NYNY Solutions

This is a good interview where Gary Vaynerchuk shares his personal story coming to the US and starting his business.

Dogbert rules

Let’s hope the retroactive price hike on Tesla Roadsters isn’t a sign of panic from a company about to go bust. Unfortunately, pissing off 400 customers who already put down their 50K deposits, by raising the cost of the vechicle they signed up for - is a sign things are not going well. 

Either that, or chairman Elon Musk isn’t a believer in word of mouth and ambassadorship… and quite frankly, he must be.

Gary Vaynerchuk may be annoying to the point where you want to tell him to just shut up.

But he’s also a guy who not only knows a Syrah from a Merlot or a [insert wine of choice], but also how the world is turning in terms of marketing, brands, viral, word of mouth and [insert web 2.0 buzzword of choice]. 

Listen to his annoyingly hyperactive analogy between web 2.0 and giving a presentation. Clever, clever.

What’s the use of hedonic regression when measuring CPI? Let’s say I buy a new laptop computer at the same price as my old one, but it’s twice as powerful. According to the arbitrary guidelines of a hedonic regression model, prices must then have fallen, driving CPI down. But, in nominal terms I spent the same amount of money for a laptop. I’m pretty sure I can’t even find one on the market with the components I got last time even if I wanted to. 

It seems to distort the fact that I spent a certain amount of money buying a computer, period. 

Ah, you say, but with this new and sleek machine you must be twice as productive, or derive twice the pleasure. Well, you know, what if all I do is e-mail and play Tetris? How am I more productive or experiencing stronger sensations of pleasure now, because I have more empty disk space?

I think The Illusions of Hedonics, is well worth reading. 

If math worked like economics, 1 + 1 would in fact be able to equal 3, if you could prove you got an extra 1 worth of pleasure out of it.

I want to share a quote from a book by Dan Kennedy, with you.

“… the vast majority’s interest in improving, but only if doing so requires no change, discomfort, or initiative. That’s why, in every field, a few out-earn the huge ‘mediocre majority’ by giant margins.”

Blunt, and true.

Just finished listening to the audiobook version of Tribes by Seth Godin.

I recommend it to all future tribe leaders.

This story about insomniac Emirates pilots just goes to show that the glass is always half empty for some.

Across a night sky
Giant planes fly silently
Pilots need coffee

Gold is currently being traded at about 914 USD/oz. That’s down about 89 USD (8.9%) from mid March, but up 33% over 6 months and up 203% over 5 years.

Why? What is it about gold that makes it a valuable investment in 2008, AD? Why are people continuing to argue for gold-backed currencies? Why are online companies creating something as arcane as Digital Gold Currencies? Isn’t that the same as re-introducing tally sticks or wampums?

Although I personally think a wampum based economy would be really cool, there is a big difference between a shell bead and gold; There’s real value in gold, not only as currency.

Each and every major currency you can think of today has zero gold backing. They are fiat currencies created and maintained by central banks, sometimes with extraordinary power over the economies they serve. Just look at the US Federal Reserve System, they’ve even stopped reporting the M3 to Congress, which basically means no-one really knows how many US dollars are being printed, which in turn means no-one can accurately predict inflation (except of course the Fed).

The world of fiat money is fascinating and vaguely resembling magic - when it works. After all, value is construed out of virtually nothing but the general faith in the institutions backing the money. It’s basically money because someone says it is. So were tally sticks, and wampums. So could Amazon Horned Frogs be  - well, that would be a pretty slimy economy, but we would be in touch with nature again, and the rainforests wouldn’t be levelled due to logging. 

Anyhow, regardless of if we carry around paper, sticks, shells or 20 cm long amphibians to buy stuff with, the truth is that the second we stop believing the institutions issuing this fiat money are willing or able to back the value of their money, there is NO basic intrinsic value in them, except of course you could blow your nose with a dollar bill. Cool - and scary.

Gold, on the other hand, has very real value. When Hans F. Sennholz wrote Why Gold? back in 2003, gold was traded at 350-360 USD/oz. I don’t know if professor Sennholz predicted gold to reach 1000 USD/oz five years from then, but it did. In the article, he explains why although gold production output might fluctuate year over year (e.g. new mining technology becoming economically viable as prices soar, my note) the amount of gold in circulation - in jewelry, electronics, stored as bullions, in teeth fillings, etc, etc, is so vast, that the total supply is for all practical purposes virtually static by now.

So, gold is there. Supply is stable. It stores well. Maybe DGCs make a whole lot of sense? I think additional actors might join in, notably companies like BullionVault that offers bullion trading today, but haven’t yet turned the customer gold into the foundation of a payment solution.