Many people write or speak to tell us what we should think. Some want to be believed because they are experts, or think they are. Some want to be believed because they claim to speak for us. Some have had revelations. Others want us to trust them because they communicate through prominent media outlets. Many tell us what we should think. I write to encourage my readers to think for themselves. I write to ask you to inquire. Question me. Have fun.

Comment of the Day
The Editorial Board should have no opinion

Jul 11, 2020

The WSJ Editorial Board expressed its opinion about the case of Michael Flynn. It does not matter what they said; in my book, the Editorial Board should have no opinion on any topic. Editorial boards’ job is not to lecture, but to facilitate views from individuals who can present valid arguments. The Editorial Board's job at the WSJ is to guarantee to me, a subscriber, that the different opinions presented are fact-checked. I pay a subscription for the WSJ because I do not have the time nor the means to fact-check whatever is written and posted on the internet. I do not pay for the subscription to be brainwashed by whatever the self-anointed authority of the Editorial Board believes is right. I can make my judgment based on the facts and their interpretation by other individuals.

More parenting is needed
Aug 01, 2019
Peter Gray in Psychology Today advises for less parenting. The problem is exactly the opposite: There is not enough parenting. In the past, when most of our ancestors lived in self-supporting households, often a farm, out of necessity, children were an integral part of whatever adults needed to do during their daily life, and they learned that way. Now, we do not need to do as much at home. Work is outside the home, food is brought in, heat is turned on and off, and mysteriously magical, colorful screens are the center of most activities. If we leave children free to explore what they find the most attractive, they will play video games. There might be some educational value in it, but one needs to learn much more. Hence, we need more effort in parenting, with parents doing more in the home than is otherwise required, and spending more time with children outside in order to introduce them to the real world. This realization hit home after I witnessed the surprise of a 7-year old seeing apples on my apple tree.
Less fight more work
Jul 30, 2017

The fight over Obamacare repeal is over, at least for now. The GOP can start to work on a new proposal that each of us can look at it, and then compare how my particular health care solution would play in it, as compared to Obamacare. In a television interview, HHS Secretary Tom Price said that Obamacare “may be working for Washington, it may be working for insurance companies, but it’s not working for patients.” Maybe it is time to consider patients’ involvement in the preparation of an Obamacare alternative? It could be that Obamacare repeal failed just because it has been prepared by Washington with consultation from insurance companies. Let us start with addressing 19 health care issues that politicians avoid talking about.

How to pay for the wall?
Apr 04, 2017

If you want to build the wall, pay for it with your own money. How much of your own money are you willing to donate? Trump received 62,979,879 votes. If each of Trump’s supporters voluntarily donates at least $1,000, which corresponds to about $42 per month for the next two years, and if we encourage those who are more affluent to double their donations, then Trump can have on hand about $100 billion, which may suffice for a substantial piece of the wall. Hence, all of you who are talking loudly about spending my money on building this wall, stay away from my wallet, but open your own wallet and send money to the “Build the Wall Fund.” Put your money where your mouth is.

What is wrong with Russia?
Dec 22, 2015

It appears that Russian leaders cannot free themselves from the medieval concept of regional influence, where weaker neighbors were subdued into becoming serf states. Is anyone capable of explaining to them that in these times of a global economy, any influence comes from economic strength? Russia, thanks to its size, natural resources and well-educated labor force, has everything that it takes to maintain a dominant position in the region, just by maintaining free trade with all its neighbors. It can do so without military interventions in Georgia and in Ukraine. Russia has everything that it takes to be a respected wealthier neighbor, to whom everyone in the region would turn for help when needed. Instead, it is a bully and a hooligan. It would take so little to change that. But it is so hard for Russia to do it. 

Closed mind for closed borders
Nov 19, 2015

Known to some as a libertarian, Llewellyn H. Rockwell Jr. speaks against open borders. His argument is that it is an infraction against private property. He misses the point that most people migrate just because Mr. Rockwell’s neighbors want them on their private property – for picking apples, washing the dishes or writing a computer code. Then, Mr. Rockwell wrongly laments that those foreigners invited by his neighbors violate his private property rights by loitering in the public spaces that he frequents. He wants the government to deny the rights of his neighbors to do on their private property whatever they wish, so he will not need to face immigrants in the public spaces. Mr. Rockwell left the train called “liberty” at the station called “xenophobia.”    

