Some Sacramento Parks and Green Spaces

9 July 2017

On Friday the 7th of July I toured some Sacramento parks with the idea of a theme of green space. I had been invited to a dinner on Fair Oaks Blvd just north of UC Sacramento, so that was my ultimate destination. I figured that with a combination of walking, sitting, and possibly bus riding I could spend most of the day visiting park areas between downtown and the university.

I got off the light rail at Alkali Flats station. This is a traditional neighborhood name for the area near to and just north of downtown. In this area of town, C Street is the northern-most useful street. It extends east into the fancy New Era Park neighborhood. It has three city-block-sized parks along it: John Muir Playground, Grant Park and Stanford Park. Then to the east of that is a large area referred to as Sutter’s Landing Regional Park, which is still under development.

There is a lot of low-income housing in the Alkali Flats area. Here is an example of some green space provided in front of one such building. I call it “urban green space.” It is usually surrounded by concrete on all four sides.

uban green space

Next I encountered some urban gardens. I have not seen areas like this in the suburbs.

urban garden

John Muir Playground has a fence around it, and a sign inside stating “no adults allowed unless accompanied by a child,” or words to that effect. However, on this warm morning, no children were there.

John Muir playground

C Street then takes you to the Blue Diamond facility. There I found a nice example of “corporate green space.” This is a lot like urban green space, but more closely controlled and maintained. It can provide a lot of great color, but is ordinarily rather limited in extent and definitely requires watering. Companies here – and many residents – are still into lawns. See my Goose Poop article for related thoughts.

corporate planting

The area just north of the American river contains a system of bike paths, and a path connecting to that system exits into this neighborhood. That would have to be another trip.

bikeways gate

Grant Park has a baseball field that may also be used for soccer. The grass was mowed, but no one was there. At the east end of this park is “Blues Alley.” I went down this alley, but found no evidence for “blues.” I did, however, notice a column of smoke rising from the area I was headed towards. A grass fire.

park field

Stanford Park was another big (and vacant) field. At its far end is the entrance to the developed part of Sutter’s Landing Park.

park lawn

This park had previously served industrial or similar uses; most of it was pretty bare. The most-used developed area was the Dog Park. I walked into the small dog area and took some pictures.

solar panel trees

This park contains some manmade shade roofed with solar (photo-voltaic) panels, most probably linked into a nearby solar “farm” and to the panels covering the parking lot to the northeast.

Sutter's Landing parking lot

The most notable features of the parking lot were two killdeer madly tweeting at each other. A “covered skate park” was closed. Inside it was covered in graffiti and housed several pigeon families. However, per its website, it opens to skaters and skateboarders every afternoon.

levee trail and lower trail

Just beyond that was the levee and the river. The levee is a key reason the American River Parkway exists. The levees began to be built in the mid 1800s in response to repeated flooding of Sacramento neighborhoods during peak flood season. Since then, flood control dams have been installed, and an extensive levee system has been completed up the American River (and also the Sacramento).

fishing on river

Fishing on the river.

Sutter’s Landing Park ends at a freeway at the edge of the East Sacramento neighborhood, not far from a railroad bridge. Here I found the blackened ground which could have been caused by the fire I saw smoke from earlier.
burn area

East Sacramento neighborhoods run right up to the levee, which in this area is roughly 20 feet high. On the other side of the levee is the river and parkland which can flood if there is a lot of runoff upstream. I could find no obvious access to regular streets from the levee, so continued walking along it to the east. I found a sump pump installation at one point, but the maintenance gate leading to city streets was locked. I was now walking along an affluent neighborhood known as River Park, which is right next to the university. It was a lot of walking in the high sun. I was in long sleeves and wearing a big hat, but my nose and cheeks got burned, and my exposed hands. At Hall Park I finally found street access.

floodplain near beach access

This is near the access point from Hall Park.

Hall Park is a nice park and includes a swimming pool. But even here I found someone who looked homeless sitting on a park bench.

Hall Park sports field

Sports field in Hall Park.

I was able to walk out of River Park to a small mall, where I ate lunch at a Chinese restaurant. Just beyond that was the university entrance, including a nearby “mini-park” space with a garden fountain and a bench.

fountain in mini park

bench in mini-park

To the right of the university entrance was the Arboretum. It was a well-developed “forest” and provided a pleasant place to stop and rest. Almost every plant was labeled with its botanical and common name, and where it is native. Though called an Arboretum, in included numerous shrubs and smaller plants.

inside the arboretum

Inside the Arboretum.

