The computer on which I’m writing this is still the dual-core Athlon I wrote about in early 2006. Since then, it’s had some new RAM, a new video card and about as many hard drives as I could stuff into it, but the faithful old mildly-overclocked Athlon 64 X2 3800+ has kept on chugging along.

I’ve been planning to upgrade for ages, but my income’s taken a serious dip lately. Most of my money comes from ads of one kind or another - annoying ones from Burst Media, less annoying ones from Google, and my various you-can-buy-this-from affiliate links to Aus PC Market - and the global economic slump has hit all of these sources pretty hard. I’m currently making maybe 60% of my income a year ago, and less than half of what I made a couple of years before that.

So I’ve been putting off upgrading, and putting it off some more, and continuing to put it off, on account of how computer gear gets cheaper and faster pretty much by the week. But lately, my income has been dropping faster than component prices. 50%-tax-deduction-bonus or no 50%-tax-deduction-bonus, I just can’t swing a new computer, and see no real prospect of being able to in the near future.

The sensible course of action for me now is, of course, to stop complaining and just keep my old PC. Maybe, to minimise the chance of catastrophic failure, I should buy a new boot drive and clone the old one onto it; I’ve already done that once, and I’ve similarly upgraded a couple of data drives. (If your computer is more than a few years old, I strongly recommend you upgrade the boot drive, too. Every hard drive will die one day; people often add more drives to their PC, but they seldom upgrade the boot device, because it’s a hassle. But a dead boot drive can be really, really annoying. Waiting six hours for a clone operation is greatly preferable.)

I’m in no danger of actually running out of money, you understand. The cats, and staggering numbers of freeloading cockatoos, are going to keep getting fed. And my life remains ludicrously luxurious compared with that of most of the world’s population.

I also keep perversely doing unprofitable things, like picking fights with scam artists and expanding my reprinted magazine columns (like the one I just put up, or this vastly expanded one from last year).

But many of you seem to quite like that stuff. And I haven’t had a donation drive since September 2008. And back in 2002, you suckers faithful readers together donated up the not-insubstantial purchase price of…

…a 16th-scale Tamiya Pershing tank kit.

So what the hell.

Anybody want to pitch in a few bucks to buy me a shiny new computer? If you do, my PayPal donation page is right here. Or you can just click this button:

You can send me an Amazon gift certificate too if you like, but all I can do with that is buy books and DVDs, since Amazon ship nothing else outside the USA. Oh, and if you’re in Australia and would like to bank-transfer some money to me, e-mail me and if you sound trustworthy I’ll give you my bank details. Since those bank details are sufficient to make fake cheques, though, I’m not putting them on public display.

NOTE: I’m not the only person tightening his or her belt at the moment, and I’m far from the most deserving recipient of your charity. If you’re tossing up whether to send $5 to Amnesty International, Oxfam, the ASPCA/RSPCA or me, for pity’s sake support human rights, poor people, or furry animals, not some dude who just wants a new computer to go with his vast monitor.

But if, on the other hand, you should decide to forego a nice breakfast at a cafe for toast at home, and then send the money you save to me, I’d be very grateful.

I would also be perfectly happy to accept a portion of the government stimulus money you would otherwise just blow on a plasma TV, or indeed a cut of the cheque that arrived addressed to your dead great-aunt.

However and whenever I get a new PC, I will, of course, whip up an article about it, like the one about my current computer and the one about the computer before that.

In the improbable-but-delightful-to-contemplate event that you all give me more money than is necessary to buy a new PC, I hereby pledge to spend it on a better theremin than the baby one I got cheap without instructions on eBay, and then record an actual tune played on said theremin, no matter how much harm this does to my relationship with my Significant Other and/or pets.

This is a bit of a specialised post. It will only be of interest to people who:

1: Are in Australia, and
2: Have an Australian Business Number, OR
3: Are an independent primary or secondary school student, or caring for one or more children who go to primary or secondary school, and meet some other requirements, and
4: Would like to buy new computer gear, or other business-related stuff. Computers only, for the “student” part of the deal.

Everybody else should skip this post. So should people with a short attention span, because I do go on a bit. If you stick with it, though, you could end up paying a substantial amount less tax.

Please note, however, that I Am Not An Accountant, and nothing in this post should be treated as accounting, legal, matrimonial or any other kind of advice. But this is what our accountant told us, and you’d better believe I’m going to take action based on it.

If you meet the above requirements, be advised that the Australian Government, as part of that economic-stimulus malarkey that’s suddenly become so trendy, is itching to give you a refund on new equipment of all sorts for your business, and/or computers for the education of yourself or your kids.

It’s like a mail-in rebate except, you know, not a scam.

The first deal is called the “Small Business and General Business Tax Break“; the second is called the Education Tax Refund. Each of them allows you to claim a significant amount of money back on eligible expenses.

