A few days ago on the Broad Oak Blog, I referred to Brad Setser's theory that China has been using the UK to make purchases of US Treasury securities, and that this may offer a different view of what has been happening recently (the apparent reduction in Chinese support for US debt).
In response to a comment, I suggested that the reason for this supposed system of proxy purchases was to allay the fears of the American public.
It occurs to me now, belatedly, that the recent reduction in direct Chinese holdings, coupled with the increase in holding by the UK, may be a preparation for a self-protective (or even punitive) dump of Treasuries using the same intermediaries. If their direct holdings remained relatively unchanged, the Chinese could (if their nominees stayed quiet) deny responsibility and forestall a backlash from American public opinion.
Friday, February 19, 2010
The Beginning of the End?
A recent episode of 'The Simpsons' featured a popular new teacher, who gave assignments by iPhone, and didn't believe in memorization, since it 'is simpler and easier to just google it'.
I laughed, until I started an on-line exchange with an instructor at a private college. I learned that there is a new breed of teacher, coming mostly from colleges of education. They use phrases such as 'training life-long learners', 'having students take charge of their education', 'learning to use the correct tools, rather than learning how to do things', 'cite sources, rather than memorizing' and 'communicating with podcasts, instead of writing'.
I have seen these methods tried in mathematics and science education, and they simply do not work. Even if they do work in other subjects (doubtful), the bad training carries over to the technical fields, hampering the learning anyway. That should be the end of the matter, except that these ideas are dangerously attractive:
Weak or lazy students like them, since they can get good grades without actually mastering anything. They also get the comfortable illusion of learning, without the pain.
Administrators like the idea, since they can then eliminate or reduce the cost of libraries and textbooks, and replace experts in subject matter with general 'communicators'. All teaching is then a higher art, being removed from 'mere content delivery'. This last is a phrase that I heard used by a colleague in our college of education.
Lastly, parents and politicians love the idea, since education costs can be brought down, and performance is way up, at least on paper. Never mind that the Pacific Rim countries, still using the 'old-fashioned' techniques, are outperforming us, year after year.
How much longer until we have the world of Ray Bradbury's 'Fahrenheit 451', when books are actually banned, because reading makes some people feel inferior?
I laughed, until I started an on-line exchange with an instructor at a private college. I learned that there is a new breed of teacher, coming mostly from colleges of education. They use phrases such as 'training life-long learners', 'having students take charge of their education', 'learning to use the correct tools, rather than learning how to do things', 'cite sources, rather than memorizing' and 'communicating with podcasts, instead of writing'.
I have seen these methods tried in mathematics and science education, and they simply do not work. Even if they do work in other subjects (doubtful), the bad training carries over to the technical fields, hampering the learning anyway. That should be the end of the matter, except that these ideas are dangerously attractive:
Weak or lazy students like them, since they can get good grades without actually mastering anything. They also get the comfortable illusion of learning, without the pain.
Administrators like the idea, since they can then eliminate or reduce the cost of libraries and textbooks, and replace experts in subject matter with general 'communicators'. All teaching is then a higher art, being removed from 'mere content delivery'. This last is a phrase that I heard used by a colleague in our college of education.
Lastly, parents and politicians love the idea, since education costs can be brought down, and performance is way up, at least on paper. Never mind that the Pacific Rim countries, still using the 'old-fashioned' techniques, are outperforming us, year after year.
How much longer until we have the world of Ray Bradbury's 'Fahrenheit 451', when books are actually banned, because reading makes some people feel inferior?
Thursday, February 18, 2010
A dire warning
Egon von Greyerz of Matterhorn Asset Management lays out his reasons for investing in physical gold. You may or may not accept his argument, but his analysis of worldwide economic problems is deeply troubling.
Whether or not gold is the right prescription, I am very much afraid that he may be making the right diagnosis and prognosis. Do have a look.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Whether or not gold is the right prescription, I am very much afraid that he may be making the right diagnosis and prognosis. Do have a look.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
A dire warning
Egon von Greyerz of Matterhorn Asset Management lays out his reasons for investing in physical gold. You may or may not accept his argument, but his analysis of worldwide economic problems is deeply troubling.
Whether or not gold is the right prescription, I am very much afraid that he may be making the right diagnosis and prognosis. Do have a look.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Whether or not gold is the right prescription, I am very much afraid that he may be making the right diagnosis and prognosis. Do have a look.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
What use are news organisations?
Our news media are a craven lot, aren't they? Mahmoud al-Mabhouh is killed in his hotel room by (allegedly) a Mossad assassination team, and everything I hear or see on the news is a fuss about the passports they used. I would almost rather have D-notices slapped all round, than have the media come in on cue and on one note like well-trained little choristers. At least censorship would indicate some residual respect for the Press; and for us.
The readers of the Boston Evening Transcript
Sway in the wind like a field of ripe corn.
T.S. Eliot
The readers of the Boston Evening Transcript
Sway in the wind like a field of ripe corn.
T.S. Eliot
What goes up...
Reading "Jesse", I see an interesting graph (reproduced right). This looks at what proportion of US mutual fund (UK: think unit trust) money is held in cash. According to the graph, funds are more nearly "fully invested" than at any point since 1970.So, where will the money come from to power further gains on the index? Or is it (as I fear) a sign that the private investor is trustingly holding the baby, just as the institutional investor (who only holds 20% of total US shares) is about to "pop out to get something, he'll be back in a bit"?
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Wednesday, February 17, 2010
Why inflation is bad
Mike Shedlock:
7Q. Who benefits from inflation?
7A. Inflation benefits those with first access to money, the banks and the already wealthy. It is a stealth tax on the middle class and poor whose wages never keep up with inflation. That problem is compounded by rising property taxes, sales taxes, etc, that eats consumers alive. Those at the bottom end of the totem pole get hit even harder. Their wages do not rise and they have no assets to inflate.
Absolutely spot-on. The theorists who say increasing the money supply doesn't matter because the effects spread throughout the system, overlook the point I've highlighted above. It's a grab.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
7Q. Who benefits from inflation?
7A. Inflation benefits those with first access to money, the banks and the already wealthy. It is a stealth tax on the middle class and poor whose wages never keep up with inflation. That problem is compounded by rising property taxes, sales taxes, etc, that eats consumers alive. Those at the bottom end of the totem pole get hit even harder. Their wages do not rise and they have no assets to inflate.
Absolutely spot-on. The theorists who say increasing the money supply doesn't matter because the effects spread throughout the system, overlook the point I've highlighted above. It's a grab.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
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