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Monday, July 18, 2011

MONEY: The Fraud of Nations on Populations?

Tell them...print more money

Make Millions Shorting Bonds...

To be short, the world's economic, population, social and political problems may be tied directly to a "failed theory of money, and the deriving consequential economic models".  Money is simply a medium that conveys to the holder that the issuer has stored value somewhere for the holder to access at will and demand.The value can only come in the form of either abstract or concrete constructs. Period. However the value of abstracts constructs derives its existence solely from concrete constructs.

Thus without food, water, OIL, shelter and such; the abstract constructs ability to survive and exist is highly impaired and ceases along with the exhaustion of concrete constructs. Period. The exhaustion of the world's oil reserves; for example, will therefore have a significant; if not, catastrophic impact on global economies as the value of money cannot be sustained only by abstract constructs - a.k.a...Hot Air

Here's the Catch 22 under present beliefs.To create an illusion of economic advance, declining nations will grow their money supply and populations,even when the nation's stores of per capita concrete constructs are declining.This acts then to fuel an "exponential decline".

" The known issuance of more and more money against a declining store of concrete constructs is thus an outright fraud by the issuer nation".They are representing that when the holder of the medium acts to demand the promised value of the medium that the issuer can deliver concrete constructs with everyday utility. If the issuer nation knows it will soon exhaust its resources (say like Nauru ,Greece and America)  it also knows that it can "never deliver" any form of concrete construct to the holder.

One solution, currently in favour, is to issue 30 year bonds (abstract constructs) and thereby push the holders' demands out to a future date. This is supposedly the date when all the laws of the universe will be known for application; so we may then create new planets at will. (sort of like a god).

Satirically, the value of 30 year bonds; issued today by any nation, is tied therefore directly to our acquiring all the knowledge and skill sets of God. So we can then create all the concrete constructs necessary to fulfill the promised value of the medium that the nation previously issued. Hmmm...highly remote.

Conclude then that all the governments on the planet are participating in this massive scheme that fools the vast unwashed by the issuance of more and more money and bonds. These instruments have little chance or worse; will  NEVER deliver the promised future value in the form of concrete constructs. Such a game:...musical chairs perhaps?

My friends, it would be welcoming to exchange ideas on this topic.As while the problems offer intense complexity, the paradoxical solution is intensely simple in the ways needed to end this scheme and possibly better sustain the utility of both money and economies.

The time for a new yellow brick road grows near!

Whose the Wizard of Oz?

T. A. McNeil
First Financial Insights Inc
Toronto, ON

Thursday, July 7, 2011

CRISIS: Geopolitical Currency

How Fragile We Are...

Rise and Shine; Changing Geopolitical Currency

I believe that we need to wake up to the reality that the "underpinning and foundation of the geopolitical theme has shifted". From a theme of a wealth based on currency. From a theme where technology and media formed part of that currency, To a new theme. To a theme where wealth reverts away from technology back to core necessities. The human condition hit its peak and many suggest is now on the other side of the slippery slope. And unfortunately “exponential gravity" acts to accelerate the downward path.

Current high fashions of Facebook, Twitter and in fact most classic mediums should become increasingly less relevant. While Facebook and social media are new to the scene their value should marginalize in time. Their economic prospects dim. They are largely tools used to continue a celebrity centric culture and grease its final hysteria. Meanwhile the mainstream media is also in peril. Printed newspapers magazines and television no longer garner the litany of advertisers, as audiences fragment and dilute. Their days seem numbered. Their influence watered down significantly from past hey days.

Wealth is shifting back to core necessities and leaving technology behind in its wake. There are many reasons for this, but the driving force is that it has outgrown its utility and it will diminish even further in a world in need of scarcer and scarcer elements. These elements such as water, food, shelter, heat and oil will forge the behaviour of individuals and the behaviour of nations. The behaviour and words of the geopolitical mantra, positions and actions will change.

Look at today's geopolitical chessboard and the US is in untenable position. Oil is now the currency that is truly the key to the survival of their economy, country and world dominance. Yet the emperor’s clothes are slowly becoming invisible. Today the US consumes about 19 billion barrels of oil from the annual global pie of 88 billion. Its own reserves are estimated at 40 billion, enough for just two years. So in other words without the rest of the world's oil to consume, the American system, economy, power, currency and way of life collapses in just two short years. They know this, but so do the others in this tribal dance.

For because of it, the dynamic motivations and currency of geopolitics is reshaping to place greater and greater emphasis on the utility of essential elements that are tied more closely to the core survival needs. And as supply diminishes, more emphasis and value will be given to these elements. Countries relying on technology and industrial capacity will lose their relevance on the geopolitical chessboard where the elements of survival define the currency of the game.