The Small Business Et Cetera Tax Break is the big news, if you ask me. It gives you a bonus 50% tax deduction, if your business has a turnover of less than two million dollars a year and you pay at least $1000 for some deductible asset.

(If your business turns over more than two million a year, you get a bonus 30% deduction on expenses of $10,000 or more.)

Suppose you buy some tax-deductible business-related thing, like a computer, that costs $2000. Further suppose that you’re paying 30% tax on the portion of your income you used to buy it.

Without the Tax Break, you’d deduct the $2000 from your taxable income over whatever period you usually do, and thus get a total $600 ($2000 times 30 per cent) tax refund by the time you’ve finished depreciating the computer’s value to zero. (In most cases, as mentioned on that ATO page, this’ll take either three or four years; you can depreciate a laptop computer by 33% per year, or a desktop computer by 25% per year.)

With the Tax Break, you get to deduct $3000 from your taxable income, giving you an extra $300 tax refund, for a total of $900.

To put it another way, 100%-deductible things are now 150%-deductible.

The Tax Break’s 50% deduction also, to use gaming parlance, “stacks” with existing deductions. You still depreciate the computer’s capital value to zero over a few years, and whatever other shenanigans you’ve got going with your accountant also still apply. Everything works as it did before, but you get an extra 50% deduction from your initial deductible purchase expenses.

(The only thing the Tax Break doesn’t stack with are the previous versions of itself, which worked the same way but gave a lower deduction bonus.)

The Tax Break also applies to any business equipment purchase over the $1000 (for businesses with turnover below two million dollars) or $10,000 (for higher-turnover businesses) threshold.

(”Substantially identical” items, or items forming a set, can be grouped together for price-threshold purposes. So if you buy $1200 worth of computer parts from various dealers and assemble them into a PC yourself, you ought to be able to apply the Tax Break to the total price.)

But you don’t have to buy a computer to qualify for the Tax Break. Cars, cement mixers, cattle-prods, circus tents; pretty much any capital acquisition that qualified as a business deductible in the first place now gives you 1.5 times the previous deduction (or 1.3 times, if you’re in the higher-turnover category).

Business-related computer hardware often seems, of course, to bear a strong resemblance to not-very-business-related computer hardware; a significant number of “educational” computers also seem to be equipped with unnecessarily powerful graphics cards. Where you draw the line is a matter for you, your accountant and your chosen confessor. If something’s only half used for business purposes and so only 50% deductible, you can of course still apply the Tax Break to it, provided the deductible portion of the expense is over the $1000/$10,000 threshold.

The Education Tax Refund isn’t as exciting, partly because of the requirement that the gear be purchased for the edification of some ungrateful student, but mainly because it only applies to computer equipment and related stuff, like computer repairs, Internet access and so on.

The Education Tax Refund is a straight cash-back deal, though, not a taxable-income-reduction one. You can claim back half of your eligible expenses, up to a ceiling of a $375 refund per primary-school student per year and a $750 refund per secondary-school student per year. You can also roll over expenses above the refund limit to the next year if you’re still eligible then.

So if you’ve got one high-school student and you buy them a $2000 computer, you can claim a $750 refund on the first $1500 of its price the first year, and another $250 on the final $500 of its price the next year.

This is all explained on the Education Tax Refund site and in this very-sensibly-named explanatory PDF. The Tax Office also has a FAQs and Examples page.

The catch

I did a bit of hunting for people criticising the Small Business and General Business Tax Break, to see if there are any pitfalls that’ve evaded me. The most negative analysis I could find was this post at Dynamic Business.

To answer it point by point:

1: The Tax Break is bad for cash flow. You may be getting a ton of money back, but you only get that money back as part of your tax refund; there’s no discount on the actual purchase price of whatever you bought. And you only get the money back in instalments, over whatever period you’re allowed to use to depreciate the goods; if something takes many years to depreciate to zero, the benefit per year may be trivial.

If you do your buying before the end of the 08-09 financial year, of course, you shouldn’t be waiting very long for at least the first instalment of your refund.

2: If you don’t actually have enough cash on hand to buy whatever refund-eligible thing you want to get, you can end up losing money if you borrow in order to buy.

You could still actually end up ahead if you buy a new computer for your small business on your credit card before the end of this financial year, and use the first chunk of the refund to help you pay it off. But if you buy shortly after the start of the next financial year, you will of course not get your first refund-chunk as quickly.

So, you know, don’t do that.

(As a general rule, Don’t Buy Stuff You Cannot Afford. Video on Hulu here, but not accessible outside the USA.)

