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Monday, July 14, 2008

How to win a Pulitzer Prize: Contact: Vic Riddle

It must be sweeps week for the Chicago Tribune, because they have featured Wapella's own Vic Riddle for the last two days commenting with his characteristic common sense about farming and economics. Says Vic

"You're going to see full production from U.S. agriculture," the 60-year-old Riddle said. "These high grain prices will hurry things up."

then again

in the absence of a breakthrough, watch for farmers around the world to keep doing what they've done forever: produce as much as they can. "That's what we'll continue to do," said Riddle. "It's what we always do."

Then Vic grabs for the brass ring

If Riddle had his way, he would dismantle export bans, price controls and import restrictions, and reach international agreements on food safety, pollution, sustainability and a host of related matters.

Getting my vote for taking his benevolent Hog City Regime nationwide.

Yesterday's Trib
Today's Trib

Go Coach Riddle! (Hugh Grant mysteriously shows up in the Tribune guess is Donna was watching Music and Lyrics while the Trib reporter scrambled for material)


Anonymous said...

The whole world would probably be much better off if the decision makers had been raised by people with some DeWitt County Common Sense.

Anonymous said...

In light of recent events, I would be interested to see what people with some Dewitt County Common Sense think of the film, "Money as Debt."

You can go to google video and type in Money as Debt and it should pop up.

I have never really understood the monetary system. It has never made any sense to me.
Even when it was based on the gold or silver standard it didn't make much sense to me.
If it was based on a bushel of corn or a gallon of milk or a box of ammunition or a unit of work, it would make more sense to me.
I always thought that maybe I was just not smart enough to under stand it, and that it was to complicated for me to understand.

After watching this film, I began to think that maybe I have actually understood it all along.


Please watch this film and tell me what you think.

I thought that maybe the accountants and bankers or those better educated or more experienced than me in the community could watch this and tell me if that is really how our monetary system works.

I would also like a devil's advocate opinion of this film, to point out what may be untrue or misinterpreted.

You have to wait a few seconds before it starts.
It is 47 minutes long.

Anonymous said...

So the money I borrowed for my house did not exist until I promised to pay it back?

Is that really true?

JBP said...

Glad that the subject of "Fiat Money" has come up here on, as this is the appropriate venue for such discussions.

I think the concept of leverage escapes advocates of the gold standard (or the bushel of corn advocates), but the concept of the Wooden Nickel is very well understood.

I have hatched many a failed scheme to arbitrage the Wooden Nickels coined by the Irish Circle for later redemption for higher priced drinks, none of which worked.

The Wooden Nickel, (much like the US Dollar) is worth only what is delivered in exchange for it.


Anonymous said...

I think JBP has it right. To we people, many things have intrinsic value, like labor, land, and capital. We could go to a barter economy where I traded four bushels of corn for seven gallons of gasoline. Bringing four bushels of corn to Casey's to fill up my automobile would be inconvenient.

So I think we can thank our Babylonian and Egyptian forebears for coming up with the idea that we all go in cahootz and agree that something like a piece of paper will stand in for corn, oxen, etc. The piece of paper has intrinsic value only so long as we all agree that it does. If the agreement breaks down, so be it, but it would likely lead to a less efficient economy, and we would probably all start have to learn to hunt, fish, and grow our own vegetables.


Anonymous said...

Did you guys watch the movie?

Surely all of that stuff is not true? Is it?

If so, why do we (USA) borrow money from, and pay interest to, banks that just produce it out of thin air? Banks that only exist because the gov't lets them exist. Banks that are sort of private and sort of gov't overseen.

Couldn't we do it ourselves without charging the interest to ourselves?

Couldn't the gov't make money and charge reasonable interest rates and have the profits go toward building bridges and hospitals etc? Instead of a few bankers making billions of dollars in profits from money that is created out of thin air.

Or, the dollar could actually be backed by the bridges and hospitals etc. that we create with these dollars instead of being backed by nothing.


Would Budwieser have been taken over by foreign interests if Greenspan had not ruined the value of our dollar?
You watch there will be more of that to come.

Anonymous said...

The U.S. dollar is backed by the U.S. Military.
The greatest Armada the World has ever seen.

It is very nice that the Chinese lend us money so that we can keep our Nuclear arsenal finely tuned.

It is also very nice that they are not smart enough to realize that we have no intention of ever paying them back. (Do the math)

At some point we will do exactly what the Princes of Europe did to the Jewish bankers way back when; Outlaw money lending and kill everyone we owe money to and anyone who complains about it.
You will even be able to take the standard disparaging words used against Jews and replace Jew with Chink, and have the same affect.


Anonymous said...