I had made it to Fair Oaks Blvd, but still had to make it across the river. There was a footpath/bike path across the bridge. The north end was surrounded by shrubbery; very picturesque.

foot path on bridge

Fair Oaks passed through a student housing area called Campus Commons where there was no ordinary commercial development. But I found the shopping area only a block or two up the street, designed in the usual suburban style, though a little more high-end than usual. As is normal in this style of development, pedestrian crossings of the main streets are few and far between. After getting an iced herb tea (and a refill) at a shop in the Pavilions Center, and browsing the Williams-Sonoma store, I sat for a while in a comfortable patio chair put out for shoppers. The two seated figures are sculpture next to a water feature.

urban green space at shopping center

I was early; it was only about 4pm. When I finally decided to cross the street to the restaurant, I had to walk way down to a light to get across legally. But at least I had survived the trek.

Sacramento Critters

2 July 2017
squirrel Sutter's fort

Tree squirrel at Sutter’s Fort.

We are all aware that many animals share human environments with us. Besides the obvious organisms that take advantage of the fact that we leave behind a certain amount of trash, both inside and outside, there are the ones that live semi-wild in our garden and park areas.

Perhaps the most obvious animals that share the urban environment with us are the birds. However, with my resources these are some of the most difficult animals for me to photograph. Robins, sparrows, swallows, and all their various relatives are familiar regulars in urban trees and bushes. Pigeons are also well-know, and often seem like a nuisance bird. In open areas you will see hawks and other raptors, indicating a considerable but hidden population of ground mammals (mostly rodents). Tree squirrels move around where we can see them, but the rest of those types of animals hide in underground areas much of the time.

Home gardens and park areas may have water features (or regular sprinklers) that support additional animals. These include various amphibians and reptiles, insects, even fish. I should mention soil worms, though these usually only appear when we dig around or after it rains hard. Worms and other soil organisms are an important part of any ecosystem but are another group that does not lend itself to ordinary photography.

We will also see some migrant species come through our cities. Many of us are not particularly aware of which animals are in this category. And there are some birds, like the geese and ducks pictured below, that you might think migrate but might actually be full-time residents. Some of these have lost the instinct to migrate due to being held in captivity over several generations.

geese and ducks at Sutter' Fort

These geese are probably permanent Sacramento residents. I don’t know about the ducks. This is at Sutter’s Fort.

Yesterday (Saturday 1 July) I visited a little museum on Auburn Blvd near Watt that has been known as the Discovery Museum, but will be known as the Powerhouse Science Center when it moves to its new downtown building (an old electric power station). This museum specializes in exhibits for children. Its original emphasis was probably the natural sciences, but it is moving into “hard” technology in a big way, with a “space mission” experience for kids, a planetarium, and more technology-related exhibits in the offing.

The museum grounds include a park and pond. The pond is kept aerated by a fountain. Aeration is important for most urban ponds, as they are usually quite shallow and warm up a lot in summer, which deprives them of vital dissolved oxygen. This particular pond was probably seeded with many of the animals that now grow in it. It has a lot of turtles for just one pond and is teaming with developing frogs (tadpoles / polliwogs). I also saw many dragonflies and a hummingbird. I asked the flying animals to pose for photographs (a habit I’ve taken up, as it sometimes works) and a few dragonflies consented to do so, but the hummingbird would not stay put long enough for me to get a proper photo.

turtles sunning themselves

Turtles sunning themselves at the Discovery Museum pond.

tadpoles in pond

Tadpoles were teaming in this pond.

dragonfly at pond edge

The dragonfly that posed for me.

Some of the first “wild” animals I ran into in Sacramento were ground squirrels at the Marconi-Arcade light rail station. I noticed them many times running across the tracks between their burrows and the public waiting areas. They are a bit nervous and so hard to photograph, but I got a few shots of them finally.

ground squirrel near its burrows

One of the infamous track-jumping Marconi-Arcade ground squirrels.

Ends of Lines

29 June 2017


Here is a rather short version of my intended post about what is at the ends of the light rail lines in Sacramento. My experiences in going back and forth on these trains have ramifications that I won’t particularly get into in this post. I have tried to do something like this in every city I have lived in. I didn’t totally do it in Seattle or Los Angeles, though.

Green Line


The “green line” is a short in-city line that just loops around downtown. It starts near 13th and R (above) and ends at 7th and Richards, which is traditionally known as Township 9 (below). The Township 9 Station is actually the best-developed station in the whole system. The basic weakness of the system is that it has no large central station or stations where lots of people can wait in a protected area. Subways provide this; Sacramento has no tunnels for trains. This also means that Sacramento trains have to share streets with cars buses and people in order to get anywhere that has a lot of people. The areas where the trains have their own right-of-ways are usually shared by real trains, out on the edge of town near nothing very important. That’s the Blue Line. The Gold Line follows the freeway roughly.


