When I was watching a Pittsburgh Penguins game last year the announcers were talking about Sidney Crosby (NHL All-Star). As they were talking about him they didn’t mention his super athletic ability, his extreme intelligence for the game, or any of the things you might thing would make him a cut above the rest. What did they mention? “He works harder than any other player you’ve seen”. Interesting. Works harder than any other player… and he’s unanimously agreed upon, the best player in the NHL. Coincidence? Let’s take a look at another example.

I just mentioned that the average CEO wakes up before 6 am. Typically a CEO will wake up, read the paper (read: The Wall Street Journal), answer some emails perhaps, and get to the office by 8 am. This means that they’ve actually done work, before they’ve gone to work. And, they’re arriving at work 1-2 hours before everyone else. What about the top executives that you see in the movies playing golf while at “work”? Or “doing business” at the golf course, seemingly every day? Doesn’t exist. You may catch them going for an early morning walk before work, however.

At any gym in America, I can guarantee you that there will be at least one person bigger than you. It is often thought that these bigger people seemingly somehow have better genetics, maybe a better bone structure, maybe better form… and some of that could be true. But you see these bigger people at the gym time and time again – and that’s exactly it. Just like the CEO, and Sidney Crosby, they’re putting in the most work; the longest hours. People that are bigger than me I ALWAYS see them at the gym. It hardly matters what time of the day I’m at the gym – they’re always there. Coincidence? Doubt it.

The moral of this blog post is that to achieve success, work the hardest. It doesn’t matter what what industry your in, what your career is. “You do everything in life at 110%”. I’m not saying that if I put in 40 hours a week playing hockey I could become as good as Sidney Crosby. He has a gift. But, if I put in 40 hours a week, do you think my ice hockey career would’ve ended at high school? As my personal finance professor once said, “I may not be the smartest, but I’ll outwork you.”. There’s too many examples of people achieving success in their industry not by a higher than average IQ, not because they have a better education, or they have insight into the industry, but because they purely just work hard.

This post is about legal tender laws and the ethics of money production (sounds like a pretty arcane subject, doesn’t it?). Inspired by Jorg Guido Hulsmann’s book, “Ethics of Money Production” it’s rather simple. Fear not, everything will be broken down in to basic terms.

On discovering the idea of money in our twenty first century world we must first ask ourselves the most basic question, what is money? Most would probably say it’s a dollar bill. Or maybe even a medium of exchange. But why do we use a dollar bill, and not say, monopoly money? Why a dollar bill and not a gold coin? This is the case for going back to a money with something of intrinsic value.

The United States dollar is what is considered a “fiat currency”. This means that it is money only because the government says it is money, and it has no intrinsic value. No intrinsic value means that in can be debased (made worthless) to an indefinite end. This is in contrast to a gold coin – yes a gold coin can be debased to some degree, if people were to switch from using gold as money to using silver as money, you can still use the gold to make jewelry, electronics, etc. Thus the value of gold as money will never be as low as the value of a dollar as money. But if this is the case, why did we ever switch from using gold and silver coins to using a paper dollar. It would seem that using precious metals as money would provide more purchasing power (you’d be able to buy more things with littler money). Many economists will tell you that we have switched from coins to paper money because of greater efficiency and lower costs. This may be partially true, but a big part of the change happened because of legal tender laws.

A legal tender law forces citizens to accept a money chosen by the government (“legal tender”) for the settlement of all their financial obligations (“all debts public and private” as often seen on the back of dollar bills). The legal tender law over rules private contracts that stipulates payment in other monies. Because it is a law, the creditor of those contracts can do nothing if the buyer pays in other moneys supported by the legal tender law (the creditor is forced to accept it, the “this note is legal tender for all debts, public and private” we see on dollar bills). So what happens when a legal tender law is enacted?

