Author: Scott Buchanan

Easy Baking: Popovers and Soda Bread

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Now that cool weather has finally arrived, here are two quick, rewarding baking recipes.

( 1 ) WHOLE WHEAT POPOVERS

 (This is sized for twelve-cup popover pan;  reduce recipe to 2/3 size for 6 cup pan, i.e.: 2 eggs, 1 c milk, 1 c flour)

Instructions

  • 3 large eggs, warmed (microwave them together for about 15 sec)
  • 1 1/2 cups (355 ml) milk (skim, low-fat, or full-fat), lukewarm  (can microwave milk 40 sec)
  • 3/4 teaspoon salt
  • 3/4 cup (110 g) all purpose (white) flour
  • A scant  3/4 cup (100 g) whole wheat flour
  • 2 tablespoons melted butter
  1. Preheat the oven to 440-450°F (230 °C). Position a rack on a lower-middle shelf. The top of the fully risen popovers should be about midway up the oven. You don’t want the tops of the popping popovers to be too close to the top of the oven, as they might burn.
  2. Use 12 cup nonstick popover pan, e.g. Chicago Metallic. Lightly grease the cups (may not be necessary every time). It is possible to use a standard, i.e. non-popover 12-cup metal muffin tin, one whose cups are close to 2 1/2″ wide x 1 1/2″ deep, though results may not be quite as good unless you preheat the muffin tin in the over for five minutes. As noted above, reduce recipe size for 6-cup popover pan (where each cup is somewhat larger than with the 12-cup popover pans).
  3. Use a wire whisk or beater on low speed to beat together the eggs, milk, and salt. Whisk till the egg and milk are well combined, with no streaks of yolk showing.
  4. Add the flour all at once, and beat till frothy; there shouldn’t be any large lumps in the batter, but smaller lumps are OK. 
  5. Stir in the melted butter, combining quickly. Best to let batter then rest at least 10 minutes, e.g. while oven preheats.
  6. Pour the batter into the popover cups, evenly; about 2/3 full. [For 12 standard muffin cups: fill them about 2/3 to 3/4 full. ]
  7. Make absolutely certain your oven is heated, 440- 450°F.
  8. Bake the popovers for 19-20 minutes without opening the oven door. Reduce the heat to 360 °F [180 °C] (again without opening the door), and bake for an additional 15-20 minutes, until they’re a deep, golden brown. [If using muffin tins, for second phase cook only 10-15 min at 350 F].   Preferable: pierce them about 2 minutes before removing from oven to release steam.
  9. If the popovers seem to be browning too quickly, reduce temperature a little.

NOTES ON MAKING POPOVERS:

( A ) These are fairly healthy and easy to make, and taste delicious split open and served warm, with butter and jelly, for dessert or snack.  Can also serve with things like chili or stew. Get creative and fill with pudding or whipped cream and fruit. Popovers taste almost like pastry, but without all the fat. The larger popovers from the 6-cup pans look more dramatic, and have big cavity inside them, especially when made with all white flour.

( B ) These are best cooked in special popover pans. These have typically six or twelve metal cups, joined by fairly thin metal rods, so heat can get quickly to the cups. It is possible to cook popovers in regular muffin tins.

( C ) The oven needs to be hot, and the oven door kept closed to keep moisture in, in order for the popovers to rise. They rise because steam gets trapped in sticky eggy dough.

( D ) You can make these with all white flour. Use a full 1.5 c white flour. (I cut back a little with the amount of whole wheat flour, since it absorbs more liquid than white flour). Using all white flour tends to make the popovers rise more, with thinner, drier walls. I like them a little thicker and chewier, hence the whole wheat.

( E ) Popovers are best when eaten within an hour or two of cooking. With time, the crispness of the outer wall gets softened by moisture from the inside. They can be re-crisped by heating in an oven or electric skillet or large covered frying pan at say 350 F for ten minutes or so. They can also be frozen, then gently thawed in microwave and then re-crisped.