But why do the banks need to exist in their current form?

Has anybody else but me watched the movie?

Anonymous said...

Politicians through time have held true to one basic principle.......

Power is to be used to do favors for your family and your friends.

Therefore, bankers will and must exist, simply because they are the friends and family of the politians.


Anonymous said...

Good points DM,

I will put it another way.

The u.s. dollar is backed by brute force.

Anyone who has ever had a good punch in the nose will attest to the fact that brute force is definitely real.

The u.s. dollar is in fact backed by something "real".


Anonymous said...

I watched the movie. Lots of interesting information in it, and I too wonder if it is all true.

I also wonder if MAD posted it at exactly 4:11 on purpose. You know like he is giving you the important 411.

411 being slang for information.

If so,

Anonymous said...

I watched it and also recommend it to all.

If that stuff is true, then our Monetary System is the greatest Pyramid Scheme in History.


JBP said...

I done seen it as well, it is not all that exhilarating. The problems with fiat money bring out some of the most outlandish behavior, such as repudiating debt on the basis of theoretical issues.

The reality is, if you go around not paying bills, no one will do business with you anymore. If you pay your bills on time, you can continue to do business with most people.

Banks exist to make money for banks. The government runs more than a few of them, and is not very good at it. Political appointees don't make very good loan officers. For example, Tony Rezko is not a good character reference for banking with Illinois Pension Authorities, yet, he held quite a bit of sway there.

I don't think banks are all that profitable. Pretty much anyone can start one (and pretty much anyone has, look at Indymac). The amount of paperwork is mind numbing and obviously not all that useful to the consumer or to effective regulation (again, look at Indymac).

I don't really think leveraged capital is a pyramid scheme, rather it is just using a proven asset over time to increase risk levels. If you take on more risk, you can sometimes get more return, and some times you go bust.

In the long run, the leveraged international banking system has existed since the 13th Century Medici in Florence with very little change in business practices to the present day. That is long enough for me to consider it a functional business entity rather than a pyramid scheme.


Anonymous said...

JBP's idea lost some steam when folks got splinters in their pockets.

Bud is being bought by an enterprise with the means to do it. InBev no doubt is wanting to buy the production and distribution. More importantly, the folks in STL realize that the heir to the throne is not a rocket scientist. Lots of US board members are lining their pockets.

Finally, I thought Amway was the greatest pyramid scheme of all time?

Gotta' go, JM Keynes is on the other line.


Anonymous said...

On a more rational note, the Second Annual Flann O'Brien Literary Festival goes in to the third day Wednesday. This year's selection, "The Best of Myles" is a collection of articles written in the 1940s. It is similar to last year's selection, "At War", a compilation of columns written during and about WWII. The author's ability to write about topics ranging from probate court to steam locomotives and his ability to write in four languages are examples of why he is the most underrated author of the 20th Century.

Applications for next year's conference, again to be held in Seagrove Florida will soon be available. Suggestions for next year's selection are welcomed but may be ignored by the founder, coordinator, bbq chef and beach chair slug: me.

Join us, won't you?



Anonymous said...

That movie only needed to be about 20 minutes long.

Is our birth certificate really our chattel certificate?
It is printed on note paper.

We prove we exist with a piece of paper, and promise to work to pay back the money that was magically created because we put our signature on another piece of paper.

Isn't our promise to work to repay the loan some kind of barter system anyway?

But can this system work without Debt?

Don't people have to go into debt for the scheme to continue to work?

Anonymous said...

Hey JB,
Besides Porn, what on the internet is all that exhilarating?

I think that movie is worth the time it takes to watch it. Can't believe it can all be true though. What are the lies in that film?

Anonymous said...


Anonymous said...


InBev bought Bud with borrowed money. Entirely with borrowed money.

Does that make them an enterprise with the means to do it?

Means to do it? No

Credit to do it? Yes

JBP said...

I don't think it takes 45 minutes to say that banks, like most businesses, take risks with other people's money.

As for the truth of it, many of the points are indisputable, but not really useful. So now we know banks take risks. How does that effect my Joker Poker game?

If the tavern owner does not have the cash to pay out the credits I earn at the machine, I don't get paid, and I am reluctant to come back for gaming. However, if I don't have the quarters to put in the machine, I can't enjoy the machines at all.


Anonymous said...

This entire conversation (save for the Flann O'Brien mention by BEP, and the promise of porn that followed it a few posts later) is one of the most boring I've ever seen on

I'm sure "Money as Debt" is a powerful release, but could we please discuss something more powerful, like "Weekend at Bernie's" or a classic TWEED or something? I'm bored to tears.