Blue Line


This is a long north-south line. I found it below par as a light rail line. It does not seem very well-planned, and I have seldom seen it very well-used, though at rush hour today it was packed to standing-room only.


Here is the south end, the Consumnes River College, a community college dating from 1970 per one sign I saw. Oddly, though, I found no development around it of any kind. No fast food places, no technology stores or clothing stores. I really didn’t quite understand it.


Gold Line


I found this the best line in the system. It is a very long east-west line that goes from the Sacramento Valley (Train) Station near downtown (above) all the way out to Folsom. Many of the stops have extra shelter and attractions like shopping centers nearby. It’s east end (below) is right at the edge of Historic Folsom, which is similar to Old Sacramento (which has no light rail line nearby).


Wheat Penny

27 June 2017

what penny both sides

Every so often I run across a “wheat penny.” So called because of the heads of wheat depicted on the back. Though I collected all sorts of things when I was a kid, including coins and stamps, I never studied those subjects seriously.

The study or collection of currency, including coins, tokens, paper money, and related objects is called Numismatics. I am not a student of this subject. I also have older pennies called “indian head.” They were produced from 1859 to 1909. The wheat penny followed this one, up to the year 1958.

This one I think I got at the Tandy Leather store. That’s how I recall it. It is dated 1951.

Sacramento Trip Updates

14 June 2017

street sign in everett

13 June: (I had written this part up earlier, but the draft is on another computer.) I rode Northwest Trailways from Pullman to Seattle. It takes the northern route, through Leavenworth and Stevens Pass. It’s prettier than the Greyhound route, but takes longer. I arrived in the late afternoon and stayed in a place called the Panama Hotel. This place is a lightly-restored hotel built in 1910 for immigrants from Asia. Jan Johnson operates it and she puts a lot of effort into it. It’s different than a “modern” hotel, but was fine for me. She sees it as a kind of museum.

14 June: The Amtrak Coast Starlight pulled out of King Street Station around 9:30 in the morning. That meant we could see the sites all the way to the California border. After an uneventful morning, I stayed in the observation car after lunch, and some interesting people got on somewhere early in our trip through Oregon. One guy had a guitar and sat down and started playing. Later he had an intense political discussion about the absence of wisdom in modern society.

leaving train station salem oregon

15 June: The train pulled into Sacramento just a little after sunrise. I started walking. I found a breakfast place open early and had some fresh fruit and a muffin. Then I walked east until I got to Sutter’s Fort (1839-1848) and photographed an egret sitting in a pool outside, looking a bit dejected. There are lots of shops in “Midtown” but most don’t open until 10 or so. I slowly made my way back downtown, where I visited my church and made a donation.

heron in pond by sutter's fort

Then I went out to the Econolodge and signed in. My 25-day stay broke my debit card, but I called BECU’s 1-800 number and got it fixed. My realtor came by a little later and took me to the one mobile home park that agreed to look at my application. We planned to prepare the paperwork the next morning and then turn it in.

After that I went across the freeway to Fry’s and got the computer I’m typing this on, as my little Linux-based netbook would not connect properly.

16 June: Took all morning to prepare the paperwork, but my realtor was happy with it and the lady at the park liked it, too. After I got back from that, I finally managed to connect to the internet. This motel uses an unsecured Wi-Fi network with a browser “landing page” that prompts you for a password. This is supposed to happen automatically, but with some computers you might have to type in the URL of the landing page.

It has turned VERY hot in Sacramento, so I waited as long as I could to go out to shop at Foodsco. This is one of those BIG grocery stores, in this case run by Kroger. It is one of four stores in the Sacramento area. They don’t always show up when you search for “grocery stores.” Poorer people come to shop there, as the prices are pretty good. The selection, however, is heavy on the processed foods side. I found the produce decent, and located some good yogurt, too.

17 June: We are expecting above 100F during the daytime for at least a week if not longer. I am staying inside mostly, though did go out for lunch and more groceries. I downloaded and watched Courtney Brown’s latest remove viewing project which was on Area 51 (officially, the Groom Lake facility). It was pretty good and confirmed what others have reported about it: MagLev trains, multi-story underground research complexes, ET involvement and genetic experimentation. When one of Courtney’s remote viewers sees something, you have to take it seriously. So a lot of the Area 51 scuttlebutt is the real deal. I suggest David Adair’s stories for more data about what it was like there maybe 30-40 years ago.

