But the small states each get two senators. Anybody in the Swamp figure that out?
Wednesday, September 30, 2020
Small states have tiny airports
U.S. proposes $1.5 trillion stimulus, $20 billion aid extension for airlines
Who will price carbon?
If there is a single issue that matters more than any other in the broader debate about climate change, it is how to price carbon dioxide emissions. The battle against catastrophic global warming will have already been lost if those advocating a low figure come out on top.
The cost of global warming is determined in tort, not government. If the cost is turned into carbon taxes then you just change the cost by increasing it as government subsidized oil consumption. Economists can never figure this out, most of them have no good pricing theory anyway.
Two hundred years of Franciscan slavery of the natives?
The bill will require a commission study the lingering impact of slavery in the state and make recommendations to lawmakers by July 2023. The recommendations should include details on what form of compensation should be awarded as well as its recipients.
I do not think we had much Black slavery out here.
We be slightly better next time
It is mostly the momentum from that fist jump, out hyperinflation right after the Nixon Shock. That initial jump required a series of adjustments to the entitlements, a bit of revenue sharing, then a longer period of disinflation.
We can change the sequence a bit, lower that initial jump, then do a contract renewal mid stream. We can this time slightly better than last time.
He bumps up against Overton:
Instead of having the Fed review its "strategy, tools, and communication practices" every five years, as recommended by the FOMC, it is time for Congress to step up to the plate and not only examine the Fed's performance but discuss alternatives to the current dual mandate. Considering NGDP targeting is only one possible rules-based alternative.
Hints at the obvious:
But, if the Fed's primary mandate is long-run price stability, should it be the job of the Fed to spike inflation?
The devaluation tax is the responsibility of the Senate.
An LBJ vs Nixon election
Democratic Sweep Will Unleash New $7 Trillion Fiscal Stimulus
I have the banking crisis in 2021, but some say we can go one more round.NFL takes a covid hit
NASHVILLE, Tenn. — The Pittsburgh-Tennessee game originally scheduled for Sunday will be played either Monday or Tuesday due to positive coronavirus tests among the Titans, the NFL announced Wednesday.
The NFL said a new date and time would be announced as soon as possible and that the postponement would allow additional time for further testing.
On Tuesday, the NFL said three Titans players and five team personnel had tested positive for COVID-19. The Titans have closed their facility at least through Friday and will not be able to practice in any fashion together until Saturday at the earliest.
Proud Boys
The group believes men—especially white men—and Western culture are under siege; their views have elements of the white genocide conspiracy theory. Officially, the group rejects white supremacy, although members have participated in multiple racist events and events centered around anti-left violence, with a former member organizing the Unite the Right rally in Charlottesville. The organization glorifies violenceand the Southern Poverty Law Center (SPLC) has called it an "alt-right fight club."
Sort of a gang without a purpose, Yippies done with violence. I am not sure the binary divide works so well, we have everything from horse clubs to QAnon to Proud Boys to the Anificants.
We have to admit there is a continuum having only the theme of causing noise. Just different groups emerge during the period of restructure, some born of plain anarchy. The systems not working well and the tree of liberty get shaken.
The market jumps on stimulus hopes
It is a paper swap to avoid Fed taxes, once again.
The corporate can put the money on deposit at the Fed, or they can use it in non bank credit instrument, like purchasing other corporates. it is not in the bank credit system, it is not subject to the tax. Corporate stocks have a partial liquidity due to the NASBA and enforced uniform accounting standards. The stock market is a substitute for distorted central banking. I think they call it gamma when it affects the market uniformly.
I nominate myself for chart of the week
A perfect example of sandbox theory, the banks can collect taxes when the demand for American banking services is high, a congestion fee.
The chart has the perfect lag during stress to identify cause and effect. Look at the response of red to blue at the onset of covid.
And the chart predicts a sudden rise in reserves at the Fed. The banks cannot collect the taxes Treasury needs.
And the chart illustrates my major point, the red lines needs to be decorrelated from the blue. Devaluation taxes are a Treasury function, it is right there in the Law, and the Fed is likely to see the whole mess resolved with adjudication. Someone will win on Due process or Right to coin, depending on their angle. Due process, where relevant, gets passed down, and collecting Fed taxes is definitely a relevant are for Due Process. If Treasury legally passed on the right to coin, then they got stuck in the 14th, Due Process banking, and if not that then illegal taking. This chart is evidence.
Mass layoff count
Disney, 28000 and Shell 9000.
Nothing unexpected in a Black Swan pandemic killing seven times as many people as auto accidents. If you think about it a moment, instead of congestion covid wards we get auto accident wards, and about every day your downtown has a mass traffic jam from auto accidents. Covid is not a conspiracy, though it is indeed better than having seven times the number of auto accidents.
Absent covid my expectation was a smooth, minor default contract, and move on with just a bunch miner recessions. My optimism grew when I compared Nixon, we survived the shock. It can be done a bit better and we survive with less stress. Then came covid.
Krugman's real complaint
We are dumping the ergodic assumption, or more properly, moving that up one layer to insurance, and ex post business. The ergodic assumption was the Samuelson, MIT trick which got us another 'This time is different'.
relating to or denoting systems or processes with the property that, given sufficient time, they include or impinge on all points in a given space and can be represented statistically by a reasonably large selection of points.
We are not that for two reasons, we can do superposition, swap between two different distribution functions. And there is residual chaos, bound but chaos nonetheless.
Ergodism is like godotism, it allows the economist to central plan, when given an infinity of optimizing selections. We got a finity of Congressional brains in a finity of government options, where finity is reduced to a small integer.
My plot is completely mainstream economics
It has all the parts, 'borrow in your own currency', embodied in Right to Coin, backed up bu Uncle milt and the monetary history. It includes liquidity policies like revenue sharing tried before. The generational over lap is accomplished by the work of doing i rather then the wish of dreaming it.
My plot is a repeat of American history, past, present and future. A New Fed contract is standard procedure, has been going on since the founding. My plan deals with the state issues which you find as a central theme in mos American history books. My plan is backed up by good math.
The Overton object has to to with me dealing with the nitty gritty of it, finding and reducing the choke points. It is not smooth, but it does equilibriate to an uncertainty which we can reduce. We can get a technology upgrade, we can get a productivity improvement, can can cover more than half of the devaluation tax.