( 2 ) TRADITIONAL IRISH SODA BREAD (NO YEAST)

INGREDIENTS

  • 4 cups (580g) all-purpose flour
  • 1½ teaspoons baking soda
  • 1 teaspoon salt
  • Scant 2 cups (470ml) cold buttermilk

INSTRUCTIONS

( 1) If you don’t have buttermilk, first make it by adding 3.5 T vinegar or fresh lemon juice to measuring cup, and filling to two cups with whole or 2% milk (i.e. a scant 2 T vinegar per cup of milk). Stir and let sit for at least ten minutes for milk to sour. I used apple cider vinegar for a faint fruity aura.

(2) Preheat oven to 425 degrees F (218 degrees C) , or slightly hotter if your oven runs cool.  Line a baking sheet with parchment paper or grease well; set aside. You can also use an 8″ cake pan or oven proof skillet.

(3) In a large bowl whisk together the flour, baking soda, and salt. Stir in the buttermilk just until combined and the dough starts to become too stiff to stir. Transfer to work surface and with floured hands lightly knead the dough 5-10 times or until all the flour is moistened and the dough comes together.

(4) Form dough into a 1 ½” (4 cm) high round, approximately 8” (20 cm) diameter. Place on prepared pan. With a serrated or very sharp knife cut a deep cross on the top from side to side, cutting about a third of the way deep into the dough. Bake for 30-35 minutes or until golden brown and it sounds hollow when tapped on the bottom. Alternatively, bake at 425-440 F for 20 min, then turn down to 400 F for last 15 or so minutes.

RECIPE NOTES FOR SODA BREAD

( A ) Note the dough for soda bread is NOT kneaded to the point of being smooth, but just enough to barely hold together, still looking “shaggy”. The reason is that with the baking soda, all the CO2 is released in a relatively short time as the dough heats up, so the dough has to be soft (not tough and cohesive) so it can quickly stretch. (This is the opposite from yeast bread, where you knead the dough long and hard to build gluten chains to strengthen the dough, so the CO2 produced slowly from the yeast during rising will not escape.)

( B ) The deep cross cut in the dough helps it expand, and helps heat to get to the center of the loaf.

( C ) This is authentic, basic Irish soda bread. The crust comes out pretty hard. It is great for dipping in stew or soup, or just spread with butter while warm and chew carefully.  I like to have the crust a bit softer, so I brush the loaf with buttermilk or butter just before baking. When cooling the loaf, cooking on rack will make crust crispy, while being covered with tea towel will soften the crust.

( D ) As with most real bread, this goes stale very fast. I suggest cutting off whatever portion you will not eat that day, and freezing it. It is fine thawed. Bread that is not too stale can be partly, temporarily resuscitated by wetting the crust, and baking it for say 12 minutes at 350 F.

(This recipe above was mainly taken from: https://www.curiouscuisiniere.com/irish-soda-bread/ )

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https://www.simplyrecipes.com/recipes/irish_soda_bread/

This is a slightly more complex recipe for Irish soda bread, including butter, egg, a little sugar, and currants or raisins. Gives softer, sweeter version, verging on scone, instead of plain soda bread with tough crust. Has nice short confidence-building video showing how to work the dough. And has good photos of what dough should look like at each stage.

How Much Money Is There?

Scott Buchanan1 Comment

It is not straightforward to define what “money” is in a modern national economy. Simply tallying the amount of coins and paper currency is inadequate. Most buying and selling is now done by shifting numbers between abstract bank accounts, not by pushing a bundle of bills across a table.  Thus, these bank accounts serve the functions of money (medium of exchange and store of value). The question then arises as to which of these financial accounts to regard as money.

Among financial assets, there is a broad spectrum of liquidity. Typically you can write a check on your checking account which, when it clears, provides immediate and final settlement for a purchase.  On the other hand, if you want to tap your brokerage account with its holdings of Apple stock to buy a television, you would typically have to sell (liquidate) your stock. A third party would have to be willing to give you something more money-like (e.g. credit your money market fund at your brokerage) in exchange for the stock at some negotiated price. Then you might have to transfer the funds from your brokerage fund into your bank checking account before you can actually buy that TV.  Because of all these intermediate steps, and the fluctuating value of the stock before you complete the sale, the stock holding would not be counted as “money”, even though its value enabled you to ultimately make your purchase.