18 June: I got up “early” and took the 86 bus downtown. The ride only took about 15 minutes. I stayed on and went back out to Discovery Park by the American River where I walked around for a while. Then I caught the next bus back to Northgate Blvd, and a short walk up to the motel. They are expecting the hottest 18 June on record today – above 105F – so I didn’t want to stay outside too long.

19-20 June: Another visit to my church, another donation. Then today I went to a “coworking” place near downtown to get a more reliable (and secure) internet connection than is available at the motel. Internet cafes are starting to drift out of fashion, what with internet connection via mobile phone becoming so common. So now some are beefing up their infrastructure a bit and offering it to “serious” computer users, usually at a price. I, however, got in on a “free day pass” plus a muffin and two iced herb teas.

Thoughts from yesterday:
Met a woman who owned a house in Reno, was planning to move to Sac, but keep the house in Reno and rent it out. This follows the modern pattern of the financially better-enabled of somehow creating an asset pool, then living off the income from it. The trick is to acquire the asset in the first place. If you get a really good-paying job and save a lot, you can do it. But to me there seems something wrong in it…

Today watched an interview with Niara Isley, an ex-airman who got used as slave labor on the moon. She came out at least 6 years ago, and has been telling the same story the whole time, and also wrote a book. Like Corey Goode, she has turned to the New Age movement for solace and support. This is apparently allowable for people who are trying to blow the whistle on the secret space program.

21-22 June: Have been travelling around a lot on the light rail. Went to both ends of the blue line; still have to do that with the two other lines. I stopped off at some different places, such as the Broadway part of the Oak Park neighborhood. Went out and visited the house where I will be staying when I move here. It is located in a part of the city where they didn’t have to put in sidewalks when they were building the houses there. Very strange.

23-27 June: Church events, a visit to Old Sacramento, and more planning for the move have filled the hours these recent days. I’ll be putting together more articles before too long.

28 June – 2 July: I have completed most of the planning for the move and visited some more Sacramento attractions. The Discover Museum, destined to become the Powerhouse Science Center, was a calm and relaxing visit that included several live animals, along with a body health exhibit and the beginnings of some “hard science” exhibits. This museum is aimed primarily at kids.

rocket engine on display

Rocket engine displayed outside at the Discovery Museum.

3 – 5 July: This was mostly move preparations. However, on July 4th I was more or less stranded because mass transit was on a holiday schedule.

On 3 July I visited Arden Fair, a very nice mall.

arden fair mall merry-go-round

Yes, this mall has a merry-go-round.

It’s an all-indoor mall, two stories (similar to the Glendale Galleria but not as big), dominated by clothing stores and cell phone shops. I got a cell phone there, as “tethering” to my PC will be the only way for me to connect to the internet at my new residence. It works rather well, but costs more than just regular phone use.

I got to the mall by walking over the railroad tracks from the Swanston light rail station. There is an old idiom: “wrong side of the tracks.” To quote the internet:

The common explanation is that in the old days of steam locomotives, the wind would tend to blow the soot to one side of the tracks. The sootier side would then become the poorer / industrialized neighborhood.

This phenomenon is in play along these railroad tracks, though it is more common these days for both sides of the tracks to look in bad shape, as commerce gravitated away from trains towards roads and freeways. The light rail (northwest) side of those tracks is run down and industrialized. On the other side there is more of a corporate presence and also some fancy neighborhoods.

Today (5 July) I visited the Natural Foods Co-op and my new neighborhood “across the tracks.” It’s in an unincorporated part of Sacramento called “Del Paso Manor.” There are about twenty or thirty suburban neighborhoods surrounding Sacramento that are still known by the original names given to the subdivisions when they were first developed. Many of these up in the Arcade area don’t have any sidewalks on the streets. Definitely designed for a drive-in / drive-out lifestyle. It will be interesting to ride around these areas on a bicycle.


8 June 2017

homemade packing crates all piled up

This is what 90% packed looks like at my place.

I had mostly homemade “erector set” style furniture, now all turned into packing crates and trunks.

Everything counted so far adds up to about 183 cubic feet. At 25 pounds per cubic foot that would be about two tons. It probably weighs a little less than that.

Another view:

manufactured trunks piled up for inventory

Road cases are my first choice for equipment storage.

How to Write a Constitution

29 May 2017

The title is a bit ostentatious, but it’s the best I could think of. Though I don’t really have the resources to give this topic justice, I was thinking about it, so decided to write a post on my Memorial Day time off.

I take for my reference the US Constitution of 1787. I hope the copy I have is accurate.

Talking about ostentatious: It starts, “We the People of the United States…” That’s nice, but probably a little broad. It should certainly mention who agreed to it, if not who actually wrote it. It is basically a piece of literature, so it could have an author.


