c in­formation he wandering around un­known to those who calculate the debt? Is it possible that, some­where in the computer-modem-sat­ellite network of information, there is an electronic pirate, who has the electronic age equivalent of great chests of pirate loot? Even more sepulchral: If a counterfeiter, in the last stages of the mechanical age, sim­ply printed hundred dollar bills on his color Xerox, why couldn’t the counterfeiter of the electronic age merely hack Into the computers of the banking system and transfer dollars to his off-shore accounts?

So th

When I removed the inside mold­ings around a window in our house, 1 found six old pennies. Since the house had once served as a kinder­garten, I supposed that playful kids had pushed the coins into the space, making a kind of time capsule for me to discover so many years later. It was fun to notice that one of the pennies was zinc, minted in the years of copper shortage of World War II suggest­ing a time for the kids’ game. The copper cents were greenish with age.

Then a thought occurred to me. I wondered if the Washington bu­reaucrats still counted the six cents as part of our national debt. Does every old house harbor hid­den pennies, hidden national debt.

There must be billions of hidden pennies, and it is possible that our national debt is far greater than admitted to us by our leaders.

The thought depressed me. After all, pennies are a product of the mechanical age. They were and still are the product of a relatively primitive technology: the minting machine. Even the fastest coinage press is limited in its production to the laws of mechanics, and can only make one coin with each stamping. Such laws held for and still rule the printing presses, which make our paper money.

My gloom deepened because I knew well that we have left the mechanical age and are now in the age of the electron and its familiar partner, the computer. Therefore, the units of debt are no longer pennies or dollars or any physical­ly expressible unit, which might actually be mechanically pro­duced. Rather, the true units of debt are tied to the ever-increasing speed of information transfer by electronic device. Expressed in nano-seconds, debt has become liability for electronic information The flip side of this coin says that wealth is no longer expressed phys­ically, as it once was, in bars of gold. At this moment in time, wealth resides in the possession of Information, encoded in electronic form. The National Debt may therefore be assumed to be spread as electronic information in com­puters throughout the world. The information moves at an awesome rate. The owner of this dollar de­nominated information is the mod­ern parallel to the bondholder of more primitive times.

On the other hand, if kids could hide pennies in the mechanical age, can electronic in­formation he wandering around un­known to those who calculate the debt? Is it possible that, some­where in the computer-modem-sat­ellite network of information, there is an electronic pirate, who has the electronic age equivalent of great chests of pirate loot? Even more sepulchral: If a counterfeiter, in the last stages of the mechanical age, sim­ply printed hundred dollar bills on his color Xerox, why couldn’t the counterfeiter of the electronic age merely hack Into the computers of the banking system and transfer dollars to his off-shore accounts?

So th

s as part of our national debt. Does every old house harbor hid­den pennies, hidden national debt.

There must be billions of hidden pennies, and it is possible that our national debt is far greater than admitted to us by our leaders.

The thought depressed me. After all, pennies are a product of the mechanical age. They were and still are the product of a relatively primitive technology: the minting machine. Even the fastest coinage press is limited in its production to the laws of mechanics, and can only make one coin with each stamping. Such laws held for and still rule the printing presses, which make our paper money.

My gloom deepened because I knew well that we have left the mechanical age and are now in the age of the electron and its familiar partner, the computer. Therefore, the units of debt are no longer pennies or dollars or any physical­ly expressible unit, which might actually be mechanically pro­duced. Rather, the true units of debt are tied to the ever-increasing speed of information transfer by electronic device. Expressed in nano-seconds, debt has become liability for electronic information The flip side of this coin says that wealth is no longer expressed phys­ically, as it once was, in bars of gold. At this moment in time, wealth resides in the possession of Information, encoded in electronic form. The National Debt may therefore be assumed to be spread as electronic information in com­puters throughout the world. The information moves at an awesome rate. The owner of this dollar de­nominated information is the mod­ern parallel to the bondholder of more primitive times.

On the other hand, if kids could hide pennies in the mechanical age, can electronic in­formation he wandering around un­known to those who calculate the debt? Is it possible that, some­where in the computer-modem-sat­ellite network of information, there is an electronic pirate, who has the electronic age equivalent of great chests of pirate loot? Even more sepulchral: If a counterfeiter, in the last stages of the mechanical age, sim­ply printed hundred dollar bills on his color Xerox, why couldn’t the counterfeiter of the electronic age merely hack Into the computers of the banking system and transfer dollars to his off-shore accounts?

So th

and still rule the printing presses, which make our paper money.