My goal has become more about Swift, it is a good ledger system. We can squeeze a five percent productivity gain if we liberate that system by giving the New Fed a much longer lease, and letting treasury handle in devaluation taxes. It is like taking Arpanet to a full Internet, we want to do the same with Swift. Rejuvinate the entire Swift system, banks and all rejuvinated by thie Swift platform once we get a mini Swift into our cash cards. Swift can make a great technology base for central banks.
Swift has what none of he other ledger systems have, a long history of dealing with bearer cash. Take that intellectual history, add to it digital bearer cash, and Swift easily dominates,especially of walled off better from Congress. In sandbox Swift is an easy and smooth cash protocol with its hierarchical clearing system. Any agent can keep cash of dump it into her corresponding Swift account. Each Swift bank already has keys and safe encryption, plus verify with timeout. It is perfect for sandbox, if we can keep the monopoly fees under a quarter point, mostly. Sandbox will wipe out the devaluation tax with productivity. The blending between Swift cash, the trading pits, and the Swift ledger is simple, much easier done than bitcoin and block chain.
Even if he New Fed Swift system limits digital cash to fifty bucks a month, fine. We would be busy for years with that getting efficiency gains fro the internet with point to point pay. That gain is a compounder with sandbox, a breadth and depth kind of thing. So, no, a puny 2% devaluation tax is not scary if we get the New Fed we need.
Actually it is defaulted into existence
The capacity for the Fed to generate more inflation can be appreciated in a straightforward statement:
ALL MONEY IS LENT INTO EXISTENCE.
Ruminating on that statement helps you understand why inflation is not running rampant despite Fed “printing presses” running at full steam. It also provides a glimpse as to how the Fed can change that. But first, let’s consider how money is created.
“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Those oft-quoted words by Milton Friedman define the root cause of inflation. To paraphrase, it means more money chasing fewer goods creates inflation.
Most economists agree with Friedman’s theory. The question, however, is what constitutes money? The problem facing the Fed is that they do not create money. Strike that; the Fed does not yet create money.
The double entry accounting system does better with inflation than it seems. The inflation we have seen happened between 1972 until 1983. It was defaulted into existence. Since then we have had disinflation, the economy taking a generation to sort out all the pricing issues. So the post is correct, just out of phase by half a generation.
The scary part is the disinflation continues into deflation, not from loose money but from the tight money leading up to another default. All those piles of too much money are just that, piles, piles tied to a regulatory tax and legal double entry accounting system. Velocity is collapsed, the economy still down below zero growth rate, mostly the black swan making all supposition shaky, I admit.
Debtor's prison
California cities can’t swap pensions for 401(k) plans if they’re in CalPERS under new law
State legislature locking up city governments, Legal, IMHO.
Hillary dunnit?
In late July 2016, U.S. intelligence agencies obtained insight into Russian intelligence analysis alleging that U.S. Presidential candidate Hillary Clinton had approved a campaign plan to stir up a scandal against U.S. Presidential candidate Donald Trump by tying him to Putin and the Russians' hacking of the Democratic National Committee. The IC does not know the accuracy of this allegation or the extent to which the Russian intelligence analysis may reflect exaggeration or fabrication.
Four years of Hillary hysteria. That is quite a mess for one person to create, almost as bad as her mess in the middle east.
Tuesday, September 29, 2020
Consider NGDP targeting
Nominal GDPs are bets by the bankers. It is the estimated amount of liquidity ex ante.
When you tax collateral, arbitrarily, you get less banking, fewer trained bankers making NGDPs. The Fed chases its tail until it owns most of the collateral, banking is shut and the Fed is left taxing the lesser amount of collateral held in concentrated hands.
This is an impossibility, a steep downward loop. Congress cannot adapt in time, this is a sudden big tax overhaul just to get the Fed tax off the back of banking. Powell and Bernanke have put a huge blunt shock in front of Congress, in the middle of an election and scarcely a small state governor with room temperature IQ.
And that is why Congress is stuck, this is not loose money, collateral is way overburdened and money is tight for all except those willing to pay the tax. The immediate effect is dead stop in the Swamp and in the big states. These politicians are overwhelmed, and have been deceived by their favorite economists. Never be able to sort this out, unless, those plan B notes get shuffled closer to the top on their Overtons.
The numbers are easy here. Government generally pays about 2.5% at most, on its ten year debt, if you take total interest payments / total debt. But the Fed tax was running a hundred billion before covid and will likely run just under two hundred billion. That is a 1% tax on bonds, yearly, a reduction of about 2/5 of their yield capacity. You will get 40% less regulated banking. That is 40% fewer retail middle class bank accounts, very tight money, tighter than you have ever seen. It is a spiral for the reasons stated earlier, velocity drops, so our ability find accounts willing to pay the tax goes down as iLog(i), more than linear. We lose breadth and depth.
Sometime in 2021 we will see this cliff approaching. Negative rates are no help, that is just a reformulated central bank tax. When we see the cliff, then suddenly, everyone will want to save the banking network. The way to save central banking network is to put the choice of inflation tax back onto Treasury, and the Senate. Taxing is absolutely none of the business for banks, nothing of the sort.
The New Fed contract can agree to that authority, a right to coin, actually, under an enforceable contract. That inflation tax is renewable, it is still partially a central bank burden, a slight monopoly fee. We want that fee at a quarter point (with a bound to half point) and the Treasury inflation at 1.75. The Fed needs about a 100 billion in market risk capacity, a half point. Everything else it does is a liquidity trade.
But the fixed monopoly fee is contractual, a trade for valuable government bonds. The New Fed can go to court and enforce the inflation contract. The intent is to make defeating the contract worthless when waiting for contract renewal is just as good. Experience shows that a good 'This time is different' takes at least five years to promulgate. In five years we can say, 'do it at the renewal'.
This mess should be handled before the upcoming tax battles, and the tax battles are long and drawn. But there is no tax solution, at this point, the can is not kicking. We cannot kick until we have bankers. Congress and the governors and the Swamp in general will be overwhelmed trying to find that Fed tax.