Money is money is money. Ask P. Diddy and Jay Z. Make that money, fool.

Anonymous said...

Move over Adam Smith, Engels, Keynes and Friedman: JBP's new Joker Poker economics will revolutionize the field.


Anonymous said...

InBev buying Bud: excellent observation. Your point underscores the changing definition of "means".

Your point also raises the well-held economic principle that it is always better to make money with other people's money.


Anonymous said...

OK.'ve forced mine hand. I'll play along.

I submit Thurston Howell III as an interesting case study on the power of money, no matter what the scenario, including possibly having to battle a large cave spider with a mirror, or hungry cannibals wanting to cook your shipmates....

In early episodes, we see Mr. Howell hiring various services from other castaways. We eventually learn he's been writing checks on a mainland (and therefore inaccessible) bank. This works while the group consider their condition temporary, but the checks are quickly devalued and eliminated when the castaways begin to prepare for the possibility of an indefinite stay on the island.

Or are they? Would gold be better? Traded shells? Mary Anne's coconut pies?

Yes, it's just a dumb TV show, but in this case we see the laws of economics accurately portrayed: once the castaways realize they're marooned indefinitely, their economic thinking focuses on the limited resources of the island.

Any fixed amount of money is the correct amount of money for a given economy. Prices will adjust. If the supply of gold money is high, and the available goods and services are few, then prices will be very high in terms of gold. And in this context, the gold money supply isn't fixed: the mine is still there, with who knows how much more gold yet to be extracted.

Under an island gold standard, the supply of money might increase at any time, and anticipation of that fact will drive current prices still higher. The money ends up heavier than the goods it trades for.

The government paper in Howell's suitcases, on the other hand, is easy to transport, hard to counterfeit, lighter than gold, and whatever amount of it the millionaire managed to bring with him is the amount there's going to be for a while.

On this isolated island, and in this isolated context, paper beats gold.

Conclusion: None of this is to suggest economic sophistication on the part of the show's creators or writing staff. But Gilligan's Island Economics can provide useful thought experiments for the same reasons Robinson Crusoe Economics has served as a staple of classical and Austrian School economics texts.

One thing Gilligan has, which Crusoe doesn't, is a shared culture with the others on the island. If Robinson Crusoe had been shipwrecked with a chest full of British banknotes, they wouldn't have done him any good. Friday would be more likely to trade for shells or gold than he would for the strange paper.

But on Gilligan's Island (and in the Kurdish rebel territories, and briefly in Baghdad), people who are already used to making their exchanges in slips of unbacked paper can continue to do so profitably without the hand of government. The invisible hand of the market serves them better - even when dealing in government paper.

Anonymous said...

EEP - you had better take back everything bad you said about Gilligan's island - I demand an apology.

However, I basically agree with the heart of what you are saying. If your stranded, generally go with barter economy for short term but your mid-long term smart money from a strictly financial point of view would have been to charge Thurston too much and complain to him about inflation and that they would never get saved on the island, knowing that they would likely be saved (all lot of visitors - wrongway, eva grub, the mosquitos, etc. over the years questioned whether the island was truly remote) and that the $ would be worth something later. Re Crusoe, I disagree a bit on the shared culture point - Crusoe benefitted greatly from not sharing culture as he had technological/innovation advantages (gun, food production ideas). Friday (sort of Gilligan character) made a very wise investment in Crusoe (other option was he would have been eaten) as he recognized that Crusoe had technology/innovation that would ultimately benefit them both.

Incidentally, both the castways and Crusoe were saved from their stranded islands.

Lending/borrowing/taking risks is all about people believing in people and moving forward. Sorry too lazy to watch the movie - I'm sure there are some good points in there but I'm keeping my head in the sand of Gilligan's island. bbd

Anonymous said...

Well put EEP.
You said this is the most boring topic and then you go on to give the best explanation yet. So that begs the question...Are you really Bored?

How are banks taking risks with other peoples money when they just create the money from debt?
Exactly what risk is involved in that?

"The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than the aristocracy, more selfish than the bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes."

Abraham Lincoln 16th president of the USA

"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government’s greatest creative opportunity.”

Abraham Lincoln, assassinated president of the United States

Anonymous said...

NOTE: I wish I could take credit for the Thurston Howell Economic theory, but I was simply repeating it, as I'd heard it/read it before.

BBD - to clarify, I do subscribe to the "shared culture" point in the Gilligan's Island context, but only in an economic sense. A shared culture of economics.

I do understand what you are saying about an *overall* shared culture.

Economically, the castaways benifited from a shared culture (i.e: all of them value paper money equally) versus Crusoe's own scenario, where he could not use any sort of paper money, since, as illustrated, paper money means nothing to Friday.

