Velocity

The Bluesmobile was at the curb on North Utahstreet , having hurtled back from Falls Church to Ballston with impressive velocity. The sun was back in the sky after what seemed like weeks of chill gray and rainy skies.

The change in weather helped me feel generally good about the $1100 I dropped at Currey’s High Performance Auto Service- the air conditioning was working again, the power steering flushed, the synthetic oil changed and a new deep-cycle battery dropped in to ignite the massive 4.6 Liter 250 HP V-8.

Oh, and the real reason I went to the shop: the expired safety-and -emissions sticker on the windshield. I knew there was a reason my son had given it back when he did, and purchased a late-model Ford Explorer.

I did not realize it until my trip to the United Nations of Northern Virginia, the DMV, on Friday, the last day of September.

Crap. Then, having a temporary surplus of automobiles, I parked it until there was an opening in the schedule for the professionals to deal with it.

I thought it might be a signal that it was time to re-headquarter my company to The Little Village By The Bay- Emmett County is a HUBZone, I had found, a “Historically Underutilized Business Zone.” Plus, if I re-titled the beast in Michigan, there are no annual inspection or emissions requirements.

Those were some of the thoughts rolling through my brain as I purchased 45 minutes of rent from the County for the time at the curb and walked into Willow.

My Seattle-based pal is in town this week, and he was seated next to Old Jim at the bar. John-with-H was drinking happy Hour Red to the right, Jim was on his second or third Bud and my pal was processing a Happy Hour White. It was good to see him, and good to see Liz-with-an-S behind the bar with Tink.

These people are an adjunct family, and I relish seeing them, particularly in light of the e-mail that had come from Potemkin Village that afternoon. The subject line was “We Have to Talk,” which in my experience are the four most ominous words in the English language.

I was more eager to talk to the usual suspects at Willow, and I tucked the revelation away until enough wine had been consumed to take the edge off the immediacy of the car-repair bill and the awful new task that has landed on the plate.

We caught up on what is happening in Seattle, which is one of the most progressive municipalities in the nation. No, make that the world. John-with is a political creature despite his position in the State Department. He was an appointee of a by-gone Administration who was able to burrow in to the career ranks of the Foreign Service.

Accordingly, he has a scathing view of the inside of Secretary Clinton’s Department, and a firm point of view about the follies of the current occupants of the Executive Branch.

It is funny how the bureaucracy works, sedimentary layers of Administrations past, all theoretically answering to the latest Will of the People.

My pal loves egging John-with an exaggerated progressive view of the world.

“We have voted to increase our taxes in Seattle five or six times,” he said in response to a disparaging comment on the President’s Jobs-and-taxes plan. “We like bike paths and parks and world-class civic amenities. It is our choice. That is democracy in action.”

John-with had to concede that it is indeed the epitome of the Founders Principals, before he found another topic on which to heap scorn. I sipped my wine in silence, the barbs flying overhead with me in the middle.

“Raven is done,” I said in a moment of silence.

“What do you mean?” asked my pal. “Is he sick?”

“No, that isn’t the problem. I called Potemkin Village and they said since we upgraded his level of care, his strength has come back a little. Big Mama has slipped badly, and she can’t handle him. She dresses him in some of her clothes, and the Staff thinks it is inappropriate. She is also letting him wander again. They said he was in other apartments three times since I got back two weeks ago.”

“Crap. That must be scary for the other residents.”

“Yeah, they were locking the door at night to keep him in, but he has taken to going on his missions at all hours of the day. They want him to leave, and that is the crisis de jour. We have to figure out how, and that means I may have to drive back up.” I sighed and drained the glass. Liz-with-S was prompt and solicitous with a re-fill.

Her intelligence and beauty are wasted on the Amen Corner, and I am hoping she finds something suitable in the Health Public Policy racket in order to grow as a professional, but I have to say I like her right where she is.

“That sucks,” growled Jim. “I hate that drive.” I nodded in agreement.

“That is not all that sucks,” said John-with. He smoothed his rep-pattern tie and adjusted his suspenders. “Did you see Mr. Bernanke in that weird performance before Congress today?”

“No, the company doesn’t let me watch C-SPAN in the office. I heard he looked shaky and out of ideas.”

“He may have looked that way, but the Fed is desperate. I checked the official website. The M1 category has increased by 18.1% over the past year.
M2 has increased by 9.2% over the past year.

“Wait, it has been a long time since my last Macroeconomics class. M1 is the total amount of real money in circulation, right? And M2 is an expanded characterization to include all time-related deposits, savings deposits, and non-institutional money-market funds?”

John-with nodded. “According to the Fed’s own website, over the past 13 weeks, the annualized rate of increase in M2 is about 19%, and about 30% for M1 over the same period. These are huge numbers. The M1 category is now at about $2.100 Trillion dollars.”

“These are very rapid increases,” I said. “They were not just floating trial balloons when they talked about heating up inflation. I have always thought that was where they were going to wind up. I guess we ought to borrow a lot of money right now.”

“Yeah,” said Jim “If you could find someone to lend it to you. He waggled his empty Bud long-neck at Liz-S down the bar. “Remember the old exchange equation of Milton Friedman and the monetarists?”

“No,” I said. “What was it?”

“M times V equals P times T,” he declaimed with satisfaction. “Where ‘M’ is the amount of money in circulation,  ‘V’ is the velocity of that money, ‘P’ is the average price level, and T is the value of expenditures or financial transactions. “ He looked at his beer with satisfaction. “If M is really increasing at 9.2% per year, then either V is collapsing or we are looking at increased inflation, and soon.”

My Pacific Northwest pal looked thoughtful. “Doesn’t ‘T’ usually increase at no more than 4% in a good year? We may have to increase our taxes again.”

“That is one thing you might have to do. Former Treasury Secretary Volker wrote an OpEd piece about this right around the time the Fed must have started it. He  beat Stagflation back in the ‘80s. He said once you let the genie out of the bottle there was not way to throttle it back.”

“So what does it mean?” I asked.

Jim looked at his fresh Bud as Liz-S brushed a lock of chestnut hair over her ear. “It means we are hosed, my friends.”

“Crap,” I said. “At least I paid for the Bluesmobile in current dollars, and that will be enough to get me out of town,” and finished the second-to-last glass of Happy Hour White just as Jon-with-no-H came in.

“Did I miss anything?” he asked.

“Nothing you won’t be hearing plenty of,” I said. “But drink now. Prices will be going up.”

Copyright 2011 Vic Socotra
www.vicsocotra.com