How to fix Monetary Policy

Chicken or the Egg?

Considering the circumstances, let's fast forward just a little bit and say the Federal Reserve is in the process of monetizing the debt in order to relieve some of the pressures of financing our fiscal deficit.

In the very short term, this is successful. The government is able to finance its debt at desirable interest rates with the help of the Federal Reserve. Everything seems okay for now.

Then the consequences of monetizing debt begins to show up. First and foremost, inflation starts to ramp us as the money supply is grown in order to pay for the Treasury notes, but let's pause for a second and take a step back.

Why do we need to monetize our debt in the first place? The answer is simply because there is less demand for our debt at a time when we need it most. There is less demand because the value of the dollar has been declining against the domestic currencies of the countries that were buying our debt. 

The rate of change in the exchange rates has been greater than the yield on the treasury notes making them losing investments. That problem going forward is that the exchange rate discrepancies are only going to increase going forward. So why would these nations continue to buy our debt?...exactly.

That is why that $10 billion Treasury note sale had weak demand, and that is why the government is going to have a hard time financing their debts going forward, therefore they must monetize.

The problem is that while monetizing the debt is a short term fix, it only increases the inability of the U.S. to finance via foreign entities going forward. What I'm saying is monetizing only increases the problems that force us to monetize in the first place. Eventually we will completely cut off our credit lines. As the old saying goes, don't bite the hand that feeds you.

There's no real moral to this story. This is like Custer's last stand. It's a futile attempt that will only end in destruction. More importantly for you and me, it's a sign that the long dated U.S. Treasury note bubble is nearing collapse. I recommend taking financial action as this is one of the greatest financial opportunities that we will ever see.

Courtesy: http://www.gurufocus.com/news.php?id=39411

              Nicholas Jones

              Analyst, Oxbury Research

Ajax

What Is AJAX?

Fundamentally, AJAX represents a generic application model that would enable more interactive, more responsive, and smarter Web applications.

The Web was originally designed for browsing HTML documents. As a result, the classic Web application model adopts a "click, wait, and refresh" user interaction paradigm and a synchronous request/response communication mechanism:

1. "Click, wait, and refresh" user interaction paradigm: A browser responds to a user action by discarding the current HTML page and sending an HTTP request back to a Web server. The server completes some processing and then returns an HTML page to the browser. The browser refreshes the screen and displays the new HTML page.
2. Synchronous "request/response" communication model: The browser always initiates requests, whereas the Web server merely responds to such browser requests. The Web server never initiates requests—the communication is always initiated one-way. The "request/response" cycle is synchronous, during which the user does not have to wait.

However, these two fundamental behaviors of the classic Web model do not work well for software applications. In the context of software applications, the classic Web application model creates many problems: slow performance due to "click, wait, and refresh;" loss of operation context during page refresh; excessive server load and bandwidth consumption due to redundant page refreshes; and lack of two-way, real-time communication capability for server initiated updates.

In the context of software applications, "click, wait, and refresh" and "synchronous request/response" result in slow, unreliable, low productivity and inefficient Web applications. These two basic behaviors must be altered to produce higher performance, more interactive, more efficient Web applications—precisely what the AJAX application model does. In the AJAX model:

1. "Partial screen update" replaces the "click, wait, and refresh" user interaction model. During user interaction within an AJAX-based application, only user interface elements that contain new information are updated; the rest of the user interface remains displayed without interruption. This "partial screen update" interaction model not only enables continuous operation context, but also makes non-linear workflow possible.
2. Asynchronous communication replaces "synchronous request/response model." For an AJAX-based application, the request/response can be asynchronous, decoupling user interaction from server interaction. As a result, the user can continue to use the application while the client program requests information from the server in the background. When new information arrives, only the related user interface portion is updated.

Courtesy: http://www.developer.com/design/article.php/3526681

Virtulization Concepts

HOW DOES VIRTUALIZATION WORK?

In essence, virtualization lets you transform hardware into software. Use software such as VMware ESX to transform or “virtualize” the hardware resources of an x86-based computer—including the CPU, RAM, hard disk and network controller—to create a fully functional virtual machine that can run its own operating system and applications just like a “real” computer. 

Multiple virtual machines share hardware resources without interfering with each other so that you can safely run several operating systems and applications at the same time on a single computer.

THE VMWARE APPROACH TO VIRTUALIZATION

The VMware approach to virtualization inserts a thin layer of software directly on the computer hardware or on a host operating system. This software layer creates virtual machines and contains a virtual machine monitor or “hypervisor” that allocates hardware resources dynamically and transparently so that multiple operating systems can run concurrently on a single physical computer without even knowing it. 

However, virtualizing a single physical computer is just the beginning. VMware offers a robust virtualization platform that can scale across hundreds of interconnected physical computers and storage devices to form an entire virtual infrastructure.

Courtesy: http://www.vmware.com/virtualization/