My gloom deepened because I knew well that we have left the mechanical age and are now in the age of the electron and its familiar partner, the computer. Therefore, the units of debt are no longer pennies or dollars or any physical­ly expressible unit, which might actually be mechanically pro­duced. Rather, the true units of debt are tied to the ever-increasing speed of information transfer by electronic device. Expressed in nano-seconds, debt has become liability for electronic information The flip side of this coin says that wealth is no longer expressed phys­ically, as it once was, in bars of gold. At this moment in time, wealth resides in the possession of Information, encoded in electronic form. The National Debt may therefore be assumed to be spread as electronic information in com­puters throughout the world. The information moves at an awesome rate. The owner of this dollar de­nominated information is the mod­ern parallel to the bondholder of more primitive times.

On the other hand, if kids could hide pennies in the mechanical age, can electronic in­formation he wandering around un­known to those who calculate the debt? Is it possible that, some­where in the computer-modem-sat­ellite network of information, there is an electronic pirate, who has the electronic age equivalent of great chests of pirate loot? Even more sepulchral: If a counterfeiter, in the last stages of the mechanical age, sim­ply printed hundred dollar bills on his color Xerox, why couldn’t the counterfeiter of the electronic age merely hack Into the computers of the banking system and transfer dollars to his off-shore accounts?

So th

lip side of this coin says that wealth is no longer expressed phys­ically, as it once was, in bars of gold. At this moment in time, wealth resides in the possession of Information, encoded in electronic form. The National Debt may therefore be assumed to be spread as electronic information in com­puters throughout the world. The information moves at an awesome rate. The owner of this dollar de­nominated information is the mod­ern parallel to the bondholder of more primitive times.

On the other hand, if kids could hide pennies in the mechanical age, can electronic in­formation he wandering around un­known to those who calculate the debt? Is it possible that, some­where in the computer-modem-sat­ellite network of information, there is an electronic pirate, who has the electronic age equivalent of great chests of pirate loot? Even more sepulchral: If a counterfeiter, in the last stages of the mechanical age, sim­ply printed hundred dollar bills on his color Xerox, why couldn’t the counterfeiter of the electronic age merely hack Into the computers of the banking system and transfer dollars to his off-shore accounts?

So th

c in­formation he wandering around un­known to those who calculate the debt? Is it possible that, some­where in the computer-modem-sat­ellite network of information, there is an electronic pirate, who has the electronic age equivalent of great chests of pirate loot? Even more sepulchral: If a counterfeiter, in the last stages of the mechanical age, sim­ply printed hundred dollar bills on his color Xerox, why couldn’t the counterfeiter of the electronic age merely hack Into the computers of the banking system and transfer dollars to his off-shore accounts?

So the final recipe for electronic terrorism becomes clear. The medium of terror is no longer the bomb. Terror now resides in the electron. In the future, wild-eyed terrorists will purchase Cray Re­search Mega Computers and spread disaster by hacking into the worldwide electronic net of infor­mation about money and injecting errors into the system. The Reign of Terror will not be symbolized by the guillotine, but by the mega-bite of false information about money.

I cannot expect those in the fed­eral bureaus to understand my concerns, and that is why I am writing this. I have become con­vinced that the major problem for the United States, and perhaps for the entire world, Is that we have an aging bureaucracy which does not comprehend the nature of the In­formation age and its impact on economic decisions at all levels.

One simple example will make my point. In the Federal Reserve System, decisions about the amount of money to create, elec­tronically, by simply adding digits to the consumable reserves in the computers of the banking system, are made on the basis of the “mon­ey supply” counted in several ways. But, as I have said, the count is seriously flawed, because much of the electronically encoded infor­mation about dollars is circulating in computers whose information is unavailable to the counters.

To stay with my metaphor of kids and pennies, many electrons are snoozing quietly in the Swiss Alps, on the placid islets of the Caribbean and in nooks and crannies far beyond the eyes of the Fed. When the central bank adds, re­serves based on its spurious count, we may confidently assume that a good bit of each addition joins the electrons already in hiding. But, do our aging bureaucrats show signs of comprehending such huge changes? I do not think so.

Here is a test to put to all that work in government offices, which make financial decisions:

1. What is index arbitrage, when done in the foreign exchange markets?
2. How might one put on a butter­fly spread in Swiss Francs versus the dollar?
3. Is it legal for an American citizen to send a personal check to a foreign bank, which has no branch in the United States, and not report the transfer?
4. Name one form of hedge used by American grain exporters in which the