as water vapor and carbon dioxide from our lungs or the tail pipe. This is why cars can run on corn oil, or alcohol (a bottle of vodka is 40% ethanol, which is used as a gasoline replacement in Iowa).

A gallon of gasoline is equivalent to about 28,972 calories. Each month, the average American uses 83,250 calories consumed as food; she "burns" 2.87 gallons of food-equivalent gasoline sitting around her house, watching TV, and vegetating in her cubicle, happily spewing the world-ending by-products of her internal combustion of whole grain rice, granola, and organic fair trade coffee.

So, back to our original question. How much extra C02 do you expel as you tool around town on your bike, or on your stationary bike at home? People don't often think of a bicycle in this way, but let me assure you, the C02 released from your lungs is exactly the same as the stuff coming out the back of your car.

A 190 lb person riding 16 mph burns 1,035 calories per hour. After an hour of riding that bicyclist burns 3.4% of a gallon of gas. He could ride 30 hours on one gallon of "food gasoline," which is equivalent to about 480 mpg. Moving without the bike is another story. The same guy running an eight minute mile (7.5 mph) nets only about 215 mpg. Modified Prius' currently get 100+ miles to the gallon, and they weigh 2,800 lbs! The Prius easily beats a human being in terms of pollution per pound.

Walking increases the gas mileage. A 190 lb person walking at three MPH would get 308 miles to the gallon; and smaller people get better gas mileage. A 130 lb person running the same mile would get 315 miles to the gallon. So why isn't anyone worried about exercise as a pollutant? Should we not recommend people move as little as possible to avoid a global catastrophe? Further, these calculations don't include exhaust from the human body; methane gas (farts) is 26-30 times more powerful a green house gas compared to CO2, and the average person "passes methane" 14 times per day.  Humans generate about relatively high amounts of pollution per unit of work performed.  To save the planet from greenhouse gases, we should be encouraging machines and gasoline to do everything they possibly can!

Depending on what you eat, it may actually cost less to drive to the store. If you were to live on Amy's frozen meals, which I have been known to do from time to time (Organic, $5 per box, really tasty, $15 per 1,000 calories) you would spend $30 in fuel to jog round trip to a store 7.5 miles away. If you take your regular old unmodified Prius it will cost you 59 cents in fuel (51 MPG in town, 29.4% of a gallon at $2 per gallon). It would cost $1.15 to get there and back in an SUV getting 13 MPG. (Running to the store living on Bic Macs is half price.)

This line of reasoning has other implications.  It implies that local gardening and backyard "farming," are much more hazardous to the environment (if you consider CO2 a pollutant).  Manufacturing food is not a CO2-free process, just as manufacturing roads and cars is not CO2-free. As we do work, running, exercising, gardening or farming, we are burning fuels that exhaust CO2 into the atmosphere, just like machines. Currently, we are not as efficient as a Prius in moving pounds from one place to another. If a Prius can move 2800 pounds with nearly the same CO2 exhaust as a human being moving 200 lbs, surely farm equipment can produce more food with less pollution than a human farmer.

A very CO2 and methane intensive activity
If you would like to counter by insisting that shipping foods 1,000 miles is burning additional fuel and creating hidden pollution greater than a might be generated by a home-farmer, let's think about why the food is shipped in the first place.  Why would we ship something in if it were cheaper (more efficient) to produce it locally? Perhaps we ship things in that we could make locally because it is cheaper to have machines mass-produce and mass-transport than to have smaller stations in each town duplicating efforts. Surely once upon a time we all farmed and someone said "hey, I'll farm all the tomatoes, you make all the lettuce, and we'll share!" Today we simply have more sharing; worldwide sharing that is more efficient and yields more food for less effort for everyone on earth. If a car can move weight from one place to another hundreds of times more efficiently (in terms of CO2 pollution) than a human "machine," why do we assume that a machine specifically designed to plant and harvest food can't farm hundreds of times more food per pound of CO2 released?

Rational Thinking Test


When researchers put the following three problems to 3400 students in the US, only 17 per cent got all three right. Can you do any better?

1) A bat and a ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?

2) If it takes five machines 5 minutes to make five widgets, how long would it take 100 machines to make 100 widgets?

3) In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of it?