3: Some people miscalculate what an additional 50% deduction is worth to them. As the Dynamic Business blogger points out, if you’re only paying 30% company tax on your income anyway (or you’re not making a huge amount more than the average wage; at the moment the Australian $34,001-to-$80,000 tax bracket is 30%), an additional 50% deductible only adds up to another 15% off the real price of the item. That’s nice to have, but not mind-blowing, especially when you have to wait a few years to get it all.

So, uh, yeah - 50% higher deductible doesn’t mean you get half of the purchase price back. Sorry about that.

(But the Education Refund does work that way, up to its ceiling.)

4: The Australian car industry really wants the Tax Break to persuade you to buy a vehicle. Or several vehicles. Also, you have to make sure the car is registered to the entity claiming the deduction, blah blah blah, Fringe Benefits Tax, blah.

Don’t buy even one new car, if you don’t need a new car.

Aaand… that’s pretty much it for the Tax Break’s down-side.

The Education Tax Refund has, as I mentioned above, other restrictions and ceiling deduction amounts. The only further “catch” I can see for it, though, is that the Education Refund doesn’t “stack” with other deductions. If the computer you’re buying for your kid is also the computer you’re buying for your home office and thus tax-deducting, you can’t claim the Education Refund on it to whatever extent you’ve claimed some other deduction or refund on it. (So if it’s a $2000 computer, and you’re claiming it as 50% for your home office and thus deducting $1000 from your taxable income, you can only claim a maximum of $500 Education Refund on it. But if you’ve got an ABN, you could apply the Small Business Tax Break to the business deduction!)

The Education Refund will be similarly reduced or eliminated by any other tax offsets, reimbursements, payments, kickbacks, hush money, or cash flung at you by a weeping tax officer you’ve just forced at gunpoint to dig a shallow grave out in the bush.

Is it worth it?

If you’re wondering when you should buy computer equipment, the answer is almost always “later”.

Wait as long as possible before buying new IT gear, if your old gear isn’t actively impeding your ability to do business. Everything gets cheaper and faster with each passing week. And the current incarnation of the Small Business Tax Break will keep running for any purchases made before the end of the 2009, so you don’t have to leap into action and buy new stuff right now. Unless, of course, you’d like to reduce this year’s taxable income, as well as next year’s.

The Education Refund offers, in return for its more annoying conditions, better value within its limits. If a new computer was going to be completely non-deductible in any way at all, as is usually the case for ordinary consumers, and if you meet the criteria for the Education Refund and have enough kids of the appropriate age to cover the cost, you really could get that computer for half price.

If you’ve been seriously considering getting new gear anyway, the Small Business Tax Break’s 50% bonus deduction is quite substantial, too. The government isn’t giving you the extra refund at the time of purchase, but they really are giving you - OK, to be completely accurate they’re giving you back - that much money.

(The size of the bonus deduction depends, of course, on what tax rate you’re paying on that part of your income. As I mentioned above, Australian individual tax brackets currently top out at 45%; company tax, which may well apply to people claiming the Tax Break, is a flat 30%.)

Computer shops all over Australia, including m’verygoodfriends at Aus PC Market, have been seeing a drop in sales in recent months. Australia’s economy seems to be in decent shape and doesn’t look likely to follow the USA down the plughole, but people have still been putting off buying new stuff until they’re sure they won’t have pawned it and moved into a cardboard box under an overpass by this time next year.

If you’ve achieved that small level of personal financial confidence then I, in my capacity as a person entirely unqualified to give taxation advice, strongly recommend you accept the Government’s gift.

I certainly will.

(Once again: I’m not an accountant. Please don’t sue me if there’s anything wrong with the above. Do please talk about this in the comments, but contact your own accountant if you need authoritative answers. There’s also a “Business Tax Break Infoline” at 1300 337 921.)

Wayne Maber of Maber Business Services is our accountant, and helped me to understand all this.

Robert X. Cringely would like us all to know that what the business world needs is more bullshit.

Apparently he’s very impressed with some Indian entrepeneur - I think he’s called Sumantra Roy - who is making tons of money, thusly:

1: Figure out that there seems to be a market, “older women stuck with (or thinking about getting) naughty parrots”, to whom could be sold an expensive e-book of information about these creatures.

2: Realise that you don’t know a thing about parrots.

3: Buy some books about parrots.

4: Realise that you don’t know a thing about writing, either.

5: Hire some guy to read the parrot books and make you an all-new parrot e-book of your own, which you can sell to the abovementioned middle-aged ladies.

6: Make one of those God-awful mile-long CLICK HERE YOU IDIOT marketing Web pages [which, thanks to a commenter below, I now know is called a “squeeze page“], full of BIG TEXT and dodgy testimonials. Including one testimonial that goes on and on, from the supposed source of the info in the e-book. This supposed source is called “Nathalie Roberts”, and she has a friend called “Wayne” who had a parrot called “Polygon”. Nathalie has twelve years of “school of hard knocks” knowledge about parrot care and training!

