Almost Two Years…

It has been almost two years since I have updated this website. As someone would say the opportunity costs have gone up, so the productivity of this blog has gone down. I am here now with a new resolution to revive this blog and make it back to the resource it once was. The opportunity costs are still high but I will try post at least once a day. Beginning today…

 

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Published in: on February 15, 2011 at 10:49 pm  Leave a Comment  
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We may need Cuba’s Old Cars

wright

~PCCapitalist

Published in: on April 24, 2009 at 12:36 pm  Comments (1)  
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Substitution Effect: Thawing Ice Other Ways…

This from The Wall Street Journal:

“Soaring rock-salt prices are prompting communities across the U.S. to try novel alternatives for clearing snow and ice, including molasses, garlic salt and a rum-production byproduct that smells like soy sauce.

Rock-salt prices normally surge in January and February, when communities running low on salt resort to buying the de-icing compound on the open market. But after last year’s fierce winter taxed supplies, state and local government officials ordered tens of thousands of tons more salt ahead of this season. The high demand pushed salt prices to $60 to $120 per ton in many places, from last year’s range of $30 to $50 a ton.

The jump in prices comes as communities are struggling with budgets tightened by shrinking tax revenue, thanks to the recession. The current bout of winter weather, which already has battered cities and states nationwide, threatens to strain budgets even more.”

This is a perfect example of how prices work in an market. This may be simple to some but there will always been substitution when prices are high. Another example is oil and alternative energies. As most people noticed as the price raised so did talk of alternative energy. This is because there was more of an incentive to substitute something cheaper. This is where the entrepreneur comes in.

The rest is here.

~PCCapitalist

Published in: on January 2, 2009 at 2:46 pm  Leave a Comment  

Happy Thanksgiving!

Happy Thanksgiving from our families to yours.

I always say every year thank your parents and grandparents for working hard and moving this country forward. Over the last 3 or 4 generations, we have seen great economic advancement. Take the time to get to know what your parents were doing and grandparents were doing back when they were your age.

It is the hard work and technological innovation that has moved society forward as a whole.

~PCCapitalist

~Marxsevelt

~Barry AU H2O

~NeoMasonian

~JuliaJCW

~Bluesman51

Published in: on November 27, 2008 at 12:22 pm  Leave a Comment  
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Worthless Bailout

~PCCapitalist

Published in: on October 11, 2008 at 2:28 pm  Leave a Comment  
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The Case of Zimbabwe’s Inflation: Part II

This is the second part of the two part series on Zimbabwe’s current situation with inflation. One thing that I did not point out last time was that this seems to be happening to a developing economy every decade or so. Argentina is the famous case. More from The Economist:

“Zimbabweans spend their local dollars as fast as possible or change them into hard currency on the black market. A parallel system is thriving in back offices and parking lots. Ronald was a civil servant but became a money dealer about a year ago to feed his family. He now makes about $100 a month, whereas his former colleagues earn the equivalent of less than $2 a month, enough to buy two loaves of bread.”

As economists have predicted when there is hyperinflation most people move to a different currency; one that doesn’t cost so much to upkeep. There is also entrepreneurship here too. Ronald has figured out that he can make more money dealing money than he can working. This of course is not good but not Ronald’s fault. It would be much better if the government didn’t hyper inflate and then Ronald could do a more productive job.

Here is how they are substituting a new currency:

“With a strict daily limit (currently less than $1.40) on bank withdrawals, people shun banks as much as possible and are returning to a cash economy. Petrol and rents are now charged mainly in American dollars or South African rand, but since some landlords have been taken to court, rents are increasingly often paid for in groceries. People buying overpriced cooking oil or sugar on the black market, since those items have long vanished from shops due to official price controls, are charged more if they pay in local dollars. Petrol coupons have become a virtual currency.”

This of course is crippling the banking market and savings market. There is no incentive for them to save due to the currency being worthless everyday. Price controls are usually a classic sub-regulation to inflation. I have never understood this. It is the governments fault that the inflation is high, but they blame someone else and try to use price controls, instead of stopping the printing of money.