Let’s take a look at a hypothetical scenario where we have gold and silver being used on the free market but then a legal tender law (LTL) will force a exchange rate. In our scenario if the market exchange rate were 40 ounces of silver to 1 ounce of gold (meaning 40 ounces of silver has the same purchasing power as 1 ounce of gold) but the legal tender law were to fix that ratio to 20:1 (20 ounces of silver could now purchase the same amount as 1 ounce of gold) what would happen? Well if there was a debtor that owes one ounce of gold, the market value of that debt is 40 ounces of silver (or another way to think about it is the debt is worth whatever 40 ounces of silver can buy). However, once the legal tender law fixes the prices of silver in relation to gold at 20:1, because silver is protected by law, the debt can now be paid back in just 20 ounces of silver, due to the legal tender law (remember if silver were presented as payment, the creditor would HAVE to accept it because the law says he has to… this is similar to how you can make your entire car payment with pennies and the creditor would have to accept it. You would definitely be an ass, but if it’s all protected by law, it must be accepted). Back to our hypothetical example, after the LTL is enacted, gold will not be used in contracts. Debtors could always use silver instead and only pay for essentially “half” of what the contract stipulated. Thus gold will either be hoarded, or driven over seas. This is how the common saying, “bad money drives out good money” (Irving Fisher) came to be. Though it should really say that “legally overvalued money drives out legally undervalued money”. Under the market exchange (and absence of LTL) the good money drives out the bad money. If a counterfeit mint only plates their coins the market will no longer accept them as money, and they will be driven out of the market. Likewise if a money does not have enough intrinsic value, while it may be accepted at first (more likely for very small purchases) it will eventually more than likely be driven out of the market.

How does this all relate to King Dollar? Is our system of dollars and fiat money not just fine? In a way, it is, but it could be a whole lot better. This is the case for removing the legal tender laws and allow for competing currencies. Think of the dollar bill as silver in the example. Because we’re forced to use a specific currency there’s no competition – all the good money is already driven out of the market place! We do not accept monopolies in any other market. We have the department of justice to break up monopolies and force competition. Monopolies under about 98% of circumstances hurt the consumer. If we are so certain on breaking up monopolies in any other market, why are we so willing to accept them when it comes to money? Our money is literally one half of every transaction (essentially one half of everything we do) should we not be most concerned with this monopoly?

I’m not suggesting that we go back to gold coins as currency, and I’m most definitely not suggesting that we have a law saying that gold and silver coins ARE currency (as that would have disastrous effects, which I may write about in another blog post). What I’m saying is let the market decide. Remove the legal tender laws that say I HAVE to pay with a dollar. If we end up going back to gold and silver coins then that is what will give us the most purchasing power and it is what will increase our standard of living. If I’m wrong, and we remove the legal tender laws, then nothing happens. Everything stays the same and we continue to use the dollar bill to pay for our goods and services. There’s of course several good arguments against using commodity based currency as money (which I’ll have to get at another time) but the underlying fact remains: with the removal of legal tender laws, if everyone continues to use dollars then everything will remain the same. If people use hard money, wealth goes up.

I started a dodgeball club at UNT. It’s been quite a success to say the least. We have only played one semester but have had over 200 different people come check it out, and regularly have close to 100 people show up on any given Friday. Oh, and we don’t advertise. So I wish I could take a lot of credit for the success that we’ve had, but it’s really just been word of mouth.

I’ve made a pretty good amount of friends since I’ve been at UNT. One thing that I’ve realized though, I haven’t made a “group” of friends. I’ve made lots of friends individually, but most of them really don’t know or hang out with each other. I’ve also realize that I don’t organize as many things as I used to. Back in high school it seemed like every other weekend I was organizing something to do. Just this past week I organized a game of Capture the Flag on campus (glow sticks were used as flags, and glow bracelets used to identify teams). It was a pretty good success. I’ll have to do more of that — UNT’s campus is quite good for games of this nature.

So what haven’t I talked about yet? The academics. Ah yes, the academics of UNT. The whole reason why you go to college, to intellectually grow as a person. This is basically nonexistent at North Texas. I’ve now taken nine classes at North Texas, and I consider probably only two of them worth my money. Which ones? Business calculus and Business law. My calculus teacher really understands that there is a difference between defining something and explaining something. In the past all my math teachers have just taught a process; a series of steps. Dr. Backs makes me feel like I’m understanding an overall greater concept. It’s too bad he’s saying peace-out to North Texas at the end of this semester. My business law class is equally as good. Ms Fjordbak is one of the more personal teachers I’ve had in college. She knew everyone’s name by the second class and makes an honest effort to try to get to know each student in her class. Her teaching style is also excellent. She realizes that law can be very confusing, so she teaches it from a very practical point of view. This is more than likely because she has said that while she was at SMU her law teachers filled the class with a bunch of technical jargon. Much appreciated how Fjorbak teaches, it makes the information you learn in the class applicable to everyday life. Most other classes I’ve taken at UNT have been very… “vanilla”. Space physics (in which I have a high interest in astronomy) was taught by a completely uninspiring professor. The only marketing class I took (“Professional Selling”) was an absolute joke (it was not about selling at all. Our major projects were an interview and resume project, one which was self-graded). Macroeconomics last semester was also pretty “vanilla”. That is not what upset me about that class though. What upset me was that any time you asked the professor a challenging question or a question outsider her own point of view she would either just completely sidestep the question, dismiss it, or make you feel stupid. It would be one thing for her to defend her point of view, but when she dismisses the question entirely, it makes me think she’s insecure about her own studies. Microeconomics this semester has been marginally better. Again a pretty standard intermediate micro econ class (with too much emphasis on graphs and not enough on logical reasoning imo) but at least the professor will make an honest effort to answer your questions (though she will sometime have difficulty if the questions do not fall within her outlines, she does try).