Shadow banking gets market share
Non-conventional lending enjoyed a substantial increase in its share of the market for financing new home purchases in 2019. The National Association of Home Builders (NAHB) says, while conventional loans continued to dominate those purchases, its share shrunk from 71.4 percent of the market in 2018 to 65.0 percent in 2019 while non-conventional mortgages increased accordingly, from 28.6 percent to 35.0 percent.
This is one sector, but the other retail banking sectors are also shrinking.
Monday, September 28, 2020
Trial results look good?
Putin To Be Among First To Receive 'Controversial' Sputnik Vaccine Ahead Of S.Korea Visit
I would surmise the vaccine at least passed the side effects issue. It has been a month or two.
It is not a banking crisis
It is a 'Do slightly better than Nixon' crisis.
We get better at this. It has been done before, in memory. It fits some pattern in history, we generally survive it. My coin toss is fairly weighted, there is a very good chance we will do no worse than Nixon. I would call it a banking pain in the arse. At this point, plan B is in the notes of our esteemed, that is enough. Those plan B notes are good enough to get a better Nixon.
Monetary velocity and value chains
Remove time from the equation, ask instead, what is the clearing rank for an inventory chain, the number of goods transfer from root to leaf. That should be the monetary base into GDP over the cycle. The clearing time for most consumer goods is a year, so that is a good time sync when used carefully. But that is not all goods, only about 70% of them.
Velocity is very important. But velocity tells ma that when value chain rank drops, then banks have a harder time collecting fed taxes. By definition, when velocity drops to one, the game is over; and the game usually over at rank two. The regulated banks have to shut down, shorten the tax collecting value chain, excess deposits back up again.
Transaction rates are central to humans, it is the definition of human. That means, demand follows a corridor, neither too much or too little. In the end, it is all consumer goods folks and comfort is defined at human interaction rates.
The Fed does not go belly up, it can print its own salaries easily. But Congress is faced with a sudden, horrid choice. They have massive tax short falls in a deflationary environment. Then comes the blunder, the large spike in default inflation. Not as bad this time, we have more clues. Here is the chart:
On general ground, this is a constant divisor, and assumes years are the complete story of the economy. It has information, more information than distortion. It at least is a good proxy for the complexity of consumer goods on a yearly budget. It is not invented, just imperfectly timed and under sampled. It looks like something went haywire in 1990. That means the Fed has very few places to stuff the tax collection, banking is about to shut down, a depression.
Fed taxes and dollar value
That is a fairly high correlation coefficient, not .95 or anything but close enough to show the two are related.
What the Fed is doing is indicating a willingness to tax the banks and make the Swamp whole. This makes government bonds safe and all those Black-Sholes time series are more accurate. The downside is that Congress is blind, they have no idea about government prices and productivity goes to hades, we end up devaluing anyway.
The red line is not the seigniorage fees, they were about a hundred billion before covid. The red line indicates, under the current circumstance, the relative bank cost of collecting that tax. The higher that line, the more willing are the retail banks to go tax collecting.
The red line is headed down, to meet the dollar value. Expect a flood of excess deposits at the Fed. It seems that cause is higher dollar effects banks more willing to go tax collecting.It is like an entry fee, congestion adjusted like any monopoly would do. In the sandbox model the pit boss takes such a small share of the trade space that exogenous monetary shocks are mostly split between deposits and loans.
The safe way to avoid the tax is to return the tax collecting duties to Treasury, give them a devaluation tax authority within an agreed bound. Leave the banks completely out of the problem. Or a partial deal, the Fed pays a fixed, and small monopoly fee, say a half point, and Treasury can hit the rest of us with the one and a half point difference in inflation taxes.
Just do not be collecting Swamp taxes through the regulated banking system. It is the monopoly tax dollar, used always to pay government taxes. So it is automatically, 100 percent a double tax, without legislative approval. The fed cannot afford the market share loss, it is extremely deflationary.
Missing ID story
Somewhat typical.
I have a tenant with a notorious life and she does not want folks to know where she lives. Then came the stimulus checks and she needed to re-register her new address. I couldn't help her unless she fessed up to her address, so she got her cocaine dealer to fill it out the form with his address and him in charge of the pass code.
She only gets half the stimulus check. This is the underground.
The Fed has a tax for that
"Inflation Is Already Here": The Fed May Have A Major Problem On Its Hands
Interest charges normally equalize prices across a demand shift.
When we hit ZB then taxes have the same effect. The more stuff you by at congested prices the higher your banking tax. It works just like interest charges, but has a different name to cover up the tax.
But he does high level complicated stuff
CDC director overheard blasting Trump health adviser: 'Everything he says is false'
The director of the Centers for Disease Control and Prevention (CDC) was overheard blasting Scott Atlas, a new member of the White House coronavirus task force who appears to have the ear of President Trump, according to a report by NBC.
"Everything he says is false," CDC Director Robert Redfield said during a phone call on a flight that was overheard by a journalist working for NBC News.
Why would anyone consider Scott Atlas to have expertise with covid?
He is not, and that is not a criticism. The criticism is with Trump, what is all this high level complicated stuff that Scott was hired to manage? The issue was covid, not complicated stuff, the complicated stuff in the Swamp is widespread.
T = 4, Mish, making you wrong on velocity
Mish:
V = GDP / M2
It's important to note that velocity has no independent life of its own.
GDP can be thought of as Prices * Transactions or (P * T).
This leads us to
V = (P * T) / M2
GDP is computed over four quarters, under the assumption that most of the GDP settles over quarters. What does settle mean? Value chains have cleared, the depreciation time of the economy is four quarters, approximately. How erroneous is that? Mish's point is that it takes longer, or shorter to settle the GDP, though he does not say that.
How much error is introduced when the GDP settling time is longer or shorter? We can measure that, using the slope of the implicit deflator index (ex post) an the cpi (current). If the settling time of the GDP is constant, then these slops will be about equal. They are not equal slopes, there is an ex post adjustment effectively changing the settling time. In fact the settling time is closer to 50 years, the time needed to figure out what prices really were.
However, over a single year those slopes only vary by a few points, and that makes velocity accurate to about 85%. still quite useful. In other words, the vast bulk of the GDP settles, or clears inventory, in about four quarters, the seasonal. For consumer goods, this makes real sense as consumers plan seasonally.
