Federal Reserve Bank charges unnecessary fees to Americans.

by tonytran2015 (Melbourne, Australia).

#fiat money, #private #Federal Reserve Banks, #unnecessary fees, #questionable fees, #questionable dividends, #new money.

Americans keep paying unnecessary fees to private bankers through Federal Reserve Bank.
Every year billion dollars of undeserved fees (or interests) have been paid to private bankers through the Federal Reserve Bank. This Federal Reserve Bank is actually a private bank, not a wholly owned branch of the US Government. There is no ground for using a private FRB and pay it billions of dollars every year.

1. USA need no one to back their newly printed dollars.

fiatmoneyc60.jpg

Figure: Fiat money relies only on the taxation power of its issuing government for its backing.

The said payment cannot be said for supporting (underwriting) the issuing of new US dollar notes. Indeed, the government of USA is a money sovereign. It can print as much fiat money as it likes (and bear the consequences). Its fiat money has value to Americans because Americans have to use it to pay taxes to their federal and states governments.

(See references [1] and [2] for simple explanation.)

2. It is wrong for the Federal Reserve Banks to give interests on the fractional deposits of constituent banks.

There are 2 objections to paying such interests. They are:

2a. The deposits by the contributing constituent, private banks of the Federal Reserve Bank are part of their own effort to make themselves appear more liquid. They cannot demand any interest from the government on their deposits, just like airlines cannot demand government compensation on the costs of carrying their statutory reserve fuel on each flight.

2b. If everyone has to bear a near zero or negative interest, why are those constituent private banks exceptional ? They received 12 billion dollars in interest for the year 2016.

3. The government can sell and could have easily sold bonds to ordinary citizens.

With the advent of telecommunication based, low cost stockbroking, the government can sell and could have easily sold bonds to ordinary citizens just like companies selling IPO. Why has not the government done that rather than dealing only with the fat bankers ?

4. The private Federal Reserve Bank has no right to charge that much.

How much had the FRB constituent banks deposited to earn that 12 billions in interest for the year 2016? Is such interest of the same rate offered to most Americans when they buy into government bonds?

5. Past presidents have tried to undo the burden but two got assassinated.

Presidents Abraham Lincoln, Thomas Jefferson and John F.Kennedy had seen the unfairness of private bankers charging interests to the country and had tried to unshackle the burden on the country. Lincoln and Kennedy had been assassinated while Jefferson survived the assassination attempt. It is currently costing $40 per year per person for the US to keep using the private Federal Reserve Bank.

President Trump may do something about it if Americans protest loudly about it.

6. Americans should demand United States Notes.

Rather than accepting the FRB Notes lying down, Americans should demand United States Notes (each with a red seal) issued directly by the Treasury just like those issued under Kennedy’s administration. Those notes had nothing to do with the FRB and America can save on the so called “interest” charged by FRB on any new money issued by US government and backed by its own taxation system.

Using the dollar notes with red seals (such as Five dollar with Red Seal Notes in series 1953 A through C, see picture in reference [6]) will save Americans $40 per head each year.

References:

[1]. Your fiat money, https://survivaltricks.wordpress.com/2017/01/09/your-fiat-money/

[2]. Your fiat money (Part 2), https://survivaltricks.wordpress.com/2017/01/12/your-fiat-money-part-2/

[3]. The-thirty-families-made-plans-for-a-future-without-you, theMicky.org, http://mikeyy.org/2017/01/30/the-thirty-families-made-plans-for-a-future-without-you/, originally by horse237, https://vidrebel.wordpress.com/2017/01/30/the-thirty-families-made-plans-for-a-future-without-you/

[4]. Stack Jones, The Banking Swindle-The History of Banking Fraud,  criminalbankingmonopoly.wordpress.com, https://criminalbankingmonopoly.wordpress.com/2014/02/20/history-of-banking/#comments, accessed Jan 2nd, 2017.

[5]. Federal Reserve System, wikipedia, https://en.wikipedia.org/wiki/Federal_Reserve_System, accessed Jan 2nd, 2017.

[6]. Five Dollar Bill Red Seal Series 1953 US Currency, Natural Web Solutions Inc.(US), https://www.collectons.com/shop/item/58107/Five-Dollar-Bill-Red-Seal-Series-1953-US-Currency#imgs58107

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A satirical guide to signs of an impending crash for small investors

by tonytran2015 (Melbourne, Australia).

#crash share market, #investment, #market crash, #share market, #signs of crash.

As a small investor (or gambler ?) you can also pick up the warning signs of an impending share crash.

To possess that ability a small investor has to have a realistic knowledge on how some listed companies crash and on how such crash can generate a market wide crash. This posting is my a short guide to picking the signals.

1. The operation of a company listed on a share market.

Let us be simple about it.

A company on a share market is just a business, a money making machine. Its value depends on its anticipated income and its trade name plus net tangible asset backing (liquidated values).

A company listed on the share market has to bear the extra burden of extravagant salaries and bonus to directors (see reference [4]), showmen, corporate executives (who all seem NOT KNOWING the business which they are overpaid for), external advisers, external consultants (to advise, with absolutely NO liability, the directors and executives!), snake oil salesmen (to sell to clients what they don’t need and can barely afford).

When you buy shares in that company, you are entitled to share a percentage of the profit and loss of that business (or show?).

Essentially, directors, executives, external advisors, external consultants (see reference [1] for some type of consultancy no one needs) are playing a game of passing the buck by separating duties of care and liabilities. The show is set up to PREVENT share holders like you SUING any of them.

You have been WARNED!

2. Long con by Pump and Dump Operators.

Vested interests always want to inflate the values of companies for their higher salary, bonus, commissions, fees and stamp duties.

