Saturday, September 08, 2007

Current Events: Better Not Fiddle With That Gizmo (in the U.K.)

A new law from the United Kingdom regarding cell phones...will it catch on in other western societies, namely the U.S.?

Friday, September 07, 2007

Friday Funnies: The Funniest Thing I've Seen All Week

If you're going to make a commercial, what is the best way to do so? Big.

Commercials about beer and alcohol seem to be one of those areas which the marketing and ad people just seem to have the most fun.

Thursday, September 06, 2007

E-Money, Part 2

The introduction of the Euro is an example of progression in the classic economy toward an all-digital economy. On the first of January 2002, the Euro became the standard currency of the member countries of the European Union. The Euro was introduced because the barriers to trade created inefficiency and waste and current systems created less value in each of their monies. This affected European countries when conducting business with the remainder of the global marketplace. Standardization of the Euro as the single currency in 12 countries of the European Union reduced the cultural barriers to trading with one another and unified at least 12 separate markets. The unified European marketplace is making it easier for other major markets in the world to do business with them, as well. Despite earlier doubts, the Euro has gained market value to be nearly of the same value as the U.S. Dollar, the most compared-to currency in the world.

This introduction of the Euro has been indicative as a case study of what evolving several markets into a unified marketplace can do to an economic system. Unifying markets can be defined as unifying resources, however, there are the structural changes that need to take place including infrastructure, demand, and a single currency. The infrastructure, as noted earlier, exists in the current capacity of the Internet. Further redundancies, such as more “backbone servers” that operate the core of the Internet, are necessary; as is the need for more bandwidth increases and the standardization of the languages and protocols that transport data. The demand exists because of increased efficiency involved with international transactions, thus relieving some of any trade deficit or increasing any trade surplus: This effect alone would sell the governments of the world to the idea, keeping in mind that the U.S. Government accounts for roughly one third of all monetary transactions in our $10 trillion economy. The single currency in this new, all-digital system would be simple: The “credit.” If all national markets were to utilize this “credit,” it would decrease the amount of waste in the world today. A major problem that critics are likely to point out is the problem plaguing individual currencies today is inflation. The best way to arrange this is to mimic the way that the European Union dealt with introducing the Euro to member nations: Rules were enacted to impose a strict level of fluctuations on the Euro. These rules were strict, since countries who wished to participate in the euro and be a part of "Euroland" had to pass some economic tests referred to as convergence criteria:

  • “The country's annual government budget deficit (the amount of money it owes) cannot exceed 3 percent of gross domestic product (GDP, the total output of the economy).
  • The total outstanding government debt (the cumulative total of each year's budget deficit) cannot exceed 60 percent of GDP.
  • In order to push down inflation rates and encourage more stable prices, the country's rate of inflation must be within 1.5 percent of the three best performing EU countries.
  • The average nominal long-term interest rate must be within 2 percent of the average rate in the three countries with the lowest inflation rates. (Interest rates are measured on the basis of long-term government bonds and/or comparable securities.)
  • The country's exchange rates must stay within "normal" fluctuation margins of the European Exchange Rate Mechanism (ERM) for at least two years. “ (

With such controls in place, it is likely that a universal “earth credit” would be an attainable standard.

Now that the theoretical groundwork has been laid, how is this somewhat evolutionary, somewhat revolutionary system going to change the way individuals and businesses buy and sell goods and services? Every time that a consumer purchases a good or service a small stream of credits will flow from one place (the consumer’s bank account) to another (the business’s merchant account) through cyberspace; every time that a business takes their margin of the profits gained from that sale to the consumer, and spends that on providing more, better items for the consumer, their account will see a decrease of funds while the business that they purchased the goods from sees an increase in their account. Imagining the endless flow of goods from their manufacturers to the consumers, and the endless flow of credits from them to the companies that serve them, a seamless flow develops between the consumer and the business. This shortens the metaphorical distance between the two, and makes the relationship that the business has with the consumer stronger. This will allow a better product for the consumer and better customer relationship management by the business. It will also allow for the business to better understand the consumers that it serves, and produce better products based on the changing needs of the consumer. By changing the system by which everyone makes their transactions with one another, everything is streamlined and people grow closer and understand one another better.