Behold: ParrotSecrets.com!

7: Profit!

7b (optional, and inadvisable): Cheerfully admit to Cringely that Nathalie Roberts does not exist, and all that “experience” was just slapped together from four parrot books by some work-for-hire guy who sure as hell ain’t gettin’ a cut of your (alleged) hundreds of thousands of dollars a year.

8: Get presented by Cringely as the kind of go-getting entrepeneur that the world needs more of. I mean, if anybody refused to do this sort of thing because of “ethics” or “morals” or any shit like that, they must be standing on, to quote Rob, an “egalitarian soap box“.

The fake Nathalie Roberts is, Cringely says, “like Betty Crocker“. You all remember when Betty was presented as a real human being who personally baked all of General Mills’ products, right? Yeah, me too!

And anyway, Cringely reckons that all this stuff must be A-OK, because “I have yet to find people bitching and moaning on the Internet about being cheated by Parrotsecrets”.

The Internet, Cringely kindly explains, provides us all with a “remarkable self-policing system of commerce”. I presume that this explains why things like, I don’t know, the standard ads you see next to a Google search, are so wonderfully scam-free.

So there y’go, guys! A product being sold to middle-aged women doesn’t have a tide of complaints about it on the Web - so it must be kosher! Every Internet discussion board, as we all know, is just packed with women called Mildred who were born in 1952 - so obviously there cannot possibly be a problem with this product!

The absence of complaints could not possibly have anything whatsoever to do with the rather small intersection of the two sets,

A: Everybody, young or old, who has enough familiarity with the Web to be able to find a place to complain about a dud product where casual Googling will find the complaint, and

B: People who do not automatically categorise any single Web page with many different sizes and colours of text, that you have to page-down 28 times to get to the end of, and which is trying to sell you something, as a scam.

But all of this is a little academic, because right after Cringely said that, a commenter found this site. It’s what you might call a… portal page… leading to rather a lot of complaints about Sumantra Roy and his numerous ventures.

Apparently Roy’s got a bunch of other similar animal-related sites (which makes his total alleged income a bit more plausible), on which he’s followed the same formula of making up someone who supposedly wrote a book and so on and so forth. And he’s got a finger in the “Search-Engine Optimisation” pie as well, and… oh, it’s all too horrible.

About the best argument anybody in the Cringely post’s comments can come up with in favour of this “entrepeneur” is “OK, it’s bullshit, but all marketing is bullshit, man!”

Well, OK, yeah. Coke won’t really make you young and popular, Bernie Madoff never really made any trades, and those AAA-rated structured investments were all actually worthless. And whenever a financial crisis comes along, there are indeed always spivs who stand ready to find people in trouble and take away even that which they hath.

And apparently, because that’s normal, it’s also OK!

So get with the program, you unemployed layabouts! Get yourself on the winning team! There can never be enough middle-men, and truth is out of style!

It wasn’t too bad from time to time seeing you answer questions about scams and hoax devices, but now it seems like a lot of your energy and brain power is wasted on that stuff. As a long time reader, every time I see a new letter answered that ends with “I’m sure it’s a hoax but I just wanted to ask you” I die a little inside. You’d think by this time, with as much as we are all connected to the world, news, and technology we would just realize that if it’s too good to be true it probably is… and if it ends up being true, we’ll know about it soon enough. Anyway, take that how you will, I’ll still idolize you in any case.

Jordan

That’d better be a golden idol, and a damn big one, if you know what’s good for you.

Unfortunately for Jordan, though, I find scams and hoaxes fascinating. Not so much when it’s the the same scam over and over, like those ridiculous “power saver” things, of course. But there’s always something new.

Just today, for instance, I discovered that New York City currently contains hundreds and hundreds of locksmiths. Do a Google Maps search and it looks as if the city has a life-threatening case of the measles.

It turns out that almost all of these companies are fake. They get themselves listed as “emergency locksmiths” in the phone book, Google Maps and so on at a fake address (which may be the address of a legitimate locksmith). And then, when someone has one of those special lock-related emergencies and calls the “local” company, the rip-offs commence.

Apparently, what they usually do is make you wait while they drive to your place from wherever they actually are, and then charge you way more than they quoted. In this respect, they’re a bit like the numerous rip-off camera stores that also infest NYC.

But there’s a lot more a crooked locksmith could do. I imagine burglary and locksmithing go together very well - it’s ever so much more civilised to let yourself into a victim’s house through the front door while he’s at work, rather than break a window. Many of the bogus locksmiths seem to be completely incompetent, though, so I suppose there aren’t all that many gentleman thieves among them.

Bogus-locksmith disease appears to be more communicable than the bogus-camera-store version. The camera stores are still pretty much restricted to New York, but the locksmiths are spreading right across the USA.

