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- THE FRIDAY LETTER -
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for friends and subscribers)
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| http://www.gilder.com/ | Issue 346.0/June 27,
2008
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HEADLINES:
- The Week / Steve Forbes: Monetary Measures (video)
- Friday Feature /
Ten Web
Startups to Watch
- Friday Blogger Bonus / On the
Trail of the Itinerant Computer
- Readings /
The Week / Monetary Measures (Telecosm ’08 Audience Q&A Video)
Steve Forbes, Gilder/Forbes
Telecosm, Audience Q&A:
George Gilder: The Federal
Reserve followers claim that the monetary base has been relatively stable for
several years and this supposed flooding of the economy with liquidity has not
really been happening and is not attributable to the Fed. How do you respond to
these claims about the monetary base?
Steve Forbes: Monetary base is what the Fed actually does to create money when, for
example, the buy a bond. They call up Merrill Lynch and say, “We want to buy a
million dollars in bonds.” The Fed sends Merrill a check. That check is created
out of thin air, but the money is good when Merrill gets the check.
That, in essence, is the monetary base,
but there are numerous, numerous monetary measures, because as the economy
becomes more complex, there are more kinds of near monies and monies out there…
The thing is that these monetary measures measure supply; they don’t measure
demand.
Just going to a car dealer and saying
“What is your inventory” tells you nothing. You’ve gotta know whether they have
the kind of vehicles people are hot to buy, then you can gauge whether that
inventory is right; do they have too much, too little? You don’t know until you
determine the circumstances.
In terms of monetary policy, you have to
know what the demand is, and one of the things, when you get the kind of
leveraging we’ve had and new financial instruments, is that one dollar monetary
base goes a much longer way than it did ten, twenty or thirty years ago. You
need to look at demand, and the Fed doesn’t really know how to do this. And,
because of their prejudice against
commodity markets they miss the most sensitive thing out there.
Commodities are trading each and every day. They feel it if there is a monetary
disturbance…
In 2004 Greenspan admitted this in an extraordinary series of interviews with The
Wall Street Journal (because he realized his reputation was falling like
sub-prime mortgages) when he in effect said that in 2003 he in effect ginned up
monetary policy, keeping rates low artificially, because he felt that that
would boon the housing market and that would help stimulate the economy.
This was deliberate. It wasn’t something
like, “Oh my God, what did we do?” It just got out of hand. So, don’t look at
these monetary measures; look at supply and demand. And commodities are the
best gauge for supply and demand in terms of monetary policy. If they are all
going in one direction, either up or down, you know something isn’t right.
Telecosm ’08 Audience
Member: Is oil a bubble and how does it burst?
View
the video to hear Steve’s replies: http://www.discovery.org/v/141
Steve Forbes, Telecosm 2008
Keynote Address: If debasing a
currency was the way to wealth, Zimbabwe and Argentina would own the world. It
just does not work; it’s a bad thing. So here we have the Fed making huge
mistakes, abetted by the Bush administration not having a strong dollar policy…
The wealth creation of having a stable dollar (starting to release some of the
frozen liquidity) would be a very, very powerful, positive tonic for the
economy. The biggest short-term threat is the weak dollar. The other crisis point
is taxes….
View
the Video: http://www.discovery.org/v/131
NOTE: Look for more Gilder/Forbes
Telecosm 2008 videos in upcoming Friday Letters.
|
The Gilder Telecosm Forum To
learn how to join this powerful network of talented, tech-savvy investors and
thinkers online daily to debate, discuss, and decode new and emerging
technologies and share valuable and actionable investment advice, visit www.Gildertech.com today. |
Friday Feature / Ten Web Startups to Watch
Technology Review Staff (July/August 2008):
Instant Voicing
Send voice messages without calling, and listen to them from a phone--or a
laptop.
Sharing, Privately
With Pownce, think Twitter meets Napster.
Cell-phone Streaming
Qik lets tourists--and reporters--broadcast live from phones.
Traffic Master
A dashboard gadget brings the Internet to highways, for traffic and local
search.
Crisis Sourcing
Ushahidi's platform allows text message to feed into the Web.
Partial Recall
QTech's reQall makes custom reminders for scatterbrains.
Are You ... Influential?
33Across calculates your online social clout for sharper ad targeting--and for
you.
Semantic Ads
Peer39's algorithms promise better ways of mining language.
Mashups Made Easy
Websites once stood alone. Now they talk to each other
Video Packet-Switching
Anagran helps the Internet handle growth in streaming media.
Read the complete report:
http://www.technologyreview.com/Biztech/20923/
__________________________________________
Friday Blogger Bonus / On the Trail of the Itinerant Computer
Nicholas
Carr, Rough Type blog (6/23/08): Back in 1993, Eric Schmidt,
then the Sun kid, now the Google dad, wrote in an email to the telecosmic
George Gilder: "When the network becomes as fast as the processor, the
computer hollows out and spreads across the network."
The Economist closed
its recent article (http://www.economist.com/business/displayStory.cfm?story_id=11413148)
on cloud computing by sketching out a picture of where this technological trend
is leading:
“In future the geography of the
cloud is likely to get even more complex. “Virtualisation” technology already
allows the software running on individual servers to be moved from one data
centre to another, mainly for back-up reasons. One day soon, these “virtual
machines” may migrate to wherever computing power is cheapest, or energy is
greenest. Then computing will have become a true utility—and it will no longer be
apt to talk of computing clouds, so much as of a computing atmosphere.”
Bill Thompson has noted that, as governments and
corporations become more aware of, and either more nervous or more excited
about, the ability to shift data and data processing effortlessly across
borders, the "computing atmosphere" may get very foggy very fast,
with the cloud turning "into a miasma ... heavy with menace." Through
the noxious mist, Thompson can even hear hounds baying.
James Urquhart describes how the idea of the itinerant
computer - a feather of software code wafting from data center to data center -
is rapidly becoming, at a technical level, a reality:
“The concept of "moving"
servers around the world was greatly enhanced by the live motion technologies
offered by all of the major virtualization infrastructure players (e.g.
VMotion). With these technologies (as you all probably know by now), moving a
server from one piece of hardware to another is as simple as clicking a button.
Today, most of that convenience is limited to within a single network, but with
upcoming SLAuto federation architectures and standards that inter-LAN motion
will be greatly simplified over the coming years.”
Check our Nick Carr’s blog:
http://www.roughtype.com/archives/2008/06/atmospheric_com.php
__________________________________________
Readings /
Commodity Peak, Dollar Bottom
http://www.ftportfolios.com/Commentary/EconomicResearch/2008/6/23/commodity_peak,_dollar_bottom
A
Record-Breaking Optical Chip
http://www.technologyreview.com/Infotech/21005/
Fed Releases
Minutes of Bear Talks
http://online.wsj.com/article/SB121457543913610801.html?mod=hpp_us_whats_news
Dell Searches
For Money in Storage
http://blogs.wsj.com/biztech/2008/06/26/dell-searches-for-money-in-storage/?mod=mod
Google's Open Source Android OS Will
Free the Wireless Web
http://www.wired.com/techbiz/media/magazine/16-07/ff_android
__________________________________________
Friday Letter Editor: Mary Collins George / mcollins@gilder.com
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