The forthcoming e-economy will change the way that the world does business in every respect. It will make money worth more, easier to purchase any item in any country, and make relations between businesses and consumers better, streamlined, and more beneficial to both parties. The true question of the e-economy, as I have implied earlier, is rather a question of when as to how: Already the amount of money that passes through “automated clearing houses,” or ACH transactions, each day numbers in the billions of dollars. Even though the governments of the world distribute most of this money, the government has always acted as a catalyst for change in a society.

Wednesday, September 05, 2007

E-Money, Part 1

Bob is a normal, average, everyday person that everyone seems to know and like. Deciding that he needs to stop by the grocery store on his way home after a rough day at the office only to pick up a few items, Bob grabs a few more items than he expected, as he always seems to do. While making his way to the cashier, Bob does a mental scan for to see if there is more cash in his pockets. Remembering that his efforts are futile, Bob stops his search: Cash money has ceased to exist. The world of the future calls for a more efficient economy: One that works on your schedule, by your rules. You are glad when you are paying for your items, because all you do is electronically transfer the necessary credits from your account to the grocery store. This transfer of credits ensures that a person does not need to hunt for cash. In the near future this will be a very plausible scenario, as economic systems move into existing in a purely electronic form. The effect of converting the current classic economy into an all-digital economy will increase the amount of funds in the system. Based on a general understanding of the mechanics of economics, this will have significant impacts on the efficiency of monetary transactions, unification of different economies, and ultimately streamline the spending habits of businesses and consumers worldwide.

Economics, in simplest form, is the “study of how people use their scarce resources to satisfy their unlimited wants,” (McEachern, 2). Resources are those things that go into producing or buying something. These include labor (the work put into it), land (someplace to do it), or time (arguably the most scarce resource of all). The ability of combining these resources and get an end product to the consumer has been what has kept modern-day society buoyant since the Industrial Revolution. This transformation in the way that countries produce goods and sell them to the consumer was felt worldwide between the years of 1760 and 1860, with the more intuitive societies feeling the full impact of the revolution (among them England and the United States). Even today, the rest of the world classifies countries on a first, second, or third –world basis. Although the global economy progressed in quantum leaps throughout the last 250 years, it was not until just before the turn of the millennium that the economy was once greatly altered.

The Internet Revolution started to transform the economy in the latter half of the Twentieth Century with the concept of the electronic data interchange entwined into the backbones of most businesses. This eventually warranted the introduction of the World Wide Web to the masses around 1990 when a group of physicists developed a graphic user interface that would have a profound impact on the masses. The group of physicists at the European Organization for Nuclear Research, the world's largest particle physics center, had the foresight that would bring the Internet to the masses and change people’s quality of life and the way everyone purchases goods and services. The Industrial Revolution changed the way we did business by streamlining many of the classic economic principles around the world—paper money, demand and supply, centralized economies; this new Internet Revolution would further streamline these principles of economics by preparing for the e-Economy.

One principle behind paying bills is the act of not paying them until shortly before they are due, otherwise known as the present value of a dollar concept. This model states that a dollar today is worth more than that same dollar tomorrow, dictated by inflation—“a persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services” ( The problem with tangible money is finding the balance between “available currency” (aggregate money supply) and “available goods and services” (aggregate product supply), and therefore, increasing the effects that inflation will have on the economy. Inflation is the real purchasing power of an individual or a business to purchase a good or a service: A dollar today is worth more today than it will be tomorrow.

An inefficiency of coinage lies in the time it takes for the markets to catch up with centralized economic policy. One of the major factors in how well a nation’s economy does is the rules and regulations put onto it by the governing body at the time. In a centralized economy the government closely monitors and regulates monetary flow. If the economy is decentralized, local or regionalized markets impact monetary flow more than any governing entity. In the United States, for example, the Department of the Treasury was granted a $14.705 billion for the 2002 (U.S. Treasury 2002 Budget Summary) budget. The reason why it is attractive for governments to impose fiscal regulations is because of taxation and ultimately a good economy benefits from the amount of money that the government is going to see out of the citizens that it presides over. Of their nearly fifteen billion dollar budget, roughly 63 percent of that is earmarked for the administration of taxation activities. There are billions of dollars of waste when taxing the population under the current economic system in the U.S. According to the “Waste-O-Meter” of Freedom Works, the IRS has wasted $18.1 billion to date on such things from U.S. Postal Service waste ($1.1 billion) to Housing and Urban Development (HUD) waste ($968 million) and approximately $550 million dollars in a failed education audit. Reduction of all monetary activities would help to eliminate this waste by streamlining the centralized bureaucracy surrounding fiscal policy. Better controls would also result as the system goes completely digital. Through the utilization of an information technology infrastructure evolved from today’s infrastructure the effects of the present value of a dollar model will be made up for by the amount of waste saved. In the end all monetary transactions will be far more efficient. By ensuring that the effects of present value are negated by the effects of increased efficiency, attaining buy-in from die-hard economists will be easier. Efficiency must start, though, within the bounds of a single economic system. The European Union’s example of the Euro is an excellent concept of increasing efficiency within the boundaries of a culture.