They will pump and dump shares in the company. The (typically six years plus) long con of pumping is hard to detect (a lie told for long enough will be believed). It makes people believe in the (hyped up) “long term growth” of the company. (See reference [2] for a typical pumping of share prices from in 2011 to 2017).

New shares will be issued at “premium” to the nominal value of the shares. The money collected is then used to pay for expenses to keep the company going until another new share issues (but not for paying dividends to existing share owners) !

The last buyers (believing that there would be bigger fools) buy in at many times the worth of the company. When the eventual dumping comes they would lose all their hard earned money.

After each share crash there is no actual change in the production capacity of the company. Only its ownership, clients, suppliers and bankers change. The crash in the bigger market and the recession in the even bigger economy only comes due to the actions of those people.

 

3. Causes of a crash of a single company

crystalcompanyc70.jpg

Figure: List of single sufficient causes for a company crash. Any single cause in this list can cause a company to go bankrupt.

a/- Its banker does not want to be its easy going, friendly banker anymore. (The bank knows more than you do about the imminent cash flow of the company).

b/- Its clients can buy cheaper elsewhere.

c/- Its suppliers have switched to new clients (with no cash flow problem) who pay more promptly after each delivery.

d/- The company has run out of new subscribers for its new share issues (which is a substantial source of income providing for its yearly expenses).

e/- If the company cannot pay its debt installments and expenses on any due date, it is required by laws to be liquidated.

4. Events in a company crash.

a/- Directors resign as they want to wash their hands more than 6 months ahead of the official liquidation. Why should they risk being investigated while there are extravagant pays for other shows elsewhere?

b/- Share holders realize that they have bought only thin air hyped up company shares and they all want to sell to the next fools or to anyone else to stop their own bleeding.

c/- The share market suspends the trading of that company’s shares and may even de-list it to bury the embarrassment.

d/- The last batch of share holders practically lose all their money: EVERY HYPE HAS TO END.

5. Traditional signs pointing to a market crash.

Figure: Signs of crash for share markets.  You cannot expect any crystal ball to change its colour to warn you of an imminent share market crash but you can notice yourself the signs prior to such a crash.

The share market is where people buy and sell shares in (market) listed companies. People buy and sell according to their perception of the sustainability of the finance conditions in the country of the companies.

The finance conditions stand on top of one another to build a tower to the sky ! It only needs the agitation of some big investors to make the tower tumble causing a market wide crash.

Prior to a share market crash there are few signs as given in the following:

a/- There is an increase in the Price/Earning ratios of companies (Investors hope for bigger fools) while their operation is not profitably expanding and their Net Tangible Assets remain nearly unchanged. Before buying you have to work out the number of years to get back your capital if there is no bigger fool.

The P/E ratio should be inverted to give you a comparison to the interest rate of government bonds which has little chance of being wiped out.

b/- There is an increase in merger and acquisition activities with the illusion that bigger is better for profits (An admission that many companies are not well managed. The lives of companies are stretched on the hope that they can reduce their overhead or get better under new managements !).

c/- There are a lot of initial public offers (IPO’s) of new companies (on the share markets) with unclear, questionable earning capabilities (Institutions want to benefit from people’s greed !).

People buy on hope into any company to be in the herd. The whole market goes up much faster than the national GDP and GNI.

According to reference [2],  “S&P 500 stock index edged up… market capitalization of the companies in the index exceeds $20 trillion. That’s 106% of US GDP, for just 500 companies!” .

d/- There are a lot of margin lending (by banks to investors who bet that short term market dips are very unlikely but if any dip does come they usually lose their investment/bet and usually most of their savings).

Any temporary dip will force Margin Lenders to sell shares of Margin Borrowers resulting in an amplification of the temporary small dip into a longer lasting and more serious dip which may force out even more Margin Borrowers and the market index keeps on falling.

Currently the ratio of margin lending to capitalization of the Australian market is only about 1%. If the same also holds true for other markets then margin lending cannot cause much damage in the current condition.

e/- Short-term interest rates are much higher than long term ones for Reserve Bank loans and Treasury Notes (People run out of real wealth making ideas for the long term and can only play the short term games of passing the buck with borrowed money in existing unsustainable structure).

f/- Uneven development of different sectors of the economy resulting in unsustainable economic condition (for example a construction boom in areas with no jobs, no roads, no people to pay for the newly built buildings leading to heavy debts by builders caused by production of unwanted goods).

g/- Everyone talks and seems to know everything about investment on the share markets (People knows that passing the buck makes much more money than doing real manufacturing/servicing. Herd mentality is obviously in action here).

6. Events in a market crash.

Greed and fear and herd mentality cause a market wide crash.

When fear overcomes greed, they all want to sell out at the same time, at any cost to cut loss.

The gamblers, the uniformed investors, the loose bankers, creditors all lose their money.  The market will usually be suspended immediately by a computer after any deep loss.

The patient investors may pick up good investment during crashes. The time window for a big dip is only about 10 minute wide and you must be a regular client of some friendly stoke brokers or possess a reliable internet trading software to have your order processed in that hectic time. I have seen my friends doing it.

Then everyone still not burnt will want to invest in real estate instead only for some of them to get burnt again in that ensuing property (new type of) bubble!

7. Avoiding getting burnt

a/- Remember that no one wants to sell a money making machine. If it is sold to you for cheap, there must be some problems.

b/- Use your money to pay out all your debts, their interest payment is usually HIGHER than any after tax return on any listed company investment.

c/- If you still have spare money, set up your own business or investment property. You will know the “true and fair” value of your business. You can hire and fire. Your voice can be heard. You also avoid paying extravagant salaries to directors and snake oil salesmen. With this type of experience, you may begin to make judgement on the values of listed companies.

d/- Don’t invest in any company whose activities you cannot fully understand. If you cannot understand their way of making money then probably they CANNOT make money. Don’t think that extravagantly paid directors will solve the impossible problems for such a company.

e/- Only gamble on the share market with what you can afford to lose. There are always new types of traps invented to catch you.

f/- If you cannot sleep at night with an investment then you cannot afford to lose: Cut the loss and get out.