The novelty in this scam is the intersection with online mapping systems, which are being made useless by the tide of fake-company spam that makes it impossible to see which “local” locksmith is actually real. Word of mouth has always been the best way to find good local tradespeople, but until someone comes up with a way to filter the fakes out of services like Google Maps, there’s now no other option.

(I wouldn’t like to be the person trying to fix this. If the fake-filtering accidentally removes some real locksmiths from the map, I bet someone’s going to get sued. Perhaps people could just call locksmiths at random, and whenever one arrives demanding far more money than he quoted, shoot him. That could work.)

Apart from the mapping thing, the locksmith scam is just boring overcharging of captive customers. It doesn’t have the elegance of a classic grift, like the one where a door-to-door salesman sells elderly people a safe for their valuables that’s disguised as a Bible, then breaks into the house a week later to retrieve the safe and its contents.

Some of the classic scams have been made impossible by advancing technology. Look at the “replace all your light bulbs for only $5″ one, for instance. The scammer in this case actually started out with only one house-worth of bulbs, and from then on he just moved used bulbs from each house to the next, collecting his fee each time. Now that people are using expensive compact fluorescents, though, that one doesn’t really fly. (There’s still this dumb variant and the Robin Hood version, but that doesn’t make any money.)

Some scams that seemed to die have been reborn, though. For a while there it seemed that the boiler room, for instance, was dead, because you couldn’t get away with faking stock trades after everybody switched to Internet brokers. But now it turns out that the boiler rooms just got much bigger and took a new name - “hedge funds“.

I just saw a Make Money Fast ad on some site or other that promised a “multiple six figure income”.

Now there’s a phrase to conjure with, eh? And as I write this, Google gives an imposing “about 17,600″ results if you search for it.

If you take “multiple” to mean “at least two times”, then I suppose it’s possible that they’re promising you a six-figure income and… another six-figure income.

I prefer to think, though, that all of those pages, in between their misspellings and unpredictable capital letters, are actually offering punters a twelve-figure income.

If the value of “multiple” is three, then there could be an eighteen-figure income going begging!

The Gross Domestic Product of all the nations of the world put together is either about fifty-five trillion or about sixty-five trillion US dollars, depending on how you measure it. That’s only 14 figures. So those 17,600 get-rich-quick pages may, I like to think, be promising that you, by yourself, will be making at least one six-hundred-and-fiftieth of the entire world’s aggregate gross income. Or around one per cent of the GDP of the USA.

Even if “twelve figures” includes two for the cents, you’d still be doing pretty bleeding well.

Or, of course, the promise might only be 12 figures of income in the worthless currency of some collapsing African dictatorship. An eighteen-figure income in Zimbabwe dollars would only be worth a few tens of thousands of US dollars, as I write this. (They announced 100-trillion-dollar - fifteen-digit - banknotes just the other day, not that they’ve got much of a way to pay anybody to print them.)

This reminds me of an old scam that promises to make you money via a mystic series of international currency conversions. The actual promise the scammer makes, though, is that he’ll turn the $1000 you send him into “One Million In Legal Tender Currency!!”, or something similar. Dumb-enough marks presumably don’t notice this, or mistake it for some sort of technical term used by the great Jewish Mercantile Conspiracy whose secret wealth-creation system the scammer claims he’s making available to honest Christian folk. But, of course, the promise actually means that in return for $US1000, you and your fellow suckers are going to get back one million People’s Democratic Socialist Utopia of East Umbopoland Glorified Pfennig-Rands, worth $US7.61.

The idea is that this isn’t a scam, see, on account of how the scammer never promised you anything other than a million units of some currency or other. I think this “loophole” is the same as those of a lot of other scams; it’s utterly worthless in the eyes of the law, but it sounds vaguely-plausible-enough to stop some of the ripped-off suckers from calling the police.

(The people who fall for this sort of thing usually don’t twig to the fact that if there’s some rapid sequence of financial transactions that’s guaranteed to turn $100 into $110, you could just do it over and over until all of the currency in the world resided in your bank account. If your system guarantees a 10% return and you reinvest the gain every time, then if you start with $100 and run the system only 200 times, you’ll have $18,990,527,646.)

I think I know what the real explanation for the “multiple six figure income” thing is, though. It’s just that the people running these scams are, if anything, even dumber than the people who fall for them.

(I await with interest the Google ads this post will attract. How many “figures” do you think will be on offer?)

I think the best part of this mystifying advertisement from the latest DailyWTF post is the bit at the top where it asks you if you’ve kissed your computer lately.

Years ago, when I was working at ACAR/PC Review, we somehow ended up with dozens of boxed copies of an accounting package called, and I assure you I am not making this up, “Tungkiss Your Money”.

On the box was a moderately realistic picture of a man holding his hands, full of gold coins, up to his mouth, so he could lovingly lick the bullion.