But, to repeat the main point, velocity is fairly accurate. It makes perfect sense to interpret velocity as the transaction rate, or relative transaction rate when decomposed. When velocity drops it generally means our value chains are shorter and we are a less complex economy. Dropping velocity is characterized by the Fed constantly intervening in an unstable economy, and constant Fed interventions means government multipliers way below one. Ignore velocity at your peril, but it is a stark warning about the cost of government, namely, we cannot afford it.
Sunday, September 27, 2020
Weighted binomials
So let Px be the frequency that the X binomial gets updated, and so on. Let Ix be the total number of coin tosses allocated to binomial X. And so on.
Then we have a relationship that the sum -iLog(i) will be the log(x^x*y*y*z*z), and we can let x,y,z be integers. -ilog(i) is the mean of binomial i, where means are normalized to 1. A switch of parameters gets us to integers, but we have to include N, the total number of coin tosses. The Pi, Pj, Pk are just the number number binomial terms shared among the total.
This tells me something about Markov 3-tuples. The left side is simply the weighted mean of binomials with a free parameter,N.
Markov is open ended in that getting three hits in a row solves to an adjacent node. So in the solution set, one has to call an 'out of bounds' for some rational reason related to context.
I digress. The weighted mean must be 1/2, normed to one. Moments are being removed. The left side happens half the time, the right side is cropped significantly. This is where I am thinking, then reconsruct the final weighted binomial, it should be white noise.
It is adaptive, the most entropic path is taken and not known ex ante. The -iLog(i) should be approximated as normal. One can see that having any binomial be the most entropic path three times in a row means a redundancy in the other coins, they are forced out of relative prime. Exceptions are generally explosions. There is an inherent cropping, allowed by the round off error.
Property tax bill and election ballot come on the same week
In California where the ballot contains proposals for additional property tax bills. I think we have another proposal to steal another tax bracket from the Swamp, and that will pass, the other failing leaving a severe contradiction, the Swamp has to give up another tax bracket to the states. The last battle over this was a last minute, midnight, Obama deal on the night of a mid term election. However it comes out, NY is involved, and we will have a few months of tax confusion.
For the Godotists, this is crowding out, pure and simple. It is a repeat of 2011. The outcome of the tax results can alter California's public sector recovery by a couple of years, and then the mess is hopeless.
I have a prior. I have abandoned my tax deal with the IRS, and now I am delayed further until well into 2022 as we have a year of tax uncertainty which jams the system. At some point my puny 10 grand deal is not worth the bother, for them or for me.
In every sense of the word it is crowding out, it is people jammed in a tax line, waiting on a tax accountant, delaying city budgets, delaying retirement, hiring debt consultants etc etc etc.
Getting shoved off the value chain
Covid and developing economies
Andy Sumner of King’s College London and his co-authors estimate that a COVID-19-induced contraction in developing countries of 10% of 2020 GDP would push about 180 million people below the $1.90/day extreme poverty threshold. And while the World Bank has based its own estimates on smaller, country-specific GDP contractions averaging 5%, it still warns that 70-100 million people could fall into extreme poverty.
Egad!
The Trumpster is broke
Trump’s tax revelation could tarnish image that fueled rise
Kleptomania and good business practices do not mix.
The Fed transfers
Those number seem about right, the Fed market risk is about a quarter to half point, and pricing risk about 3%.
The Fed needs to pay interest when it has too many gains, and earn interest visa versa. Generally the Fed is dealing with left skew or right skew. So it is essentially balancing fits own loan to deposits across the maximum liquidity balance point.
Think of the inflation tax that first appears in the a treasury deposit. No corresponding loan, and the aggregate loan/deposit decreases and traders respond with new borrowings. But not completely, and the Fed, a pit boss, will intervene and take on more market risk. The Fed will increase its L/S, paying out money, a small loss.
Treasury, being an exogenous money printer, gets small hedging gain due to innovations. small hedging gain. But the inflation tax is expected and shared by all parties. Over time the Fed S/L is still price neutral, government is not. So this scheme require government to deal with its own rising prices.
That means a significant reform, mainly remove all the inflation adjustment clauses. But in return for the reform, government gets a permanent new tax. And it is a variable tax to some extent, depending on the contract. But if real growth is over 2% government should be fine. The inflation tax comes to 400 billion a year. The CBO says we need 900 billion extra per year to cover or existing debt. This simple trick gets us half way there.
Not all central banks are the same
ZURICH (Reuters) - The Swiss National Bank plans to pay out 2 billion Swiss francs ($2.05 billion) -- and possibly more -- to Switzerland’s federal and cantonal governments after swinging to a big 2019 profit, it said on Thursday.
The SNB expects an annual profit of 49 billion Swiss francs ($50.29 billion),
But it loses now and then:
The profit, after a 2018 loss of 15 billion francs, means the SNB will pay out the maximum agreed amounts to governments for last year. It will discuss possible additional payments with the finance ministry.
It is income averaging over two years, to a 17 billion a year profit and paying 1 billion a year. A tax rate of slightly less than 5 percent.
It is 55% owned by government. It operations seem independent of government.
They have a minus .75% saving rate, who pays that? Not too many,the member banks keep the money off the central bank account.
The bank’s unorthodox policies have also led to a massive swelling in the size of its balance sheet: the SNB is one of the world’s largest investors, with a portfolio of stocks and bonds larger than that of sovereign wealth funds run by oil and gas-rich states such as Qatar and Abu Dhabi.
The market to set the currency is foreign exchange. They mostly hold foreign assets. The Swiss Franc is a share in a large investment bank, a mutual fund. It negotiates its tax rate like any other voter, subject to vote. But it is a government monopoly. There are other investment banks in Switzerland, some of them large and well known. How did the Swiss National get the monopoly? By agreeing to extra taxes?
Saturday, September 26, 2020
Due process and right to coin
At some time Due Process did not include the demand for fair central banking. But the concept has been widened to include most of the bill of rights, and so being locked out of central banking s like being denied mil service. There is this special case, a conflict on the right to tax without a vote. It is a general tax, a money tax, but unelected banks choose where that tax is collected. The right to set the value of the currency has been superceded by the sanctity of debt, which means only the federal government can apply the inflation tax, it must use open market, and that means trade the inflation tax for banking independence.
