Greek comedy/tragedy

I knew that politicians were idiots who only tried to save their own asses, but the Greeks are redefining the concept of idiocy and bringing it to a whole new level.

So last week, the EU decided to cut half of Greece's debt and also to award it with the second half of its loan (in exchange for more austerity measures and more EU meddling in Greek business of course). All this in a desperate effort to avoid the entire Eurozone project from blowing up into their faces. And what does the Greek prime minister decide on Monday? That he is going to hold a referendum to see if the population agrees with these measures... From a democratic standpoint, cheers to him! From a political, economical, stability point of view, he's a freakin' moron! Referendums take time to be approved, to be organized and to be held, and then to be analyzed. The Greeks don't have time! And now the Germans might back out on the deal.

Soooo shall we say we are back to square one?

All that pain gone down the drain (and to begin with, the solution was a crappy one which only brought temporary relief, but a crappy solution is better than no solution). All because one idiot wanted to shift the blame from his back to someone else. What a f*****g moron!


Oh and this is entirely unrelated (well it's still about Grece), but I laughed very hard when I saw this:











America produced Steve Jobs.
Greece produced No Jobs.

I know, I know, it's very insensitive on both sides, but I couldn't help myself.

I can has cheeseburger now?

You sometimes get to a point in your life when you start to reevaluate your priorities. Because when you're constantly tired and constantly rushing to get things done, there's obviously a lack of efficiency somewhere. And today I have come to the conclusion that I'm doing it all wrong. What exactly? No clue. But when you love what you're learning and it interests you and you're all fired up about it but no output is coming you have to come to one of two conclusions: 1) maybe you're not as good as you thought you were and what you thought was intelligence well maybe it's just arrogance; or 2) you're incapable of conveying that fire and those smarts to the outside world (which in a sens is worse than being an idiot). Either way, I'm doing something wrong here.

After months of stalling, I finally started reading The seven habits of highly effective people and though I'm not very far into it, there was something that caught my attention. At one point, the author is talking about the tale of the goose that lays golden eggs and how, in order to keep enjoying the eggs, you need to care equally about the goose as well as the eggs. Kind of like farmers in Malawi who keep sowing their land year after year after year because they never have enough to eat and eventually the soil becomes so depleted in nutrients that production starts decreasing every year more and more and they just become more and more poor. They need to eventually get fertilizer in order to enrich their land (aka take care of the goose) in order for their crops to become sufficient. Anyway, leaving aside the metaphors, it is true that I have been neglecting my goose these past few years. You push yourself to the edge in order to get everything done and afterward you are too blasé and too tired to keep going so you need to take some time off. But the time off then causes you to fall behind in everything else so you need to again push yourself and etc. and etc. and etc. Spinning cycle that never ends. And what does that leave me with? A fucked up back, quite unattractive dark circles under my eyes, those extra pounds which will never go away if I never eat properly and no applicable knowledge that would show that I actually didn't waste my time in school. So shall we say loss-loss?

In the end the point is that something needs to change. I think that after a year dedicated to self-discovery and selfishness (I was selfish that's for sure... how much did I discover? Well, not a total waste of time, but I still have a long way to go), the next one should be dedicated to proper habits. After all, Aristotle did say that we are what we repeatedly do.

Problem is that all I want to do right now is watch last night's Fringe episode. I can has cheeseburger now?

This is madness! This. Is. SPARTA!!!!

Following the latest economic news on Europe sometimes makes you feel like you are entering some sort of a parody of how societies and economic systems are supposed to work. When you follow the news on a regular basis, you constantly have the felling that the end of the world is near. Whether it's revolts and civil wars or terrorist attacks or economic crises or just good old mother nature, there's always something to keep you on the edge of your seat. And if everything is fine and dandy for you or your neighbors, then there are over 100 other countries where things can be shitty and what with globalization and our financial system there's always a way in which that can screw you over.

It sometimes makes me wonder whether we as humans should have the right to lead something as fragile, as complex and as big as a country. They say that everyone can make mistakes and as humans it is natural that we make mistakes. However, when your mistake involves millions of other people in the street, then we should question whether that natural characteristic has the right to exist within political or economic systems. We should question whether any changes in policies or structures should ever be made. In physics, they make over 16,000 runs of the same experiment before they even begin to question the validity of their theories. In that perspective, who the hell ever thought that the Eurozone would be a good idea? Probably the same schmuck who thought sub-prime mortgages would work out alright.

Alright, I might complain a lot, but the truth is that while we might feel like grand men who are setting the foundations for better societies, in the end, we are just children building sand castles on the beach and any minute now the wave is going to come and wipe away a decade's worth of efforts. And how can we even phantom to talk about global economies when more than half of the people on this Earth don't understand the slightest thing about their neighbors and much less about someone living at the other end of the globe. We have many dreams about how this world could be, but we fail to see the full implications of our plans. And how can we? It would be like trying to predict the weather that we would be experiencing 10 years from now.

It is in moments such as these that we wish we had someone who knew what he was doing. An actual adult. But the only thing that ever came close to an adult-figure was God. And God is either dead or he doesn't understand shit about the economy. Then again, neither do we...