Andrew, the editor, was pretty good at finding ways to convert randomness like this into profit, or at least perks.

But we never could shift all those Tungkiss Your Moneys.

Everybody else gets to sound off about the global financial crisis without actually knowing much about it, so I was pleased when a reader invited me to take my turn:

What’s your take on the global financial crisis? You’ve never indicated you know anything whatsoever about finance, but you’re usually “pretty on the ball” about everything else, so I though maybe you’d feel like blogging on this.

Ryan

Indeed I do not know a lot about economics. My knowledge pretty much stops at how tax brackets work, and that copper is not a precious metal. But since readers of this blog know pretty much everything, I presume there will soon be some +5 Insightful comments at the bottom of this page, correcting the ghastly errors I am surely about to make.

(Or maybe there’ll just be one guy saying that this is what we get for not listening to Lyndon LaRouche.)

I’ve no real opinion about what’s going to happen to the US and/or global economies in the short term. Fortunately for me, I’m in Australia, which doesn’t look like being squashed too hard. Australia has a healthy commodities sector, and major Australian financial institutions don’t seem to have much exposure to the US problems. Yet.

In the long term, though, the USA and countries that depend upon it economically - which means just about all of them - are going to have to feel a lot of economic pain.

Both Presidential candidates know this, on account of how they’re not idiots (so yes, I do suspect that only one of the vice-presidential candidates knows it too). But they wouldn’t say a word about it even if you tortured them, on account of the great American allergy to ever paying more than about half of the tax that people in much nicer countries seem quite happy to pay.

Because the USA is taking on such colossal government debt, for the war(s) and the various bailouts, it seems to me to have only three options.

1: Just keep doing what it’s doing, paying interest on the old debt by taking on new debt.
2: Jack up taxes and/or reduce spending so it doesn’t have to increase its level of indebtedness, or may actually be able to pay the debt down.
3: Say “screw it”, get drunk, and print more money.

The second approach is a sure-fire vote-loser. If it were me then I’d start out by taxing the absolute balls off the owners of any house of worship that seats more than a thousand people, but the USA is a country where 21% of the atheists apparently believe in God, so that probably wouldn’t work too well.

The third option is what people often seem to think the USA is doing now - “creating” new money to bail out the financial sector. It’s an awe-inspiringly dumb thing to do, though, and even the Bush administration isn’t stupid enough to try it. (Robert Mugabe seems just fine with it, though.)

What the USA is actually doing, and what I presume they’ll continue to do, is option 1, steady-as-she-goes. As long as people are reasonably confident that the government isn’t going to fall on its sword by refusing to pay up when bonds mature, and that inflation isn’t going to start running fast enough that a bond with a lousy 4% return will be worth less than you paid for it when it matures, then people will keep buying bonds, and the Treasury can just issue more and more of them and hope there’s enough of a market to get ‘em all sold. China is as addicted to selling stuff to Americans as Americans are addicted to buying it, so I presume it’ll keep that economic perpetual-motion machine rolling, even if inflation does make bonds lose real value over time.

The borrow-more-to-pay-your-loans-off approach is an obvious loser for normal personal finance, but I think whole countries - and businesses, for that matter - can actually make it work, if their increase in national productivity means that their debt is not increasing, proportionally speaking. If you used to owe a million dollars and make 20 million dollars, and now owe two million and make 50 million, then proportionally speaking you’ve reduced your debt. You should find it easier to service, or pay down, the second debt than the first one.

During the terms of Republican presidents since Reagan, though, the USA has been taking on debt much faster than it’s been increasing production, no matter which way you look at it (some people apparently regard this as a good thing).

The exact numbers are squirrelly - like unemployment statistics, they get harder and harder to measure the closer you look - but the cost of the wars and the 2008 bailouts will unquestionably greatly exceed Reagan’s Savings and Loan “jackpot“.

All of this has just got to shake through into a serious quality-of-life reduction for the average American some time soon. Either jacked-up taxes or a severely devalued currency, I think. The US national debt is overwhelmingly in US dollars, so if the $US drops to five Euro cents, it’ll be much easier to dig enough stuff out of the ground to pay off the debt. (But a Toyota Camry will cost half a million dollars.)

There are ways in which the USA could spectacularly reduce governmental spending and thus make the situation far easier to handle, but I strongly doubt the most obvious one - giant military cutbacks, including closing many of the USA’s more-than-700 military bases all over the world - has any chance of flying. The USA could cut four 400 billion dollars out of its annual military budget and still be spending twice as much as anyone else, but this sort of thing is so far-out that you won’t even find the option to do it in “budget simulators“.

Sci-fi writer Charles Stross wrote a very interesting essay about the current situation the other day. I agree with him that the USA’s determination to not bend before the economic hurricane means we may see the world situation change far faster than anybody would have predicted only a few years ago.