They do not know…
Sep 14, 2015

Mr. Trump says: “A lot of what I’m doing is by instinct.” I prefer that our President would make decisions based on systematic due diligence. The instinct that guides Mr. Trump in his professional life arrives from his vast experience, starting when he was growing up under the mentoring of his successful father, followed by a solid education and years of practice. Mr. Trump's confidence is misguiding, as it gives his supporters the illusion that someone who mastered real estate dealing can be equally skillful as President. It is similar to the illusion surrounding Dr. Carson, that he can be as good a President as he is a brain surgeon. If both gentlemen were humbler, they would realize that they qualify to be President equally as much as Mr. Trump qualifies to conduct brain surgeries and Dr. Carson to run Mr. Trump’s real estate empire. The problem is not that they do not know many things they should; the problem is that they do not realize that.

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Cash is king, more potent than we think

On March 12, 2020, on the eve of President Trump declaring COVID-19 a national emergency, the New York Times reported that something weird had happened on Wall Street as traders ran for cash. They were selling everything they could, including gold, commonly considered as a secure investment during turbulent times. Within the preceding three days, the price of gold dropped from $1,675 per ounce to $1,610 per ounce. A week later, in its headline, the Wall Street Journal proclaimed that “wild rush for cash rattles markets.” The price of gold sank to below $1,500 per ounce.

Why cash is better

We all enjoy the conveniences of a cashless economy. It is wonderful when everything runs fine. At tumultuous times, cash on hand is what we need. When in my local supermarket people were battling to buy toilet paper, and police were called to calm them down, I went to the ATM at the bank down the street. Nobody was there. I withdrew a little extra cash. It is hard to envision what hurdles COVID-19 might bring to us. But I know that the rustling of banknotes in my hand will get me what I might need.

Money at our disposal, as in a checking account, is next in value to the real cash. Traders sell gold because they know that stocks lose their value due to the COVID-19 turmoil, but they will rebound as soon as the virus is restrained. They want money on hand to buy at low prices before the market turnaround. Professional traders are not the only ones seeing this opportunity for profit. As is natural in times of crisis, I have talked over the phone with more friends and family members than otherwise I do. A few of them mentioned that they took the opportunity of the market crash to deposit funds to their IRA or buy some stocks. It means that they had money available on hand. It usually happens that those with even a little extra cash on the side end up having more of it.

We hoard cash

One might expect that with electronic payments, there should be less cash in circulation. Recently, the Wall Street Journal reported that it is the opposite. More physical money is released, and then it disappears somewhere. It means that more than before, people hoard cash. Looking deeper into this unexpected attraction to cash, we can learn interesting things about the global economy, politics, and our finances.

The report by the Federal Reserve Bank gives us some insight into what is going on. It is expected that the amount of cash in circulation increases with the growth of the economy. In the United States, it is reflected in an increased number of low-denomination banknotes. For example, compared to the end of 2014, by the end of 2018, there were in circulation about 16% more $20 bills, the most popular banknote denomination in the United States. The growth for other notes was similar or smaller, except for $100 banknotes, which soared in circulation at 32%, double the pace of the other notes. As the WSJ reports, experts estimate that about 75% of the $100 bills left the United States.

Everyone stashes cash

According to the same article in the WSJ, the problem is worldwide. Last fall, a German man was suing, unsuccessfully, his friend for losing about €500,000 stuffed in a faulty boiler. When he was on vacation, his friend fired the boiler to warm the house, burning the cash. The German Bundesbank estimates that Germans have €150 billion packed in attics or basements, buried in gardens or stuffed in envelopes. Bankers know about it because people bring for replacement money partially eaten by mice, rotten when buried, or in accidentally shredded envelopes. But when bankers ask the public, “Everyone says that they are not hoarding cash but the money is clearly somewhere,” one of the executives of the European Central Bank complained.

How much cash is out there?

No one knows. The estimated €150 billion hoarded by Germans is equal to about €1,800 (close to $2,000) per person. Australians, who experience the same phenomenon, count that as much as 2,000 of their dollars (about $1,200) per person is hidden somewhere. When reporting this, the governor of the Reserve Bank of Australia added that he does not have near that on hand. The mentioned article in the WSJ reports that bankers in New Zealand can account only for about 25% of the country’s cash.