Being alert to the signs may help you getting burnt. It has certainly helped me and my friends.

References (added 07 Mar2017) :

[1]. Ex-HBOS banker ‘sold his soul for swag’, bbc new, http://www.bbc.com/news/business-38842723, 2 February 2017.

[2].  Wolf Richter, S&P 500 Earnings Stuck at 2011 Levels, Stocks up 87% Since, Straight Line Logic , https://straightlinelogic.com/2017/02/19/sp-500-earnings-stuck-at-2011-levels-stocks-up-87-since-by-wolf-richter/

[3]. Barry Ritholtz, Excessive CEO Pay for Dumb Luck, bloomberg.com, https://www.bloomberg.com/view/articles/2017-03-06/excessive-ceo-pay-for-dumb-luck, accessed 07 Mar 2017.

[4]. Colin Twiggs, CEO pay is rigged | Barry Ritholz, Gold Stocks & Forex, https://wordpress.com/read/feeds/289142/posts/1366147221, 07 Mar 2017.

[5]. tonytran2015, Bankers given outrageous incomes by their boards, https://survivaltricks.wordpress.com/2016/12/22/bankers-given-outrageous-incomes-by-their-boards/, posted on December 22, 2016.

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Simple determination of East Asia lunisolar New Year

by tonytran2015 (Melbourne, Australia).

#East Asia New Year, #lunar New Year, #lunar leap year, #lunar leap month, #lunisolar calendar, #Vietnamese New Year.

When traveling to or working with East Asia countries Westerners are sometimes puzzled by their Calendar and long New Year festivals which vary from year to year on the Western Calendar.

This blog gives simple explanation to Westerners the rules of East Asia Lunisolar calendar which is based on Celestial observations and has been designed to give season information to users.

To easily understand this article, readers are advised to first read the simple summary on stars in the sky [1] to know the declination, right ascension and the date of a star.

Simple calculations [2] shows that each lunar month is 29.530 days. Two lunar months has a length of 59.06 days. The lunisolar calendar used in China since ancient time has had Winter solstice falling on the 11th month of the year since more than 2000 years ago, since 113BC (Han Dynasty II p.38 [3]) .

The solstice point (the point from ecliptic most South of the celestial equator) is moving slowly in the sky and is currently opposite to 90 degree Right Ascension.

1. New Year time is just a convention.

A lunisolar year can be made to start at any of its seasonal point, the point can be in the Winter or in the Summer. It all comes to a matter of convention. For example, the Burmese lunisolar calendar has its New Years starting when the Sun enters the constellation Aries.

For East Asia lunisolar calendar making, there are two major alternatives for determining its New Years as in the following.

2. Simple rules.

MoonShapesNAngles5C

Figure 1: Phase of the Moon. A new Moon is the Moon with a thin white crescent on its leading edge (top right corner of the picture) which is first visible  right after sunset on the Western horizon.

If the calendar makers want their people to have simple and clear rule on the start of a New Year, they can define the New Year starting on the Second New Moon after Winter Solstice day.

This would be easy for ordinary people and people in remote areas to work out their two last (11th and 12th) lunar months of the year, and have enough time to prepare for the New Year festival.

3. Precision rules with uniform determination of months.

polrnorthq2c30.jpgFigure: Inversion map of the Northern Celestial 3/4-sphere. The non-concentric circle is the ecliptic and winter solstice is its most distant point from the North pole (on the left of the North pole).

The Eastern Asia lunisolar Calendar requires each of its lunar month has a characteristic star in the sky to match with the seasons. There are 12 chosen characteristic stars. A lunar year has either 12 lunar months (normal year) or 13 lunar months (leap year). Any lunar month not containing any of those 12 chosen characteristic stars is called a leap month and is named after its preceding month.

If the Calendar Makers insist on astronomical precision with uniform determination of months then they can define each month having to contain a star at regular spacing of Right Ascension, that is 11th month having some star of 90 degree R.A. on the meridian line at midnight on one night of the month and so on [4], [5].

Therefore they would require that

11th month has a star of 90 degree R.A.,
12th month has a star of 120 degree R.A.,
1st month has a star of 150 degree R.A., (Regulus of Leo has 152.05° R.A., 12° decl.)
2nd month has a star of 180 degree R.A.,
3rd month has a star of 210 degree R.A.,
4th month has a star of 240 degree R.A., (Delta Scorpii has 240.22° R.A., –22.60° decl.)
5th month has a star of 270 degree R.A.,
6th month has a star of 300 degree R.A., (Altair of Aql has 297.7° R.A., 8.85° decl.)
7th month has a star of 330 degree R.A.,
8th month has a star of 0 degree R.A.,
9th month has a star of 30 degree R.A.,
10th month has a star of 60 degree R.A.,

any month that has no star in the above list is called a leap month bearing the same name as its preceding non-leap month. Therefore it is hard for ordinary people to know the beginning of the Year.

4. Most probable choice.

I would think that the ancient Calendar makers chose the first alternative rather than the more difficult second alternative.

The second alternative also has an additional complication that there is a precession of Equinox at a rate of 360 degree per(approximately) 25,920 years. In 2000 years the Winter Solstice has moved by 27.7 degrees (about one month). Chines Calendar Makers would have noticed it and saw the need for adjustment had they chosen the second alternative but I could not find any literature about that kind of adjustment.

It is most likely that Chinese Calendar Makers had chosen the first alternative. Their choice may have had influence on Calendar Makers of neighboring countries.

