Hair transplants and famous bald people

Transplanting hair is a grafting procedure that takes 4 to 5 hours, with the patient under local anaesthesia. A strip of scalp is removed from the back of the head, then cut up into grafts of hair. Hundreds of tiny slits are made in bald areas, and the hair is transplanted one or two follicles at a time. More than one procedure is usually necessary, and some patients have temporary swelling in the forehead or numbness in the scalp. It takes about 3 months for the transplanted hair to start growing again. Each procedure costs several thousand dollars.

There is an alternative to grafting. In a transplant procedure called “the flap” a flap of skin with hair is lifted from the scalp and rotated into the place of the bald spot and then stitched at the hairline. The flap is done in 4 or 5 surgical procedures over a period of a few weeks. Because it is never completely severed from the scalp, as is the case in grafting, the flap doesn't lose its blood supply. As a result, the patient heals faster and the hair never stops growing.

However, even though the option of having hair is there, many famous persons never bother with transplants. Famous bald people include: Patrick Stewart, Ben Kingsley, Phil Collins, Andre Agassi, Marvin Hagler, Graham Gooch, Michael Jordan, Montel Williams, Bruce Willis, Vin Diesel, and many others - and not forgetting Homer Simpson. If the list seems long it's because male pattern baldness - resulting in partial or complete baldness - affects some 40% of western men.

"There's one thing about baldness, it's neat," said American humorist Don Herold. After all, "God only made so many perfect heads; the rest He covered in hair."

The computer rat vs the computer mouse

Douglas Engelbart invented a large foot-operated control called a rat for the computer in the late 1950s but it never caught on. What did catch on 20 years after he invented it was the computer mouse.

Inspired by Vannevar Bush's call to make knowledge widely and freely available, Engelbart drew on his experience as a radar technician during World War II where he saw computer pointing devices that roughly resembled the mouse and designed the X-Y position indicator for a display system, for which he earned U.S. patent number #3,541,541 in 1970. He nicknamed it the mouse because of the tail that came out of at the end. (In the picture, Engelbart holds the first computer mouse, demonstrated on December 9, 1968.) The Xerox Star was the first home computer (in the 1970s) to feature a mouse but it was only with the launch of the Apple Lisa in 1983 when the computer mouse started catching on.

Douglas Engelbart invented or contributed to a number of products, including email, windows and video conferencing. He never received a royalty for his computer mouse invention but did receive something money can't buy and a computer can't calculate: international respect and honor.

All the gold ever mined still exists today

Gold is virtually indestructible; almost all the gold ever mined still exists today... all 165,000 tonnes of it, only enough gold to fill two Olympic-sized swimming pools. All it would neatly fit under the Eiffel Tower. That is not a lot. That is because you'll have to drill through 250 tonnes of rock, then pulverize it, then chemically treat it to get enough gold for only a single wedding ring. Gold also simply is beautiful to look at. These are the qualities that has always made gold one of the most sought-after precious metals with the price of an ounce trading for $1000 and more (see the history of gold prices).

Gold is extremely malleable and pliable. A one-ounce piece of gold can be beaten down to 5 micrometers thick - that is 1/10 the diameter of a human hair - and laid out into 50 miles of wire. It can also be made so thin that it becomes a translucent sheet; in fact, astronaut's visors are covered in a thin gold film to protect their eyes from glare. Gold also has anti-inflammatory and other medicinal properties.

Ancient Sumerians of Mesopotamia (modern-day Iran and Iraq) were the first, at around 5,000 BC (some sources indicate 4,000 BC), to use gold for ornaments. The Egyptians would soon fall in love with the precious metal too. But gold was mostly use for personal adornment; the first gold coins were issued by Egyptian pharaohs only at around 2,700 BC. Large scale gold coinage for the monetary purpose was introduced in by King Croesus during his reign (560 - 546 BC) of Lydia (modern-day western Turkey). Croesus became one of the wealthiest persons ever.

How banks make money - or do they?

Banks operate through credit multipliers. When Depositor A places 100,000 USD with Bank A, the Bank puts aside about 20% of the money. This is labeled a reserve and is intended to serve as an insurance policy cum a liquidity cushion. The implicit assumption is that no more than 20% of the total number of depositors will claim their money at any given moment.

In times of panic, when ALL the depositors want their money back - the bank is rendered illiquid having locked away in its reserves only 20% of the funds. Commercial banks hold their reserves with the Central Bank or with a third party institution, explicitly and exclusively set up for this purpose.

What does the bank do with the other 80% of Depositor A's money ($80,000)? It lends it to Borrower B. The Borrower pays Bank A interest on the loan. The difference between the interest that Bank A pays to Depositor A on his deposit - and the interest that he charges Borrower B - is the bank's income from these operations.

In the meantime, Borrower B deposits the money that he received from Bank A (as a loan) in his own bank, Bank B. Bank B puts aside, as a reserve, 20% of this money - and lends 80% (=$64,000) to Borrower C, who promptly deposits it in Bank C.

