Campbell's Critiques on Fiat Currency, Washington Gridlock, Business Journalism and Career Choices

Hundreds of articles are posted every week but their content is almost never challeged. Campbell does just that. He conveys his comments, concerns and criticisms in a concise conversation, concluding his critiques with either his concurrence or contrary point of view. He invariably ends each critique with a question or two for you to mull over until his next insightful and thought-provoking commentaries. Put your thinking cap on and give them a read. Words: 1722

Ian R. Campbell of www.StockResearchPortal.com (A subscription site providing in-depth research on over 1,600 Toronto and Venture Stock Exchange copper, gold, silver, oil & gas, and other resource companies in their Company Universe) provides below his daily Economic & Resource Stocks Commentary. You can subscribe to Campbell’s service here.

(Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited aspects of Campbell’s commentary below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.)

Today’s comments are on the long-term availability of fiat currency, the implications of Washington gridlock, the quality of business journalism and the issue of job choices and availability. Campbell’s 4-part critique is as follows:

1. When Does Fiat Currency Run Out?

A March 16 article* reports that the eurozone’s temporary bailout fund has paid out a 26.6 billion euro (about U.S. $35 billion) sweetener for Greek bondholders involved in the stricken country’s debt swap.

My Comments: Private sector investors typically ‘pay their money and take their chances’ so for me that such a payment is being made is, in my opinion, tantamount to falling backward into the ‘too big to fail’ sinkhole…There must be huge ‘financial sector’ risks perceived by the Euro Governments, and Governments generally, or such a payment would not be even considered – let alone made.

One has to seriously wonder why such a payment would be made from what in the end has to be Eurozone (and perhaps European and, perhaps, even non-European) country taxpayers to private sector bondholders… I believe the practical answer can be found in a statement attributed to Gordon Moore, the inventor of Moore’s Law [see definition below]. While Mr. Moore was referring to growth of something specific, the “it” in the following statement can fairly be said to broadly apply:

“It can’t continue forever. The nature of exponentials [see definition below] is that you push them out and eventually disaster happens.”

Stated differently, one could say: 

“If things continue to grow and get ever heavier, they eventually collapse under their own weight.”

As an aside, I see this as the biggest problem with government, economist, and market focus on % increases and decreases in economic metrics (for example, GDP), as it has always seemed to me that: perpetual growth rates imputed into things are nigh impossible – whereas growth or declines in absolute $ may be less so.

Conclusion

In answer to my question ‘When Does Fiat Currency Run Out?’, I believe the theoretical answer is ‘never’. 

Article Notes:

• Moore’s Law is a rule of thumb in the history of computing hardware whereby the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years. (Source: from or based on Wikipedia definitions)

• An “exponential” is something that grows exponentially, or geometrically if it grows at a consistent compound rate over the same chronological intervals.  (Source: Wikipedia)Think of geometric growth as ‘perpetual growth’ – something that I believe most, me included, would think is theoretically possible, but impossible as a practical matter.

• *26.6bn Euro ‘sweetener’ paid to Greek bondholders. Source: The Telegraph, Angela Monaghan, March 16, 2012. Reading time 4 minutes.

• You might want to read So Far, the Bankers Win that speaks to collaboration perceived by some between politicians and bankers that has been, and is, occurring at the expense of taxpayers. Source: The Financial Sense Blog, Danielle Park, March 16, 2012. Reading time 2 minutes, Watching and listening time of the Bloomberg video that accompanies this second article 4.7 minutes.

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2. Washington Gridlock – Implications!

A March 15 article* reports on ongoing gridlock in Washington, citing the two U.S. political parties so far being reconciled over “the debt ceiling, taxes, spending cuts, the deficit super committee, appropriations bills and finally the extension of unemployment compensation and a two-month extension of the payroll tax cut”.

My Comments: Washington political gridlock will almost certainly continue through this Presidential election year, and very likely beyond 2012 – baring something of a crisis nature occurring – because of what I believe to be America’s long-term deteriorating economy in the face of what seems to be a current ground-swell (at least this month) of American belief that the U.S. economy is in ‘good recovery’…

Conclusion

[As such,] I think:

• U.S. Federal deficits will continue at unmanageable levels,
• the U.S. Cumulative National Debt will continue its escalating growth pattern, and
• the U.S. economy will continue to weaken against a number of its principal trading partners.

*Gridlock in D.C. Source: Casey Research, March 15, 2012. Reading time 5 minutes.

