Wimminz – celebrating skank ho's everywhere

of course, there aren’t any kings any more, not like there used to be…. and as for gold, frankincense and myrrh…

When I was a young lad I saw a really crap sci fi film about this blob of stuff that doubled in size / mass every 36 hours, it was clearly based on bacteria…. the money shot in the film was some boffin using a spinning top as a model of the earth, so he sticks a big lump of plasticene in the spinning top, this is what will happen in 720 hours when the blob has eaten europe, and the top wobbles off the table, eg the earth will wobble out of its orbit and everything will die.

Of course this is crap, the entire planet could be converted to blob and stay exactly where it is in orbit, assuming the blob can convert every element in the periodic table to itself, assuming it gets some external energy source to keep doing this conversion, assuming the one thing it never starts eating is itself.. then and only then could you get the planet blob, devoid of all life and all everything except blob, but it would still be in the same orbit with the same axial tilt and rotation, and the moon would still be a lump of dead rock.

Real science vs horror film “science”

And yet, this horror film “science” is EXACTLY the basis for what we can our economies, all of which are predicated on the idea known as “growth”.

It doesn’t matter if growth is 100% in 36 hours as in the film, or 1.5% in 365 days as in a “weak” western economy, they are both, mathematically speaking, exponential functions.

As a small aside, ALGEBRA used to be taught in all schools, it was dropped, and later on, in higher education, CALCULUS was taught, differential equations and all that jazz…. Algebra and Calculus are two utterly different things… you can balance your chequebook or do the accounts for an entire army or bank or country with algebra, and while algebra will allow zero as a number, it will not allow infinity as a number..it is more “1 divided by 0 does not go” than “1 divided by 0 is infinity”

The thing that ALL exponential functions have in common, without any exceptions whatsoever, is once that curve starts climbing the y axis it very very very quickly reaches infinity.

If the sci fi blob had space-faring ability then it doesn’t matter if the growth rate is 100% in 36 hours, or 0.00000001% in 36 hours, by the time it has consumed the solar system the milky way doesn’t have long to live…. this is because the solar system is comprised of a mind staggeringly huge, but still very finite, number of molecules.

If all the gold in the world is 1.5 million kilogrammes, and it is all made into 1, 10 and 50 gram coins, and I lend you 10 grams at 10% compound interest per week, and you make no repayments;

1. One week later you owe me 11 grams
2. One year later you owe me 142 grams
3. Two years later you owe me 20,176 grams (20 kilos)
4. Three years later you owe me 2, 865,885 grams ( 2.8 tonnes)
5. Four years later you owe me 407,078,825 grams, one third of all the gold in the world
6. Five years later you owe me 57,822,669,934 grams, 57 million kilos, or 38 times all the gold in the world.

Fuck it, the week is doable, even the year is possibly doable, just have to mug someone, but a year later it is seriously tough, and a year later we are talking a fort knox heist, and a year later impractical for the USA & China & Russia working together, and a year later flatly impossible for the entire planet working together…

How about a lower rate of interest, not 10% a week, but a rate of interest over fifty times lower, 10% a year… it doesn’t matter, in 200 years you owe me one third of all the gold on the planet, and in 250 years you owe me 38 times all the gold in the world…

..and it is that stage of the exponential curve that goes from one third of all the gold in the world to 38 times all the gold in the world, whereupon it starts to get REALLY steep and ridiculous, that is the common feature of all exponential curves….

You can start with 1 gram of gold at the lowest rate of interest ever given and a couple of thousand years later you owe me an entire solar system made of solid gold…. once that happens I am the only one with any gold, commerce and industry and trade ceases… permanently.

“Growth” then, when spoken of by an economist, is the same as growth when spoken of by a sci fi horror doctor about the one solitary molecule of cancer in your testicles, right now it is nothing, by tonight you’ll have huge and very impressive balls, by midnight you will be 100% alien growth.

So we get to a place where qualitative easing follows qualitative easing, billions of debt turn in to tens, then hundreds, then trillions of debt.