If East Asian Calendar Makers chose the easy rules of for determining New Year day then the 1st month of any East Asian New Year would contain a star that has a date of 18 February(= 21 December + 59.06 days), 59.06 days after Winter Solstice. That would come to a simple rule for star watchers (for the current configuration of Earth orbit):
The New Year starts on the second new moon after Winter Solstice day and the first lunar month of the lunisolar calendar should have a star of 18 February (= 21 December + 59.06 days) of Right Ascension of nearly 152 degrees (near to that of Regulus of Leo) on its meridian at midnight.

The second through to the tenth months of the lunisolar calendar have been anchored to seasons by requiring each to have a star chosen as specified in section 3. If bright stars of approximate Right Ascensions are chosen instead, there would only be more or less leap months repeating the name of the preceding months. The choice of bright stars of approximate Right Ascensions may also have been influenced by superstition and politics.

 

References

[1]. tonytran2015, Finding North and time by stars ,survivaltricks.wordpress.com, https://survivaltricks.wordpress.com/2015/08/28/finding-north-and-time-by-stars/

[2]. tonytran2015, Finding North direction and time accurately from the horn line of the Moon, survivaltricks.wordpress.com, https://survivaltricks.wordpress.com/2015/08/12/finding-north-direction-and-time-accurately-from-the-horn-line-of-the-moon/

[3]. Sima Qian, Records of History by the grand historian (translated by Burton Watson), Qin Dynasty, Han Dynasty I (Rev. Ed.) and Han Dynasty II (Rev. Ed.), the Res. Cent. for Transl. The Chinese Univ. of Hon Kong and Colubia Univ. Press, Hong Kong and New York, 1961.

[4]. Helmer Aslaksen, The Mathematics of the Chinese Calendar, http://www.math.nus.edu.sg/aslaksen/calendar/chinese.shtml, accessed 19 Jan 2017.

[5]. Ho Ngoc Duc, Thuat toan am lich (in Vietnamese), https://www.informatik.uni-leipzig.de/~duc/amlich/calrules.html, accessed 19 Jan 2017.

 

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Navigating with an AM MW radio receiver

by tonytran2015 (Melbourne, Australia)

#AM, #broadcast, #emergency, #radio, #radio direction finding, #find North, #Medium Wave, #radio navigation.

Every natural disaster emergency kit is recommended by authorities to include a battery operated Amplitude Modulation Medium Wave (AM MW, also called AM Broadcast) radio receiver to receive critical information and instructions.

The radio receiver can actually do much more than receiving information and instructions. It can find the direction to nearby broadcasting stations and even find your location on any map showing the stations.

The technique is applicable when there are nearby (closer than 100km) AM broadcast stations. It is useful  to regions near the terrestrial magnetic poles where  magnetic compasses do not work well, to desert crossing and to coastal boat travel when other modes of navigation are not available (such as when in bad weather and without any working magnetic compass).

1. Basis of Radio-direction-finding.

An AM broadcasting station in Medium Wave sends electromagnetic waves out from its antenna at the speed of light. The invisible EM waves propagate outwards from the broadcast station’s vertical antenna. The antenna continuously releases consecutive, expanding circular magnetic lines of alternating (clockwise then anti-clockwise) orientations. The circles spread out in all directions. When a receiver receives the signal, the alternating magnetic field is at right angle to both the spreading (propagation) direction and the alternating electrical field which is almost in the direction of the broadcasting antenna.

Most AM radio receiving Medium Waves (0.5MHz to 1.6MHz) use ferrite rod antennas to capture these magnetic field lines. The ferrite rod of an AM MW receiver is usually placed inside and along the top edge of the (usually flat) receiver.

sharpradio

Figure 1: A battery operated multi-band AM radio that can be used in emergency. This battery operated multi-band AM radio  with a fair sized signal strength indicator in a small window on the left of the dial was made in the 1960’s. Its pulled out rod antenna is only for Short Wave reception, an internal long ferrite rod antenna is used for Medium Wave reception.

 

radiosony

Figure 2: A compact radio receiver WITH an AM internal ferrite rod antenna that can be best for emergency use. This compact AM/FM receiver has an internal ferrite rod antenna for AM MW reception and can properly receive AM signals even without using any earphone.

 

When an AM MW (also called broadcast band) radio receiver has been tuned to a station, you can notice the signal strength varies when its ferrite rod antenna is rotated on the horizontal plane: The received signal is weakest when either end of the rod is pointed directly at the transmitting station, and it is strongest when the rod is at right angle to the line of sight to the station. The technique has been widely used for ships until the advent of low cost GPS. Reference [1] gives a really interesting long list with pictures of AM radio receivers specially built for the application of this technique on ships.

CAUTION: Many compact AM MW radio receivers do NOT have ferrite rod antennas, they use their earphone wires to receive the electrical component of the broadcast waves. This method of finding directions does NOT work with such receivers.

 

2. Simple direction finding.
Rotate the top edge (with the ferrite antenna) of the receiver by a full horizontal turn and notice the two opposite directions where signal receptions are weakest. When this happens, one of the ends of the ferrite rod is pointing exactly at the station and the station lies on the line through the top edge of the receiver. Additional information from somewhere else is needed to tell in which of the opposite directions the station may lie.

 

3. Finding the receiver on a line through the station shown on a map.
If the direction of the top edge of the receiver relative to true North is known, the locus of the receiver on the map is a straight line through the broadcasting station.

 

4. Finding the receiver on a circle through two stations shown on a map.

arcbearing

Figure 1: Finding your location using intersecting angle bearing circles.

Any map showing the locations of the broadcasting stations S1, S2, S3,… can be used to locate the position R of the radio receiver. Any receiver with the angle from R-S1 to R-S2 being 40 degrees (an example value) in the clockwise direction must be on the circle drawn through S1 and S2 for that example value of 40 degrees. The example circle is called the circle bearing the angle of 40 degree in the clockwise direction for viewing the line S1-S2.