If one of us assigns value to something the other does not, the exchange of said something is not going to hold any value, thus the exchange would never occur.

But I see the overall point you are making about a "shared culture" and agree, that Crusoe benfited greatly from not sharing a culture with Friday.

Anonymous said...

P.S: bbd, if I recall correctly, the castaways on Gilligan's Island *were* saved, but in a cruel twist of fate, didn't they end up right back on the same island?

Anonymous said...

Let wrap this up with the story of a good banker.

It is circa May 1991 at the 1st National Bank on the Square in the office of the Man in Charge.

The following is almost verbatim.

"How am I supposed to give you a loan for a car if you don't have a job?"

"How am I supposed to get a job if I don't have a car?"

"Well I can't argue with that logic. Bring in your motorcycle title as collateral and I will cut you a check."

It was a 4 year simple interest loan.
I paid it off in about a year.


Anonymous said...


Why couldn't you drive the motorcycle to the job? Was it winter?


Anonymous said...

Actually it was probably circa winter 1990/1991.

Rain is more of a problem with motorcycles than cold, of-course ice is the worst.

Ultimately I disproved my own logic.
I ended up in a place where you don't need a car to get to work.
I actually ended up in a place where a car is more of a hinderance and not a necessity.

But that car is how I got to that place.


JBP said...

"How are banks taking risks with other peoples money when they just create the money from debt?
Exactly what risk is involved in that?"

If people do not pay back their loans for one reason or another, the bank goes bankrupt, and its owners lose their equity. The depositors lose what they have in the bank above some insured level as well.

Higher leveraged banks..."banks that create money from debt" (Bear Stearns for example) have a bigger risk of going bankrupt than lower leveraged banks (John Warner Bank for example). If you want the kind of returns Bear Stearns was promoting, and they had some great years, you were subject to the risks that came to play recently.

But Bear Stearns is pretty much gone and JWB is still going, so the rules of risk vs. return still seem a sound way of judging an investment.


Anonymous said...


Explain through the use of logic and reason, why the Federal Government is borrowing and paying interest for it's own money.

Anonymous said...

Could the debt we owe to the Chinese be used as a tool to move towards a one world government?

You know, like they'll be InBev we'll be Bud.

JBP said...

"Explain through the use of logic and reason, why the Federal Government is borrowing and paying interest for it's own money."

The Money Supply belongs to the people of the United States, not the government. The government could certainly inflate the money supply and not pay interest for the use of the people's money, but it would not serve the citizenry very well to have high inflation and a lack of credit with trade partners.

There is something inherent about performance to budget, even a bloated inefficient one, that gives a degree of confidence to investors and trading partners.


Anonymous said...

I'm People.

How come I don't get none of that their interest you talkin bout

Still the money comes out of thin air, Right?

So Abraham Lincoln's Idea was wrong?


Anonymous said...

Why not make the entity that we pay interest to some sort of noble cause?

Help lots of people with the profits instead of only a few.

I'm with Abe also. Prove why his idea is wrong.
I don't think you can.

JBP said...

The money is paid out by the government to investors. If you own a T-Bill, you are getting some of that interest.

Lincoln had a lot of Whig ideas involving government ownership of enterprise that were fine in theory, but didn't work out very well in practice.

I can look about 2 blocks from my house to a government sponsored housing project that is a mess. Loses money, doesn't get maintained, has unhappy residents and unhappy neighbors...along with political appointees in managerial positions.

I would rather bank with a company that has a greater degree of independence from the government than a housing project.


Anonymous said...

Just because you answer with some sort of smoke screen logic doesn't mean you have answered anything.

Unlike your housing project, which is complicated by millions of actual real things, (nails, bricks, pipes, etc.) Banking is simple, you just make money out of thin air. There would be very little to actually do.

The easiest way to make those housing projects valuable assets is to have owners living in them and not renters. Give them low or 0% loans have them own their apartment and see what happens. Renters won't drop a dime on a drug dealer. Owners will drop a dime on a drug dealer! More likely a Hammer!

Look in your neighborhood at the yard and general upkeep difference between rented homes and owner occupied homes. You really notice this difference when the house is next door to your own.

Your free market B.S. would be great, but anybody with half a brain knows we don't have free markets. Never will.

Stupid people do not deserve to be taken advantage of.

You either believe it is O.K. to take advantage of people, or you believe it is Wrong to take advantage of people.
No grey areas.

JBP said...

Then go start your own bank and run it with a high set of ethical standards.

It is not that hard to start one. And as you claim "Banking is simple".

What stops you?


Anonymous said...

Everyone knows a ball is real.

