Posted by hank,
Sun Oct 12 19:07:00 UTC 2008
Well, yet again the government thinks that it can fix all its problems by giving people the illusion that they have more money. Thanks for the loan I’ll have to pay back in my taxes (or, worse, they will just inflate the currency to pay it out)!
I think I might just mattress (yes, I’m using that as a verb) the money, or spend it on things one might need if we go into a depression, like long shelf-life food or ammunition. Any thoughts on what might be good to purchase? (I also have no debt at all, so that’s not really an option for me like it is for 99% of the nation)
Tags: money
Posted by hank,
Sun Aug 24 09:26:00 UTC 2008
I have recently been reading Economics in One Lesson by Henry Hazlitt, and in Chapter 11, Section 2, I found an interesting analysis of tariffs and how they actually hurt everyone except the special interest producer. In his hypothetical example, the consumers pay more for the products, there is less export of American currency to foreign countries, and therefore less export from America, and he even goes on in the following sections about wages decreasing as an effect of tariffs.
This has made me rethink “buying American,” which seems to be a big movement in today’s society. If it is more expensive for me to buy from an American company, and I do it anyway, along with tens of thousands of other consumers, what are the actual effects? That company doesn’t go out of business, yet some foreign company with cheaper equivalent products may, or at least it will lose profits, resulting in the increased unemployment in that country and a decrease in buying power of that country, affecting American exports. If the option to buy the alternative is lost, the cost of the product to consumers increases, hurting working families in America. The employees of the American company will keep their jobs instead of moving to other industries, which is seen as the motivation behind the choice to buy American. But, the unseen result is that there is less American money in the pockets of the foreigners, money that has no purpose other than to be spent in America. Therefore, by buying American, you are helping that single company at the expense of the minuscule loss to every American company that exports its products outside the country. In reality, it doesn’t really matter if you buy American or not, since that money will probably not spend long in foreign circulation before it is re-used to buy American out of necessity. The power of electronic circulation of currency these days is incredible.
Hypothetically, if I buy my Honda Civic instead of a Chevy Volt, what’s the difference? When I purchase the Honda new, I am putting a few thousand dollars in the pockets of a Japanese company. Dollars don’t work over there, so they need to change them into something else. They have a few options:
- They can convert it into Japanese Yen, whose exchange rate today is 1 yen per 0.009101 U.S. dollars by selling the currency to an American entity. This simply decreases the American holdings of the foreign currency, and injects the money right back into America.
- They can convert it into Japanese Yen by selling it to another foreign country on a currency exchange, or by selling it domestically to a currency trader. This probably happens to some extent, but it just represents one more extremely fast electronic hop through the global investing ether.
- They can convert it into holdings in a US company, bonds, commodities, homes, or other US-based securities. This helps our economy, allowing our companies to function, maintaining American employment directly.
- They can loan it back to US entities and collect interest in dollars, which have to go through this process again (yes, I realize that bonds fit here, but I feel they fit better in the previous bullet). Eventually, these all have to end up back in the pockets of Americans, and even lift the burden of risk from all American lenders. If these loans are defaulted upon, it was simply a bad investment by the foreign investor, whose product and money we have now!
- Finally, they can simply buy American. Our exporters will benefit greatly by the increased spending, and will buy products being produced in America for lower prices than they can be found in Japan, necessarily adding to the efficiency of operation of the world market (otherwise, the exporters would go out of business).
Note also that investing in foreign currency is a gamble. It is definitely possible that a foreigner may sell us a Honda Civic today for $10,000, and 6 months from now inflation of the money supply (the M3 that the Fed doesn’t publish anymore, not the CPI, which is open to interpretation) will drive the purchasing power of those dollars lower, meaning by buying that car, we actually cheated the manufacturer out of some amount of buying power. Therefore, if the car company wants to continue being profitable, it cannot keep its holdings in American currency for more than the short term, meaning it has to offload it, the most logical place being back to America, or to a Japanese currency trader, who will do the same.
