A plain meerkat’s guide to economics.

It seems to me that the world economic system is in a bit of a mess at the moment and, as I have an hour or so free, I thought I would give the politicians and economists a few tips on how to sort it out.

Before I start, I feel I should list my economic qualifications so that you can judge my authority and knowledge in this field.

None.

I have relied a great deal on advice from that famous economist, however, Sir John Milton Keynes.

I was also inspired by a chart on a BBC web site that took my attention while I was browsing through the blog of a well known published author at:-http://klquirkytales.blogspot.com/2011/11/news-round-up.html

I recommend this blog, do have a read.

So lets get the Euro zone sorted first and then get on to the difficult stuff. The problem all seems to be about who owes how much to whom so take the UK and Ireland as an example. The UK owes Ireland €113.5 bn and Ireland owes the UK €104.5 bn. Now even my simple maths can cope with that and see that the UK owes Ireland €9 bn net. OK that’s simplistic and I know it is different people and companies that owe different banks different amounts but why not look at it in a simple way. I suggest we set up a bank in the UK and call it, oh I dunno, say, The Bank of England and tranfer all the UK to Ireland debts to that bank. Do the same in Ireland, perhaps call this bank, err, The Bank of Ireland. The two banks then net off the debts with the end result that the UK owes Ireland €9 bn. Doesn’t seem so bad now does it? All we need to do is cut down on MP’s expenses for a couple of years and we could pay that off. Think how much we will be saving in interest payments. Now we could do the same with the other countries – if they all had central banks. They do? That makes it even easier. Now all the companies in the UK that were going broke because of all the interest they were paying on their debts are not paying any so they can afford to invest and take on people and start selling to each other. I think this is called economic growth. All these people that are now employed are now not drawing benefits but paying income tax and national insurance so the governments income increases so the deficit can be paid down. This is called a virtuous circle.

There is one big catch to all of this which I am sure you will have noticed, being clever Open University students. Where does the Bank of England get the money from to pay the aforementioned €9 bn that we still owe to Ireland. Well, perhaps they could print some money. What! They already have? Where did it go? I didn’t see much of it, did you? You say they paid it to the banks? Don’t be silly. Why would they do that? Oh, I Asee. Yes, I guess someone has to pay those salaries and bonuses to those poor, unappreciated bankers ( Did you know that ‘b’ is pronounced ‘w’ in German?  Sorry, I digress. ). Here is a different idea. Why not get the Bank of England to print a bit more money – say £100 bn ( None of that Johnny Foreigner Euro stuff ) . I think the population of everyone over sixteen years of age in the UK is about 50 million. Do the math as the Seppos say and you give every adult in the UK £2,000 in vouchers that has to be spent on goods that have been produced in the UK, within 3 months. Wouldn’t this produce more growth than giving it to banks who will buy gold bars and stick it in the vaults – if there is any left after the salaries and bonuses have been paid?

I know it is a bit more difficult because of the difference in owings between some countries. For example, Italy owes France €309 bn and France owes Italy €37.6 bn which means that Italy owes France €271.4 bn net – a huge sum, so what is to be done there?  Italy could invent a new currency – perhaps call it the Lira or something similar and tie it to the Euro. Then devalue the Lira against the Euro by 10% each year. This means that Italian exports in France will get cheaper year by year and so France will buy more of them. French goods will become more expensive in Italy so Italians will buy less of them. This means that the net balance will slowly reduce. To make this politically acceptable to private Italian savers with money in the bank, their accounts should be topped up by the 10% loss each year by the Italian central bank so that they will not withdraw their Euros before they are converted to Lira. After about five years, the net debt will be reduced dramatically, the 10% ‘girdle’ will be removed from the Lira and it will be allowed to find its own level which, at the moment would be at about 50% of the Euro so Italian industry would become very competative again and economic growth would take off. Well, until lunchtime anyway.

The same thing should happen with all the world debt that China are holding. The renminbi is badly over valued at the moment and should have some downward pressure applied by agreement. If the Chinese government refuses then tariffs equal to the required devaluation will be applied by all countries around the world to exactly the same level. This will have the same effect as devaluation of the Chinese currency.

Simples!

Next problem please.

Alexander Potempkin – Moscow 2011

References:-

The General Theory of Employment, Interest, Money and Meerkats – Sir John Milton Keynes 2010

http://klquirkytales.blogspot.com/

http://www.bbc.co.uk/news/business-15748696

Dimensions

I lay in bed. I look at the wall facing me, at the foot of the bed. I move my gaze to the right, following the wall. The wall stops, there is another wall at right angles stopping it from going any farther. There is a corner between them where they join – two walls but only one corner. I follow the corner upwards to where it hits another wall. This one is called the ceiling. It is at right angles to the other two. Now we have three walls and three corners. The three corners descend towards each other and meet to form a super corner. What is next. Ah, another wall. This one must be at right angles to the other three and, when it is in place it must produce how many corners – I suggest six. The problem is where you put this wall to satisfy the conditions. I try this wall in different positions, nothing works. Something is missing. We need another place. What is missing must be the fourth dimension. Problem solved, we have a tesseract.

Now we have to test the hypothesis.

If you unfold a square – two dimensions, you end up with four lines – one dimension.

