Jason Moran's News

I hate those greedy, evil and selfish banks as much as you do. This predicament is a terrible spot to be in. However, do you want to have another depression? The depression was the result of a "do nothing" policy. The government never stepped in and things were pretty bad for a while. They would have been worse if a world war didn't start up after a few years.

Anyway, $700b bailouts suck, too. I've been paying my mortgage and other debts, so why should I take on more to cover the sorry louts that can't pay up (and to cover the banks sorry behinds for ever approving them in the first place!).

However, have you ever heard of The Paradox of Deleveraging? The same principal carries in the opposite direction. If *I* am thrifty then *I* save money. However, problems happen when *everybody* does the same thing. If *everybody* suddenly becomes thrifty then they do not save money! By spending money I am providing somebody else's paycheck. If everybody stops buying things then *I* do not have a paycheck because of how everything interacts. The paradox of deleveraging is similar because it isn't one or two banks failing - it is all of them!

The third option that isn't being talked about is nationalization a la Sweden a few years back. Not everybody is a fan of it, though. Fannie Mae and Freddie Mac are already pretty much nationalized...so why not some more financial institutions? I haven't come to a conclusion on this one yet.

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I did want to say that the powers that be are finally checking into the silver market. It seems that when demand is through the roof, supply is pretty much gone, yet prices go down it raises some eyebrows.

In the 20s and 30s W.W.I was simple the World War. Maybe we'll start referring to 1929-1932 as G.D.I because it was simply the first of it's kind.

I don't want to be a doomsday nutcase, but I am deeply scared about the world we live in. I'm not scared of life ending - I'm scared about catastrophic economic collapse. Something that can shake the world more than a 10.0 earthquake, a worldwide wipe out of retirement savings, financial institutions, and debt/credit.

Grandpa Bouchard, my mom's dad, was nearly vibrating a few months back because he was so excited about the massive collapses he predicted would be coming in the near future. He was never specific, but he felt like many banks would fail and we might just see times not-so-different than those during the Great Depression. He was envious that I was young enough to experience it, learn from it, and make it out on the other side someday. I guess it is possible that much of what is remaining of his retirement savings could get wiped out. I certainly hope not because if that turns out to be the case then the Average Joe will be in a much worse predicament.

I was reading a few articles and they didn't scare me - but that's because I already scared myself by wildly speculating what could happen.

So many of the banks out there are interconnected such that the rapid failing of a few could bring down the whole lot of them. The Fed pretty much had to bailout AIG a few days ago. If they didn't I think things could have quickly become exponentially worse.

It's no wonder my favorite commodity (silver) has spiked (along with gold, oil, etc) - these things are considered "safe" thus many are buying them up because they don't know exactly what stock will lose them their life savings next. At least gold and silver have a REAL value to fall back on...

It doesn't seem like you are all convinced that silver is a good thing yet. Think again.

I already presented my case by showing that industrial use is growing every year (after all, silver is the most reflective, conductive, (etc) of the pliable precious metals). The world's existing supply has nearly been depleted. One of the richest sultans or oil czars out there could actually buy all of the known silver in the world (if they wanted to). Very little silver exists, it's as simple as that.

However, that article I linked to has something even more interesting to say:

Let me state that clearly - one (maybe two) U.S. bank holds a net 36% share of the entire COMEX silver market. The same one or two U.S. banks hold 82% of the total commercial net short position. This is a concentration that is unprecedented; maybe double or triple or more what the Hunt Brothers held on the long side in 1980. Without these, one or two traders, there would hardly be any commercial silver short position at all. This makes the big concentrated short a danger to everyone, including the market itself. That’s why the regulators must act now.

This bank(s) will probably go out of business (is it JP Morgan/Chase?) because it will simply not be able to buy out all of the shorts it now owns. That may not make perfect sense to you, but this is a way to sort of think about it: One unlucky bank owes the world massive amounts of the not-readily-available silver, and when push comes to shove it will simply be unable to pay up. When it makes the attempt silver's value in dollars should sharply increase.

The gamble is worth it! Worst case it's an even trade, best case you make a pile of money.

Here is what you do--

1.) Type your answers to each of the questions below into the Flickr search engine.
2.) Pick an image from the first page only (I even tried to go with the first photo on most of mine)
3.) Copy and Paste the URLs for each image into Mosaic Maker.
4.) Save your mosaic to your computer and upload it into your own post.


1.) What is your first name?
2.) What is your favorite food?
3.) What high school did you go to?
4.) What is your favorite color?
5.) Who is your celebrity crush?
6.) What is your favorite drink?
7.) What is your dream vacation?
8.) What is your favorite dessert?
9.) What do you want to be when you grow up?
10.) What do you love most in life?
11.) What is one word to describe you?
12.) What is your flickr name? (or a common handle you've gone by)

I stole this idea from Angela

"[Silver] was politically demonetized beginning in 1873 and ending in the late 1930s when Roosevelt's silver manipulations forced China off the silver standard. Removing all that monetary demand for silver naturally made it lose value against gold, and rising industrial demand could not yet soak up the excess supply."

It makes you wonder whether the United States is as rich as it is because it went off of both the gold and silver standard. Maybe the fact that America started living off of credit and fiat money (money that the government mandates is legal tender but really has no actual value) gave it the leverage to spring ahead of everybody else. However, we all know that fiat money can have the bottom fall out from under it (see the Japanese Yen in 1989 - it is still recovering. I wonder if it was smart in the short run (of 100 years or so) but dumb in the long run. Sure I can buy expensive houses, cars, jewelry, and great stuff on credit - but that doesn't mean I can afford that debt and continue living that far above my means in the long run.