3. What People Read – Business Journalists – Interesting!

A March 12 article* quotes Reuters ‘finance blogger’ Felix Salmon as saying that “the business section is the first section that they (people) throw away”, and (in essence, as I read the article) it is only when something happens that you have a story – you do not have a story if you write about something you or someone else ‘thinks might happen’. Salmon is also quoted as saying “If you want public-interest journalism, if you want to interest the public, you don’t want to put it in the business section”.

My Comments: Salmon’s views resonate with me. It strikes me that assuming him to be right, as a tennis umpire might say: ‘advantage those who inform themselves with respect to economic and business issues, and who apply their opinions so formed in their day-to-day activities and lives’.

One also might wonder at the ability of journalists to do other than report factually on matters if they have neither the knowledge nor the experience to analyze and draw sensible conclusions from the facts they present.

Summary

As I see things, reporting facts well is of value, analyzing and drawing conclusions from is far more so.

*Business Journalists: Too Unread to Fail? Source: The ComplianceEX Blog, Jon Lewin, March 12, 2012. Reading time 3 minutes.

4. Skills – Do They Fit Jobs?

A March 15 article* summarizes what it claims to be ‘Ten Hot (current and future) job careers’, ‘Five Jobs on the Way Out’, and ‘Five Extinct Jobs’. The issue of job availability for the young in particular, but populations in general, is obviously of great importance to both sustaining and growing an economy.

The article summarizes, for ‘Ten Hot Job Careers’ only, the median pay and projected growth in the number of jobs from 2010 to 2016. It suggests to readers that “if you’re sick of your job and craving and new profession, now might be the time to head back to school and get that secondary degree in one of these ten specializations”.

My Comments: I find this article interesting, not for what it says, but for what it doesn’t say. The following summarizes the jobs listed for each of the three categories in the article, along with my overview comments with respect to those jobs made in the contexts of general job requirements as I see them.

 1. Ten Hot Careers:

1. Computer Software Engineer,
2. Database Administrator,
3. Dental Hygienist,
4. Financial Analyst,
5. Forensic Science Technician,
6. Mental Health Counselor,
7. Performance Makeup Artist,
8. Personal and Home Care Aide,
9. Skin Care Specialist, and
10. Veterinarian.

Think carefully about each of these ten job categories. All but Performance Makeup Artist, Personal and Home Care Aide, and Skin Care Specialist require advanced education. It is no surprise that the median annual pay stated for each of these jobs was the lowest of the ten job careers suggested, reported as U.S.$36,730, U.S.$18,180, and U.S.$29,550 respectively. With the exception of Mental Health Counselor, the median annual pay for the other jobs on the list ranged from U.S.$48,150 to U.S.$87,250. I think surprisingly, the median annual pay for ‘Mental Health Counselors’ in the United States was reported as being $37,840. It strikes me that there has to be something wrong with that number given the importance of mental health counseling – and what I think has to be the higher education, training, etc. such a job requires. I leave it to you to reach your own conclusion on this and its implications, to the extent you conclude there are any.

2. Five Jobs on the Way Out:

1. Carpenter,
2. Photo Processor,
3. Postal Service Mail Sorter,
4. Record Store Owner, and
5. Telemarketer.

I doubt developed countries will need less Carpenters as infrastructure, commercial buildings and houses deteriorate and are in need of continuous repair. As for the rest of the jobs listed, if you read these e-mails you know I believe technology is reducing, and likely will continue to reduce, the number of those jobs in developed countries from what they would be without technology advances.

3. Extinct Jobs:

1. Elevator Operator,
2. Iceman,
3. Lamp Lighter,
4. Lector, and
5. Type Setter.

I don’t know why the article bothered to include these – other than perhaps to equate some former jobs to a ‘dinosaur’ status, with the implication some current job types will end up in the same place.

 Summary

I leave you with this question. Can confirmation be taken from this article that prospectively meaningful job creation will largely occur in vocations that demand higher education – implying skewing in favour of those individuals with higher than average intelligence – as technology continues to advance? I think it does in broad terms, and further intuitively believe that more fulsome studies into the question of future job availability must suggest likewise.

*Unemployed? Under-employed? Bored? Check Out These 10 High-growth Jobs. Source: www.munKNEE.com, Lorimer Wilson (from onlinegraduateprograms.com), March 15, 2012. Reading time 5 minutes.

Editor’s Note: The above commentaries have been has edited ([ ]), abridged (…), and reformatted (including titles, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The commentaries’ views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.