All in all, I would almost encourage buying foreign to get rid of these worthless pieces of paper as quickly as possible. Let the foreigners deal with our ruined currency.
Tags: money
Posted by hank,
Thu Nov 01 03:33:00 UTC 2007
It’s time to raise the taxes on the rich in this country. I can’t believe that Warren Buffett only pays 17.7% on his $46 million. Why am I stuck paying 20-30%? That’s stupid. I hope the next president realizes this and fights to lower taxes drastically for anyone making sub-upper-level-executive salaries.
I started trading options about a week ago, and made a little profit on Boeing. Redhat started taking off today, and I might buy a call on that. Watch Redhat!
Tags: money
Posted by hank,
Fri Oct 12 03:17:00 UTC 2007
Radiohead made an album recently, and you can buy it for however much you type in. I spent $5 on it, and downloaded it immediately. It made me feel good. It’s too bad more artists don’t do this.
Tags: money
Posted by hank,
Mon Oct 08 16:54:00 UTC 2007
It looks like Redhat is about to rally
Stock up if it goes past $21! It could really zoom. The support is built up long term. I signed up for an options account with Scottrade today. It will allow me to:
- Buy puts and calls to open
- Write covered calls
It’s too bad they don’t offer naked put writing and selling to close. I would have liked to play the game of just trading pure options without ever exercising them.
Tags: money
Posted by hank,
Sat Oct 06 04:48:00 UTC 2007
After looking through hundreds of stocks, I think I might check this one out:
It looks technically promising. We’ll see how that turns out.
Tags: money
Posted by hank,
Mon Aug 27 03:33:00 UTC 2007
I found that after paying off medical school loans and paying malpractice insurance, and factoring in that most doctors don’t get vacation and work more hours per week than I do, it might not be worth the added years of schooling and the added stress unless you really love what you’re doing. Here are some calculations:
The Programmer
Assumptions
- The average programmer makes around $70,000 mean salary while in the work force
- They get a 2-week vacation
- They work 40 hours per week for the remaining 50 weeks
- They start working at 22 and retire at 59. (37 years of earnings)
? (70000 * 37)/(37*50*40.)
= 35.00
$35 per hour
This is assuming the programmer goes to a state school and has little or no debt. Ivy-leaguers might have some more issues.
The Doctor
Assumptions
- The doctor makes around $135,000 per year
- He/she works 50 hours per week (which can vary per specialty, but some are as high as 80-100 hours per week)
- The doctor pays $20,000 in malpractice insurance per year
- He/she has $120,000 in debt from medical school and plans to pay it off in 10 years at 5% interest (not compounding, but it’s negligible)
- He/she has a residency of 4 years, making $40,000 per year
- They start medical school at 22, finish at 26, are a resident until 29, and retire at 59. (30 years of good earnings)
Now, let’s make a nice huge equation for a doctor:
? ((135000*30) + (40000*4) - (20000*34) - (120000 + (120000 * 10 * .05)))/(34*52*50.)
= 37.90
$37.90 per hour
So, after all that hard work, all those stressful hours, all that worrying about job security (especially for anesthesiologists), in this case they would make about $3 more per hour. Now, I do realize that being a doctor isn’t all about money. This is just a warning for those who are misled by the high salaries. If you believe you would enjoy being a doctor, go for it! But, if you don’t think it’s right for you, you may consider other things that in the end pay just as well.
Tags: money
Posted by hank,
Thu Apr 05 01:09:00 UTC 2007
I saw this on the old blog today:
Hawt. I hope they change all my ads to look like that. Turns out they blogged about it here.
Tags: money
Posted by hank,
Tue Feb 27 19:56:00 UTC 2007
My solution to this problem:
(1..100).each do |i|
puts i%3==0 && i%5==0 ? "FizzBuzz" : i%5==0 ? "Buzz" : i%3==0 ? "Fizz" : i
end
This should be trivial for just about any programmer. Took me 40 seconds or so.
Tags: money
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