Who gets robbed of Due Process? Mostly the middle class unless they keep money in stock and bond funds. Short term credit risk goes way up because collateral is taxed, so middle class accounts see high transaction fees.
There is no class action, as the Supremes will claim the middle class already has the right to coin, and collecting fees is part of the setting of value. Can we have a system where the central bank is the dominant tax collector? Not a good idea, better to let Treasury tax have the inflation tax. Then treasury directly sets the value of the tax dollar by executing the devaluation contract, or law. The Fed remains price neutral.
The inflation tax is us, voters, paying for past due taxes with borrowing. But if we can expand the Fed , say double the customers, those taxes drop from 2% to 1%, our smart card fee. That is the trade, Fed independence, more of it. larger market share; our seigniorages taxes gone but we get higher rates.
But we can easily double the customers, if we can dump Treasury. There are 20% unbanked or severely under banked. Fair banking should increase personal efficiency by five percent, there we go.
Get the poor onto a bank account, get them a Swift correspondent account. Then they have a secure identity on line and off line. Loan money to the poor, in small amounts. They will get a sense of the future, become more efficient. credit lets us change the order of events.
I would think due process applies, when the best money technology is denied to the poor and middle class, that is a violation of the right to coin.
Simple autonomous encryption
Perfect secrecy cryptography via mixing of chaotic waves in irreversible time-varying silicon chips
This is an advance of the previous idea. The idea was a one way chaotic encoder, it is very fast in one direction as it is analog, repeatable, but simulating it requires a million cycles. The security derived from the idea that a cheater had to simulate all possibilities and find the code while the sender need only simulate for the message.
This one advances that by having both parties share their reverse simulation numbers, then encrypt with both of those. The receiver has a message encrypted with both party keys, but it can factor its own out very quick, then use the reverse simulation to back out the other party native key. The attacker problem goes up exponentially, the secret channel complexity goes up linear.
The main takeaway,m we can make secure smart card and it is not expensive.
Ethereum cash
For smart cards were are making a tiny ETH miner that validates contracts.
Since the miner is Spectre compatible, it can asynchronously clear contracts with counter parties in other compatible hot wallets. So, it has shades of Lightening, it can short cut the ledger loops and complete complete contracts trees before clearing the blockchain. Any group of signatories to a contract can execute proof of agreement on a stable contract node, if they have the blockchain protocol for ETH. Then the whole complete sub chain verified on the master. The master chain serves a purpose, it holds collateral and risk ratings. ETH can be passed around within a complete contract tree.
Bitcoin cash
I dunno if they have defined the protocol with respect to smart card. The easiest definition is a signed account entry that can be submitted by the account holder. The they chain up and we get a lightening network.
A better way is to have a correspondent hot wallet with a trusted miner and defined a fulls cash protocol. When the cash users want the block chain market, they request an exit from the trusted miner account. The easy way to do this is repurpose, and simplify Swift cash. Build a short trusted miner correspondent bank net to handle cash in and out, all encrypted. Like master charge, or even center it around an automaed S/L.
Swift cash
Really simple, all our cards can be little Swift nodes,able to carry currency issued by our correspondent bank. The swift protocol includes making change, our cards can do that and maintain the encrypted signature of the issuing bank.
It is exactly like paper, it wears out after a few years in some cases. But the Swift money protocol is a contract, it include, mark the ledger on loops, for example. Keeping loops out of any possible chained set of contracts. All Swift cash is under Spectre management, and all Swift automated pits are Spectre hot wallets. There is a lot of bearer currency, at odds with the ledger, it should never accumulate.
In Swift the standard ledger is the standard <1,y,z> S/L. This will be bearer cash issued by the Swift correspondent bank running the pit. We using the hierarchical approach, the ladder of correspondent banks build the liquidity distribution, a value chain.
A histogram, almost like a yield curve with 'angle' instead of time. Each of the banks in the hierarchy cover a certain slope, up the value chain, or market size, in superposition lateral to the value chain. They are a search engine, trying to find us all and get us on account.
Swift has great advantages.
Swift was built as a value chain system with wholesale central bank. The hierarchy distributes currency risk fairly. Swift cash is the monopoly tax dollar and has special restrictions and right, easily implemented in the protocol. Swift is government defined and can impose some limits on bearer cash fro other ledger systems. We have an entire network of Swift compatible correspondent banks ready to use.
What is open banking? A set of accounting services the banks offer. Bet sandbox needs three APIs for Swift, take a loan, make a deposit and extract cash. Mainly because the smart card is the ultimate source for you transaction history. It keeps your contracts. With cash to can send it elsewhere there is a smart car that can hold the cash, including other automated pits or trusted miners.
ll contracts are really ledger swaps. If we consider the local Spectre secure cache as a ledger, then all swaps are marks on a ledger with a trusted miner and a fails to deliver exit.
No bearer cash in a loop?
Consider the case we all have cards supporting bearer cash. If I check cash from my account and pass it out, I might receive some of that cash back, via a chain of automated contracts. Now, I would consider that a requirement to mark the ledger, for Swift, in any event, loops need to be unraveled for contract stability.
If bearer cash loops are not unraveled then we have an arbitrage point for the cash originator. So, for the limits on bearer cash, like the built in limit, no double spending, there are optional limits or contract conditions imposed by the ledger authority. Swift money will almost certainly ban loops. The Bitcoin block chain likely doesn't care, except for bitcoin closed slice networks. And ethereum handles it implicitly in bandwidth payments. This is the same as saying all bearer cash should have some timeout.
Automated trading always wants congested contracts to clear, sooner the better. The pits keep hot wallets and have short, finite limits on liability.
It is not entirely her fault
Top NASA Official Unveils $28 Billion Plan To Land First Woman On Moon
Multi-genderism took hold and all genders had to be represented in the plumbing, that added 16 billion alone. NASA plans to have the whole alphabet over to Houston for training.
Filling in the model
Yelp on Wednesday released its latest Economic Impact Report, revealing business closures across the U.S. are increasing as a result of the coronavirus pandemic’s economic toll.
As of Aug, 31, 163,735 businesses have indicated on Yelp that they have closed. That’s down from the 180,000 that closed at the very beginning of the pandemic. However, it actually shows a 23% increase in the number of closures since mid-July.