This will probably not be the last hyperinflation that we will ever see, but the more we educate the more it hopefully will not happen. Even though, in some cases dictators do not have an incentive to stop inflation. They can pay for many things with their printed money. They do have a chance of revolt but that doesn’t seem to be stopping them.

~PCCapitalist

Published in: on September 12, 2008 at 12:21 am  Comments (1)  
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Ben Franklin on Economics and Currency

Ben Franklin was one of the great founding fathers of our country. He is seen on he 100 dollar bill and has invented many things we use still today. Ben Franklin actually wrote about currency in 1729 right before Adam Smith’s “Wealth of Nations.” So it is interesting to see what Mr. Franklin had to contribute to Economics before Economics really existed. It is called “A Modest Enquiry into the Nature and Necessity of a Paper Currency.”

Here are some parts I found to be interesting:

“First, a great want of money in any trading country, occasions interest to be at a very high rate. And here is may be observed, that it is impossible by any laws to restrain men from giving and receiving exhorbitant interest, where money is suitably scarce: for he that wants money will find ways to give 10 per cent. When he cannot have it for less, altho’ the law forbigs to take more than 6 per cent.”

This is important and reminds me of a part of Ludwig Von Mises’ “Human Action,” which they both realize tht there is a natural rate of interest. This rate cannot be controled by government due to the fact that there is a fixed amount of money in the economy and there is a certain demand for the use of that money, hence why banks were invented.

“Upon the whole it may be observed, that it is the highest interst of a trading country in general to make money plentiful; and that it can be a disadvantage to none that have honest designs. It cannot hurt even the usurers, tho’ it should sink what they receive as interest; becase they will be proportionably more secure in what they lend; or they will have an opportunity of employing their money to greater advantage, to themselves as well as to the country.”

This is obviously touching on inflation and how Ben Franklin is trying to figure out of the world works around him. He does continue to try to figure out who is hurt and helped with the increasing amount of money.

There you have it from the man that help found this country…

~PCCapitalist

Published in: on September 7, 2008 at 3:08 pm  Comments (3)  
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RNC Convention

Published in: on September 6, 2008 at 2:47 pm  Leave a Comment  
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New Blog: NetRight Nation

A new blog has hit the sphere. It is called NetRight Nation. This is a project for Americans for Limited Government, which is a great organization that does many things. They are a libertarian/conservative leaning group that investigates corrupt officials and works on other issues. I have heard right to work, eminent domain, and school choice comes out of their office. Here is what NetRight Nation says about their blog, some of it is still a mystery:

“This is the very beginning of an extensive blog project launched by Americans for Limited Government. This is our temporary site where we will gather ideas as well as promote relative news and blogs until the launch of the official NetRight Nation site.”

Hopefully, this will keep us informed with ways we can keep limited government. There latest post is about how Nancy Pelosi  and Harry Reid have taken a vacation because they know offshore drilling would pass. Enjoy!

~PCCapitalist

Published in: on August 6, 2008 at 10:59 pm  Comments (2)  
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GM and Ford in trouble

Bloomberg is reporting that booth GM and Ford could be on the verge of going bankrupt. Here is the information:

General Motors Corp. and Ford Motor Co., the two biggest U.S. automakers, have about a 46 percent chance of default within five years, according to Edward Altman, a finance professor at New York University’s Stern School of Business.

The Z-scores for GM and Ford give both a bond rating equivalent to a CCC ranking, though GM is in slightly worse condition than Ford, Altman said. GM reported a $38.7 billion loss in 2007, the biggest in its 100-year history, and hasn’t posted a profit since 2004. The scores are based on the companies’ finances at the end of the first quarter.”

Is this really because of mismanagement of GM and Ford? or is it because they have been protected for years by tariffs and now can no longer be protected?

~PCCapitalist

Published in: on July 28, 2008 at 12:29 pm  Leave a Comment  
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