Wednesday, November 28, 2007

Gold Standard

Money only has value because other people think it has value. Other people can think money has value because it can be exchanged for something generally recognized to be valuable (gold) or because they believe that other people believe that it has value (dollars and almost all other currencies are like this). The problem with the later “monopoly” money system is that governments can print out more money whenever they get into debt. Think of it like an “IOU from the government” that everyone accepts. When this happens there is more money floating around able to buy stuff so people are willing to pay more for stuff so prices go up.

So is the government being able to print out money backed by nothing but a promise ever a good idea? Most non Austrian school economists (those that follow the Mundell-Fleming model etc) think that it can be. Occasionally people may switch from the normal state of save a little, spend most, borrow a little to one of two other states. The inflationary state of spend a lot, save a little, borrow loads. The deflationary state of spend a little, save a lot, borrow very little. It might be irrational for people to live in these two states but one individual will find it difficult to swim against the tide. In fact when other individuals move the economy to one of these states it is in the individuals interests to act this way too. The advantage of being able to print or burn money when you want to is that this change in the money supply can move the economy from one of these strangely attractive undesirable states.

There are problems with backing a currency by Gold.
1. Gold was very useful when you wanted something small you could hide from rampaging Vikings. In a world where Vikings have quit their rampaging and now sell us flat pack furniture some unit of wealth that fits more the needs of today’s society might be useful
2. Everyone hording their gold seems strangely reminiscent of Scrooge MacDuck swimming in gold coins crossed with Humphrey Bogart in Terror in the Sierra Madre.
3. Gold is useful for making overpriced audio leads and Jesus pieces. It does have an intrinsic value for making things and this leads to the employment of jewelers and such. If we lock away all our gold it cannot be used to clad rappers out in bling.
4. When a currency becomes backed by gold, gold will rise in price. So a load of people will go out and start digging up gold. These people could better use there time creating something that had an intrinsic value that was not altered by it being used to back the currency.

I hope we have moved away from an economy of fear (of Vikings) and hoarding to one where we can value things based on what they cost to produce. I will discuss backing a currency by the unit of production (the kilowatt) in the next article.

Tuesday, November 27, 2007

Coffee Inflation

There is no medium and large coffee anymore there is Tall and Grande. The words used to describe coffee sizes seem to be undergoing some bizarre exponential growth. At the current rate only astronomical terms will be able to be used for coffee sizes. I predict your order of coffee will change each year


Actually while I am giving out bullshit theories everyone needs a good end of the world theory.
I predict the world will end when India plays China in the world cup soccer final. Observing any event affects its outcome. And the more accurately observed an event the more you are likely to affect the outcome. The most watched thing to date was the moon landings but that was only a few billion people with bad fuzzy black and white TV. Now imagine how much observing will be done by 10 billion people using High Def big screen TV’s.
Now a shot goes in and everyone in the world concentrates on the position and the velocity of the ball. Some will concentrate on one the rest on the other. At this moment so many billion observations will be made that both the position and the velocity of the ball will be precisely observed. This is an impossibility and the universe will disappear.

Thursday, November 22, 2007

Gaia theory extemophiles

Gaia theory posits that “living and nonliving parts of the earth are viewed as a complex interacting system that can be thought of as a single organism.” This predicts that organisms will change their environment to improve its habitability to life. Darwinian selection says that organisms will adapt to their environment.

We only have one planet to observe Gaia on. Mars and Venus do not seem to have successfully carried out Gaia feedback mechanisms. Other extraterrestrial environments cannot yet be studied with enough detail to find life yet alone examine how life is altering it’s environment.

However there exists sealed off environments on earth where extremophile organisms have lived cut off from the general biosphere. If Darwinian selection is correct these organisms will adapt to their environment. This can be seen in cave animals losing the use of their eyes or in the case of bacteria such as Snotties that live on sulfur compounds. Another example of extremophiles found in gold mines that use radioactivity as an energy source

Do these organisms alter their environment is a way that is beneficial for life? Note that is beneficial for their life, they are adapted for living in these extreme conditions. Have these cave bacteria altered the cave environment in a way that aids their existence? Particularly you are looking for a symbiotic relationship between two forms of bacteria whose ratio alters in the environment depending on whether the dominant bactria’s byproducts are reaching toxic levels. The two forms of bacteria would be expected to be adapted to live ideally at one extreme of the conditions present in the cave but whose dominance would move the cave environment to the other extreme of conditions where the other form is better adapted.
These bacteria would have the roles of white and black Daisies in a simple daisy world model.

If Gaia theory is accurate you would expect to find that in any cut off cave biosystem (at least) two types of bacteria will coexist whose ratio will depend primarily on the environmental factors that the other type of bacteria has created. If such symbiotic cave biosystems are found then Gaia theory has another piece of supporting evidence.

Thursday, November 15, 2007

Next and Prediction

This article describes the physical problems with prediction of future events.

One issue that is rarely dealt with are the computational problems of such predictions. By this I do not mean their complexity but the actual possibility that such predictions can be made.
Take Newcomb’s paradox, a description of which can be found here. Essentially it is a game where if the machine can guess what you are going to do you lose money.