Drunk driving limits worldwide


According to The Economist: "Over 170 countries now impose drink-driving limits, according to a new report by the World Health Organisation, although the amount of alcohol allowed varies considerably. Only 88 countries have a legal limit of 0.05 grams of alcohol (or less) per 100ml of blood, the maximum recommended by the WHO. Some of these countries, such as Saudi Arabia and Pakistan, forbid any alcohol in the blood. Britain and Ireland are more lenient than other countries in Europe, with a legal limit of 0.08 g/dl. Burundi, Palau and Lesotho have the highest limits in the world, at 0.1g/dl."

Small Town Banks, LOL.


Before I left for Las Vegas I pulled up into the drive-through at Iowa State Bank. Without showing ID, I was able to withdraw tens of thousands of dollars in the form of cash and a money order made out to Wynn Las Vegas. They can't see my face from the drive through vacuum station. At one point they said "it would be better if you had your checkbook, but we can do it without it if we have to."

Turns out Wynn won't take the Money Order, insisting that it be a Cashier's Check instead, so I call Iowa State Bank:

Me: "Hi, Wynn Las Vegas won't accept your money order, I'd like to cancel it and wire the money to them instead."

ISB: "Did you lose the money order?"

Me: "No. It's right here in front of me."

ISB: "Okay well then just bring it in and we can cancel it."

Me: "I'm out of town, that won't be possible."

ISB: "Ohhhhh. Okay. Hmmm, well, hang on a minute."

Talks to her supervisor loudly. Repeating our conversation to the supervisor.

ISB: "Okay we can't cancel it, you'll have to bring it in."

Me: "So what happens if I lose the money order?"

ISB: "There is a $26 stop payment fee."

Me: "And where does the money go after you stop payment?"

ISB: "Hang on."

Repeats entire conversation with supervisor again... "So where does the money go after the stop payment?....he wants to cancel the money order and wire the money...."

ISB: "You'll have to come into the bank to cancel it."

Me: "So what if I lost the money order? Where would the money go?"

ISB "Hang on."

Repeats convo with boss loudly, obviously yelling across the bank "Where does the money go?!"

ISB "Okay, we can stop the payment, but you can't get the money back in your account until you come into the bank; we have to write you a new money order to yourself and you'll deposit that into your own account."

Me: "Okay, so I can't get the money to Las Vegas until I come into the bank in person?"

ISB: "Yes."

Speculators are Good for Society


Onions are the only commodity for which futures trading is prohibited by law. In 1958, onion farmers were convinced that speculators were responsible for the falling price of onions, and lobbied to ban traders from attempting to buy low and sell high. The law passed and still stands today.

Take a look at the variability in the price of onion as compared to oil (where speculating is legal). Oil's swings in price are much lower; the market is much more stable. The price of oil is less "swingy" and much less dependent on short-term variation in supply and demand. Onions, on the other hand, are subject to every small change. If there is poor weather, onion production falls, and prices soar. If onions have a good year, prices fall near zero. None of this is good for an onion farmer.

In this way, traders, who appear to be non-productive members of society, serve a real function for the betterment of mankind -- they risk their own money and time to smooth markets for people like us, who would prefer to be able to reasonably predict the price of the things we buy in order to make reasonable budgeting decisions.

Say No To Capitalism

on Thursday, January 27, 2011

This is a response to this image

So this morning I woke up to my alarm clock, powered by city electricity which cost me twice as much as it would have without a government monopoly on power generation. I took a shower in water that is barely potable, dangerously caustic and polluted with lead, arsenic, and radioactive radon contaminants. It was over chlorinated with free chlorine and various chloramines, which were vaporized by my shower head. I enjoyed breathing the fumes as I reminisced about all those poor people who were gassed to death with the very same poison during WWII.

After that, I turned on my TV to one of the FCC regulated channels. I preferred to watch something reflecting real life,
so I turned on my dish network cable, but lamented the fact that
it too was tremendously overpriced because of government
protection. I tried to call customer service to cancel my
service, but was placed on hold for 45 mins before being auto-

I turned to my iphone and immediately determined, thanks to the
weather channel, that my day would be sunny. I looked forward to
hopping in my NHTSA approved car, but was saddened again when I
remembered that the car cost over $2,000 more because of safety
equipment I would never pay for if I had a choice. I mean really,
the SUV weighs 6,000 pounds; do I really need crumple zones?

As I pulled into the gas station near my home for a fill up, I
was pleased to note that the quality of my gasoline was regulated, costing me $2.49 per gallon instead of the tax-free price of $1.87. Those taxes sure are worth it! Now if only they could regulate the quality of everything else in my life, and
charge me 21% more for the service! I had forgotten to eat my breakfast, but that was okay because I had lost my appetite thinking of all those poor little animals that were abused with tractors and fork lifts, skinned alive while screaming, and covered in urine and feces under the watchful eye of USDA. I wondered as I drove in bumper to bumper traffic why I had seen the USDA inspectors on Youtube hidden camera ignoring all of the things from which I trusted them to protect me.