The preamble lists the things this government is to carry out:
Form a more perfect union;
Establish justice;
Insure domestic tranquility;
Provide for the common defense;
Promote the general welfare;
Secure the blessings of liberty…to our posterity.

This is important. These are the long-term and continuing goals and purposes of this government; they are its job. A group needs goals and purposes, and must sometimes be reminded of them. “General welfare” is a bit vague, but we’ll leave it that way for now.

Legislative Powers

I find it a little odd to bring this up first, rather than giving a more general overview of how the system was supposed to work. Too many incorrect assumptions could be made here; we need to spell this out better.

Article 0.

We propose that this nation take the form of a constitutional Republic. This gives us a layered approach to both policy-making and action. There are individuals at each level who represent, or preside over, a group of individuals at the next lower level. Every member of the system is not normally expected to interact with anyone above their level or below the level they supervise or represent in matters of official business, except under special circumstances. Every group at every level has the right to operate as it sees fit, and this right can only be overridden as described below. The assumption is that most people already know what to do or can figure it out.


The purpose of legislation is to set guidelines (policy, laws) that bind those at that level to act within certain limitations or restrictions. This document specifically covers the national, or federal, level, but is also meant to serve as a guide, or pattern, for lower levels.

I will not cover the details of Article 1 here, however, we cannot move on before inspecting Section 8.

Areas of legislative authority / responsibility:

  • Taxes, duties, imposts and excises (to be uniform across all states).
  • Specify outlay to pay debts.
  • Specify outlay to provide for the common defense.
  • Specify outlay to provide for the general welfare.
  • Borrow money.
  • Regulate commerce beyond state boundaries or responsibilities.
  • Regulate immigration.
  • Regulate bankruptcies.
  • Coin money, regulate its value, and establish standard weight and measures.
  • Establish Post Offices and post roads (ensure free flow of communications between citizens).
  • Offer limited patent and copyright protection to authors and inventors.
  • Establish lower-level judicial bodies (tribunals) as needed.
  • Protect the nation from piracy at sea.
  • Declare war, and similar war powers.
  • Raise temporary armies while maintaining a permanent navy.
  • Organizing and activating the Militia for certain purposes.
  • Rule over the seat of government.
  • There are more points, but these are the main ones…

Executive Power

Traditionally, the executives of history (kings, emperors, etc.) got to make their own rules. This was not just a matter of egotism. They had things to get done and they needed to be able to act. One of their favorite pastimes seems to have been making war. This had to change. The chief executive of a nation does have the “power” to make war, as the military is under his/her command. However, it was considered that war should be a matter of policy and not executive action, and this still seems the wiser route.

To further discourage executive policy-making, the Founders proposed putting the matter up for a vote every four years. This seems rather arbitrary to me; why not whenever a majority or some higher ratio of legislators found it needful, but not more often than every four (or three?) years. But we shall leave this be for the time being. The point is: You can’t get policy continuity in the Executive Branch if the senior person is changing all the time, and that’s the way we want it.

Judicial Power

“Judges” have traditionally served a wide variety of functions. At their best, they act themselves, or by guiding a jury (or similar group of peers) to determine who the real criminal is when something goes wrong. As far as I can tell, they do not have a particularly high reputation in this regard. Like anyone else faced with a real criminal, the judge can be threatened when faced with a “hard decision” and forced to back down.

If judges cannot be depended upon to uphold the ethics standards of the group, then who can be? If a group is that far gone, there is little hope for it. But for now, let’s move on to Article 4.


This section (Article 4) goes over certain matters of equal treatment across state lines. After all, these states are all part of a Republic, and are supposed to cooperate with each other. You can’t have the police forces of two states in battle because their laws are different.

But I feel this whole subject of states is not taken far enough in this document.

Article 4.

The full and globally-recognized territory of this nation has been – and shall continue to be – divided into geographical regions known as “states” or “territories” based on a combination of historical and geographical factors. States have the right of sovereign rule within their boundaries, assuming the restrictions imposed by this document are respected. Territories have not yet attained the full rights of states, but may petition Congress to be granted these.

All policy (legislative), executive and judicial actions originating at the federal level of this republic shall not extend any further than the states, except under most extraordinary circumstances. Certainly, no federal law, federal action through any of its agents, or federal judicial decision shall apply to or be binding on any individual citizen (that being understood to include only real persons, not “private” entities created through legal means) unless that citizen has specifically requested such a bypass.

It is further expected that state governments will, in turn, deal only with county governments, and those only with municipal governments and those only with neighborhood governments (where that may apply), as this has proven to be more acceptable to citizens and more conducive to individual initiative and thus, the general welfare.

