Gravity and Inflation - A Point Of View

Gravity is one of the most pervasive yet weakest forces in the cosmos.
We can predict gravity, yet its source within matter remains a complete and utter mystery.

We remain convinced that it is an "attractive" force because that is what we perceive. However, equally possible is the theory of "atomic expansion" which would create the identical effects that we now call gravity. See: http://www.thefinaltheory.com/


Caption: Artist depiction of gravity waves around merging black holes. Credit: NASA

The point is that we really don't know if gravity is a mysterious, uncontrollable yet observable attractive force OR an attractive "sensation" we perceive because the quantum effect of atomic structures cause electrons to pierce the atomic cloud by the width of 1/2 an electron thus causing matter expansion. The result and therefore the effect is identical under both theories.

What does all that have to do with money?

Well, the Federal Reserve Note (aka "the dollar") is the base currency of the world. And we are printing a lot of them and plan to continue to do so because of our current worldwide economic crisis. Too much money chasing too few goods is considered inflation. Like gravity, we "perceive" inflation as higher prices. But it is eqally true that the prices are actually the same, it simply takes more dollars to buy the same thing because the dollars are worth less.

Like atomic expansion theory, the latter point (dollar de-valuation) is very hard to understand because, like gravity, it is all around us. We don't see anything else. After all, a dollar is worth, well, a dollar. Isn't it?

How about the law of supply and demand. If there are lots of dollars floating around because we keep printing them, doesn't excess supply of money mean the value of a dollar decreases?

These are hard concepts for many people to grasp, yet they are fundamentally important to them and everything that is going on around them.

Back to gravity... The time will come when science (probably through quantum physics) will show us that gravity as a strange, uncontrollable yet observable attractive force does not exist they way we think it. After all, why doesn't NASA use Einstein mathmatics when calculating orbital equations but rather uses Newtownian geometrical concepts. Hint: Space-time warping is probably an intellectual cul-de-sac.

Another dead-end is thinking that the world base currency (the dollar) cannot be devalued.

It is already happening. Banks are not lending despite infusions of liquidity and near zero interest rates on interbank commerce. They do not want to lend money now and get paid back with dollars that are worth less (much less) in the future.

They know it and no one may speak of it. When it appears to us that prices are increasing, we will not discuss it as dollar devaluation. We will seek to blame someone else.

Do not underestimate the gravity of this situation.

Investor Relations & Customer Service

With most customer service calls going to low labor cost countries where the person on the other end of the phone or email account can only follow a script and has no personal experience with the product/service for which you have a problem, here is a suggestion:

Send an email to Investor Relations. If you write a respectful, fact based letter and provide your full name, address and phone number, you would be amazed at the level of service you receive.

I have had to very positive experiences recently- One with INTUIT and one with GATEWAY COMPUTERS. In each case I received either a call at home or an immediate email from someone proporting to be one of their officers, I outlined my problem in more detail, and received near immediate satisfaction. Certainly levels of service that were above and beyond. I am not a stockholder in either of these companies.

To complete the story, there are 3 privately held companies which deserve mention on outstanding customer service through their normal channels: SC JOHNSON WAX, BOSE, MADRID SKATEBOARDS.

I'm Sure This Is Not Going To Be A Problem

As most of you know, I am a Fed watcher and I particularly enjoy reading their research papers.

This one is from the Federal Reserve of St Louis ( you can find this and other data/publications at http://research.stlouisfed.org ).

I posted this one because finally someone on CNBC used the "inflation" word. The "talking head" being interviewed pointed out that we must spend our way out of this recession and only governments are capable of doing it. We were advised not to worry about it for two reasons:

(1) Every Government is now doing this so don't worry about destroying the US dollar. I presume he means that every government is destroying its currency simultaneously therefore the net effect is zero. Oh boy....

(2) Any problems these government actions cause such as hyperinflation or currency devaluation can be fixed in later years when the world economy is on better footing.

How would you interpret those words? It sounds to me like:
(a) things are really bad,
(b) the cure will just about kill us,
(c) we will probably be ok (after all we always have been in the past).

Yikes!

Merry Christmas
Tedbits

Cheap At Any Price

It's official, money is free. Let me know if you are able to get any.

http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm

Recent Quotes - Is Anyone Listening Anymore?

When speaking of the next "bubble"

"Little pieces of paper are the next big thing," speculator Joanna Nadir, of Falls Church, VA said. "Just keep telling yourself that. If enough people can be talked into thinking it's legitimate, it will become temporarily true."

"America needs another bubble," said Chicago investor Bob Taiken. "At this point, bubbles are the only thing keeping us afloat."

When speaking of American rights:

"Every American family deserves a false sense of security." said Chris Reppto, a risk analyst for Citigroup in New York.

When speaking of the basis of our economy:

"The U.S. economy cannot survive on sound investments alone," said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves.

"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group. "We are in a crisis, and that crisis demands an unviable short-term solution."


Legal opinions on these matters from Alfred Dewey, esq are forthcoming. And his partners Cheetham and Howe vacationing in war torn Greece were unavailable for comment.

Enjoy!