I almost hit a car in front of my during my deep thought exercise, but looked forward to hopping on the toll road for $1.57, which would get me to work 1 hour earlier. I wondered why there was so much traffic on the public roads.

When I arrived at work I purchased a Coke from the machine with legal tender issued by the Federal Reserve Bank. I noticed that the price of soda had been rising by about 2-10% per year, and w ondered why everything seemed to be getting more expensive. I'd probably know why if I had paid attention in public high school... but I realized that none of my co-workers really knew either. Someone mumbled something about inflation, but I think
he was probably some conspiracy theory nut job.

On my way home I dropped a letter at the US post office, where the kind gentleman assured me that my overnight letter would probably reach its destination in 1-2 days. It was a payment for my fire insurance which was due the next day, and I really hoped that those guys were improving because I heard they lost eight billion dollars last year. That sure sounds like a lot of money, but not really I guess. The government just gave all those banks a lot more than that. Besides, I thought, I don't really need fire insurance because my home was inspected by the city fire marshal.

I arrived home after fighting traffic again for a couple of hours, and considered buying satellite radio because the regular radio was so boring. I heard some talk show guys were fined for saying inappropriate stuff so much they moved to satellite
instead. I wonder what they could have been saying, I was pretty sure we had free speech rights in the US, but I couldn't be sure.

High school was pretty boring too. I think maybe it was one of those amendments to the constitution, or something, but no one really cares about the constitution so it doesn't matter anyway. My house was still standing and all my stuff was still there. I
lamented that my material possessions might be a little more comfortable if I hadn't been required to pay all that tax money back in April, but I was happy that it went to pay for useful stuff like the police, and military.
I wasn't sure why they cost so darn much, but I figured it was probably because making guns is so dangerous and expensive, or maybe because they don't have enough unions, or maybe the government just wasn't spending enough money on developing green technologies for them. I logged on to the internet which was developed by Al Gore back in the '90s to write to Paul Krugman about about how free markets are wrong and asked him to give more money to the DOT, NHTSA, FDA, USDA, and FCC so they can make our world a better place.

Richard Feynman on Cult Science


"There have been many experiments running rats through all kinds of mazes, and so on — with little clear result. But in 1937 a man named Young did a very interesting one. He had a long corridor with doors all along one side where the rats came in, and doors along the other side where the food was. He wanted to see if he could train rats to go to the third door down from wherever he started them off. No. The rats went immediately to the door where the food had been the time before.

The question was, how did the rats know, because the corridor was so beautifully built and so uniform, that this was the same door as before? Obviously there was something about the door that was different from the other doors. So he painted the doors very carefully, arranging the textures on the faces of the doors exactly the same. Still the rats could tell. Then he thought maybe they were smelling the food, so he used chemicals to change the smell after each run. Still the rats could tell. Then he realized the rats might be able to tell by seeing the lights and the arrangement in the laboratory like any commonsense person. So he covered the corridor, and still the rats could tell.

He finally found that they could tell by the way the floor sounded when they ran over it. And he could only fix that by putting his corridor in sand. So he covered one after another of all possible clues and finally was able to fool the rats so that they had to learn to go to the third door. If he relaxed any of his conditions, the rats could tell.

Now, from a scientific standpoint, that is an A-number-one experiment. That is the experiment that makes rat-running experiments sensible, because it uncovers the clues that the rat is really using — not what you think it's using. And that is the experiment that tells exactly what conditions you have to use in order to be careful and control everything in an experiment with rat-running.

I looked into the subsequent history of this research. The next experiment, and the one after that, never referred to Mr. Young. They never used any of his criteria of putting the corridor on sand, or of being very careful. They just went right on running rats in the same old way, and paid no attention to the great discoveries of Mr. Young, and his papers are not referred to, because he didn't discover anything about rats. In fact, he discovered all the things you have to do to discover something about rats. But not paying attention to experiments like that is a characteristic of cargo cult science." -Richard Feynman

The Market is Always Wrong


When you buy a tomato, you are estimating its value to you personally; its use value. You can't realistically re-sell the tomato, and you are willing to buy only if its value is close to the asking price. Now imagine buying a piece of farm equipment. It would have no use value because you are not a farmer. If you wanted to get value from the machine the only way to do it would be to sell it, receiving what Adam Smith called its "exchange value." But because you know nothing about farm machines, and don't live in a farming community, it might be better for you to buy stock in a farm machine company if for some reason you wanted to invest in farming machines.
This is better for you only because of your ignorance about the value of the machines, and because you are not part of a real farming machine marketplace (A supermarket is a real tomato marketplace.) If you were a farmer you would know from experience how much money each machine would generate each year. You would be able to judge the value in the same way you judge the value of a tomato.