The thing is, I believe that UNT knows a lot of their courses are in the dump. For example our entrepreneurial program here at UNT just hired a fellow named Dr Mendez. Mendez has been hired by various schools to turn their entrepreneurship programs around. The new business leadership building is world class, and should help attract a few good professors. But is it too little too late? There’s only three “Tier One” schools in Texas (T1 meaning they get extra research funding because they have top professors, selective students, and top facilities) UT, Texas A&M, and Rice. North Texas wants to become a Tier One school (who wouldn’t?), but they have a TWENTY YEAR PLAN to do so. Let me repeat that. A twenty year plan. Meanwhile other schools such as UT Dallas, University of Houston, and Texas Tech are all just merely a step or two away. North Texas must have some sort of leadership issues at the top.
I love North Texas. I really don’t want to transfer away to another university. I love the town I’m in. I love the friends I’ve made. I love the athletics. And I love how close I am to everything. But I’m not so sure I can stay at a university where the majority of classes are just run-of-the-mill. For goodness sake I was more impressed with the professors I had at my community college than I have been at UNT.

I don’t want to transfer. Do I have to? I’m not necessarily getting the maximum intellectual stimulus in the classroom, but does that have to stop me overall? What is education, and is it limited to the class room? I think not. And furthermore, if I were to take an econ course at UNT and make an A, then take an econ course at SMU and make a C, for which class would set me better off? What if I just work hard and make the best grades I can at North Texas? Does North Texas have a bad enough reputation that I might be passed over when looking for a job in the future? These are just some of the questions I am struggling with right now.

(Originally Posted 2-13-10)
If you have used Facebook the past year or two like I have, there’s no doubt that you’ve noticed changes to the site’s layout multiple times. It seems like every time Facebook changes their layout out it’s met promptly with criticism. “Why’d they change it”, “If it’s not broke, don’t fix it”, “I hate this new layout”. Those are just some of the comments I hear about the style of Facebook whenever they change. All of them are valid points, Facebook has never really had any show stoppers with their UI (user interface), so why do they always change it? I can say I’ve been a critic myself, while I’ve never seen the layout change so dramatically that I can’t use Facebook, I’ve never really seen the reason to change it in the first place. And that’s exactly why they should continue to change their layout.
Yes, that may sound absurd, but that’s what they need to continue to do. Do we all remember when Myspace reigned king of the social networking websites? And do we all remember the vast UI changes that Myspace went through? Oh, you don’t? Well that’s exactly why Myspace isn’t a social networking dominance anymore. Yeah, some could argue that it’s for other reasons like it’s slow, it has too much ads, etc. and they’re right, but if it’s made well enough, users will put up through those ads – I mean they did, for the 4-some odd years that Myspace was king of the hill, right? Here’s the issue with Myspace… they never changed their UI- whether they needed to or not. This caused a huge lack of innovation. It was always the same with no change and people got tired of that. I can guarantee you that if Myspace would have made changes to their UI, they would have stumbled upon some of the things that people flocked over to Facebook for. But they didn’t.

Anyway, the point I’m trying to make here is that Facebook changing their UI is a good thing. With their changes they will continue to innovate and create a better user experience in the long run.