Historically gold was more expensive than silver because there was 8 to 12 times as much silver as gold. I don't know if anybody has been paying attention, but we've already mined 95% of the worlds surface silver. Nowadays there is 7 times as much gold as silver! Also, silver has a rising demand every year because it has an ever increasing industrial use. In other words we have used 90% of the worlds surface silver in the past 100 years and we are using more every year, yet it still doesn't cost very much.

The government wanted us off actual bullion (silver, gold, etc) as currency so it forced us to use worthless paper money instead. It's an "agreement" that the government has forced upon us. When we run out of money, the government simply prints more. I feel like we've been living in a land of make believe our whole lives and somebody is just going to stop playing the game sometime soon. We're living in the money Matrix and I've just figured out the facade that has been in place this whole time. There is no dollar.

Is it possible that the dollar (well, all of the world's fiat money) could collapse? I mean, do you understand that at a point in time the paper money we had were representations of actual bullion (silver or gold) that was held in a safe repository somewhere (like a bank)? Paper money exactly represented trading gold/silver for other goods or services. Now it is simply paper money that represents...uh...well, the government tells us it has legal value. Dimes and quarters used to have 90% silver in them and were roughly equal in value to the precious metals inside. In 1965 they changed half dollars from 90% to 40% silver and most other coins were filled with worthless metals. Let's just say that coins prior to 1965 are worth a bit more than face value.

Anyway, I haven't plunged into this yet, but I plan on grabbing up all kinds of silver and perhaps gold since it never really loses value. It fluctuates in the market, but over time it is more dependable and stable than almost any other commodity. In the long run your pile of silver and gold can be traded for more and more of the increasingly worthless money we use to buy things with.

So, there's an African tribe that doesn't count using numbers (the Pirahas). They have a word that means "one or two", a word that means "four or five", and a word that means "many" or "a lot". In other words, they never directly count or say exact quantities of items.

This guy says it the best - and I know it's a really long quote to read through, but it's funny and interesting and it explains how baboons use the same counting system:

So, I grew up on a Bushveld Farm in Africa.

And, as one does on farms in the raw, one must maintain a system of control... over baboons.

Experience taught the farmers how to deal with baboons, as a necessity towards having a harvest- baboons are quite destructive you see.

The first method is by catching one using the 'pumpkin' trick. Quite easy:
Tie down a pumkin, make a hole in it just big enough for a baboon hand to slip in and wait.

The baboon will come along and stick his hand into the pumpkin, grab a handful and then try to remove his hand... but as an empty hand can go in, the clenched fist cannot get out... baboon does not want to let go... and is therefore stuck. Then you paint the fellow white, and let it go. The returning baboon will scare the living daylights out of his tribe and they will disappear for a while.

The other method... well... shoot a couple and the farm will be avoided for a LONG time.

It is not as easy as one would think to hunt baboons, firstly, as they have very effective watch..err.. watchmen (Bobejaan-brandwag) who will sound the alarm as soon as they spot people with guns. The trick is as follows (works for Maize fields):

If one man walks into the field, and hides, the baboons stay away.

If two goes in, and one comes out, they stay away.

If three goes in and two comes out... they stay away...

But if four goes in and three comes out... they seem to think that many went in and many left... all right to plunder. (ok, know it should be 'feed', but we live in a relative universe!)

We used to tease and say "1-2-many" is how baboons count. So, imagine my puzzlement when I saw that there are... well... humans living by a similar system!

I thought I'd revisit Salary Vs. Contracting now that I'm back in a salaried job.

I have now worked an even amount of hourly, salary, W-2 contracting, and 1099 contracting.

My overall take on it is this: I want to do pure 1099 contracting if I can help it at some point in the future...but I am enjoying the perks of a salaried job while I can.

I haven't gotten paid for holidays in years, and it is really nice to still get a full paycheck for 3 and 4 day weeks. I don't have any vacation days yet, but when I do and I take my vacation it will be awesome to not take the "double hit". When you are contracting it is a double hit because you pay lots for your vacation and you come home to no pay for the time you took off.

However, let me explain why the 1099 route is the best way in my personal opinion (for software developers). First of all, you don't 1099 under your personal name. You create a corporation (LLC, S-Corp, etc). The business at the front end is the key to the whole thing.

Since you are working for this newly created business you can pay yourself for your work and for rent (because you have to do your work at some physical place). Then you get to write off your computer, supplies, travel, and all kinds of other things on your taxes. Plus, it provides legal protection. If you did something stupid like break a non-disclosure agreement they can't sue the pants off of you directly, they would be suing your company.

Before I continue with a few more good 1099 points, let me tell you some of the bad. Your taxes are way more complex, so you'd better hire an accountant. You'll have to do some payroll stuff for yourself and any other employees you have, including their taxes and sending off IRS paperwork. Some of your clients won't pay, or at least not in a timely manner. Sure, you might make 30,000 dollars, but what if they give that to you in 5 months in a single payment? Can you survive until the check shows up? One last thing, you need to pay double taxes (employer and employee portions).

Anyway, the last couple 1099 pros: You generally make a bit more than salary/normal contracting so that covers your extra taxes and then some if you are writing off enough on your taxes. You can hire other people to do the work for you. Lastly, you can work on your own terms.

Let's say you are busy at a client but company ABC wants you to redo their website for $8K. You don't have the time. However, you ask your website-savvy buddy that wants to moonlight a little how much he thinks he could redo the site for. He says he could redo it for about $4K, but in case anything unexpected comes up it could max out at $5K. You take the contract, let your buddy do it, pay him worst-case-scenario $5K and bank $3K just for setting the whole thing up. You can't do that if you are working directly for an employer.

All that being said, I'm happy where I am at my salaried job right now.