Wednesday, October 23, 2013

The Stability of The Purchasing Power of Our Money

Take two words, monetary policy, go to sleep, and in the morning you will have less purchasing power.  Does it work that fast? No, but over a period of time, say 20, 30, 40 or 50 years, your purchasing power will erode. Few people even care what the words monetary policy means, much less what monetary policy does.  As all of us who carry Federal Reserve Notes, also known as our paper money, in our wallets, you would think that we would care about monetary policy and who makes it.  Monetary Policy in the United States is made by the Federal Reserve Bank Board, with input from bankers and economists.  My problem with this is that there is no input from people living on a fixed income like Social Security or a pension.

Monetary policy today is designed to accelerate economic growth, and that is where I have a problem. I do not think that monetary policy should be responsible for economic growth as it is interpreted by the members of the Federal Reserve Board.  Economic growth should be encouraged by the laws passed by Congress, and not by the manipulation of monetary policy.

Keeping interest rates very low may bode well for those borrowing money, but it does not bode well for those seniors trying to live off of their pension, Social Security and a few certificates of deposit (CDs) paying a fair rate of interest.  When interest rates are held down by Federal Reserve Bank policy so as to encourage faster economic growth through greater borrowing by everyone that knows how to use leverage, there is only one class of people left holding the short straws, and that is those seniors investing in CDs from their bank.  Because CDs are paying so little in our present low interest rate environment, many seniors are being "forced" by circumstances to invest their money in the stock market in search of higher current yields on their money.

I will stop here, and let you who read my blog MONEYTHOUGHTS digest these three paragraphs.  It is important to understand what I have written.  Not because what I write is important, but because what I write explains why 1.) the stock market is up so much, and 2.) why it is important for everyone to take an interest in what is happening with monetary policy.  We are all part of the monetary system we use in the United States, and as such we should all have a say in how monetary policy is formulated.  Monetary policy is too important to be left just to the bankers and a few economists. Perhaps it is a bit radical to insist that we all have some say in how monetary policy is decided. After all we that live on a fixed income are most dependent on the stability of the purchasing power of our money!

Thursday, October 10, 2013

Norwegian Freighter by F.D. Zigler

In the summer of 1964, I hitch-hiked to New Orleans and got a job on a Norwegian freighter. I took a number of photographs with my trusty 35mm camera, not as many as I would have liked, but I held on to them and used two of them for these two paintings.  Here are two views looking towards the rear of the ship from two different elevations. I recycled an old wood window to be my frame and after looking at it for about a year unpainted, decided that I would like the paintings better in a gray frame that reminded me of the gray on the ship. That was an interest summer as I went to South America and the Caribbean.

Norwegian Freighter by F. D. Zigler, acrylic on plywood, 2012.

Wednesday, October 9, 2013

The Shutdown and The Jerks That Shut it Down

Shutting down the Federal Government has only drawn these jerks that have shut it down to the point where we can see that they really don't know how much the Federal Government does every day that we don't know about, or just take for granted.

The death benefit that is paid to every family of a person killed on active military duty is just one of many many things our Federal Government does, and it helps military families make their way through a very difficult time.  But, this is not all the Federal Government does for families, the sick and injured, and so many other programs that we don't know anything about help our veterans too.

This shutdown is not about the budget or the deficit.  It is politics at its worst.  It is about making the first black President of the United States appear that he can not do the job.  Because, if the first black president does a successful job for 8 years, then there might be other men and women of color that could do a good job too.  The Republican Party for the most part doesn't appeal to people of color, or for that matter, to a lot of white people either. They are a political party on their way out because the social and intellectual landscape of the United States has changed and is continuing to change rapidly. The Republican Party's refusal to do anything about immigration reform is just one part of their failing to deal with the United States in the 21st century.

