Inflation VII

 

I Can’t Make You Love Me

'Cause I can't make you love me if you don't
You can't make your heart feel something it won't
Here in the dark, in these final hours
I will lay down my heart and I'll feel the power
But you won't, no you won't
'Cause I can't make you love me, if you don't

Trying to make demand when there is no demand is just as bad.

I have argued in previous blog posts that inflation has two parts, long-term currency inflation. https://dbeagan.blogspot.com/2018/08/the-happening-riding-high-on-top-of.html and short-term product inflation  https://dbeagan.blogspot.com/2022/02/inflation-predictions.html.

In the most recent episode of the Planet Money podcast they discussed the 2% inflation target. https://www.npr.org/2023/01/13/1149071772/two-percent-target-inflation-expectations. It was argued that an inflation of 2% was tolerable because if someone takes 2% of your beer you won’t notice. But if someone continually takes 2% of your beer, you might not notice on each sip, but eventually you will have no beer. To prevent this a zero percent inflation target sounds like even more of a more reasonable target.

Zero percent was discussed and dismissed because the US central bank, the Federal Reserve, can’t lower its interest rate below zero when inflation goes below zero, i.e. deflation. I would argue that this confuses the role of the Fed. It’s role to serve as the lender of last resort, to provide liquidity to smaller local banks and provide for the nation's currency. It has done this, has prevented runs on banks, and successfully transitioned the US to a fiat currency where the fiat is constrained by the US economy. However since the dollar is also used in international trade, the constraint should arguably be the international economy, not just the US economy. That it is only constrained by the US economy means that  there is more demand than there are US dollars, and currency inflation has been the result.

Product inflation has much more to do with product supply and demand. If the interest rate goes up, then the cost of producing goods goes up. and supply is reduced. If the interest rate goes up, then there is a time shifting of demand from tomorrow to today. Since price is when marginal cost is equal to marginal demand, changing supply and demand can affect prices. However as noted, you can time shift demand, but you can’t create demand.

The goal of currency inflation should be zero. There should be no goal for product inflation and just an acceptance of whatever supply and demand  randomly dictates for product prices. Supply can be contracted by increasing interest rates. Demand can be shifted in time but not created. Maybe setting interest rates below zero to increase supply is impossible ( but isn't that what tax credits and other subsidies do?). The hubris of thinking that we can control short-term product inflation has led the Fed to think that it can control total inflation. As long as long-term currency inflation is zero, even if short-term product inflation is sometimes greater than zero and sometimes less than zero, that should be expected and tolerated.

Engineers

 

Theme from Star Trek

I know his journey ends never
His star trek will go on forever.
But tell him while he wanders his starry sea
Remember, remember me

To boldly go where no man has gone before.

I am an equal opportunity nerd.  I read the novelization of Star Wars before attending the premier of the movie ( now called Episode Four).  I wore out my box copy of the Lord of the Rings novels. Don’t test me on trivia about  comic book super heroes.  I did not pass this down to my children.  While my eldest son appears in the Behind the Scenes for the House of the Dragon, he is proud that he never saw an episode of, Game Of Thrones, even though HOD was a prequel to GOT.  But there is a special place in my heart for Star Trek because it provided a role model for me at a time when I did not know what white collar workers did. ( The lyric above is from Star Trek.  It has lyrics? Yes, instrumental TV themes often had unplayed lyrics.  Look up the Bonanza lyrics and sing along!)

At a time when my father and neighbors were all factory or other blue collar workers, Star Trek provided an engineer as a role model.  I knew that I was unsuited for the starring role of Captain Kirk, but I could aspire to be like Lieutenant  Commander Montgomery Scott who we all knew was the real keeper of the soul of the USS Enterprise, not merely the jockey of the ship.   Mr. Scott thank you for inspiring me.  I  have tried to give it Warp Factor Eight, and maybe a wee bit more.

Choose Life

 

I Am Alive

We are alive
Oh, and though we lie alone here in the dark
Our souls will rise to carry the fire and light the spark
To fight shoulder to shoulder and heart to heart
Let your mind rest easy, sleep well my friend
It's only our bodies that betray us in the end

Flat-lining means that you are dead, not alive.

A function where everyone, x, has the same value, made the same choice, if that choice is 0 or 1, is y=1 or y=0. It is a flat line. The Cumulative Distribution Function would be 0 before the choice and 1 after the choice.

A function where everyone, x, is free to make a choice, which is still 0 or 1, is a logistics distribution. The Probability Density Function of a logistics distribution is not y=0 or y=1, but is
y= e^-((x-µ)/s)/(1+ e^-((x-µ)/s)), where the e^-((x-µ)/s) is the probability of the choice, µ is where the average choice is made, and s is the range over which the choice occurs.   If you saw this reading on a Vital Signs Monitor in an ICU, you would say that this is a pulse and a sign of life. The Cumulative Distribution Function is still 0 before the range of the choice and 1 after the range of the choice.

If there is no free will, and everyone in the group agrees with you, but did not make their own choice, then there is no pulse in that group. Despite the fact that everyone agreed with you, the group has flatlined. Only if everyone in the group makes their own choice, which may not be yours, is there a pulse and the group has not flatlined. So you have a choice, the group agrees with you and is dead, or the group is free to choose a position that may disagree with you and is alive.

I will eventually die, but I want my group to still be alive.

Individuals vs. Groups

 

Opening to The Prisoner

Where am I?
In the Village.
What do you want?
Information.
Whose side are you on?
That would be telling. We want information. Information. Information.
You won't get it.
By hook or by crook, we will.
Who are you?
The new Number Two.
Who is Number One?
You are Number Six.
I am not a number- I am a free man!