In addition to monitoring closed businesses, Yelp also takes into account the businesses whose closures have become permanent. That number has steadily increased throughout the past six months, now reaching 97,966, representing 60% of closed businesses that won’t be reopening.
Under conditions of perfect liquidity, the assumption would be that these business sell for subsitute uses or to new owners. We have no perfect liquidity.
The question is, what would have happened is we have much better liquidity. We do not know, except ex post, or alternatively, if we had a complete cycle. If you connect the Lucas dots, and pretend, then at the start point, we assume all traders know about the business S/L market, the business loan business. When that happens we have a trading pit that wants a binomial model of he complete sequence. Traders obtain some commutativity, the ability to re-order some events and minimize the risk path. That is risk minimizing, maximum entropy.
The goal is to get everyone, in the Antificant fights, to have the same weapon, a contract manager which can get these relative values uncovered for everyone, before the looting. So the looter say to himself, 'Self, isn't this where I can shoes with credit"
They run around looking to burn, but each possible fire spot gets a reprieve,'Hey, not that one, They have a great sale tomorrow', and so forth. Never getting a consensus to light the fire.
It is kind of self fulfilling. When the kids grow up with a positive number on their smart card, their risk level grows. They all have the same S/L app, and can see the trading pit used by the whole neighborhood. The kids learn to interleave, that is patience, that is learning how to avoid long lines.
Babearoony time at the Supremes
That some fine affirmative action right there.
Sen. Josh Hawley (R-Mo.), a rising star on the Judiciary Committee and outspoken critic of Roe v. Wade, sent a letter Saturday to Senate Minority Leader Charles Schumer (D-N.Y.) warning him and other Democrats to refrain from criticizing Supreme Court nominee Amy Coney Barrett on the basis of her Catholicism.
Let us get more complex. Do we still believe, like Aquinas, that humans have a special ability to talk to a ghost? That we are destined to describe god in our language and logic?
And more practical. Does the Catholic Church intend to fund huge warehouses to hold millions of fetuses in tiny aquarium pods?
I speculate on the T cell cleanser
It is an engineered nano particle whose geodesic spikes collect all the common T-cells of modern life, cleanse the system of all old T cell, and get a restart. Clean up the useless white cell pipelines from years ago.
Stimulus in the pandemic
The idea is to keep the essentials going until we have a covid solution. A liquid S/L system works fine. Add to it an extension of unemployment checks. On the onset of the Black Swan, the pit boss intervenes a lot due to idiosyncratic actions, we normally do not reveal our essentials.
The fair banking system should shrink to match the new economy. The missing trades are spent on covid bets. We become specialized in anti-body engineering. But velocity returns.
Where is velocity now? Hidden from the tax dollar. Home production, shadow banking, second hand markets, off the books skilled labor and generally down from covid.
Low velocity means fewer dollar coin tosses to pass around, operating off the maximum entropy point. So the Fed has less and less information about the deposits and loans, the distribution of liquidity.
The seigniorage is a burden, and restricts credit markets, then on a negative shock, those constrained credit markets are not available. The Fed can never track the incidence of that tax, deposits to loan way under sampled. So the tax causes skew which shows up in cyclic Fed market risk,which get absorbed by Congress.
The Fed needs to be mostly partitioned from the government budget issues. Our tendency is to think the Fed is independent and can be libertarian. Not so, and it is not the Fed problem to constrain direct inflation by Congress.
The more independent Fed keeps credit channels open with lower transaction costs unburdened any inflation tax. So quit trying to constrain Treasury's ability to create inflation, make a trade, there is a happy medium. The Fed' target is bound white noise, it will execute an interest swap when market risk exceeds a quart point of assets.
The Fed needs a representative sample, congestion priced is fine.
Inevitible
The Rise of Skyborg: Air Force Betting on New Robotic Wingman
The next year will be pivotal for the Air Force’s effort to acquire a new class of autonomous drones, as industry teams compete for a chance to build a fleet of robotic wingmen that will soon undergo operational experimentation.The “Skyborg” program is one of the service’s top science-and-technology priorities under the “Vanguard” initiative to deliver game-changing capabilities to its warfighters.
The aim is to acquire relatively inexpensive, attritable unmanned aircraft that can leverage artificial intelligence and accompany manned fighter jets into battle.
Sounds like a mistake
US Is Preparing Military Response To Wave Of Iranian-Backed Attacks On Its Forces In Iraq
I see no advantage with this and we will get a longer term mess. Class this as Trump Dufas..Buy a free pass on the whole BLM thing
California NAACP president aids corporate prop campaigns — collects $1.2 million and counting
You get a company card, "Prequalified BLM by the NAACP". Good in any ghetto.
Up to the willingness of banks to collect taxes
Governments can borrow more than was once believed
Hence only muted concern about borrowing to respond to covid-19
The muted response is Wall Street avoiding the seigniorage tax. The howls are regulated bans abandoning the retail banking sector.
If you ignore the seigniorage taxes then interest costs have jumped by 25%, more or less, since before Trump. This is the typical recession pattern, repeatable indicating the government borrowing is part of the recession cycle. We are crowding out.
Taxing banks and shutting down retail banking is not a multiplier greater than one, it guarantees that government borrowing results in a depression.
Milking our priors does not help. Here is the new chart after the accounting revisions at FRED:
The blue line are reserves left at the Fed, and the higher that line goes the more Fed tax the regulated banks avoid. The difference between the blue and red results in remits, otherwise known as taxes, back to Congress.
So we are playing the great game of avoiding that tax, and the regulated retail banks have the losing hand. No banking? Have a depression.
The Fed made changes in the monetary base format.
They no longer have excess reserves, they have non borrowed money, just plain reserves. These are still effective Fed deposits, as as such always earn interest on fed loans. It will always earn positive rate because deposits do not pay the Fed tax, they avoid it.
So what the Fed now calls non borrowed funds really mean funds borrowed by Congress, funds that skip the seigniorage tax when rates are zero. There is no escape, loans are moment matched to deposits. There is no escape because double entry accounting tracks all exits within a bound uncertainty. So, for the Fed, currency neutrality will include seigniorage tax neutrality as needed. And the Fed still is, and always will be, a central bank.