Now say the predictor is a program that is feed with all sorts of information about you and then uses that to make a certain prediction. Such programs exist. Shannon made one that guessed which number you will pick next.

Now scared of how this first program will be used to rip you off you decide to figure out how it is going to guess. You get the same program copy it to make a second program. Then you find out what it is going to say you will do and you do the opposite. This is a similar idea to that used by Turing to show that you cannot tell in general using a program whether a program will terminate. Essentially his argument boiled down to if you could make a DoesTerminate() program then you could feed this program this input

If (DoesTerminate()==True)
Loop forever

In the same way you could have a predictor P() and use it in your program
If (p()==2)
pick 1
pick 2

You could argue that the predictor could know you using a copy of itself and take this into account. Such arguments do not hold for the halting problem and they do not hold for the "prediction problem". This means that no computation can ever predict every action you are going to do.

Tuesday, November 13, 2007

1 million IQ points

How about aiming to make people smarter in a measurable way?

There are things that make your life better or at least easier. These include being good looking, being born in a country that is not overly corrupt. Another thing that helps is being smart. It is easy to get carried away here but essentially when people are smarter their lives tend to be easier.

Charities tend not to make their aims measurable. They tend to say “help the poor” rather then reduce “teach x number of people to read”. This makes it harder to tell what a charity has achieved. Because of this I think there is an advantage to having a declared measurable ambition.

The persons age or their smartness does not matter the aim is simply to make them smarter in a measurable way that helps improve their life. IQ is not a great measure of intelligence. But it is the best measure we have. For all its faults IQ does seem to be correlated to earnings and quality of life.
There are a few ways you can increase IQ. The easiest for me to do is to make the environment more stimulating. This has already (probably) increased the average IQ by 18 points in the last fifty years.

Is increasing peoples IQ a worthwhile aim?

Wednesday, November 07, 2007

The Taste Delusion

The industry based on separating out good and bad versions of a similar food stuff is a sham.

Experts cannot tell the difference between good and bad vintages of wine
People cannot even tell red wine from white wine.
They cannot tell single malt whiskey from blended whiskey
The place you drink coffee matters more then the coffee
Basically people will think anything fancy is nice even water from a garden hose if you dress it up a bit

Tuesday, November 06, 2007

Bog Body Business

Everyone wants to sponsor carbon sinks, but why just sponsor the sexy rainforest ones and ignore the bog ones?
There are hippy schemes where you can donate money to help preserve bogs.

How about a capitalist way that you can ensure a piece of bog is preserved? I want to do this by setting up a business that relies upon the continued existence of the bog you purchase. I am of the belief that just because you are dead does not mean you are no longer useful.

So I want to set up a graveyard for bog bodies. Your burial provides for buying a bit of bog that is kept as bog from then on. This preserves a carbon sink as well as your corpse. You get to decide how you are buried, so you can be happy that you get to mess with the minds of archaeologists in the future. I think I would get buried in a wedding dress surrounded by statues of Jimmy Saville.

Being a bog body the choice of gingers for thousands of years.

Monday, November 05, 2007

Deal or no deal

Watching this program makes me wish full on Charlton Heston biblical plagues upon the world.

This guy simply sums up the major problems

Playing the game boils down to
1. Do an average on the remaining boxes and expect an offer of this much.
2. If you get offered a small bit less then this but really need the money accept the offer.
3. Do not ask people who look lucky to help you when they open their sealed box. They have no effect on the box you idiot.

2. is interesting because it implies people who are poor sometimes have to accept sub optimal choices. By this I mean if someone offers me 1000 euro and I refuse based on the "correct" play I might feel annoyed but I will be ok, however if i needed the money to pay my rent I would probably have to take it.

However if I lost 1,000,000 playing correctly I would have acted like an idiot. Maybe this is to do with moneys marginal utility in that if you do not have much money a small amount can really help and if you have a lot even a large increase is of not that much benefit.

Thursday, November 01, 2007

Taxing Cannabis

Due to the reduction in house sales there is a one billion deficit in the Irish budget. In order to make up this deficit the finance minister needs either to cut spending or raise taxes. I want to examine the effect of allowing cannabis to be sold and taxed by the government on this deficit.

The amount of cannabis usage can be estimated from the amount of seizures "Cannabis resin valued at €48.7m was seized". Between 10% and 5% of all drugs are seized according to internationally agreed figures. So this means that the current cannabis market in Ireland is worth conservatively around 500 million Euro.

This 500 million could make how much tax for the exchequer?
Profits on cannabis is unlikely to be as high as the 400 times mark up on heroin.
This can be evidenced by the lack of cannabis dealers shooting each other. Still as this is an illegal drug it is reasonable to assume the costs of the actual product are minimal.

So if the legal seller of cannabis took half the cost to create and distribute the product and the exchequer took the other half in tax (this is a conservative estimate of the possible tax take) then at a minimum 250 million Euros in tax could be gathered each year from current levels of cannabis usage.