Tuesday, September 04, 2007

The Missing Bank Teller

This month the largest exercise to plan for pandemics in the United States will take place. Financial services firms—to the tune of 1,800—will be participating in this simulation for three weeks. The U.S. Department of the Treasury and the Securities Industry and Financial Markets Association will learn, on paper, such pressing questions such as how many employees to expect calling in sick, telecommunications issues, service disruptions and, yes, even long lines at ATMs.

Jim Binder, a spokesman for The Operations Clearing Corp., said the Chicago-based provider of derivatives clearing and settlement services will have 30 to 40 workers involved in the planning exercise. The full details of how the simulation will unfold are being kept secret until it starts Sept. 24, Binder said.

The simulation reminds me, actually of when we used to play war games back in the Army. One thing that would happen is soldiers would be issued “casualty cards” which depicted what sort of injury one would have if they were shot and not killed. Medics, the solder’s units, and the soldier themselves, could react appropriately. In much the same fashion, firms participating in this simulation won’t be able to choose how many employees they will be losing for the duration: Depicting what events as they would be in a pandemic.

How will this affect the consumer, at least on the surface, though?

[The U.K.-based Financial Services Authority] said [an equivalent exercise there] showed that some banks would be forced to close branches and reduce banking services, including ATMs. According to the FSA, the test also raised questions about whether the U.K.'s telecommunications infrastructure would be able to support large-scale teleworking for a prolonged period as staff shortages eroded the maintenance capabilities of service providers.

In a world where catastrophe seems to be something occurring more frequently than in many other times in modern history, something like this seems prudent. And while some minor inconveniences could be experienced for consumers of these various financial service organizations, the long-term benefits will be if something happens catastrophic enough to warrant full implementation of the lessons learned for such an exercise.

Or, at the very least, the lessons learned from such an ordeal can go to help increase effectiveness and efficiency of the organization in peacetime. “Fight as we train, train as we fight.”

Monday, September 03, 2007

Monkey Mondays: Monkey Vs. Monkey

Only a monkey, it would seem, can check its ilk. Putting a Common Langur (Presbytis entellus) in charge seems to have become the most cost-effective way of checking groups of the more common Rhesus Macaques (Macaca mul atta) from indulging in vandalism.

A Decade Apart: Subtle but Gaping Differences in 10 Years’ Time

[Note from Matthew: Due to the Labor Day holiday in the U.S., today's will be a shorter post.]

Relative to many out there, I’m a young fellow: Born in Montana in 1979, spending my formative years in the upper Midwest, I was exposed to a great mix of the culture of those from decades previous to me and I was able to see the cultures developing in those in decades younger than me. I don’t know if my upbringing was necessarily anything special, but it offered me a perspective that other people might not have. Every so often it seems that a quarrel between the generations arises: Which is better, which is worse, and where the starker of the contrasts lie. People like to compare; with that being said…

The Beloit College Mindset List for the Class of 2011” offers insight into the worldview of people born circa 1989, who will graduate college in 2011. A few of the insights are covered below; for another perspective, try this Google News Search.

1. What Berlin wall?

I remember keenly when this happened, as well as when the Soviet Union…in fact…

15. Russia has always had a multi-party political system

I was on a vacation with my family in Red Lodge when this happened.

7. They have grown up with bottled water.

Remember when water was actually okay to drink from the tap?

23. Wal-Mart has always been a larger retailer than Sears and has always employed more workers than GM.

I didn’t even hear about Wal-Mart until years after these kids were born.

26. Katie Couric has always had screen cred.

I remember her early days before she anchored NBC’s morning program.

55. MTV has never featured music videos.

Gosh, I remember when they actually played music videos and it wasn’t something like “My Super Sweet 16.”