According to the Federal Reserve Bank, the $5 bills have the shortest lifespan, a little below five years, whereas the least-used $100 notes last almost 23 years. But cash in the safe or in the shoebox can last much longer. It often is getting lost, as the owners might die without letting anyone know about a secret hiding space. It can be destroyed by fire and not reported. Mice can eat it, or it can rot. Australian bankers estimate that about 8% of cash is lost this way.

Where does the cash go?

Nobody is telling. Individuals keeping their savings in cash are the biggest mystery because it is hard to estimate how much they have. It is not much easier to find out how much cash that businesses keep as a reserve. For example, news reports say that Apple has about $200 billion in cash. Some of it is in short-term securities, easily convertible to cash, but a larger portion is invested in longer-term marketable securities. Looking at Apple’s financial statement, one can find out that by the end of 2019, cash and cash equivalents were only about $40 billion. Furthermore, “cash” on this statement can mean money in the business operational accounts, not physical cash. In short, besides CEO Tim Cook, there likely are very few people who know how much physical cash Apple has in its vaults in banks and offices spread all over the world. Bankers most likely can only guess.

What pertains to Apple applies to all businesses. Publicly traded companies need to disclose their finances. Privately held corporations need not do it. Every business owner needs to be prepared to handle unexpected obstacles. It could be a fallout from an erroneous decision, a lawsuit, or a superior force such as COVID-19 that can threaten the survival of a business. In such circumstances often banks are reluctant to extend credit, not mentioning that sometimes money available in the bank might be blocked to secure potential liabilities. In such moments, nothing is as useful as physical cash that no one knows about.

Millennials stash cash too

As European bankers noted, people are mum about the cash they have in their drawers, shoeboxes, or bank safe deposit boxes. We can learn by accident that they paid with cash the down payment on their first mortgage. It happens more often than one might think, especially among first-generation immigrants.

Millennials are perceived as immature, nonconformist and irresponsible; hence, one might assume that they are reckless in handling money. It is exactly the opposite; millennials keep more cash on hand than older generations. They still might live with their parents and have unpaid college debt, but they already figured out that cash is king. This might be a facet of millennials that we still have to learn more about.

Shady businesses

Vast cash reserves are a must for all dubious business operations. Organizations such as the Taliban or the Islamic State need to pay cash for arms. Companies trying to circumvent trade restrictions imposed on Russia, Iran, or Venezuela need to deal with physical cash if they do not want to get caught. The mentioned earlier report by the Federal Reserve Bank report reveals that many of those missing $100 bills ended up in Russia. Financial market commentators claim it is 661,500 pounds of it, which equals $31.5 billion. As they say, “If you are Iran, if you are Venezuela, if you are Russia, you either have been cut off, or can be cut off” from the international banking system. In such cases physical cash is the only way to conduct business.

Escape from despair

When reading reports about refugees from Syria or other places of misery, we often do not place enough attention to mentions of the cash that these people need for bribes, for smugglers, and to finance travel. An illegal crossing from Mexico to the United States is estimated to cost between $4,000 and $10,000 per person. Credit cards are not accepted – cash only. Tens, if not hundreds, of billions of dollars are stashed around the world just to facilitate the desires of millions of people to flee from their despair.

Criminals like cash too

It is self-evident but needs to be brought up. American $100 bills are most favored. European bankers noticed that criminals there like the €500 note too. Hence, they stopped issuing these banknotes in 2019, but they are still legal tender. The Swiss government has kept in circulation the banknotes representing 1,000 Swiss francs, now worth slightly more than $1,000.

War on cash

Eliminating €500 notes is part of a coordinated attempt by banks and governments to exert tight control over the money flow. Governments want to make it tougher for the shadow economy and criminals. With electronic payments, it is easier to track the money movement and enforce the taxes due. With the elimination of cash from most business operations, one can assume that a substantial percentage of cash transactions might be the illicit ones. For banks, cashless services are simpler and cheaper. For marketers, electronic transactions are gold mines of useful information. For service businesses, cashless operations simplify protection from theft of cash by employees. Hence, cashless operations are heralded as a sign of progress. It is not so good for customers.