There are a number of measures of money in modern economies. In the U.S. some of these are:

M0: The total of all physical currency (coins and paper bills).

MB (“Monetary Base”): The total of all physical currency (coins and bill) plus Federal Reserve  Deposits (special deposits that only banks can have at the Fed). This is money essentially created by the government plus the Federal Reserve, which does not necessarily enter the private economy to be spent.

M1: Physical currency circulating outside of the Fed and private banking system, plus the amount of demand deposits, travelers’ checks and other checkable deposits. This is highly “liquid” money, i.e. accepted and used for transactions in the private economy.

M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000). The funds in these additional savings and money market accounts can in general be easily transferred to checkable accounts, and thus could go towards making purchases if desired.

MZM: “Money Zero Maturity” is one of the most popular aggregates in use by the Fed because its velocity has historically been the most accurate predictor of inflation. It is M2 – time deposits + institutional money market funds.

Below is a chart showing the growth in the U.S. in the past fifteen years of M0 (total currency, labeled “currency in circulation), MB, M1, and M2. The grayed areas are recessions, i.e. 2008-2009 and the present.  [1]

Various Measures of “Money” in the U.S.

The M1 money supply (green line) was about $1.4 trillion ( $1,400 billion on the chart) in 2005, was fairly steady for several years, then started a steady ramp up to $4 trillion by January, 2020. Due to the extraordinary events associated with the Covid-19 shutdown (government stimulus package plus Fed purchases of securities), M1 jumped up to $ 5.4 trillion by August of this year. M2 followed similar trends, though on a much larger scale, rising to$18.3 trillion this year. This compares to a current U. S. total GDP of about $21 trillion.

The lowest line on the chart is the physical currency (blue line), which has grown slowly but steadily. The “Total MB” (red) line, was essentially on top of the blue line up until the 2008-2009 recession. Since MB = physical currency plus reserves, this meant that the amount of money in the reserve balances at the Fed of the private banks was nearly zero before 2008. The reserves jumped up (difference between the red and blue lines) in 2009, with the onset of massive purchases of securities by the Fed (“quantitative easing”). The Fed buys these securities from the banks, and credits their reserve accounts. The Fed has tried to taper down its holdings in recent years (red line declining 2015-2019), but suddenly purchased trillions more this spring (red line jumping up in 2020).  Most pundits hold that all this Fed money injected into the financial system has been the major cause of the enormous rise in stock prices in the past decade, especially in the past six months.

[1] Chart produced on the St. Louis Fed “FRED” site, https://fred.stlouisfed.org/categories/24 . This site has a wealth of economic data. Unfortunately, it is not easy to change units, so I was stuck with “billions” instead of “trillions” for the axis labels. Also, the M0 and MB numbers were only available in “millions”, so I had to divide those numbers by 1000 to get them to fit on the plot with M1 and M2. The grayed out spots on the graph labels is where I blotted out the “ /1000 ” which the plotting software put in. It would have been cleaner, in retrospect, to have exported the data to Excel and replotted it there.

Money as a Social Construct

Scott Buchanan4 Comments

Wikipedia offers the following definition of “money”:

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value.

To illustrate why all advanced societies use money, let us consider a village which operates on a barter system. (Many primitive cultures probably operated on a basis of mutual gifting rather than strict barter, but that does not affect the point at hand). Suppose the baker has produced two loaves of bread that will go stale in a day, so they would be best sold today. The baker would like a pair of sandals from the cobbler. They agree this is a fair trade, but the cobbler is backed up and will not be able to make the sandals for a couple of days. Thus, they cannot immediately make a swap. For this mutually advantageous transaction to proceed, the cobbler must agree to the obligation to deliver something (namely, a pair of sandals) in the future, in return for the loaves of bread today. The baker must believe that the cobbler will deliver on his promise.