Those jerks in Congress that believe that this will not hurt our economy and have no affect on the world's economy are stupid or they just don't care how much they hurt people.  This brings me to a point that some people will disagree.  The Republican Party doesn't care about people.  It is that simple. Their values are the values of selfishness and indifference.  Most people are seeing this now with the Federal Government shutdown, and they will remember this too at the next election.

Sunday, October 6, 2013

Diptych: Portraits of The Black and White Obama

Why a White Obama? The White Obama portrait is for those people that say they want their country back, but really mean they want a white man in the White House.  Many years from now, when serious historians will write books about the first black president of the United States, in the back of the book under the Index, and under the letter "R" will be the words racism towards President Obama, the First Lady and the Obama children.  Remember, I prefaced this with the words "serious historians" because no serious historian of American cultural and intellectual history of President Obama's years in the White House can ignore the racism directed towards the president, his wife and his two daughters.  For this reason, as an artist that paints political satire, I painted and constructed the wood frames for these two portraits. Some may disagree with my premise and others might resent that I would paint these two portraits as I did, but they are my interpretation of what I have seen and witnessed as an American for the last 71 years.  Racism is as American as cherry pie.

Diptych: The Black Obama - The White Obama by F. D. Zigler, acrylics on canvas board 16x20 inches, wood frames constructed and painted with gesso and latex eggshell black and white paint, 2013.

Friday, October 4, 2013

Let Us Pray

I listened today to an economist talk about what a default on our US Treasury debts would mean to interest rates here in the United States and around the world.

First, it must be understood what is meant when economists refer to the US dollar as the reserve currency of the world.  People, corporations, institutions and other countries buy US Treasuries as a means of holding cash.  Yes, it is not like dollar bills in your wallet because the US Treasuries that they buy pay an interest rate.

This interest rate is considered by much of the world to be the least likely debt instrument to default. And, because it is considered as such, it carries one of the lowest interest rates for a short term debt instrument, a Treasury Bill.

If the United States defaults on its debt, our US Treasury Bills will no longer be considered the safest short term debt instruments in the world.  As a result, interest rates on Treasury Bills, notes and bonds will go up.

But, that is not all!  The interest rates on everything else will also go up.  Higher interest rates have a way of slowing down the economy, and since US Treasury debt is held by people, corporations, institutions and foreign governments, the economy of the whole world will slow down.

Corporations and other large institutions are constantly looking to invest in bigger and better buildings and plant and equipment, but each project's approval is based on an interest rate assumption for that project.  Many projects at higher interest rates are not feasible to do, so they are put back on the shelf for another time.  This happening around the world means that economic growth is thwarted!

I don't expect people in Congress to understand what I have just written, but I hope the lobbyists that line their pockets with campaign contribution do.  Hopefully, corporate America will explain this to those Republican Congress people that don't understand a fucking thing about economics or for that matter world finance, a world reserve currency or how the economies of the world are so tied together that a default by the United States, the largest economy in the world, will impact the rest of the world too.

Let us pray.

Thursday, October 3, 2013

A Celebration of Life and Art: October 2013

This week is a week of relaxation, to some extent, and celebration of being another year older.  Since my retirement at the end of October, 2005, I have painted and made many constructions related to my artwork.  In 8 years, the pieces have so to speak piled up.  I haven't sold much, but that isn't why I paint and make my wood constructions and frames.  I do it because I like to work with my hands; and, I like to take an idea that I sketch on the back of an envelope, and make it into a 2 or 3 dimensional object. A painting starts with an idea and is transferred to a drawing and then the fun begins.  The drawing then has to be broken down into its parts and constructed.  This is what I enjoy.  Sometimes it is a bit of a puzzle, and at other times my hands and head take me where I want to go.  It is like something in the recesses of my head know what to do and all I have to do is carry out their wishes with my two hands. I am going to post a few pieces from the last eight years, and I hope a few of you who read my blog will enjoy seeing them.  These pieces made from wood and painted in acrylics are a few of my latest pieces.
So along with my Birthday this week, I celebrate my artwork production.