Private Enterprise. This does not mean that a private enterprise, operating across state boundaries and employing numbers comparable to numbers of citizens in a state, or producing things of value on a similar order to that of the combined production of all smaller enterprises within a state, should expect to be favored by the rights and protections afforded smaller enterprises by a state, simply by virtue of the location of their headquarters. Indeed, if any enterprise should grow to the extent outlined above, it can expect to be required to deal directly with the federal government in all matters where it must be treated as a whole, as in the matter of taxation.

The above summarizes the points that I think are important in the game of operating a nation. Though using the context of the US Constitution has limited my comments in some ways, the points I have mentioned are some of the most important. We have erred by overlooking them.

Second Warm Period on the Palouse

21 May 2017

The plants are popping out very strongly on our warmer days.

They seem proud this year. The weather was rough, and the warmth came late. They suffered this Spring, but came through it OK.

I hope we can do the same!

flowering apple tree

“I’m the best apple tree on the Palouse.”

quail on pullman trail

Quail like sunny days, too.

And That Is Banking

18 May 2017


…real banking, can all by itself, increase production.

– L. Ron Hubbard
HCO Policy Letter of 2 September 1982

The implication of the above reference is that poor banking practices can cause runaway price increases, while sound banking practices can increase the prosperity of all.

I wanted to write something about this subject because I have been studying about how home loans work, and it helped me realize some things that others have been pointing out for a long time.

Note that on 19 May I rewrote this post to try to make it more accurate; see more about that below.

Financial people tend to speak in terms that are not easily understood, and to assume you know about something that you don’t actually know about. However, most people have heard of the term “balancing the books” and this is a basic concept worth going over.

I suppose the idea that the books have to “stay in balance” is similar to the idea that “for every action, there is an equal and opposite reaction.” In the physical universe, this is true by observation. However, money and finance are conceptual universes, or you could say a kind of mathematical model of the physical universe. If a car exists, it is assumed that someone was paid to make it, whether that’s really what happened or not. So if I buy a car, I basically convert some of my cash into a vehicle. In my books (if I kept books), the price paid moves out of the Cash asset category and into the Vehicles asset category, and they stay balanced. What if someone gave me the car? I basically have to create a special category for gifts, which in a commercial business would be similar to something called “retained earnings”.


Now, say I’m a bank, and I have some deposits from my customers, and loan a portion of these to someone. This decreases my cash – the pool I make loans from. How do I replenish that pool (other than by getting more deposits)? In normal banking I would have to use part of my income (payments on loans I had already made to other people) and put that back into my cash. In mortgage banking I could do something called “selling the loan.” Basically, the loan turns into a security (essentially a document that can be bought and sold) that I can sell to a company that buys those types of securities.

Where do those companies get their money? They also create and sell securities – stock, basically – to investors. The investors include a lot of firms that help people save for retirement, as well as other investment firms. Those firms buy all sorts of stocks and other securities with that money.

The ultimate source of money for buying debt (making loans) in the U.S. is the Federal Reserve. The “Fed” is part of a network of “Central Banks.” Central Banks get charters from governments to control the money supply for them. They regulate banks, and they buy debt (or make loans, however you want to look at it). The Central Banks deal mostly with the large commercial banks, which are all international corporations. Smaller local institutions deal mostly with the big banks. The chain of purchasing debt works its way down until you get to the borrowers, who are expected to keep up their flow of payments. Governments are also large borrowers. To borrow money, they issue “bonds,” which come with a promise to pay dividends, and the full amount borrowed at the time of maturity. So in the case of government borrowing, the taxpayers, have to pay all that through their taxes. That’s why “bond initiatives” have to be approved by voters. In the end, a lot of what we make at our jobs goes to make profits for the owners of “debt.”

Making Money

Before my recent studies, I hadn’t really heard about this practice of “selling debt.” But debt is a receivable on the bank’s books, so it is worth something. It never occurred to me that you could somehow sell that to another company to get more cash (stay liquid, as the financial people call it). But this is really just another way of saying that the bank borrowed some cash. I’ve heard of companies borrowing to make payrolls, or buy new equipment. I’d just never heard of banks borrowing so they could make more loans. Of course, assuming they continue to service (collect payments) on the loans they sell, they have to forward most of those payments to the new owners of the loans, so that portion of their income is no longer available for lending.