I bet all this talk ends with the beginning of the 2nd half of the baseball season.

This string is what happens when you guys don't have your ball to watch.

JBP said...


My business partner has pneumonia and I don't want to be around him.

Many more discussion on fiat currency occur when there a pneumoniods involved.


Anonymous said...

As far as the Gov't debt is concerned, why do we need to pay interest to private companies? Why should their be profit in that?

JBP said...

Because no one will loan the government money if they do not pay interest.

Too easy, next.


Anonymous said...

Have foreign banks started to ask us to pay our debt in gold instead of dollars?

Anonymous said...

The federal reserve has always been some kind of one world government conspiracy. Maybe a communist one world government conspiracy.

One way to have honest public officials would be to give them the death penalty when they stray from the path of a high set of ethical standards.

Anonymous said...

Who is going to tell the Emperor he has no clothes?

Anonymous said...

If the people who are loaning the government money are getting the money out of thin air, why does it matter?

JBP said...

People loaning the money to the government get the interest paid by check or more likely bank notation.

It is not out of thin air. The interest money is fungible, can be traded, exchanged for goods etc.


Anonymous said...


Anonymous said...

The most important thing to realize here is that the money can and must be used to pay taxes.

Anonymous said...

An emperor who cares too much about clothes hires two swindlers who promise him the finest suit of clothes from the most beautiful cloth. This cloth, they tell him, is invisible to anyone who was either stupid or unfit for his position. The Emperor cannot see the (non-existent) cloth, but pretends that he can for fear of appearing stupid; his ministers do the same. When the swindlers report that the suit is finished, they dress him in mime. The Emperor then goes on a procession through the capital to show off his new "clothes". During the course of the procession, a small child cries out, "But he has nothing on!" The crowd realizes the child is telling the truth. The Emperor, however, holds his head high and continues the procession.

Anonymous said...

This is getting was non-entertaining some time ago...but now it's just getting scary.

Anonymous said...

Re deals on housing: we have that in the form of Countrywide and other sub primes. Don't you get it: some folks don't care.

Go the library and get a history book. You will learn that the US has had a number of panics, scares, recessions, et al over our history.

Wait, libraries are probably havens of propaganda.

I'm with you EEP, some of this is disturbing.

As the literary conference wound up today we didn't have any luck with the parasailing. The poor chap powering the bike got very tyred. I was unable to get an lift.

As I read an article in the NY Times about Jewish folks with tattoos not going to heaven I noticed several young ladies with "tramp stamps". I counseled them on being able to be buried in a Jewish cemetery. They all assured me that they were not of the Hebrew faith. I then offered them my Irish sunscreen, with a little wallpaper paste added.

We will reconvene here on the "Emerald Coast" next year. The water, while a beautiful shade of green, is not near as verdant as the shores of the fair isle.

Literarily yours,


JBP said...

Yes, the fiat currency discussion must end.

On to Larry Storch and F-Troop please, and his relationship to our current governor.

No discussion of fiats there please.


Anonymous said...

What is weird about a children's fable?

It makes a good point here.

Pretend like you understand the monetary system so you don't seem stupid.

Anonymous said...


An ownership society would prosper. Unfortunately George W. Bushes version of it involved letting banks rip off people buying houses and getting student loans.

Maybe you are the folks who just don't care.

Get it!

You don't care if things are fair.

Anonymous said...

I do care: I get to pay for the mess. When did fair ever have anything to do with the way the world works?

Attempts at redistribution of wealth, in particular through a dictatorship of the proletariat, have failed miserably.

Ronald Reagan

Anonymous said...

The right ownership society would be more cost effective in the long run. Just eliminate the Bush friends scams and schemes. (guess who gave bush the most in campaign contributions? BANKS! ..Remember the first law he signed?)

Who said anything about redistribution of wealth?

Let them buy their apartments at low or 0% interest and see what happens.

Dimes and all that.

You probably think what most credit card companies do is fair. If you do, you have no proper sense of fairness.

To people who say,
"The world is not fair."
You should say,
"It is if I have anything to do with it."


Anonymous said...

As I was leaving a public house today I was invited to the Roscommon County fair. Adverse as I am to public gatherings, I obliged my host, as he was showing his prize bullock. He assured me that the competition was very equitable, even "fair" and that he had no advantage on the other participants.

The weather at the event was fair, neither too warm nor too cool. I convinced my host that American baseball was worth watching. We soon saw many balls hit in fair territory.

I asked if he would buy a condo at Cabrini Green. He declined.

All were treated with equity. Some have earned more equity than others. They had earned it.

P. Pearse

Anonymous said...

If you google Irish Sunscreen it takes you here.

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