The siegniorage fee is faked in the sense it can be paid in advance, via the new Fed contract. That is, we know it is there, always will be. We have the Constitutional ability for a provable New Fed contract. A little math says we can do pretty good by being honest about it.
It makes contract provability difficult
The Hill talks about secret keys, and I straighten out the problem.
Unfortunately, the Department of Justice and Attorney General William Barr have proposed requiring American technology companies to break this essential protection by providing what’s known as “exceptional access” to their encryption systems.
In theory, it would require companies to establish a mechanism where the government could compel companies to unlock particular encrypted communications when the government obtained a warrant to do so. Even if such a mechanism already existed, past experience suggests that despite their best efforts, the government would not be able to keep such a system uniquely secure.
When we want contracts autonomously enforced then we prove check exit and entry conditions. Adding the NSA back door means requiring warrant checks on a contract basis, that is out, out, out.
We can, however, have the contract agree, ex ante, to limits on activities. Limits and conditions we can carry inside he contract layer.
Friday, September 25, 2020
Iran has UAV dive bombers
New U.S. Drone Weapon: Nonexplosive “Ninja” Hellfire Missile
Iran can dive bomb a carrier with a cheap UAV. The maneuver blows a pothole in the asphalt top and spreads shrapnel all over the Tomcats. The tiny prick shuts down carrier operations for the day, and can be repeated cheaply. Who was the stupid bonehead who thought this would be a good idea? One of the senators, or ex senators, or dead senators. One of those bums, was it Lindsey Graham?
The Antificants want a deal on all this wasted hardware, they are not covering the entire cost.
Standard issue
Dianne Feinstein's Husband Caught Up In Latest University Admissions Scandal
The first scandal was making senators into affirmative action appointees. Then there was all the insider dealings on the fake new green deal rail programs from Diane. Now this, all allowed because we are stuck in a failed hispanic state.I am not sure about this
The reason for those provisions is simple. Under the U.S. Constitution, Congress is the only branch of government with spending authority. So the Federal Reserve Act is carefully written to prevent actions by the Federal Reserve that would amount to fiscal policy.
Article I, Section 8, Clause 1:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
I do not see this as an exclusive method. And we have this:[The Congress shall have Power . . .] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; . . .
Congress can assign the power to coin money to the Fed, which it has done. That includes the power to regulate the value of money. Implied in that regulation of value is the authority to collect fees on money usage. So that power to tax banks backs up any and all Fed money programs, but does not extend beyond that. Congress restrictions on the Fed amount to double entry accounting system, and that is obeyed.
Within the regulated banking system the Fed has been granted to both tax and spend. I am the better expert on this, not John Hussman.
There is also the sacredness of debt, as defined in one of the post war amendments. I am the expert here too, and debt is sacred to the extent it is traded on a voluntary basis under Due Process terms (open bidding). In other words, the proper central banking model remains perfectly legal, we are free to go ahead and devalue intelligently as long as we get a good trade in return, like Fed independence, longer and stronger. The trade includes having Treasury deal with its own inflation tax, keep the Fed out of that mess. We make the Fed more neutral even if we cannot make money neutral.
Always a lot of fun
Charles Barkley mocks calls to defund police: 'Who are black people supposed to call? Ghostbusters?'
The Fed tax and deflation
Covid is not Bernanke's fault, and it is an outlier. But it is clear that the negative covid spike will bounce around inside Bernanke's tax loop for some time. Inflation is not soon in our future, we will make some decisions before that happens. Oil at forty, seems normal, there is a lot of past oil price volatility that reverts via short term deflation. That Fed tax is now a permanent and a large flat tax. A huge burden on the banks.
Two tier labor agreement
Teachers Unions ClashThe Massachusetts Teachers Association is in the midst of contentious contract negotiations with one of its unions, the Field Staff Organization, which represents 70 professional employees.
MTA executives have proposed what amounts to a two-tier salary structure, in which the starting pay for new employees would be cut by about 30 percent. The proposal would also add 12 additional steps to the salary scale, effectively increasing the amount of time it would take to reach the top.
Bad idea, makes the can harder to kick. Also a sign of deflation, meaning the pensions don't kick. The two tier solution in California is one cause of the police-teacher union battles.
A brave soul makes prediction
Right now, the U.S. Dollar Index is trading around 94. When Roach predicted on “Trading Nation” last June the index would plunge 35%, it was trading around 96.
I bet otherwise. I am not joking about that fed tax, it is very deflationary. I bet this is deflationary and the dollar will stabilize to pre covid levels, about where it is. No one is playing with cheap money, that tax is onerous. It is a tax on banking, nothing can be more deflationary for a central bank currency.
But it is a tighter spiral. The deflation affects tax income, and it soon becomes obvious the can will not kick. Even then I think we can finagle a devaluation and still keep direct inflation under 2%, total inflation under 1%. It is unpredictable because we have not yet opened up the bidding.
There is a fair trade in the devaluation, Fed independence, longer, stronger. Greater bank productivity goes a long way. We can do this deal, in five years we be facing a 1% to 0% price inflation, yet again.
Jobs aren't coming back, yet
An 'ominous’ report reminds us the U.S. economy is far from OK: Morning Brief
We are doing the long and drawn out recovery, worse than 2008. This can ain't kicking. Pre-covid, I was beginning to believe the can had another cycle left. Covid was a true Black Swan.
Interferon and covid
Some people are known to have trouble fighting infections because they make antibodies that deactivate their own interferon. On Thursday, a global consortium of researchers said such immune reactions to the protein could account for life-threatening Covid-19 pneumonia in at least 2.6% of women and 12.5% of men.
Interferons (IFNs, /ˌɪntərˈfɪərɒn/[1]) are a group of signaling proteins[2] made and released by host cells in response to the presence of several viruses. In a typical scenario, a virus-infected cell will release interferons causing nearby cells to heighten their anti-viral defenses.
This to me looks like a conflict in T-cell, which was the residual worry about this virus. The immune system is best with one infection at a time. If we get too many 'common viruses' then ultimately one of them cannot be serviced by the T-cell system, capacity is not there.
Trump has a vision for mining minerals?
GOP duo reshapes Montana politics to match Trump’s vision
WTF are these nuts taking about? Protectionism so they get a free pass on digging holes? Some bizarre thinking here.