If two stations S1 and S2 are shown on a map and A is a directed (signed) angle from the line to S1 to the line to S2 then the locus of the radio receiver is the circle through S1 and S2 bearing that directed angle.

For example, if the angle from R-S1 to R-S2 is 40 degrees (an example value) in the clockwise direction, the receiver must be on the circle drawn through S1 and S2 on the map for that example value of 40 degrees. The example circle is called the circle bearing the angle of 40 degree in the clockwise direction for viewing the line S1-S2.

5. Finding the receiver as intersection point of three circles through three stations shown on a map.
If three stations S1, S2 and S3 are shown on a map as in the figure of the last section and the directed (signed) angles between the directions to S1, S2, S3 are all known, the receiver is on the intersection of all three circles through each pair of S1, S2 and S3 bearing the respective directed angles between them. Usually, only two circles are needed to draw the intersection point, which is the location of the radio receiver R.

6. Limitation of the method.
a. The method works well if there are non-interfering AM broadcast stations within 100km of the navigator and the terrain is nearly flat.

b. When there are high atmospheric electrical activities it may be hard to find the direction for weakest reception by the ferrite rod of the broadcasting signals.

c. Many compact AM MW radio receivers do NOT have ferrite rod antennas, they use their earphone wires to receive the electrical component of the broadcast waves. This method of finding directions does NOT work with such receivers.

d. The method does NOT work with Shortwaves as shortwave signals are not received through ferrite rod antennas.

e. Note that Philips from Holland had a famous radio model, L4X00T, with a fold up/fold down rectangular antenna loop for shortwaves, which can also be used to find out the direction of the incoming shortwaves in the same way as described in preceding sections. However shortwaves bounce and they do not accurately show the directions to the stations.

Reference.

[1]. Radio Direction Finders, angelfire.com, http://www.angelfire.com/space/proto57/rdf.html, accessed 06 Feb 2017.

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Your fiat money (Part 2).

by tonytran2015 (Melbourne, Australia).

1. Fiat money

Figure 1: Fiat money are paid to government employees. All citizens have to pay their taxes with that fiat money.

The simple basis for accepting the fiat money is that those who had done works for the government have the fiat money (a form of certificates) and the population at large have to exchange goods and service for those certificates to pay their own tax (those who don’t pay will be jailed) and buy some goods or service from the government.

2. Pushing for public use of the fiat money as a storage for wealth.

A government will require that its people pay their taxes and government service fees with its fiat money. They must do it or face having no government service or even face punishment.

People in that country have to obtain the money from government employees (who have been paid with fiat money) by supplying them with goods or service.

So the government has created a demand for its fiat money at the time of tax payment.

It is clear that a fiat money requires neither trust in nor support for the government nor any gold or silver holding by the government.

As long as the fiat money has NO EXPIRY DATES, the population at large may prefer keeping it even outside tax time to keeping perishable goods as a form of storing their “wealth” for rainy days.

This second step of using fiat money to store “wealth” relies (rightly or wrongly) on the belief that the government will not suddenly declare those certificates invalid (demonetize some denominations).

The pre-WW2, National Socialist (1933) government of Germany is most known for operating its economy with neither gold nor foreign currency backing using only its own fiat money called Reich Marchs.

The coupon system in communist countries is also similar to fiat currency with the difference that coupons are not freely transferable and may have expiry dates.

3. Fiat money sets its own value against goods and service.

If all government employees are self-sufficient homesteaders spending little money then the fiat money exchanges itself with a lot of goods or service from other people who need them to pay taxes. The population at large has to compete hard for fiat money in order to pay their tax!

If all government employees are like drunken sailors spending money easily then the fiat money exchanges itself with little goods or service (and the drunken sailors may then complain that they had not been paid much !) .

It all follows the rule of Supply and Demand between government employees and the population at large.

4. A government can influence the value of its fiat money.

A government can lower the value of its fiat money by reducing its tax while keeping the payment to its employees unchanged. It can also do that by offering to buy some type of goods from its citizens for government usage or government storage .

Conversely, the government can increase the value of its fiat money by increasing its tax while keeping the payment to its employees unchanged. It can also do that by selling to its citizens goods in government stores (including foreign currency)  or rights to use some government resource.

However, when its tax is too high, a government risks causing a revolt by its people (as the British empire had bitterly found out with its taxes on its American colony). On the other hand, if tax is too low relative to government payments, there is a risk of high inflation and the population may try to avoid fiat money until tax time, when they absolutely need it for paying their taxes.

5. Keeping the value of fiat money constant.

It is easy to see that for an unchanged population and an unchanged economy, the fiat money has a constant value when government’s yearly payment is equal to its collected tax.

If the government’s collected tax is more than its payout (having a budget surplus) it will sit on a stack of its own fiat money. In this case, it can even use its own fiat money to buy gold from the population at large.

If the government’s collected tax is less than its payout (having a budget deficit) it will need to draw from the stack of fiat money it has saved up from previous years or it may even have to sell its gold reserve to the people to get back some of its own fiat money to make up for the short fall for spending.

So the gold reserve is just a buffer to cover for years of low tax collection.

6. The gold reserve of a country does not need to be of any fix ratio to the total of fiat money in circulation.

The gold reserve only determines the total of all consecutive budget deficits before the government run out of gold to sell to the people to uphold the value of its fiat money. (See references [4], [5] for the removal of gold backing to the dollars.)

Any government with good record of never having budget deficit does not need any gold reserve . However, some gold reserve is always kept as a precaution against multiple years of natural disasters. It is noted that a number of countries deposit their gold reserves overseas despite the risk of losing them to the keeper countries (see reference [6], [7]).