At this stage, Depositor A's money ($100,000) has multiplied and become $244,000. Depositor A has $100,000 in his account with Bank A, Borrower B has $80,000 in his account in Bank B, and Borrower C has $64,000 in his account in Bank C. This process is called credit multiplication. The Western Credit multiplier is 9. This means that every $100,000 deposited with Bank A could, theoretically, become $900,000: $400,000 in credits and $500,000 in deposits.

For every $900,000 in the banks' books - there are only 100,000 in physical dollars. Banks are the most heavily leveraged businesses in the world.

But this is only part of the problem. Another part is that the profit margins of banks are limited. The hemorrhaging consumers of bank services would probably beg to differ - but banking profits are mostly optical illusions. We can safely say that banks are losing money throughout most of their existence.

The SPREAD is the difference between interest paid to depositors and interest collected on credits. This spread is supposed to cover all the bank's expenses and leave its shareholders with a profit. But this is a shaky proposition. To understand why, we have to analyze the very concept of interest rates.

Virtually every major religion forbids the charging of interest on credits and loans. To charge interest is considered to be part usury and part blackmail. People who lent money and charged interest for it were ill-regarded - remember Shakespeare's "The Merchant of Venice"?

Originally, interest was charged on money lent was meant to compensate for the risks associated with the provision of credit in a specific market. There were four such hazards:

First, there are the operational costs of money lending itself. Money lenders are engaged in arbitrage and the brokering of funds. In other words, they borrow the money that they then lend on. There are costs of transportation and communications as well as business overhead.

The second risk is that of inflation. It erodes the value of money used to repay credits. In quotidian terms: as time passes, the Lender can buy progressively less with the money repaid by the Borrower. The purchasing power of the money diminishes. The measure of this erosion is called inflation.

And there is a risk of scarcity. Money is a rare and valued object. Once lent it is out of the Lender's hands, exchanged for mere promises and oft-illiquid collateral. If, for instance, a Bank lends money at a fixed interest rate - it gives up the opportunity to lend it anew, at higher rates.

The last - and most obvious risk is default: when the Borrower cannot or would not pay back the credit that he has taken.

All these risks have to be offset by the bank's relatively minor profit margin. Hence the bank's much decried propensity to pay their depositors as symbolically as they can - and charge their borrowers the highest interest rates they can get away with.

But banks face a few problems in adopting this seemingly straightforward business strategy.

Interest rates are an instrument of monetary policy. As such, they are centrally dictated. They are used to control the money supply and the monetary aggregates and through them to fine tune economic activity.

Governors of Central Banks (where central banks are autonomous) and Ministers of Finance (where central banks are more subservient) raise interest rates in order to contain economic activity and its inflationary effects. They cut interest rates to prevent an economic slowdown and to facilitate the soft landing of a booming economy. Despite the fact that banks (and credit card companies, which are really banks) print their own money (remember the multiplier) - they do not control the money supply or the interest rates that they charge their clients.

This creates paradoxes.

The higher the interest rates - the higher the costs of financing payable by businesses and households. They, in turn, increase the prices of their products and services to reflect the new cost of money. We can say that, to some extent, rather than prevent it, higher interest rates contribute to inflation - i.e., to the readjustment of the general price level.

Also, the higher the interest rates, the more money earned by the banks. They lend this extra money to Borrowers and multiply it through the credit multiplier.

High interest rates encourage inflation from another angle altogether:

They sustain an unrealistic exchange rate between the domestic and foreign currencies. People would rather hold the currency which yields higher interest (=the domestic one). They buy it and sell all other currencies.

Conversions of foreign exchange into local currency are net contributors to inflation. On the other hand, a high exchange rate also increases the prices of imported products. Still, all in all, higher interest rates contribute to the very inflation that are intended to suppress.

Another interesting phenomenon:

High interest rates are supposed to ameliorate the effects of soaring default rates. In a country like Macedonia - where the payments morale is low and default rates are stratospheric - the banks charge incredibly high interest rates to compensate for this specific risk.

But high interest rates make it difficult to repay one's loans and may tip certain obligations from performing to non-performing. Even debtors who pay small amounts of interest in a timely fashion - often find it impossible to defray larger interest charges.

Thus, high interest rates increase the risk of default rather than reduce it. Not only are interest rates a blunt and inefficient instrument - but they are also not set by the banks, nor do they reflect the micro-economic realities with which they are forced to cope.

Should interest rates be determined by each bank separately (perhaps according to the composition and risk profile of its portfolio)? Should banks have the authority to print money notes (as they did throughout the 18th and 19th centuries)? The advent of virtual cash and electronic banking may bring about these outcomes even without the complicity of the state.

Article by Sam Vaknin, Ph. D. Reposted by kind permission. Read the complete article: Danger - Banks Ahead!