If you unfold a cube – three dimensions, you end up with six squares – two dimensions

If you unfold a tesseract – four dimensions, you should end up with cubes in three dimensions but how many? Using the previous examples, the answer seems to be twice as many objects as there are dimensions, so eight. Now we have four dimensions in one room.

This would be a good way to build a space saving house. Build eight cubes, call them rooms and then fold them into the fourth dimension. ( You might need to hire a special tool to do this ). No corridors are needed because all of the rooms are next to each other. This house only takes up as much space as one room but it has eight rooms, each one is as big as the house.

We can draw points, lines, squares and cubes on paper in two dimensions. Can we draw a tesseract reduced by two dimensions and draw it on paper in two dimensions? The answer, surprisingly, is yes.

wikimedia.org/wikipedia/commons/4/45/Dimension_levels.svg

The most recent physics, string theory, predicts we live in a space with ten dimensions, M theory requires eleven  This is where it gets difficult. Where do you fold all these dimensions? It seems that we can just about visualise and cope with eight cubes folded into a tesseract in four dimensions but eleven dimensions? They must all be very tightly folded. Quantum physics, of course stipulates space with an infinite number of dimensions.

So far we have stayed in the room but if you start at any corner where two walls meet and then follow this corner until you come to a third wall, you will be in a super corner where the three walls meet. If you get right into the corner then you are at a point. A point has position but no dimensions. If you now go further into the corner, past the point with no dimensions you suddenly burst out into a different universe where there are no walls, no limits and no corners, only cabbages and flowers, butterflies and bees. Different rules. How many dimensions? Is colour a dimension, is smell? What about time?

Forest dreams

The speed of rotation of the Earth and hence the length of the day was determined many years ago, about 4.6 billion years in fact,  by how much mass of star dust coalesced to form the Earth and the quantity of rotational energy transferred from that dust. This rotational speed has been decreasing very slowly since the moon split off from the Earth and started the tides in the oceans. These tides act as a drag and so are slowly reducing the rotational speed and hence the day is getting longer. The friction of the oceans in their basins is also slowly warming the Earth, but not by very much.

The rotational speed of a spinning object can be varied by frictional drag, as we have seen but it can also be affected by moving the object’s mass closer to or further away from the centre. This can be seen when a spinning skater speeds up by bringing her arms in closer to her chest.

The same effect can be seen on the Earth by cutting down trees, a laid down tree has its mass closer to the centre of Earth than does a growing one. As the Earth is progressively deforested then this effect will increase and so the day will get shorter.

One more argument for growing trees and not chopping them down.

Radioactive decay and the meaning of life.

Take a lump of pure uranium 235. Make it a small lump or the experiment won’t last very long. ( See ‘chain reaction’ )

This uranium is unstable and will decay into different elements over time. This can be shown as a decay curve that shows exponential reduction of the uranium. This means that each molecule of uranium will decide to decay at a different time. But, they are by definition all the same so why do some ‘decide’ to decay earlier than others?

Possibilities:-

1 – Each molecule is different and so decides when it wants to decay.

2 – Something is in control and so tells each molecule when it is it’s turn to decay.

3 – Neither of the above are true so the decay of each molecule is totally random and it is only the very large number of molecules involved that give the smooth decay curve.

Argument:-

#1 cannot be true because each molecule is made of the same, identical smaller particles.

#2 seems unlikely, who, what, would bother to individually control every molecule in the universe?

That leaves #3 which seems to be true. If so then this fist sized lump of uranium is demonstrating that all events in the universe are random.

Sounds good to me.

 To put it into modern terms, there is no app for the meaning of life.

Today's controversy

Neutrinos have been discovered travelling faster than the speed of light. Was Einstein wrong? No, not in this case anyway. C = the speed of light in a vacuum. There never is a vacuum even in deep space – how deep is space, stupid expression, space stretches to infinity, or back on itself in every direction. Quantum theory suggests that positron / electron pairs are popping into existence and then cancelling each other out all the time so there is always something in a vacuum, quantum froth.

 This something will slow particles to less than ‘the speed of light ‘ depending on their mass. Light has a wave / particle duality. If you have an observer then they will be ‘seen’ as the quantum particle equivalent of the wave which is packets of light called photons. Photons must have mass because they have energy because they are always moving - it is a non question to ask, 'what is the mass of a photon at rest?', so they will be slowed by particles in a vacuum. Neutrinos will be the same in that they will be slowed by any particles in their way. So, if neutrinos are observed to be travelling faster than ‘ the speed of light’, it just means that their mass is less than that of photons. Einstein has not been mocked. He was probably playing dice with god at the time.

What is now?

What is now?

Send a person to stand on the sun, ok, be kind, give them asbestos boots, with instructions to shout ‘Now’ at the same time as you. Stand in your garden on a cloudless day and look at the sun through smoked glass. Can you see him? Are you ready? Shout ‘Now’ and wait. 18 minutes later you see him shout back ‘Now’. The question is, ‘why did he wait so long? Look at it from his point of view. He shouted as soon as he saw you shout so his now is 9 minutes after yours but, from your point of view, your now is when you shouted and his now is 18 minutes later. We now (!) have three ‘nows’. Which one is the real ‘now’. Depends on your point of view.