Thursday, May 9, 2019

Direct inflation in 30 years

The long term, central bank inflation expectations of the boomer grand kids is .5%, a half point, with price variance of about 34%, envelope numbers, basically the minimum possible error in 'right to coin', it is Einsteins 1/2 quant of energy** in the vacuum. That is two of these Fed contracts, a peak to peak look at the total sequence in handling the right to coin.

At that point, the right to coin will be an institutional nuisance, an extreme last ditch, and costly salvation for Congress, the nuclear option. Everyone glad to pay the half point and keep it tamped down.

We can easily derive this  result with a combination of spectral theory and Moore's law, working from the faster transaction rates realized by both Morse, Moore, and Shannon Law.

** Note, this is Einsein''s number at infinity, real finite stuff doesn't make it to infinity, and will requant instead. Planck's curve is taken at infinity.  There is no infinity, and there is no flat space, the half bpoint flat energy is likely more like three quarters of a point, 1.5 sigma.  This is requant noise inherent in the compressed, meta stable systems.

Finance is not nearly infinity, it is orders of magnitude less.  That is a great scale difference in computation, the two scales do not match. Physics has  a 'dense' spectral system, like those relying on exponentials. Finance is sorting large, but very finite sequences.

So the long term cost of right to coin is closer to 3/4 a point, still reasonable. We can forget about  changing that law for a hundred years. At some point society will amend away all the benign rituals from the past.

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