This is about trying to get my priorities straight than anything else. There is so much knowledge in the world, so many things that I want to study and try, and so many things I want to do, I have to do get rid of the distractions in my life, and Facebook was certainly a major distraction. Did I lack self control? Yes. Though I would never deny a chance to hang out with friends to “stay on facebook” or “stay on the computer”, it was sort of like that. There was a vicious cycle of checking facebook, getting distracting by something, checking this, looking at that, getting on skype, this that and the other thing, then by the time that’s all done, it was time to check facebook again. I found it really difficult to actually get work done. Now without that first step, I’m hoping it will be much easier. Facebook certainly DID cause me to miss some things with friends because it would consume that first part of my life, I needed to study or do homework, then when friends would ask me to do something I may not be able to do it because I actually had to study or do homework because I had put it off.

Getting rid of the Facebook certainly isn’t as bad as I thought it would be. Because when I’ve typically not gotten on or had other priorities, Facebook would be one of the first things I’d check when I had a spare moment, or the first thing I’d check when I’d get off vacation, or get out of class for the day. But when you no longer have an account you can log into, it just leaves your mind completely. It’s quite a cleansing feeling I might add, and I do highly recommend it. There’s always a chance I can re-activate my account, but I just don’t see that happening anytime soon. What’s the point? Was my life significantly better when I did have a facebook? I don’t think so.

Also I know this isn’t very well written, do forgive me. I’m having a bit of trouble summing up all of my thoughts on this, I’ll edit it or post a revision that’s more clear later.

We know it all too well. Way too well. That painful and cringing feeling you get as you realize exactly how much money you’ve thrown away when you fill up your gas tank. It seems as though with everyday gas prices continue their climb skyward and the public continues to want to put the blame on someone. For many people, that blame falls on Obama administration. For others, they want to blame OPEC for high prices. And even some want to blame speculators for pushing the price up. In reality, none of these answers are entirely correct, and some can be dismissed entirely. The real cause can be more or less directly linked to the Federal Reserve. To understand this, we must look at why none of the other parties are to blame.

Those wanting to blame the Obama administration for high oil prices clearly don’t have much of a clue as to what’s going on. The Obama administration could do nothing but put a price cap on gasoline which would already damn his reputation for not being business friendly as the very basic principal of price caps violate many microeconomic laws. Some will blame Obama for not providing enough stimulus to support “green energy”. The argument being that if more funds were allocated toward green policy we’d be driving cars that run on less gasoline. Obviously by calling for more green-friendly energy policy it presents the lack of understanding on how technology actually works – it starts at the top, very expensive, and slowly trickles down to a price where the mainstream can afford it. This happens only when the market is ready for such thing to take place, and is not dependent on how much green budget there is or how much carbon tax is collected. Obama can try to tighten the grip on speculators as he recently announced he would do, but in reality, speculators are just a function of what supply and demand is. Due to unrest in many oil-producing countries speculators speculate on the future price of what oil could become. This speculation is done with logic and reasoning and not to fulfill the wallets of a few wealthy investors. Since anyone can get into the market of buying commodities, it’s a wonder more people don’t speculate.

OPEC would seem as a pretty logical cartel to blame, they’re the ones who set all the oil prices right? Well if you believe that we still get most of our oil from OPEC countries then it’s time to do a little more homework. According to the US Energy Information Administration and OPEC themselves, the top two countries that import crude oil into the United States – Canada and Mexico are not members of OPEC. Only six of the top fifteen countries we import oil from are actually members of OPEC. It would be great if we could blame one single cartel for the fall of our pocketbooks, but the truth is that we need to look at the cartel in our own backyard – the Federal Reserve.

The Federal Reserve, often referred to as the FED inflates our dollar by expansionary monetary policy programs such as Quantitative Easing, and Quantitative Easing 2 (QE, QE2). Because these programs in which the FED buys US Treasury bonds are bought with newly printed dollar bills the purchasing power of each current dollar bill in circulation goes down. As each the value of each bill decreases it takes more bills to buy a good. We’re able to see this correlation not only through recent history from easing programs, and incredibly low interest rates, but from the higher than natural rate of inflation over time.

If you had a dime that was minted between 1946 and 1964 the metal in that dime contained 90 percent silver and 10 percent copper. By using the current price of an ounce of silver ($48.07) and a pound of copper ($4.29) and keeping in mind that a dime weighs 2.5 grams, if you were to melt down that dime today, it would actually be worth $3.48. That means if the Federal Reserve didn’t always have expansionary monetary policy and let the economy contract when needed, you would be able to buy a gallon of gas for just about 11 cents. That 11 cents may seem irrelevant, but consider that the price of gas was a historic low at 17 cents per gallon in 1931, you actually see how cheap the price of gas would be if it weren’t for the inflation the federal reserve prints.