Cash is freedom and privacy

Pedro Escudero explains this in his brief article on Medium. Our cash purchases are anonymous. Corporations like Amazon developed algorithms allowing them to predict what we might buy before we even realize that we need it. Sometimes it might be a useful nudge but leads to us buying what they want to sell, not what we need or want. The more we buy paying cash, the marketing is less accurate and simpler for us to reject.

Companies can use data about our electronic purchases against us. Recently, National Public Radio reported about records of automatic toll charges in Illinois having been released to a party unrelated to the person who charged the toll. For example, a stalker got information about his ex-girlfriend.

It could happen when an error, technical difficulties, frivolous litigation, or any other unfortunate turn of events can limit our access to money that we have in the bank or available on a credit card. The rule of bad luck is that we end up in such a predicament usually when another misfortune strikes us. The rustling of banknotes is the most straightforward remedy.

Lastly, the cashless economy leaves us at the mercy of an operator. Even the most advanced technological systems can fail, depriving us of access to our own money. Also, a centrally controlled system can be abused to limit our freedom. Some of us might be restricted from buying specified items, from buying in particular stores or certain areas. Some might say that this kind of abuse of power might happen in a totalitarian country, not in the United States. In my book, if there is technological availability, our politicians will find a justification to use it.

The unique role of the American dollar

Thanks to the size and relative stability of the economy of the United States, the American dollar became the currency of global trade. As mentioned above, it is favored as well by people involved in suspicious and purely criminal activities. It is considered a reliable deposit of wealth by people who might keep a few hundred dollars in an envelope, just in case, as well as people and organizations having tons of $100 bills stashed in the places only known to them.

The euro introduced 20 years ago, aspires to become a similar international currency. It already has taken from the dollar part of its role as global money. With the growth of the economy of China, the role of the Chinese yuan will increase. The WSJ article mentioned earlier indicates that the currencies of Australia and New Zealand are used for international trade, too, most likely in the region.

It means that the dominance of the American dollar as a global currency will dwindle. However, as long as the dollar is considered a secure haven for wealth, it will stay like that for decades to come. But if people around the world lose confidence in the stability of the political system in the United States, they will turn away from the dollar. This can trigger catastrophic inflation, meaning the end of the United States as we know it.

The magic of the $100 in the pocket

I was once assigned an adolescent man as a helper. He was a recent high school dropout from an impoverished family and living in a bad neighborhood. He did not have $5 on him to buy lunch. With a mentality of a loser, he already believed that the opportunities of America were far beyond his reach. Seeing some street smarts in him, I asked if he could somehow get $100 in cash. He said that he could. I asked him to keep this $100 in his pocket, so he could feel rich, knowing how many things he could buy. But, I tasked him with not spending this $100 unless he could refill the wallet, except in an emergency. I explained to him that the secret of feeling and becoming rich is in always having on hand a little extra cash.

It happened many years ago, and we worked together only one day; hence, I do not know how it turned out for this guy. But we met briefly in the office a few months after our initial encounter. He was upbeat. He pulled me to the side, opened his wallet, and showed me five $20 bills in it. “It works,” he said.

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About me

I was born in 1951 in Gdansk, Poland.
Since my high school years, I have interest in politics and love for writing. During my college years, I started writing to student papers and soon became a freelance author to major Polish political magazines.

In 1980 I wrote a book “Czy w Polsce może być lepiej?” (“Could it be better in Poland?” – this book is available only in Polish) analyzing major problems in Poland at the time and outlining possible solutions.

I was among those Polish political writers who by their writings contributed to the peaceful system transformation that finally took place in 1989. Since 1985, I have lived in the Chicago area. I went through the hard times typical of many immigrants. Working in the service business, I have seen the best and the worst places, I met the poorest and the richest. I have seen and experienced America not known to most of the politicians, business people, and other political writers. For eleven years, I ran my own company. Presently, I am an independent consultant.

My political writing comes out of necessity. I write when I see that the prevailing voices on the political arena are misleading or erroneous. Abstract mathematics and control theory (of complex technological processes) strongly influenced my understanding of social phenomena. In the past, my opponents rebuked my mathematical mind as cold, soulless, and inhuman. On a few occasions, I was prized for my engineer’s precision and logic.

I have a master’s degree in electronic engineering with a specialization in mathematical machines from Politechnika Gdańska (Technical University of Gdansk).

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