(This Gawker piece is excellent, too.)

Because I have a small element collection, I occasionally troll eBay for interesting metals.

Recently, I’ve noticed people selling “copper bullion”.

This, for those of you not up on precious-metal terminology, is a contradiction in terms. Bullion (”No, not the little cubes you put in hot water to make soup.“) is, by definition, precious metals. Gold, silver, platinum, palladium; a metal that’s rare enough that it can be used as a reasonably portable means of exchange in its own right, not just struck into coins that can be used to purchase goods worth far more than the coins’ intrinsic metal value.

Copper, on the other hand, is a “base metal“. It’s common enough that trading it by the ounce is ridiculous. As I write this, the spot price for copper is about $US3.85 per pound, not per ounce.

(It occurs to me that this may be the heart and soul of the copper bullion scam. Just charge as much per ounce as the metal is actually worth per pound, and wait for some Modern Jackass to take the bait.)

What people are trading for $3.85 a pound on the base metal markets may or may not be .999-purity “fine” copper, but it’s actually quite easy to buy very pure copper from engineering suppliers, or indeed your local hardware store. You generally have to pay more to get copper that’s been alloyed with something else.

Today, the price of copper has risen enough that many small-denomination copper coins are now worth more intrinsically than their face value. I’ve got a roll of fifty of the old, now withdrawn, Australian one-cent pieces here; it weighs about 132 grams, which at $US3.85 a pound makes this “fifty cent” roll worth about $AU1.15 right now.

That’s still not a lot, though, and the notion of selling copper as bullion remains silly. There’s no real market for it. If you go into one of those heavily-armoured shops that buys and sells gold and silver bullion and try to sell them a slab of copper, they’ll laugh and send you on your way.

Precious-metal prices always rise whenever one or more of the world’s great economies are in bad shape, so the USA’s current enthusiastic attempt to commit economic suicide has created a big spike in gold and silver prices. As I write this, gold is worth around $US970 per troy ounce, and silver’s around $US19. As recently as 2000, gold was worth less than $US290 per troy ounce, and silver was around five bucks an ounce.

One troy ounce of copper, at the moment, is worth about 26 US cents.

Even if you’ve got a tonne of copper, it’ll still be worth less than $US8500 at the moment. $US8500 worth of gold currently weighs six-tenths of a pound.

And yet… there are people selling “copper bullion”. EBay’s rotten with ‘em at the moment.

I just did a “completed items” search for “copper bullion” on eBay, and turned up one 1055-gram bar that went for $US34.05 ex delivery (value at $3.85 per pound: $US8.97), a one-pound bar that went for $US18.51 (and is now worth, that’s right, $US3.85), and an overstruck US copper penny (you could still see the ghost of “ONE CENT” and the Lincoln Memorial through the crudely-restruck eagle and “1/10 TROY OUNCE .950 COPPER”…), which sold for $US3.25.

If that penny was genuinely a tenth of a troy ounce - which sounds near enough - then the 95% copper content in it might actually be worth as much as 2.5 cents now.

And on it went. Before I got too depressed to go on, I found at least one successfully-sold “MASSIVE!! 3 KILOS .999 Fine Copper Bullion Bar/ Ingot”… for $US140 plus delivery.

It’s worth $US25.46.

I did like the little ingots (available in copper and silver!) stamped with an image of Martha Mitchell holding a telephone, though.

Even if you decide to get in on the ground floor by buying a hundred of the one-troy-ounce “Australian Copper Bullion” ingots currently on offer on ebay.com.au, what you’ve actually just bought is 6.86 pounds of copper, worth less than $US27.

As I write this, the eBay Buy It Now price for one of those packages of a hundred little ingots is $AU350 - about $US340 - plus delivery.

So even if the price of copper rises by a factor of ten, you won’t have made your money back, unless you manage to find yourself a greater fool on whom to unload your zillions of little copper bookmarks.

I have a nice 25 by 15 by 250mm offcut of copper bar - I bought it from this seller, now on OZtion instead of eBay. It’s great for demonstrating eddy-current magnetic braking, with a rare-earth magnet. But it weighs 827.5g, which is 26.6 troy ounces - ninety-three dollars and ten cents, at the $3.50-an-ounce “bullion” price!

I also bought a bunch of 3.5-inch copper boat nails a while ago. (Copper’s used for boat nails because it won’t corrode, and you can drive work-hardened copper nails through wood with no trouble; when I annealed one of the nails, though, I could bend it with ease.) I’ve given a few of the nails away, but have about 950 grams of ‘em left, and I think they’re quite pure copper.

The copper in the nails is worth only about eight bucks at the current spot price, and they cost me about forty Australian bucks delivered - but if I melted them down into fancy little ingots and sold them for $3.50 a troy ounce, they’d bring me well over a hundred dollars!