Suddenly Weimar republic and Zimbabwe hyperinflation doesn’t seem like so much a problem any more, when there are more dollars and pounds and yen and so on owed than there are litres of brine in the oceans, and remembering the exponential curves this means there will be more global debt in units of currency than there are molecules in the entire planet……

perhaps, like the sci fi film, we need an agent that will dissolve the blob, while miraculously making no changes to the mass or spin of the planet that the growth of the blob threatened to, at least, according to the storyline…

We can hyperinflate away those burgeoning trillions and quadrillions of fiat currency debt until they are no more substantial than higgs bosons or quarks, dissolving invisibly into the cosmic background radiation.

Trouble is, the problem isn’t and never was the trillions of fiat currency debt… that’s just an inevitable artifact of the actual problem, exponential functions.

Cut to closing scene of sci fi horror film where everyone is partying down like it is 1999 after saving the planet, camera pans down to one remaining cell of the blob, which splits into two…

Because the exponential function is still there.

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Much has been talked about FIAT currency, I even mention it here, as opposed to something like a gold backed currency.

The Weimar republic and Zimbabwean hyperinflation were products of fiat currencies, where the ink and paper on a 1,000 dollar bill is worth more than 1,000 bucks, so you have to make it a million dollar bill, then a hundred million dollar bill.

Fact is, we no longer have FIAT currencies.

You can roast a banker on a stack of burning ten trillion dollar notes, and then wipe your ass with them afterwards.

This is perhaps one of the most important things you have read in 2012.

We no longer have FIAT currencies.

We now have VIRTUAL currencies, traded virtually, in a world where the lightspeed limits of moving a trading house 50 miles closer to the stock exchange can lower ping times enough to gain advantages in HFT (high frequency trading) events that are over in milliseconds.

You can’t burn bits and bytes… and unlike anything based however loosely on real world physical phenomena such as paper and ink, the supply is essentially infinite…. you can quite trivially inflate the money supply to the point where there are more virtual dollars in existence than there are atoms in the universe.

1 x 10 exp 82, that is a 1 with 82 zeroes after it.

10,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

I can make that dollars, easy peasy

$10,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

“You owe me the galaxy of Andromeda”

It is, literally, lunacy, but it is where we are at, our counting system for “keeping score” of who does what, who produces what, how much things cost to make and store and ship, has become completely virtual and completely arbitrary.

It’s a bit like the 1960’s programmers using two digit year codes and not worrying about y2k, they were not stupid people, far from it, but today solutions trump tomorrow’s consequences.

The same is true of the world of finance, despite popular belief, many of the worlds leading bankers and financiers are not merely stupid or greedy or power crazed fiends.

Like everyone else today they were born into a world where we shifted from one archaic system of monetary exchange based on precious metals, to another one based on fiat currency which is loosely tied to the amount of energy in a barrel of crude oil.

Going back to gold and silver coins isn’t the solution, fiat currency isn’t the solution, and as the world outside of the upper echelons of banking, and readers of this blog, is starting to realise virtual currencies aren’t the solution either.

Introducing calculus, an exponential function, into currency was the PROBLEM, it isn’t a new problem, 2,000 years ago the bible warned about usury, not because it begats evil bankers, but because it is an exponential function, and therefore a cancer.

I suspect, strongly, that as the cure is too daunting to stomach, we will see another band aid placed on exponential function, and weimar style deflation of virtual currencies….

A simple bash script run on all the banks saying “divide every single customer’s account by 100” will do the trick, the same trick as above with the gold, by shifting the steeper slopes of the exponential curve away to the right and further into the future.

Now you earn $20 dollars and hour and have $2,000 dollars savings and $200,000 owing on your mortgage and a gallon of gas is $4

Divide by 100 and you earn 20 cents an hour, have 20 dollars in savings, a 20k mortgage, and a gallon of gas is 4 cents, YOU are in EXACTLY the same place financially, in terms of buying power etc, but the exponential curve just got shifted further away to the right.