Pages

Economics 101: Creating Money


Banks create money. That's their main purpose. When a bank loans you $100,000 to buy a house, they don't actually have $100,000 sitting in a vault somewhere. In fact, at most, they have about $10,000 because the "liquidity ratio" in the U.S. is between 0 and 10% [[http://en.wikipedia.org/wiki/Reserve_requirement#United_States]]. (Watch Bailey try to explain this next Christmas while you're watching It's A Wonderful Life for umpteenth time) The other $90,000 is, effectively, a kind of credit... a promise to pay in the future. Yes, they will cut a check for $100,000 but they're only allowed by the government to do that as long as they have deposited no more than 10% of that amount with the Federal Reserve. Every dollar the government prints, is either in the bank or a promise to pay in the future... a bank or someone holding government bonds (i.e. Treasury bills, Savings Bonds, etc.). Thus, about 90% of the "wealth" in the U.S. is in these promises-to-pay. The more common name is "credit."



2014-01-24
This paper effectively refutes the accepted explanation of "fractional reserved banking" the "money multiplier"
http://www.thefreelibrary.com/Money,+credit+and+bank+behaviour%3A+need+for+a+new+approach.-a0250677146 and makes the case that it was this reversal of cause and effect that caused the actions taken in response to the 2008 financial crisis to be largely ineffective.


Patching Java is Futile


How to turn off Java in your browser - and why you should do it now
Roger Grimes, InfoWorld's resident security expert, says in his latest column... "Patching has failed, so it's time for Java to go".

I couldn't agree more!

Having programmed in a lot of languages, I've studied and tried to use Java, but have just never warmed up to it.

At the end of the day, there were always more productive ways to implement the functionality with greater reliability than Java.

Java may be the kind of environment that's useful for very large projects with many developers the way COBOL and Ada are, but it has high development overhead (lots of coding to accomplish little) and resistance to maintainability (updates usually break the dependant applications).

Roger notes that the latest versions have greatly improved things.

But I can't imagine anyone running mission-critical systems would risk upgrading their Java engine without management commitment to extensive testing and allocation of major dollars for the almost guaranteed application upgrades and changes that will be required.

It's just not worth it.

Let's move on.

NASA's "back in harness"

NASA's new "test harness" for its next generation of interplanetary flight systems gets "first light" this month. -- DocSalvage

NASA is back in harness