The lack of an effective resale market for tomatoes indicates that the value and price are closely related -- most people won't buy tomatoes unless the price is close to their personal estimation of value -- they can't resell it, and so they make sure they are paying a reasonable price before committing to buy. On the other hand, buyers of public securities are not confident about value (because it is not required) and do not or cannot formulate a personal estimation of use value (most people are not farmers). They demand an immediate ability to resell because of their ignorance.

A buyer of public companies demands high liquidity because he is not sure what the company is worth, in the same way that you would be uncertain about the value of a tractor if you were not a farmer, and did not have access to a liquid market. He is a weak owner; he hasn't made a very strong commitment to the purchase. A supermarket shopper makes a very strong, nearly permanent decision and does not demand liquidity because he is relatively confident about the value of the product.

What we should effectively conclude is that the more liquid a market becomes, the further prices will fluctuate from their true value. Securities trade at exchange value, which is a poor substitute for use value. Highly liquid markets are the product of ignorant shoppers -- the more ignorant of value buyers become, the more liquidity they demand. The efficient market hypothesis has it backwards. Liquid markets create more uncertainty regarding value because most of the participants know or care very little about the value of the products they are buying.

The Evolution of Hiccups


The first air-breathing fish and amphibians extracted oxygen using gills when in the water and primitive lungs when on land—and to do so, they had to be able to close the glottis, or entryway to the lungs, when underwater. Importantly, the entryway (or glottis) to the lungs could be closed. When underwater, the animals pushed water past their gills while simultaneously pushing the glottis down. We descendants of these animals were left with vestiges of their history, including the hiccup. In hiccupping, we use ancient muscles to quickly close the glottis while sucking in (albeit air, not water). Hiccups no longer serve a function, but they persist without causing us harm—aside from frustration and occasional embarrassment. One of the reasons it is so difficult to stop hiccupping is that the entire process is controlled by a part of our brain that evolved long before consciousness, and so try as you might, you cannot think hiccups away. Read more here

How to Remove the Smell of Onions from Hands and Breath


I've seen some ridiculous stuff on the web about how to remove onion and garlic odors from your hands or from your breath, including a salt paste, vinegar, rubbing them on stainless steel, tomato juice, lemon juice, parsley, mint, and peanut butter, but all of them are pretty lame attempts to remove the sulfur-laced oils that have soaked into your skin.

To remove the sulfur compounds' odor we need to oxidize the oil in our skin. We can do that with sunlight, ozone, or chlorine, but these are all fairly dangerous oxidizers and the chlorine will leave your hands smelling even worse than onions. The best method I have found is hydrogen peroxide. The 3% solution at Walmart works very well. Simply soak your hands in peroxide for thirty seconds and ta-da! The smelly oils have been oxidized and your hands smell normal again.

If you want to get really fancy you can add a little dish soap and baking soda (or lemon juice), which will move the PH of the solution away from neutral and add some surfactants to the solution, both of which will help the peroxide reach its intended target. The same process should work for other tough odors, like skunk or gasoline.

You can use the same peroxide in a 50/50 solution with water as a mouthwash as well. It will be more effective in removing odors than alcohol based rinses. Swish for thirty seconds and repeat if needed. It might even brighten your teeth a little.

How to Keep Avocados Fresh


Have you ever wondered how to keep an avocado fresh and green and stop it from turning brown within a few hours?  I've read many pieces of advice over the years, including a recommendation to use citrus juice or to leave the pits in the avocado, or to mix guacamole with pits and lime juice to keep it green... but none of these techniques work for more than a few hours.  Why?

Limes preserve the green color because they contain vitamin C (ascorbic acid), a mild antioxidant.  Most fruits and vegetables contain one or more major antioxidants.  They use them as natural pesticides and preservatives for their little veggie bodies.