Wiki says:
Montana is a relative hub of beer microbrewing, ranking third in the nation in number of craft breweries per capita in 2011.[222]Significant industries exist for lumber and mineral extraction; the state's resources include gold, coal, silver, talc, and vermiculite. Ecotaxes on resource extraction are numerous. A 1974 state severance tax on coal (which varied from 20 to 30%) was upheld by the Supreme Court of the United States in Commonwealth Edison Co. v. Montana, 453 U.S. 609 (1981).[223]
Tourism is also important to the economy, with more than ten million visitors a year to Glacier National Park, Flathead Lake, the Missouri River headwaters, the site of the Battle of Little Bighorn, and three of the five entrances to Yellowstone National Park
How does any Trump vision fit into this picture? These nuts have no sense.
Thursday, September 24, 2020
Already planning on moving the bum out
There Will Be a Peaceful Transfer of Power
National Review article.
I think that the Trumpsters have hired a moving company.
The key trick in the growth model
If we assume each agent is running a triple entry accounting system. Then, if the general distribution tree is a factorial, of dimension three, there exists a transformation into three matched binomials. It should be maximum entropy, it should be unique and preserve serialization.
We are assuming optimum portfolio balancing from the canonical trade format. Owner, clerk and customer. Each agent allocating serial trade space share according to -iLog(i), three 'i's sums to one. The trade selection based on the binomial that look more like a fair coin flip, I think it works out to.
My statement here the Huffman tree for each of three entropy generators has a transformation into an equivalent binomial. The the full factorial problem is reduced to balancing the three binomials by allocation of trade space. This is equivalent to altering coin weighting and toss share. There should always be a unique entropy maximizing selection of the next binomial, in the reduced model.
Take total factor productivity and covid
We are making lots of bets, but the odds are getting better. As the trials and research bear fruit, the bets become more even. At some point, the bets become good enough, this thing is a random arrival. In other words, what we have works.
What remains is valuable alternatives that bulge inventories an trail out later. This is he residual productivity, the surplus. It is there because of value chain length, they get stuck on the chain, but still have value. Again, the idea of kinetic energy comes to mind, under sampled covid projects. The results free to bounce around and find other opportunities. Market size must be undetermined to an error bound in adaptive systems.
It is always a queue balancing problem when arrivals are serialized somewhere. They will be relatively prime, integer solutions.
The better growth model
The total system is three value chains. The length of the chain and the total market size are bound together, with uncertainty in self sampled systems. But it has stable points and economies of scale are met such that product containers can be standardized. It solves the three relative prime problem.
And there is a maximum market size. There is a human comfort zone, we humans have a hidden Markov model. The uncertainty in market size appears as folks getting on and off the distribution, 'fails to deliver', In physics it is known as kinetic energy. So, the economy will be super positions around the lower levels of the Markov 3-Tuples. The model would be three adaptive binomials, alpha, beta and gamma; solutions to the optimum relative primes.
I think of Walmart. Customers, clerks, and owners; three queues. Moments are matched.
Then superpositions and you economy model is a mosaic,made of mutually coherent binomials, like bunches of franchise Walmarts with auto stores and banks all arranged, at optimum, as a distribution without loops. Hidden markov 3-tuples.
We will find many of the familiar optimum ratios and all that, including price volatility where it is supposed to be..
The binomials normalize arrival rates for inventory and people. They thus look mostly like independent arrivals, and that is optimum diagonalization, you might say. They share of the arrivals for each depends on entropy, how close to balance is the thing.
Would you work on a starship that won't be completed for a hundred years?
Is economic growth inexorably slowing down?
That was the question in my mind when reading this good post by John Cochrane.
For the right money I might, but that begs the question, would you invest in a project that won't be completed for a hundred years? Would you vote for a government project that wouldn't be completed for a hundred years?
Here is a related question. How hard would you look for a task that will be completed in a few years? What if all the best projects require require a hundred years?
My point being that depreciation cycles get longer as the value chains grow longer. Economies of scale, value chain length and productivity are mostly the same concept.
Why are people staring at their smart phone screens? Because the real life transactions are too fast in the urban dense economies with increasing economies of scale. We have a limit, our cities have Avogadro numbers. If we want to go higher, we need extra dimensionality, and we do not have it. More importantly, human comfort is exceeded when we cannot stop to say hello, and we will exit the task due to discomfort.
This problem needs solutions, generally in the form of real artificial intelligence, the kind outlawed by the NSA. Allow us to have an autonomous contract manager in our smart phones and we will be staring at our screen much less, and saying hello more often. But the screens are still useful, when we need them the information displayed will be much more accurate and complete. A good balance for big tech, our welfare bums of the day.
A common problem in the Swamp
Trump team suspected Mueller cognitive decline
Just look at Diane Feinstein or Lindsey Graham or Biden. Trump never had much cognitive ability to begin with. We are pretty much screwed.
I doubt it
Democrats Crafting New $2.4 Trillion Stimulus Bill to Spur Talks
I would be surprised if Nancy has a clue on this. I suspect it is another of Kamala's attempts to bail out California pensions.
The 4 trillion in defense waste and the constant war declaring
Lindsey Graham Begs Fox Viewers: I’m Being Completely Annihilated In Fundraising In My Senate Race
In fact, we intend to dig up McCains corpse and burn it for the same mistakes.
I suggest you retire before causing any more harm.
A misdemeanor endangerment charge
Louisville Police Release Identity Of Suspect Connected To Shooting Of Two Officers
According to the local DA.
I fully expect dozens of cops will get themselves shot by agreeing to such a ridiculous ruling combined with the Second Amendment. The cops union should just make it legal to shoot cops, avoid all the legal hassles. Kind of like a war.
Asked and answered by the Kentucky DA:
LOUISVILLE, Ky. (AP) — In the wake of the decision not to prosecute Kentucky police officers for killing Breonna Taylor, authorities and activists alike wrestled Thursday with the question of what comes next amid continued demands for justice in the Black woman’s death.
Shooting cops is OK according to the DA.
I would have asked a different question.
UK: Man Arrested For Not Wearing Mask Asks Cops Where They Were During BLM Riots
What question do my readers think I would ask?
What question do my readers think I would ask?
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