Mother

Mother
Originally uploaded by jmoule.

People often ask, "How is your mother?" Well, you can decide for yourself. This is my mother, age 93, taken on Christmas Day 2004.

The Decline of the West

Warning: This post proves that older people begome pessimistic and wordy. You may want to skip to something lighter accompanied by a pretty picture.

When I was young, I believed what older people I admired told me - particularly my father and my grandfather. Later, I believed what I was taught in college. After that, I believed what I read in books, particularly if the author had what appeared to be solid credentials. However, not all these sources of wisdom agreed with each other. By the time I was forty I began to wonder if anything that I thought I knew was really true. By the time that I was fifty, I began to be able to rely on my own experience. There were things that I knew were true because of what I had seen with my own eyes.

I have tried to stay away from politics in this 'blog as a matter of principle. What I am about to say is not intended to be political. I am not saying it because I read it or because any particular political party believes it. I am just talking about what I have seen with my own eyes.

Huge Federal deficits, combined with a foreign trade imbalance, continued over a number of years, lead to massive inflation and a decline in the value of the dollar. Period. The first time that I saw this was in the Second World War. The United States ended the war as the strongest country in the world militarily. The dollar was strong relative to many other currencies. However, after four years of war, a dollar in the US would only buy one quarter of what it could buy before the war. The war was financed by people who loaned money to the government by patriotically bought US Savings Bonds and being repaid with dollars which were worth much less.

The second time that I saw this was in the 1970s when the Johnson administration decided that we could have guns and butter. We fought a war in Viet Nam and instituted a massive social welfare program in the US at the same time. This lead to massive inflation. (How many of you remember getting 14% home mortgages and thinking your were lucky?) At the end of the decade, the dollar was greatly devalued.

The parallels between the 1970s and this decade are eerie. The 1970s began with a sharp drop in the stock market following a prior twenty year long prior bull market. The country was bitterly divided over an unpopular war. High oil prices ravaged the economy. Who knows what further parallels will emerge as this decade evolves?

It has been argued in the past that it is alright to run a budget deficit because "we are borrowing the money from ourselves". A major difference between the 1940s, the 1970s and now is that we are financing our budget deficit with foreign lending. The financial community beginning to show skepticism that the US will be able to pay back the money it has borrowed without devaluing the dollar. As Alan Abelson pointed out in the most recent issue of Barron's, Lithuanian 5 year notes trade at 3.15%. Comparable US Treasury securities trade at 3.5%. That simply proves that investors now regard the United States as a worse credit risk than Lithuania.

Rather than recognizing that we are on the way to a train wreck, the government is proposing to borrow trillions more to "fix" Social Security. This will all end badly. I'm sure that we will end this decade with the dollar devalued. Our past history proves it. What additional disaster could ensue if foreign governments, who have funded our debt, suddenly sell their US bonds, I'm not smart enough to predict. But I'm sure that it won't be pretty.

Those who oppose massive deficit spending blame this all on George Bush. But, under our constitution, the blame really falls on Congress. They, not the President, establish the budget.

Africa

We have decided to return to Africa this coming August-taking a photo safari in Kenya and Tanzania. We had been thinking of going to Budapest and Prague, or perhaps Burgundy, but we realized that what we really both wanted to do was go back and look at animals again.

Retirement is tough, etc., etc., ....

Bistro Jeaunty

After Thanksgiving, our daughter Allison visited us for a few days. On Monday we drove up to the Napa Valley. It was a beautiful day - very clear and the grape vines were a golden color. The leaves had not yet fallen. After puttering around, we had lunch at Bistro Jaunty in Yountville. Wow!

For a first course, Kat had a rabbit terrine, I had pickled pigs feet, and Allison had the winner (recommended by the waiter): deep fried local smelt. As a second course Kat had quenelles with lobster sauce , I had veal kidneys, and Allison had... well, I don't remember. We were overwhelmed by the quality of the food, the service, and the "Country French" atmosphere. This has suddenly become my favorite bistro style restaurant within a one hour drive of our house. Chez Panisse Cafe, eat your heart out!

You may notice that we did not exactly eat a balanced meal. No salad. No veggies. I guess we were all trying to see what the kitchen could do.

The Day after Thanksgiving

John Surfing
Originally uploaded by jmoule.

This is John Moule surfing at Pebble Beach, California the day after Thanksgiving 2004. The rest of us (even Rosie) were on the beach, watching.

James Moule

James Moule
Originally uploaded by jmoule.

Nobody likes photos of themselves. However, the time has come to select one. This was taken by my son-in-law, Stefanos Polyzoides, on Thanksgiving 2004 (using my camera).