Looking at Maslow's hierarchy of needs, nations treated as individuals are past self-actualization and are returning to the basic needs of existence. Power on the geopolitical chessboard will be held by those with the abundance and control of these elements. The role of technology and media will be less and less important as nations chase the remaining crumbs of the planet's proverbial table of resources.

Power on the geopolitical chessboard is shaped by the underlying nature and supply of the game's currency. As its currency's nature changes, so does its power. So does the game. Rise and shine...

T A McNeil
First Financial Insights Inc
July 7, 2011

Geopolitical Soup Lines 2018


Saturday, July 2, 2011

Quantum Realonomics

Discarding Archaic Economic Doctrines

Quantum Realonomics

How did economists get it so wrong…and why they always will?

The prospects for an endless stream of words working in organized fashion to answer these two questions are of great possibilities and scope. Indeed well beyond a few yeoman paragraphs. The discussion is a short venture of analysis and conclusion to encourage conversation and further thought.

The answers to both questions reside in either the absolute denial of or the limited algebraic measures given to the principles and laws of physics (all natural sciences actually) and exponential effects in orthodox economic equations. It seems that the full integration of these laws and effects into the orthodoxy of economic theory is lacking.

Are these laws politically inconvenient to include? Are economists simply alchemists who ignore exponential principles? Do they simply craft fancy stories based on the tea leaves of complex geometric symbols? Personally I have a suspicion that the answers to these questions is yes, when physics, natural sciences and the exponential function are not given the weight they deserve in the field of economic concerns. 

Because the system failed in 2008, all the historic theories and beliefs should be in question. This massive failure means consideration should be given to tossing out all of the preceding ideas. Then test, retest and consider new possible hypotheses and theories.

Common sense begs that we further ask the question “is the present economic equation simply a fraud?” One that is based on the past collective muses of charlatans using fancy words and mathematics to keep the wolves at bay. Common sense also asks if we were to reinvent economic theory from scratch without knowledge of prior beliefs, how would it compare and contrast to the present system. Of purposes in this discussion, two are to pinpoint key weaknesses in the current system and fuel creative thought toward a new model, with a goal to better manage the planet.

So far no one has pinpointed the causes of the 2008 failure nor have they said that we have done such and such to fix the broken parts, the likelihood of another even more massive failure is still a high probability. Particularly, if the laws of physics and exponential effects are ignored, economists getting it right is absolutely impossible. Absolutely.

The Economic Equation

Origins of economics trace back to the simpler days of Adam Smith when concerns were focused on the best ways to manufacture pins. We have come a long way baby. The term economics itself is perhaps archaic, even superfluous as it fails to embed a sense of our modern complexity and the vast interrelated areas of concerns. Thus a new term may be required to better define the broader complex nature of a revised field of study.

The argument for a new term gathers strength when we ponder a possible mathematical equation as opposed to a linguistic definition as a device for understanding economics. The mathematical equation defines an algebraic formula that includes as variables all the known human fields of study ranging within arts and sciences. The fields of human study are vast; totalling in the thousands.

Each field (variable) has a function with its own ever changing character.
Measuring and observing both the dynamics of each variable and the inter-relationships among variables are impossible human and mechanical tasks. Simply, this is because the changes of both dynamics and variables are constant and instantaneous, with unknown consequence. One small obscure change can have an enormous and pervasive effect. Indeed, terminal

Accepting this mathematical definition suggests that economics includes in some measure all fields that pertain to human life. Secondly it is impossible to know what variable or field has the greatest impact on outcomes at any one point in time. Thirdly the boundaries of what forms the linguistic definition are ambiguous, not lending itself to a complete area of concern, For this discussion, a new term is used that may better conceptualize the scope and dynamic of this mathematical definition. The term is “Realonomics”. 

Physics, Exponential function 

For brevity, while realonomics consists of vast areas of human study it may be prioritized into say fifty primary fields.  Leading with economics, it is then combined with history, anthropology, mathematics, rhetoric, politics, sociology, logistics, statistics, neurology, psychology and so on.

This discussion centres largely on the role and implications of physics in the mathematical equation that defines realonomics. The emphasis is placed on physics and exponential concepts over other fields as its effects are clear, pervasive and more time critical in importance to the fate of the planet Second much has been discovered in this field since the time of Adam Smith that has not been incorporated into the orthodoxy of economic models. Examples include relativity theory, thermodynamics and quantum concepts as discoveries that are not well-integrated. Third even simple mathematical functions such as “exponentials” are not fully asserted in the orthodox models. The combination of these shortcomings results in a false view of reality that causes long-term dysfunctional economic and human behaviour. Very dangerous.

In the end, realonomics embraces a much stronger marriage with physics and exponential math to gain a better understanding of the larger realities we face.