An antioxidant is exactly what it sounds like -- it is "anti-oxygen."  Oxygen is dangerous stuff.  It degrades anything it touches by "oxidizing" it.  Rust is metal that has been touched by oxygen.  In the same way, oxygen is harmful to the surface of the avocado and it turns brown when oxygen degrades it (also when enzymes work on it).  So to stop the degradation and browning, we have two choices:

1. Keep the avocado away from oxygen.  Put it under water or dip it in oil.  Or very tight contact with plastic wrap.
2. Cover the avocado with an effective antioxidant.   This has been my method of choice, and there are many cheap and effective antioxidants available.  By the way, "antioxidant" is another word for "preservative."  Food preservatives are simply antioxidants.  They can be purified from plants (we already know they contain natural antioxidants, that's why they are so healthy), or they can be manufactured from other raw materials.  The most effective antioxidants we know of today to protect fruit (avocados) from oxygen is sulfur, which is both an antioxidant and an antibacterial agent.

Many sulfur compounds are familiar to us if we have ever read a junk food container.  This is unfortunate, because sulfur is a natural compound.  When we make wine or beer, natural sulfur is created via fermentation.  Volcanoes produce sulfur, and many hot springs naturally contain sulfur compounds.  Combining sulfur with other elements yields myriad scary sounding chemicals: sodium metabisulfite, potassium metabisulfite, sulfur dioxide, sodium sulfite, sodium bisulfite, potassium bisulfite, potassium hydrogen sulfite.  These are all different forms of sulfur and perform the same basic function -- to put a little sulfur in, on, or near the food to keep bacteria and oxygen away from it.  Sulfur is used in beer and wine making to keep bad bacteria out and to keep the wine or beer from oxidizing (which would turn them to vinegar).  Sulfur in these applications is referred to as "sulfites."

Other antioxidants used as preservatives include BHA, and BHT, which are also antioxidants, and are ironically sold as both "health supplements" and also feared as "artificial preservatives."

The best known preservative is sulfur.  It is both antibacterial and an antioxidant.  To preserve our avocado and keep the oxygen away from its precious green meats, we need sulfur!  I have been using potassium metabisulfite for some time now and it works wonderfully well.  It is potassium bound to sulfur, and when it touches water it releases sulfur into the water.  Just put a little bit of the sulfur powder in water and wash the avocado with it.  When you want to eat the avocado you can remove the sulfur by washing or you can simply eat it, as I do.  If you are not allergic the sulfur is harmless.  After the wash the avocado will stay green and fresh and protected from rotting and bacteria for over a week.

Let's Make Halloween Better


There should be regulations on the candy you can give out.  Candy isn't healthy and we don't want kids getting too much unhealthy stuff.  Plus you'll make your poor neighbors feels bad if you give out better candy, so I think anyone giving out premium candy should be forced to give about half of it to all their neighbors who may not be able to afford to give out good candy... and that way all the homes will give out equal amounts of good candy.

It's totally not fair to let rich people give away huge candy bars and have all the kids love them more.  It's just letting the rich get richer because when the kids grow up they'll love the rich guys and probably pass laws that favor the rich people.

Better still, I think the government should issue a uniform standard issue candy supply for each household; that way every house will be equal and no one will feel bad and we'll be sure the candy doesn't have razor blades because each will have a government tamper-proof seal on it.

Further, the candy has to be healthy.  And there are only a few people who make healthy candy and HCA (Halloween Candy Administration) would test each candy for about ten years before approving it as kid safe and approved for use in government Halloween bags.

Iowa's Unknown Drinking Law


Iowa Code 123.47A Persons age eighteen, nineteen, and twenty---penalty.

1. A person shall not sell, give, or otherwise supply alcoholic liquor, wine, or beer to any person knowing or having reasonable cause to believe that the person is age eighteen, nineteen, or twenty. A person age eighteen, nineteen, or twenty shall not purchase or possess alcoholic liquor, wine, or beer. However, a person age eighteen, nineteen, or twenty may possess alcoholic liquor, wine, or beer given to the person within a private home with the knowledge, presence, and consent of the person's parent or guardian, or with the signed, written consent of the parent or guardian specifying the date and place for the consumption and displayed by the person upon demand, and a person age eighteen, nineteen, or twenty may handle alcoholic liquor, wine, and beer during the course of the person's employment by a liquor control licensee, or wine or beer permittee. A person, other than a licensee or permittee, who commits a first offense under this section commits a scheduled violation of section 805.8, subsection 10. A person, other than a licensee or permittee, who commits a second or subsequent violation of this section, commits a simple misdemeanor. A licensee or permittee who violates this section with respect to a person who is age nineteen or twenty is guilty of a simple misdemeanor punishable by a fine of not more than fifty dollars.