You may be a free man, but is that man an individual or a group?

The cult classic TV show, The Prisoner, deals with the question of man’s place in society: are we at war with society, or part of that society. If we are not part of society, or society does not include us, then we can be at war with society. If we are part of society, then only if each individual in society is free, can society be free.

Every group, such as society, consist of individuals. If everyone in the group acts together, the behavior of a group can be described as a function. For those who have ever attended a sporting event, individuals acting in concert can create the “Wave”, a function.  Every wave has energy, and therefore a frequency and an amplitude. Material objects also can have a resonant frequency. That is why soldiers crossing a bridge are instructed to break cadence, lest their marching might accidentally be at the resonant frequency of the bridge and their energy destroy the bridge.

The whole duality paradox of light, is it a particle? or is it wave?, may be no more than the difference between the behavior of an individual photon, a particle, and a group of photons, a wave, and that duality is therefore not a paradox. In the controversial finale of The Prisoner, Number One was revealed to be number Six. Society, Number One, is the individual, Number Six. The controversy was among those who view individuals as separate from society. Number Six is not free unless Society is free.

Eccentrics

 

I’m An Ordinary Man

An average man am I, of no eccentric whim,
Who likes to live his life, free of strife,
doing whatever he thinks is best, for him,
Well... just an ordinary man...

If no eccentricity is ordinary, then being eccentric must be exceptional!

In mathematics, ellipses, parabolas and hyperbolas can all be defined as sections, slices, of a cone. If that slice passes exactly through the apex, tip, of that cone, it's eccentricity is exactly one and it is a parabola. Eccentricity describes your relationship to the tip. If the eccentricity is less than one, then the slice, section, of the cone is closed, an ellipse, where a circle is a subset of an ellipse. If the eccentricity is greater than 1, then the section is open and is a hyperbola.

Astronomers have confirmed that the universe is open, not closed. That rules out the shape of the universe being an ellipse, or some other sphere.  But both a hyperbola and a parabola are open, infinite. The question is therefore whether the universe also passes through the apex of the cone. It appears that the universe is also hyperbolic, and not a parabola. This has an additional mathematical feature. Rotation of a parabola creates a complex number, a number that has a real and an imaginary component. A hyperbolic cosine already has imaginary components, but the result is a real number. Its rotation by any degree is still a real number.

In an earlier blog post, I had proposed that approaching an absolute (God) is what cast Lucifer out of Heaven (Order) into Hell (Chaos). Based on observed data from vehicles at I-4 and the Central Florida Parkway in Orlando, since Greenshields and Van Aerde are parabolic functions,  I would also like to suggest that, in Heaven ( uncongested conditions) there is no difference between Van Aerde’s parabolic function and a hyperbolic function, but in Hell (congested conditions) there is little difference between Greenshields’ parabolic, functions which tolerates no eccentricity and thinks it has passed through the apex/absolute ( an individual), and a hyperbolic function which recognizes that it did NOT pass through the absolute (a group).

IOW, Lucifer  cast himself out of heaven because he thought he was God, and acting only for yourself and tolerating no eccentricity, means that you share in Lucifer’s sin. If America is exceptional, as it claims to be, it should also tolerate eccentrics.

IRS Enforcement

 

Look Down

Look down and see the beggars at your feet
Look down and show some mercy if you can
Look down and see the sweepings of the street
Look down, look down,
Upon your fellow man!

The People are our fellow man.

The House GOP's first bill out of the gate doesn’t address inflation or gas prices or immigration, but instead zeroes in on the Internal Revenue Service.

The rINOs, republicans In Name Only, in charge of the House are opposed to our republic, the government.  Since the frontal assault on Jan 6, 2020 failed, and the 2022 mid-term elections did not work out as planned, is anyone surprised that they are now trying siege warfare.  If domination by assault doesn’t work, a siege, starving your enemies, is the next step.  Kind of like Russia’s missile attacks on Ukraine’s power and water infrastructure.   Domination is domination. Just as those in control of Russia do not care for the well being of the Ukrainians, so too the rINOs in the House do not care for the well being of those in our constitutional republic.

Any enforcement by the Internal Revenue Service raises, ….doh…..revenue for the People’s government.  If you are opposed to the People, then you are opposed to any revenue for the People.  If the riNOs also want to starve the People then it is because they look down on, and do not think that they are,  the People.

Spooky Action at a Distance

 

Spooky

In the cool of the evening when ev'rything is gettin' kind of groovy,
I call you up and ask you if you want to go and meet and see a movie,
First you say no, you've got some plans for the night,
And then you stop, and say, "All right."
Love is kinda crazy with a spooky little girl like you.

Maybe it wouldn’t seem so spooky if you understood it.

Einstein’s distaste for Quantum Mechanics came because of what he derided as spooky action at a distance, also know as Quantum Entanglement.  If you take two identical particles which are superimposed and separate them by a great distance, the measurement of a previously unmeasured attribute, such as spin, will have the same value in both particles, even if they have been separated by a distance that precludes transmitting that information at the speed of light.

For example, if one entangled particle is moved two light years from the other particle, it will  instantaneously have the same measured attribute as the other particle even though any information would take two years to pass from one to the other.  However if those two particles are superimposed, entangled, then they still have the same world line when transformed in Minkowski space.  If they are then separated in physical space, they are still on the same and NOT on different world lines.  If they have the same world line, then they are still the same particle, and of course will produce the same measurement.  If nothing has changed, then maybe spooky action at a distance is not so spooky after all.