Heck, I’ve got a whole box of old CPU coolers, many of which have solid copper heat sinks! I’m a MILLIONAIRE!

(Oh, and I wrote the title for this page before I discovered that at least one eBay seller actually is selling “lead bullion“. Oy.)

This scam’s a weird one, though it’s apparently been around for a while; Google for “copper bullion” and you’ll find quite a lot of exceedingly dodgy Web sites trying to get you to buy the stuff. (One of the sites I found also linked to one of those “run your car on water” sites that always show up in the Google ads whenever I write about how you can’t run your car on water.)

The scam would also appear to be quite well-known among people who spend a lot of time trading metals on eBay.

With any luck, this blog post will save at least one person from blowing their kids’ university fund on vastly overpriced copper door-stops.

Car salesman sells new car to woman with bipolar disorder who only came in to have the oil changed in the other, six-month-old, car she bought from them. But she was in a manic state, and easily persuaded to buy a whole new car she totally didn’t need.

Hilarity, and a lawsuit, ensue.

There’s some pretty good discussion board fodder for the Capitalistas and the Weenies right there, eh?

(And let’s not forget the burgeoning population of people who decide they must be mentally ill because that’ll make them cool and important. They’re usually well represented in Internet discussions concerning any of the diseases they wish they had.)

I was going to post this as a comment on the Jalopnik page, but it grew into something post-worthy by itself, at least according to the low standards of the Department of Unwelcome Education.

I am, in brief, on the side of the unfortunate purchaser. But not for the simple weenie-ish reasons you might think.

Very, and uncharacteristically, unwise financial decisions are almost diagnostic of a manic state.

A person suffering from full mania is quite likely to feel like the king of the world. Able to take on any project, tackle any problem, speak wisely on any subject. And, of course, pay back any debt. So “suffering” is often not really the appropriate word - you’re high as a kite, and it doesn’t cost you a penny or involve any illegal drugs.

Until you start buying new cars, having unprotected sex with strangers, buying illegal drugs, et cetera.

(Traditional mania-driven car purchases lean more towards the red-convertible end of the market than the seven seat Mazda SUV in this story, but I suppose there’s no accounting for taste.)

If you can avoid the believing-you-can-fly kinds of behaviours, and the more obnoxious stuff that’s likely to lead to people locking you up somewhere, full-blown mania is arguably the best drug in the world. It’s a shame that, in bipolar disorder, mania is usually followed by full-blown clinical depression. But what can I say. God’s a bastard.

OK, sure, say the Capitalistas. Crazy lady bought car for crazy reason. But lady’s craziness is not the car dealer’s fault.

And, indeed, car salesmen are not expected to be able to tell whether the bright and bubbly individual who just decided to buy a car on the spur of the moment is entirely in their right mind or not. Let’s face it, buying a new car is seldom a very sane act in the first place.

Salesmen also shouldn’t - and, generally, don’t - sell cars to people who’re obviously in a severely mentally compromised state.

(The mildly compromised are still welcome, and may be the mainstay of the pickup truck market.)

But there’s seldom any way for an average Joe to tell the difference between someone who’s in a manic state and someone who really is just a very (I might go so far as to say insufferably) positive person, who is well able to afford what they’re buying.

The sparse Associated Press version of this story doesn’t give many facts to go on. There’s a bigger version in the Detroit News, here. Assuming it’s correct, after the buyer sobered up (as it were), her husband took back the car and the dealer agreed to rip up the contract, on receipt of a doctor’s letter confirming the buyer’s condition.

Said letter was then delivered. And then the dealer changed its mind, and “redelivered” the car.

If this is accurate, then the dealer is pretty clearly in the wrong, although they were not necessarily in the wrong - legally or ethically - for selling the car in the first place.

Now let’s see how long it takes for this case to end up in one of those “Stella Awards” lists.

Today, the gods of the botnet have favoured me with a bunch of “Randomname check this” e-mails, some of which promote PMHD and some of which are still promoting good old CNPM.

But they don’t tell you which one to invest in!

According to the thousands of completely different and independent real human beings who’re sending us all the exact same e-mails every day about these piddling pink sheet stocks, both of them are about to receive major acquisition attention.

So you should spend all of your money on both of them!

This is terrible! I’m so confused!

Meanwhile, the multi-sourced “GOLD investments in Africa”, “Real invest in real resource”, “African GOLD Investment” spams keep rolling in.

I am indebted to a commenter on my last post for this image from the internationally respected Land Resource Association LLC’s photos page:

That dude on the left looks very trustworthy, but the one on the right is clearly unconvinced that even white men are dumb enough to send any money.

The Land Resource Et Cetera Web site, by the way, is registered in the well known city of Ghana, Switzerland.