As I wrote this, I came to see that “selling debt” could also be given another meaning. It could also be seen as selling people – governments in particular – on the idea that they should borrow money in order to do things. They shouldn’t save, they should borrow. You shouldn’t “wait until you can afford it,” you should buy it right now, do it right now. With governments, this is particularly pushed as a way to finance wars. Every major war I am aware of was financed with debt – the taxpayers (via the government) borrowed money from banks, then had to pay it all back afterwards. It is a potent way to “make money” in a short amount of time. I don’t know, however, if it really accomplishes anything over longer periods, especially if it involves making war.

Fractional Reserve Banking

Some people believe that this is a new idea. But it is really just a newer term for an old idea. According to Google’s Ngram viewer, the phrase first appeared in literature around the turn of the last century.
As long as banks have been loaning money, they have been using deposited funds (or other assets) to do so. The idea of “Central Banks” was pushed into place after it seemed that unregulated banks had an inclination to dig too deep into their cash. Now Central Banks police what fraction of a bank’s deposits (or cash, to use a simpler term) must be held in reserve so that their depositors will be happy with the illusion that their full deposited balance could be withdrawn at any time. Depositors get to account for their full deposited amounts as “cash,” when in reality only a fraction of that amount is actually available to be paid out from the bank’s reserves.

No one likes “reserves” because they just sit there and don’t do anything. It’s kind of like a having a Fire Department in your town. In a perfect world, they would never have a fire to fight, or even a cat to get out of a tree. In this real world, you need to have one because “stuff happens.” Same goes for reserves.

Some would argue that amounts held is reserve should be quite substantial. It gives stability to an economy, and breeds a certain level of confidence, even a certain willingness to take risks. I think there is validity to those arguments. But that does not mean banks need to keep 100% of their “on demand” cash deposits as reserves. This is discussed more below.

The beauty of a cashless system (in the eye of the banker)

In the “old days” money meant gold coins, or ingots of silver, or other precious metals, or gems. Today it can be reduced to a code in a bank’s database. Money (currency, really) had to be manufactured, transported and stored when not in use. Meanwhile, businessmen had grown used to account books, and moving larger sums around using bank drafts instead of currency. This began the move away from “hard” money. The “softer” the money, the easier it was to handle and move about. Banks and their major customers really liked these benefits. And so, national currencies were pushed into place, the use of paper money was greatly expanded, and finally computer systems were developed that just require an ID card to access account records.

Global-scale electronic funds transfer systems now exist, and are very widely used. All accounts at all modern banks are computerized. Banks are now relieved of the problem of having to store precious metals in their vaults, though “modern” money can still be stolen. To the extent that the world goes cashless, banks and stores are relieved of the problem of securing their on-hand currency, and only have to worry about their computers, which can be locked away in their now-empty vaults.

So, what’s so good about cash?

However, the credit or debit card holder now has to worry about the security of his electronic transactions. I once had a bank make a $2,500 error in my favor. They never bothered to correct it, though I told them about it more than once. For them it was insignificant, but that’s a huge amount for me. What if my account suddenly one day had $2,500 less in it? They better be able to correct that!

In a secure and honest world, using a card instead of cash (currency) would be a great way to go. In the world as it really exists, I want to be able to fall back on coins and paper money. If a store’s electronic payment system goes down, I want them to accept my cash. If I need some water out of an old-style vending machine, I need some coins or I go thirsty. If I want to tip a waiter, it’s easier for me to think with using a couple of extra bills.

When money is a commodity, then you can’t have some unless you earn it or physically steal it from somebody. When money is only a number in a database, what happens if I can’t get access to that database? And what happens if someone can get illegal access to it? Or in some other way fiddle with accounts just by making some entries in a computer program? It gives the tech-savvy an advantage I’m not sure they’ve earned. The cashless ideal includes a reliance on technology that is not necessarily as reliable as I need it to be. At the business level, if a transaction gets fouled up, it can be fixed later. At a personal level, it could mean the difference between staying fed or going hungry.

I’m not advocating a return to cash necessarily, though we might be forced into it should the electronic funds transfer systems stop working. But I am pointing out that our turn away from cash did not handle the most important problems we have always had: dishonesty, thievery and avoidance of real productive work.

Reality Check

My original concept of how this scam works was simple, but incorrect:

The bank has my $100. I thought this meant it could loan out $1000. That’s not exactly right. It is only allowed to loan, maybe, $90. Except, that loaned money is going to end up in another bank account, and then about $80 of that could be loaned back out. That whole cycle can be imagined to repeat maybe 5 or ten times. Now a lot more than my $100 has been loaned – deposited – and re-loaned. That’s what people call “creating money.” I discuss this more below.