Here we see the importance of credit and debt, which depend on mutual trust, to enable transactions where there is a time lag between the actions of the two parties. The cobbler’s promise may just be a verbal agreement, but now suppose the cobbler writes down on a piece of paper, “The holder of this certificate is entitled to one pair of sandals from me, the village cobbler,” and gives this to the baker. Now this piece of paper is nearly the equivalent of a pair of sandals in value. It has become a store of value. If the baker later decided that he would rather have some candles instead of the sandals, he might be able to exchange this certificate for the candles. Thus, this piece of paper, which started as a statement of a debt between two individuals, would serve the function of money. (In fact, such “bills of exchange” issued by merchants were an important form of money in late medieval Europe).

It would be even cleaner if the baker could simply sell the bread to the cobbler for something that functioned in that village as “money”, such as silver coins. The baker could then use some of the coins to either buy shoes or buy something else, either now or later.  In this case, the coins operate as a convenient medium of exchange and also as a store of value. Both functions enormously aid financial transactions, which is a reason that money is so ubiquitous. Money also facilitates taxation by central governments, so governments have an incentive to put a monetary system in place.

In Money We Trust

For this system of money to work, the key players all have to believe in the value of the silver coins. Thus, money is a mainly social construct, an article of mutual faith.

With the rise of banking in the Renaissance, banks issued paper certificates which were exchangeable for gold. For daily transactions, the public found it more convenient to handle these bank notes than the gold pieces themselves, and so these notes were used as money. People generally trusted that the banks actually did have the gold in their vaults; if people lost confidence in the bank notes, they would all come at once to demand their gold in a “run” on the bank, which usually did not end well.

In the late nineteenth and early twentieth centuries, leading paper currencies like the British pound and the U.S. dollar were theoretically backed by gold; one could turn in a dollar and convert it to the precious metal. Most countries dropped the convertibility to gold during the Great Depression of the 1930’s, so their currencies became entirely “fiat” money, not tied to any physical commodity. For the U.S. dollar, there was limited convertibility to gold after World War II as part of the Bretton Woods system of international currencies, but even that convertibility ended in 1971.

Many older Americans and Europeans have a gut feeling that gold is “real” money. Its main advantage over fiat currencies is that there is only a limited world-wide amount of it, so it cannot be multiplied at the whim of some government or market force. However, even gold is just a shiny yellow metal whose value is whatever people believe it to be.

Money and Social Order

There are “preppers” who hoard gold coins, expecting that in the apocalypse they will be able to purchase goods with gold. But who knows how many gold coins it would take, in such a scenario, to buy a can of beans? Or if you show up in town flaunting gold coins, how long before the local warlord’s gang comes calling at your doomstead? I suspect in such a scenario society would revert back to using “commodity money”, using items with real alternative value, such as AA batteries, food items, or ammo.  In the 1700’s frontier, beaver pelts, which had intrinsic value, were used as a common denominator for pricing and exchange.

If people lose faith in the value of some form of non-commodity money, it will in fact become valueless. For instance, during the American Civil War of 1861-1865 both the North and the South issued paper currency to fund their military efforts, since neither side had enough gold to pay their soldiers and suppliers of military goods. These were both fiat currencies, not at the time redeemable in gold.  The North retained its government and a strong economy, and only a portion of its money stock was paper, so it experienced only moderate inflation. However, towards the end of the war, with excessive printing and with defeat of the Southern Confederacy in sight, the Confederate dollar lost nearly all its value. People no longer wanted to accept Confederate dollars in exchange for real goods, since they (rightly) feared that they would be unable to exchange the “greybacks” for the same amount of real goods in the future.

As long as a given government remains in power and does not issue crazy amounts of money (as in post WWI Germany or recent Zimbabwe), or some catastrophe does not strike, fiat currencies tend to remain in use. The value of fiat money derives in part from a government declaring that it must be accepted as a form of payment (“legal tender”) within that country, for “all debts, public and private”. The government typically requires that its citizens come up with some amount of its currency to pay their taxes, so that automatically creates some level of domestic demand for the currency.

Today, most “money” is not even tangible printed bills, but is in the form of digital entries in accounts “somewhere”. Nearly all of my life savings exists in the form of investments in stocks or bonds of corporate entities, which are held in accounts that I only ever access from my computer. I rely on on-going functional, reasonably honest government to enforce rules on the stewardship of those funds at multiple levels. So I am betting everything on the supposition that law and order prevail.