History of money

Autarky: Countries are self-sufficient and do not trade with each other

Legal tender: medium of payment recognized by a country's legal system

Troc/Barter: Exchange of products of similar value (prehistoric Europe)

Problems:

1. Valuation: hard to find equivalent between dissimilar products such as, for example, wheat and wood on which all participants to the trade taking place would agree upon (two people won't value the same product the same way based on personal preferences, background, etc);
2. Timing issue: a cattle herder wanting vegetables has to find a farmer willing to exchange his tomatoes for cattle (if the farmer wants honey, then the herder is screwed! Well, not really, but he has to find someone else...)
3. Storing: some products such as food cannot be kept for a long time for future purchases
   

Gold and Silver money: value of currency is defined by intrinsic value and weight of metal used in composition (ancient Greece, Rome and medieval Europe)

Problems:

1. Through use, the coins could end up loosing part of their metal thus loosing their value (debasing)
   
2. Metal could be voluntarily scratched off from the coins in an effort to gain (debasing)
   
3. Gold and silver coins could be melted and mixed with alloys and then re-transformed into coins (debasing)
   
4. Cumbersome to carry.
   

Receipts, bills of exchange and promissory notes: paper issued by international bankers upon the receipt of gold or silver coins and convertible back into coins at sight upon presentation of note; primarily used by travelers in order to avoid theft (started in the Xth century in Italy and spread into Europe; still used until the XIXth century)

Banknotes: same concept as promissory notes, though these are issued by banks when one makes a deposit or a loan. Is used as an exchange medium between particulars as an alternative to coins based on the assumption that the note can be exchanged with gold and silver coins at the bank. Basis of today's monetary system and money creation. As notes often circulated for a long time without being reclaimed, a bank could lend more money than it actually had as deposits. (started out in VIIth century China and spread out in Europe in the XIVth century).

Bill of credit: paper issued by governments similar to banknotes. Provincial governments exchange these notes with gold and silver coins in order to pay their obligations (somewhat similar to treasury bills from this perspective). Bearers can then use them to pay taxes (started in XVIIIth century America)

Problems with paper money:

1. No fixed value and is therefore susceptible to devaluation when a country suffers from inflation.
2. No intrinsic value and therefore is only useful as long as people have confidence that it will be accepted as a means of payment or that it can easily be converted into gold or silver coins
3. Banks suffered frequent runs by customers who lost confidence in the value of their notes and who tried to convert them into treasury coins. However, as banks lend a big percentage of their deposits, they don't have sufficient funds to face such a scenario and they would often be forced to declare bankruptcy.
   

Fiat money: paper issued by an official institution (usually a central bank) and whose value is given by government regulation or law and is not backed up by gold or treasury coins.

In order to solve the confidence crisis, governments assigned the production of notes to a unique official institution (usually a central bank). The time of implementation of this system varied greatly from one country to another. The first central bank was created in Sweden in the XVIIth century, while in Brazil this only happened after World War Two. The purpose of central banks was to restore the public's confidence in the banking system and also to fight inflation. Up until the 1950's (1970's in the case of the US), the notes printed by central banks were still convertible into gold at a predetermined rate. The gold standard was eventually dropped as it imposed many restrictions upon loans and commercial activities and this brought about fiat money.

Electronic money: as with initial bank notes, individuals nowadays rarely retire the full amount of their deposit with a bank. Payments are primarily made through checks or bank transfers. Therefore, deposits are used to make loans which then will be used to make other deposits. This process creates liquidity through banks' electronic recordings on their balance sheets. What's more, with the growing popularity of credit and debit cards, paper money is rarely used anymore and some even predict its extinction in favor of "electronic money".

People never learn

You know you have crossed over to the dark side when your idea of a relaxing Sunday night consists of watching a documentary on the 2008 banking crisis.

Leaving that aside, Krach: les dessous de la crise économique mondiale is fairly fascinating as it explains how the crisis came to be. And when you later on read that people at UBS are worried that they won't get their bonuses and that their scandal will cause tighter regulations on the industry, well you're not as surprised that we ended up in this shithole. And let's just say that it'll be a miracle if we don't fall into another economic crisis.

On a lighter note, once it all passes, we can safely laugh about it!



Did you see it? Did you? Did you? Hint: it's the subscript under the Bank of Evil sign towards the end.

How complicated is your life?

My theory is that the degree of complication in one's life is directly proportional to the number of people that said person needs present in his or her life in order to be happy. So as the number of people increases, things get more and more complicated for the simple reason that a limited amount of resources (aka time) has to be divided by a bigger quantity and therefore leaving less and less available for each individual. Thus, those who can be happy by themselves reach a state of minimal complication (following the assumption that happiness is maximized when the individual is alone).

However, as life becomes more and more complicated, happiness has to start decreasing at one point, right? A bit like the concept of diminishing marginal returns, happiness will no longer be able to reach a potential maximum due to the increasing strain that complication puts on it. So for those who need many people in their life in order to be happy, well, they reach some sort of paradoxical state where they simply cannot be happy. In this case, a small number of people decreases their happiness, but an optimal number of people also decreases their happiness through the complication factor.