A government with reckless overspending will have to sell its gold and rights to use national resources until the day it has nothing left to sell. Then the value of its fiat money may plunge.

Leaving aside the question of whether its gold was undersold or not (see reference [8]), the British government might be right in selling its gold reserve in the 1990’s if it can be absolutely certain to always have NO budget deficit from that time, even in the face of natural disasters.

7. Borrowing from the population.

When the government want to borrow X units of its fiat money from its citizens, it may have to conduct an “auction”.

It may offer to all of its people to give the government any each of their spare $90 now to receive $100 in 1 year time.

Too many of its citizens may accept the offer and the total amount of their money may far exceed the requirement of the government. If that is the case, it may next say No, not $90 anymore, but $91. The amount may goes up again until the acceptance has only about X units, the amount it requires.

Anti-corruption requires that the bidding process be public and transparent.

This is the idea of Treasury Bonds, or Government Debentures.

If the final auction price is $97 of current money for $100 of money in 1 year time then the Treasury Bond rate is (100-97)/97 or 3.1%.

8. The foreign exchange value and the bond rate of a fiat currency in a growing economy.

When the economy goes strongly, there is anticipation of budget surplus and government developing more growth or adding to its  gold reserve and there is more confidence in its fiat currency. Its fiat currency is in strong demand by its neighbors to buy its goods and service, hence its exchange rate may rise.

At the same time, its people feel good and want to use their existing money to set up shops or factories. The Treasury Notes auction offers are now less attractive and there would be fewer participants therefore its Bond rate rises.

The converse applies to a weakening economy.

References

[1] . tonytran2015, your fiat money, https://survivaltricks.wordpress.com/2017/01/09/your-fiat-money/, posted on Jan 9, 2017

[2]. , posted on December 1, 2016

[3]. Venezuela follows Indias footsteps in demonetization scheme, econotimes.com, http://www.econotimes.com/Venezuela-follows-Indias-footsteps-in-demonetization-scheme-445257

[4]. FDR takes United States off gold standard (1933), history.com, http://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard, accessed 10 Feb 2017

[5]. Nixon shock, Wikipedia, https://en.wikipedia.org/wiki/Nixon_shock, accessed 10 Feb 2017

[6]. De Gaulle and international monetary relations, charles-de-gaulle.com, http://www.charles-de-gaulle.com/the-stateman/the-modernisation-of-the-country/de-gaulle-and-international-monetary-relations.html, access 10 Feb 2017.

[7]. Germany brings its gold stash home sooner than planned, cnbc news,
http://www.charles-de-gaulle.com/the-stateman/the-modernisation-of-the-country/de-gaulle-and-international-monetary-relations.html, 10 Feb 2017.

[8]. Sale of UK gold reserves, 1999–2002, Wikipedia, https://en.wikipedia.org/wiki/Sale_of_UK_gold_reserves,_1999-2002, accessed 10 Feb 2017.

 

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Your fiat money

by tonytran2015 (Melbourne, Australia).
You need to know about your money in order to understand the many actions of your government.

1. Fiat money

Figure 1: Fiat money are paid to government employees. All citizens have to pay their taxes with that fiat money.

Nearly every country in the world uses money issued based on its governing power. Such a money is called fiat money.

A fiat money is not guaranteed by any goods such as gold or silver. A fiat piece of money is just a certificate of some amount of work done for the government by some of its employees and those certificates can be used by anyone to pay taxes to or buy some goods or service from the government.

Refusal to pay taxes results in jail terms. Therefore the population at large have to exchange their goods or service for those pieces of fiat money from government employees so that they can have fiat money to pay their taxes to avoid jail terms or to buy goods and service from the government.

It is quite risky to keep too much of any fiat money. The threat of demonetization alone can make the holders of the money suffer and submit to whatever oppressive demands from the issuer of the money if they don’t want to lose all its value. (Even China has been under US pressure when it owned about $1200 billions US in debt in 2016.)

Some people can manage to keep just only enough of fiat money to pay their taxes and daily expenses and so they can survive any devaluation or demonetization.

References

[1]. How Much US Debt Does China Own, about.com, http://usgovinfo.about.com/od/moneymatters/ss/How-Much-US-Debt-Does-China-Own.htm., accessed Jan 10th, 2017.

[2]. Tyler Durden, US Treasury Gives Explicit Warning To China, Germany And Japan Not To Devalue Their Currencies, zerohedge.com, http://www.zerohedge.com/news/2016-04-29/us-treasury-gives-explicit-warning-china-germany-and-japan-not-devalue-their-currenc, Apr 29, 2016

[3]. , posted on December 1, 2016

[4]. Venezuela follows Indias footsteps in demonetization scheme, econotimes.com, http://www.econotimes.com/Venezuela-follows-Indias-footsteps-in-demonetization-scheme-445257

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The Scorpius constellation

by tonytran2015 (Melbourne, Australia).

#find North, #direction, #by stars, #Scorpius, #Antares, #Sagittarius, #Ara, #navigation, #constellation.

Celestial navigators who do not use declination and right ascension begin their navigation by learning the various bright, easily identifiable constellations in the sky (There are no more than 10 to learn.). The Scorpius is usually chosen to be the second constellation to be learned since it is as large as Orion and is useful when Orion is out of sight.

The Scorpius is a crowded, large Southern constellation of June. Part of it is always seen in the sky of June for the whole night, attains its highest elevation (or altitude) about midnight and is immediately South of the most Southern point of the Ecliptic. Scorpius can be seen on the rising side before sunrise in January, seen for the whole night in May and seen on the setting side after sunset in November.

It has the size of 30 degree (in angle) and  has the shape of a hook oriented 55 degree clockwise from the great circle arc through the Celestial poles. Arabian sky watchers see a resembling to the body and tail of a (now declawed) scorpion and gave it the name Scorpius.