Quantum Focus

Plainly, quantum concerns are of the largest order, often defined and existing in the hidden and perhaps smallest particles or principles of order. So “quantum realonomics” is concerned with the big picture as related to the hidden particles and principles of “realonomics

The premise of current economic models centres on the individual transaction and its intrinsic ability to properly steer; by accident, human activities in the right direction. It leaves the course of human existence to the luck of a series and aggregation of accidents that is surely a romantic belief. Quite foolhardy too. 

Instead the premise of “realonomics” centres on the implications of the outcomes of the aggregation of transactions and their relationships to the course of human existence. It tests the benefits of these outcomes against the criteria of sustaining current and future existence; rather than just measuring the simple immediate benefit of a transaction. Its equilibrium equation seeks to balance the current and future needs of humanity, with the perspective of its possibilities and related probabilities. Quantum concerns move the level of examination to an even higher stratum with emphasis on the hidden constructs affecting the larger picture.

To illustrate the application of “quantum realonomics” the following analysis is provided of our planet.

Quantum Realonomics of Earth

Earth in its simplest clinical construct may be broken into two driving variables. These constructs are population and utilities. Utilities are both external and internal to the planet. Currently, the external utilities cannot be controlled, while the internal utilities may be controlled and managed to meet the objectives of the planet’s indigenous population.  Examples of external utilities are heat, light, gravity and so forth. Whereas its internal utilities consists of atmosphere, minerals, water, ecosystems and other physical elements. These internal utilities are split between renewable and non-renewable elements with renewable elements dependent on the external utilities for renewal. For ease of this analysis assume "renewable elements" are infinite. 

Battleground earth is thus the conflict between its population and internal utilities that are non-renewable elements. Think of these elements as a vast absolute reservoir that is to be used by the planet’s indigenous population over an unknown specified time. Once exhausted then the population must find more on other planets or exist on only the renewable elements. If the population’s existence is organized and highly dependent on non-renewable elements, then its journey may cease when they are gone.

Two factors related to population may affect the usage of these non-renewable elements. Greater per capita consumption or population size or both, will act to speed the use of the absolute reservoir of resources to its exhaustion. Add the exponential function of mathematics to these population and resource constructs, then “the time line to exhaustion is dramatically shortened.” Dramatically…

The Devil is in the Exponentials
…not details

Little attention is paid or else little is understood of this dooming mathematical concept, so a quick refresher is in order. There is a simple rule to determine how many years it takes for any population of items to double using basic long division. Simply divide the growth rate 7% (say 7) into 70, and the result is a doubling of the population in ten years. In twenty years it is four times the original size, in thirty years it is eight times, and so on. This calculation is commonly referred to as the rule of seventy-two

Now applying this exponential rule to the population and reservoir of absolute non-renewable elements provides interesting observations and outcomes. Assume a population of 1,000 and a utility reservoir of 10,000 units. Every ten years the population doubles and it uses 1000 units of the utility reservoir every ten years per thousand. So in the first ten years it uses 1,500 units with an average population of 1,500 (2000+1000/2 = 1,500). In the second ten year period the units used doubles to 3000, and in next period they only use 5500 units, not 6000 as the 10,000 originals units are then completely exhausted.

Observe that their population continued to grow itself exponentially every ten years, while even knowing they would soon extinguish their resources. Not a very bright bunch most would say doubling their population every ten years to fuel the rapid depletion of all their resources. In fact, in their last ten years powered by exponential winds they used more resource units than they did in the first twenty. Hmmm…certainly not an astute move, yet growth is good?

Unfortunately it does not matter in the quantum sense for Earth if we double the population every 10, 25 or 50 years. The result is ultimately the same because the math speeds its path to exhaustion of the planets non-renewable elements. Before this happens inflation will be rampant, while government debt and deficits will charge out of control. Bringing out the worst in social and political upheaval as the march of growth plays on. Sound familiar? You see…the devil is in the exponentials.

Speculating Outlooks and Remedies

Poor ole Earth, for it is now theoretically possible to determine the approximate date that its non-renewable elements will no longer exist. Divide, the current annual per capita utility use multiplied by the population, into the total theoretical utility reservoir of non-renewable elements. The number that results is the most likely date the reservoir will experience the exhaustion of its non-renewable elements based on current population and consumption .Add the exponential growth math, and the date moves much closer. It is not a big number in either cases, and is still subject to errors, guesses and unknown, unknowns.

The remedies start with an abdication of the orthodox economic doctrine that encourages unbridled exponential growth in consumption, pollution and population of the planet. In turn we need to embrace a model that aligns economic thinking with both the planet’s physical exponential realities and the laws of physics. By starting with this change, the policies, beliefs and behaviour at all levels have an opportunity to adjust and slow the path to the complete depletion of non-renewable elements. This is not an easy change. This is hard and complex. This is necessary.

 “Au pays des aveugles les borgnes sont rois”

T A McNeil
First Financial Insights Inc.
July 7, 2011

in the country of the blind, the one eyed men are kings”   


Est modus in rebus: There is a proper measure in things.