The other part of my perception of what was wrong with this system was the cashless nature of modern transactions. This possibly provides more opportunity to “fiddle” the system. If you have to provide a borrower with real currency to complete a loan, then if you run out of currency, you can’t make any more loans. If you only have to credit an account on a computer, then you don’t need the currency. So, who’s to stop you from just pumping out loans? Your accountant, if he’s honest. Or a regulator, the next time you get audited. So the real point here is that the removal of hard currency from the system, reducing it all to numbers in databases, has a tendency to degrade the underlying concepts of what money is and represents. It should represent real value, real productive work. You should not be able to “fiddle” it into existence when you have done nothing to earn it.


I originally linked this trend towards a cashless system to the decline of interest rates, close to their total disappearance. I have a problem with interest because I don’t think most of the explanations for it are correct. It is often described as a payment to the lender based on the risk he takes by loaning money. But what about the risk the borrower takes in borrowing money? And what about loans between friends or relatives? I think the banks just decided to shift the paradigm because they had the power to do so. Look at interest rates on savings accounts, for instance. It used to be recognized that the depositor was actually making the bank a loan, and should earn interest on his unused balance. But depositors had no way to enforce that idea on bankers, so gradually interest payments on savings accounts have reduced to almost nothing.

The abandonment of the use of interest rates to control inflation in certain markets, and the subsequent increase in the supply of money in those markets, are bits of history not totally explained by the factors discussed above. Though the smaller banks that overextended themselves before the Great Depression could be blamed for what happened, I think that blame would be misplaced. They, however, felt the brunt of new banking regulations, while at the same time, what was to become a huge boom in the mortgage markets can be traced back to those times. I think there remains an untold story (at least it hasn’t been told to me) about how that all came about and about what is unfolding today. My concern is that we will strike out at the wrong targets (called misidentifying root cause where I work) and simply prolong our agony as a result. Benefiting from the suffering of others has never been an honorable way to gain status in a society. Yet suffering continues while a few grow unbelievably rich. Until we begin to apply more effective solutions to problems of finance, the economy, and politics, we will continue on our slide towards a non-sustainable system that will eventually totally break down.


I relied heavily on an article written my Kenneth Ballard here:
to get an explanation of how banks account for the loans they make.
I don’t know much about this guy, but he seems to know what he’s talking about…I wish the subject were easier to understand. I have had a terrible time trying to do so…
Wow! Mr. Ballard has responded with corrections here:

Follow-up notes for those interested

According to the Federal Reserve’s own website:
“Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. … Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks.”

Notice that this says nothing about loaning money. The “reserve requirement” is a fraction of total monies on deposit. So, that means the rest of the monies on deposit are available to loan out. I think the first stumbling block here is the term “deposit liabilities.” Who, who isn’t accounting trained, knows what this really refers to? It’s like two conflicting ideas in the same term. This goes back to the fact that there are two balancing sides to every transaction. When a bank receives money from a depositor, it’s not a gift, but on the other hand, the depositor gets nothing in return, except a receipt. As the reference I cited at the beginning states, in the “old days” that receipt acted as money. Nowadays, the fact that a person has money “on account” gives them the right – or ability – to buy things with it.

The depositor counts his bank balance as cash – as a liquid asset. He can do this because there is an implied promise (perhaps written somewhere) that the bank will pay him back “on demand.” More realistically, the depositor has loaned the bank some money for its use. But there is no formal loan contract, as would be the case if the depositor had purchased a CD or a bond. So the depositor is encouraged to not think of his deposits as “on loan” to the bank. However, that is closer to the actual situation. I think this difference between perception and reality is what some people object to. Yet, if the banks do a good job, no one will ever know the difference.

It could be argued that banks should be more honest about what they are doing. It would probably better reflect how they actually operate if they sold bonds or CDs to anyone who wanted to maintain a significant balance with them. Or to make them a “member” like the Credit Unions do.

Private individuals are never going to fully realize that a portion of their deposited funds is being loaned to others unless the way their account at the bank works actually makes that clear. In the past it has been a workable system in spite of this. But since interest rates collapsed, more and more people are questioning it. The “multiplier effect” would still work, but perhaps the banks should be made more responsible for both the positive and negative aspects of it. Having to “insure” bank accounts is not something that should be necessary. If the banking system were more honest with the public about how it actually operates, I think the public would support it – especially if it resulted in real economic growth at the local level. Right now something is suppressing that growth. Questionable ethics levels in the banking community does not help matters any. The banking system has a lot of power to do good in society. Or harm. It is not currently demonstrating the good side of that power.

A Miracle!

3 May 2017

First warm day of the new year!

pullman weather for Wednesday 3 May 2017

With a “scorcher” scheduled for tomorrow!

On Saturday, back to what it’s been like most of Spring, then a steady (I hope) climb towards Summer.