The brightest star of Scorpius is Antares but it is so close to the ecliptic that it is often outshone by the Moon and bright planets traveling on the ecliptic. Antares often requires extra care for proper identification. Identifying Antares give a good practice to star identifying.

1. The Scorpius on a Mercator sky-map.

mercator8gc30.jpg

Figure 1: The Scorpio constellation is in the shape of a hook, is close to the ecliptic and one third from the left edge of this Mercator sky-map.

Figure 2: A common Asian scorpion.
The Scorpius has too many stars and its brightest star Antares can even be over-shone by planets wandering near to it. Therefore its identification often requires additional care.

2. An alternative method of recognizing stars in the Scorpius

Figure 1: Scorpius Sagittarius and Ara are easily recognized together.

I found that it is easier to recognize the bright stars of three constellations Scorpius, Sagittarius  and Ara together. They resemble a tree with two side roots rising at right angle from a ground line.

The two brightest stars of all three constellations are Antares and Shaula in the Scorpius.They are separated by 17 degrees in angle. They line up with two other dim stars to form a straight line (delta Scorpius, Antares, Shaula and kappa Scorpius) which is slightly longer.

The South-trailing end of this line continues to be the bisector of a right angle line formed by five stars zeta Sagittarius, Kaus Australis, Shaula, theta Scorpius, alpha Ara.

The line of two brightest stars looks like a tree sticking up at right angle to the ground line formed by dimmer stars in line with alpha and epsilon Ara. The tree has two side roots (Shaula-Kaus Australis. and Shaula-theta Scorpius-alpha Ara) originating from Shaula and each is at 45 degree from the tree trunk.

After the bright stars have been identified, each constellation can be identified using its conventional map as given in [1] and [2].


3. Taking photos of the Scorpius.

Scorpius

Figure 1: Photo of the Scorpius Constellation taken with a Samsung Galaxy Note 2. The original photos have been digitally enhanced.

Scorpius

Figure 2: Another photo of the Scorpius Constellation taken with a Samsung Galaxy Note 2. The original photos have been digitally enhanced. There are three bright dots in a straight line at the top of the first photo. The two on the left are two planets on the ecliptic. The third one on the right is delta Scorpius. Antares is the bright dot under the three in line.

The Scorpius is adequately bright and its photos can be taken using a smart phone such as a Samsung Galaxy Note 2 with no extra attachment.

4. Easy identification of Scorpius by a slide sky map.

starmap18april0130c.jpg

Figure 1: The Scorpius position by the Mercator slide sky map.

Observers who are not quite familiar with the Scorpius constellation can use the slide sky map described in reference [2] to confirm the its identity. The latitude of the observer, time, and North direction are required for identification using a slide sky map. The figure here gives its altitude (elevation) and kits orientation at the time of the first photo of the preceding section.


References.


[1]. tonytran2015, Finding North and time by stars in the tropics, survivaltricks.wordpress.com,Finding North and time by stars in the tropics, posted on May 25, 2016


[2]. tonytran2015, Slide Sky-Map for displaying tropical stars, survivaltricks.wordpress.com, Slide Sky-Map for displaying tropical stars., posted on October 7, 2016


[3]. tonytran2015, Finding North and time by stars, survivaltricks.wordpress.com,Finding North and time by stars, posted on August 28, 2015

[4]. The Orion constellation., posted December 26, 2016 

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Quick fire making using sunlight.

by tonytran2015 (Melbourne, Australia).

#crystal ball #crystal sphere #fire #glass lens #making fire #monocular #ocular #sun-rays

You may already have in your possession some excellent lenses for making fires. Knowing about them will help you make fire quickly from sunlight when facing an emergency. All lenses described in this blog can make a cigarette smoulder in less than 30 seconds and can light up that cigarette afterwards.

1. Concentration of radiating heat flux by a lens.

The radiating heat flux from the Sun is concentrated by a factor C given by

C = Pi*d*d/(Pi*f*a*f*a) =

C = (d/f)*(d/f)*(1/a)*(1/a).

where d and f are respectively the diameter and focal length of the lenses and a is the angular diameter of the Sun (a = 0.5*3.14/180radian = 0.0087 radian).

The angular diameter of the Sun cannot be changed. It is obvious that we have to increase the ratio (d/f), which is called the aperture number of the lenses, to increase the heat flux concentration. The deciding factor for success is the aperture ratio of the mirror or lens system.

C = 13200*(d/f)*(d/f).

This concentration of heat flux is remarkably high for any lens system with D/f of more than 1/3 and can be used to ignite properly prepared tinder to make fire in survival situations.

The calculated concentration of radiating heat flux can only be achieved using precision optics. Any imperfection on the surface of the lens disperses the image of the Sun and reduces the concentration drastically.

2. A transparent perfect sphere.

crystalballc70.jpg

Figure 1 : A small clear sphere (25mm diameter).

crystalball2c70.jpg

Figure 2 : Small clear sphere (close up view).

You may have a small clear glass sphere somewhere in your household either as a decorative item, or as a bottle stopper, etc…

The small transparent sphere I use here is a small (25.4 mm diameter) clear quartz sphere often used as an item of curiosity and often called a “crystal sphere” by fortune tellers.

Calculations using geometrical optics show that (for n=1.5) the focal point is about 0.5 radius outside the surface of the ball and the equivalent focal length of the sphere is about 2r×(3/4)= 1.5r

Even if only rays of distance less than 0.5 radius (from the central ray) converge on the spot, the aperture of the sphere is still
D/f = (2*0.5r)/(1.5r) = 1/(1.5),

a high value for aperture.

At an aperture value of 2/3, the concentration of radiating heat by sunlight is

C = 13200*(D/f)*(D/f) = 6000.