My energy level over the three days has been nothing but excellent. When I first started the juice diet I would have thought that I would have had a lack of energy, get headaches, and not be able to work out. None of that has been true for me, which may be a testament to how decent my diet already was. I have more energy in the morning and working out is not a problem at all.

I would definitely recommend the juice diet to anyone who would want to try it. It is a fantastic way to lose weight while not going hungry (yes, juice DOES fill you up!) and getting all your required nutrients. The second day of the diet was the toughest for me – the pure fact of knowing that when you get home the only thing you can “eat” is juice will probably drive you close to insane. But once you get over that fact, and learn how to make some decent juices (I had pineapple juice this morning and it could possibly be the best thing in the world) then you’ll be okay.

Fruits and Vegetables I wouldn’t recommend juicing:

• Ginger Root (This was disgusting.)
• Radishes
• Beets (really no flavor at all but they stain)
• Cactus (really weird… has the taste of sour grapes yet the juice came out very thick and slimy)
• Eggplant (no flavor, spend your money on something else, like cookies).

Fruits and vegetables I WOULD recommend:

• Pineapples (seriously nothing beats fresh pineapple juice. NOTHING)
• Apples (great for making the worst juice bearable)
• Kiwi (kiwi + apple = crazy delicious)
• Carrots (carrots are like the most sweet vegetable on earth. Straight up carrot juice is not bad at all)
• Spinach and celery (both of these are veggies that you think would be awful as a juice, but in reality, not too bad.)

I am happy to say that while the juice diet was a fun experiment I will be greatly looking forward to eating some Taco Bell in the days to come.

The morning juices aren’t bad at all. In fact, they’re quite delicious. I made kiwi apple juice this morning and I have to say that it was one of my best concoctions yet. I followed up the kiwi apple juice with a glass of apple, strawberry, and blueberry juice, which also happened to be excellent. That was around 9:30am, and I just finished juicing my next drink (at the time of writing it’s approximately 3:30pm). I have been reluctant to actually juice something else because I know I’ll have to put vegetables in it. And I love vegetables. I like the taste of raw broccoli, the taste of cauliflower, the taste of carrots, the taste of squash, etc. Every vegetable I purchased, I like to eat. But I don’t like to drink them.

I finally understand why dieting is so difficult, and why fat people have such a difficult time losing weight. I walk past several vending and soda machines throughout my daily routine, and I walk past several restaurants. In no way am I tempted to go off and purchase a Snickers or get a chicken sandwich from the Chick-Fil-A we have on campus but throughout the day I’ve been thinking what my first meal is going to be when I end this diet. How much I would love to go to a buffet when I end this diet. How much I miss Cheesy Gordita Crunch’s from Taco Bell. It probably sounds like I’m addicted to food. But what will happen after I end this diet and break my fast? If I were to actually go to Taco Bell or Pizza Hut I’d put on all the weight I just lost with the diet (not that my goal is to lose weight, it’s more of a psychological experiment). This is what’s so difficult for people that struggle to lose weight. They try a diet (and whether they pass or fail it) they’ll end up at their old habits that got them to where they wanted to diet in the first place.

The idea to diet has some seriously crazy psychological effects on you. Mind you that juice does fill you up, so it’s not like I’m starving, but it would be so easy to go back the normal routine. Even something as simple as having a turkey sandwich and chips for lunch (one of my personal favorites) makes me want to give up the juicing.

Though I’ve never smoked I would imagine giving up “normal food” and replacing it with a juice diet is similar to quitting smoking. All the temptations are there… your roommate is eating normal food, your friends, if you get asked if you want to go to a restaurant you can’t eat. Many of the things that bring you some joy in life are stripped away temporarily. Although my original plan was to go 14 days without eating food and doing nothing but juicing, I’m thinking I’m going to be altering those plans soon… I think I’ll go to I run out of fruits and vegetables (which should be about 7 days). I’ll revisit this idea after the third or fourth day. Oh and a quick note, I did go to the gym last night (yesterday was my first full day of juicing) and had no ill effects. I had plenty of energy, had no feeling of passing out, blacking out, having a seizure, etc. I even played basketball after my workout, which is something that I normally do not do.

One last word and that is; Carrot juice is no substitute for carrot cake.