The actual aperture number of this clear sphere is higher than 1/1.5 and the sphere can be used as a lens to light up cigarettes using sunlight.

Figures 3 : Lighting a cigarette by a small 25mm clear quartz sphere.

The above photo also demonstrates the danger of leaving clear glass balls on any combustible surface. When the afternoon Sun comes down to an elevation of 41degree (= arcsin 0.6666), the image of the Sun is exactly on the combustible material and combustion becomes a real possibility !

The concentration factor of C = 6000 is only realized with a perfect sphere. For any body of revolution of nearly spherical shape, the concentration of radiating heat flux is much lower, and may come down to C = 100 when there is some appreciable astigmatism. For this reason, PRECISION IS MORE IMPORTANT THAN SIZE for transparent spheres.

I prefer having a small perfect sphere to a large approximate sphere.

 

3. A watchmaker double staged ocular.

Figure 1: A watch maker monocular.

Figure 2 : A watch maker monocular (rear view).

Figures 3 : Lighting a cigarette by a watch maker monocular.

A monocular is a compound magnifying lens used by watchmakers to see small details of watch movements. It is a simple version of the oculars used for each eye in common sport binoculars.

Every first aid kit for hikers should have this light weight and useful device and a pair of sharp tweezers for detecting and removal of hurting spikes or splinters sticking in the skins.

The lens nearer to the eye of a proper ocular has a large diameter to give the eye a wide field of view. The double stage makes tiny object has a large image at infinity.

When sunlight travels in the reverse direction from the back (big) end to the front (small) end it will focus at a tiny spot outside the ocular and about 20mm from the front lens.

The aperture ratio D/f of this compound lens is about 1/2.

If the dark end of a cigarette is placed at that bright tiny spot smouldering will begin in less than 1 second on a sunny day.

If the oculars of your binoculars are thread removable then you can also use them in emergency but keeping in mind that taking apart a pair of binoculars will allow dirt to contaminate it.

The concentration factor of C = 13200*(d/f)*(d/f)  is only realized with a lens having perfect spherical surfaces. For any lens with only approximate shape, the concentration of radiating heat flux is much lower, and may come down to C = 100 when there is some appreciable astigmatism. For this reason, PRECISION IS MORE IMPORTANT THAN SIZE for any monocular.

I prefer to have a small quality monocular than a large one with low quality.

4. Aspherical condenser lenses.

Figure 1: A fused quartz aspherical lens.

Figure 2: Fused quartz aspherical lens viewed from another direction.

I was lucky to be given a fused quartz, thick aspheric lens. Its aperture ratio is about D/f=1/1.5 while other thin spherical, glass lenses have a ratio of less than 1/2.5.
The concentration of solar heat flux is much higher when using it than when using an ordinary magnifying glass.

Figure 3: A one battery LED torch with a thick aspherical lens at the front.

The front lenses of zoom focus LED torches are low cost substitutes for such aspherical lens. They do work exceptionally well and are even unbreakable since they are made from (acrylic ?) plastic.

Disadvantage.

The disadvantage of using any such aspherical lens for making fire is that it is heavy and it has very short distance from its flat side to the bright focal point. Sunlight coming to this bright focal point from many widely separated directions and it is difficult to direct them all to the trough of the dimple at the center of the end of a cigarette. I found that it is less easy to light up a cigarette using an aspherical lens than using a good monocular of the same diameter.

Again, it is important to also note that PRECISION IS MORE IMPORTANT THAN SIZE for any aspherical lens.

I prefer to have a small quality aspherical lens than a large one with low quality.

 

5. A flexible Fresnel lens for wallet.

Figure 1: A thin flexible Fresnel lens for wallet. Concentric grooves can be noticed at the right hand corners of this picture.

The lens is usually made of thin, flexible, soft clear plastic of the size of credit cards. This type of lenses is sold as wallet sized magnifying glasses for map reading.

A Fresnel lens has high aperture ratio and can be used to light up cigarettes with ease. However it needs to be properly cleaned after each use as it is easily scratched.

6. Method of lighting up a cigarette using a small lens.

1. A cigarette or its imitation made up from rolled up toilette tissue sheets with darkened ends seems to be the readily available suitable tinder sticks for making fire using sunlight.

2. A conical dimple should be made at the dark end of a cigarette. The depth of the dimple should be about the size of its radius. That is a conical concave surface should be made out of the dark flat tip of the cigarette. This tiny concave surface reduces radiating heat loss from the fire to be started at its trough.

3. A precision lens is used to focus sunlight onto the dark end of a cigarette. PRECISION IS MORE IMPORTANT THAN SIZE as the high concentration of sunlight depends on precision of the lens surface.

4. The axis of the lens system should point exactly at the Sun to have maximum amount of sunlight converging on the focal point.

5. Sunlight should be focused on one point on the surface of the dimpled end of the cigarette to blacken it. Smoke should be seen arising from the spot within 10 seconds after focusing. Other points of the surface should then be smothered to have all the surface gradually blackened.

6. Sunlight is now focused on the trough point of the dimpled surface. Smoke will be seen and the trough will glow red when assisted by gentle wind blowing toward the other end of the cigarette.

7. The cigarette should now be smoked or blown externally so that hot fume from the flame end travels toward its other end to heat up the adjacent zone to ready it for combustion.

8. A strong red glow indicates that the cigarette has been burning. It can now be used to start up a fire.

 

References

[1]. tonytran2015, Making fire and lighting cigarettes with sunlight, survivaltricks.wordpress.com,  Making fire and lighting cigarettes with sunlight, posted on February 27, 2016

[2]. tonytran2015, Mirror for making fire using sunlight, survivaltricks.wordpress.com, Mirror for making fire using sunlight, posted on April 13, 2016

 

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