The hyperbolic model of the corridor fiat banker

The basic idea is to model the borrowers and lenders as a Weiner process, show that the hyperbolic differential equation is a solution in tanh, then show that the tanh function is a suitable equation for principal and interest, then define the relationship between principal balances the generate balance. The result will be both the lending and borrowing rates as well as the target principal amounts.

This basic hyperbolic form has tanh as a solution but when we add in the lending and deposit outstanding balances we can make a solution for this Weiner process:

In which t is replaced by the principal balance ratio. Then we find the appropriate polynomial that makes the function: t*tanh(x) t+tanh,a polynomial, and that defines the solution set in x and t, both quantized. t is the principal balance target and should count sequentially. The banker then adjusts x, the angle between lend and receive, along the finite set of hyperbolic angles and targets t. That makes a no arbitrage solution.

Now its plain to see that sinh is principal returned plus interest received while cosh is principal returns plus interest earned, hence tanh will be a flow from near zero to near one, always positive.   So we can define one the deposit and one the loan.

The solution looks like: tanh(a)^2 = 1-1/t. Some how we will make that a polynomial, likely using Lucas numbers.  Tanh goes to one as t goes to infinity. Does this allow a zero inflation rate? In otherwords, can the banker always retreive excess fiat from the system by making loans attractive and keeping principal balances near target? I am working on that. But I think tanh can go negative of positive when t goes to less than one. That would switch the positions and allow the bank to 'gain' permanent money, as long as the economy has spare entropy.

Use the last form of tanh, where the e^-2x and e^2x can be rates on a unit one principal balance:

The ratio t which scales tanh  will force an eccentricity in the hyperbola, and that should change. The discrete set of x which are selected will be separated by the allowable error in the system. Transaction rates are relative to total transactions and term length a resultant, not an input.  But they should be the shortest terms in the yield curve.

The basic  idea is correct, the hyperbolics can track a Weiner process.

The dollar has been on a tear

Wonder why short term rates are low? This is the dollar, rate of appreciation in blue, YoY compared to gold in red. Holding the dollar has earned 2.5% compared to holding gold or any other mix of currencies. Holding dollars for international trade has been the winning trade over anything but stocks.

How monetary easing caused poverty in 1992

The green line is Gini, a coefficient that gets higher when poor people get poorer.  Notice that the mild recession of 1991, before Clinton took office, was accompanied by an active Fed driving down short term rates.  We can see that because the effective funds (red) and target rate (blue) overlap.  As that happened, Gini made one of its biggest jumps in the last thirty years, poor people got a lot poorer.  Keynesians will lie and commit fraud to cover this up. It is right there in the data. The Fed generally lowers rates to save either business interests or DC, usually at the expense of the poor people.

So the paradox, Brad Delong and Larry Summers who finally made things work in the Clinton administration decide to support false Keynesian claims and take the blame for a rise in poverty they did not cause.  Keynesian frauds cannot even shoot straight!

Los liberales cree que los bancos centrales ayudan a los pobres cuando bajan las tasas. No es así, el banco central hace pobres más pobres.

How the stimulus crowded out and nearly caused a double dip

Look at the California unemployment rate, the red line.  Notice, at the peak, twice it tried to come back down, only to be driven back up by the stimulus, the purple line. How do we know? Because the green line, the oil price, clearly indicated we suffered from an oil shortage.  The stimulus drove that price back up, and as soon as the stimulus drove it back up, crowding out appeared and California began laying off again. You can see that happen twice, yet we see no effect in actually reduing unemplyment, none.

The Housing Ruse:

Keynesian knew that their policies were not valid in the middle of a commodity shortage, they had to invent a theory of low demand. Hence the Dean Baker wealth effect from housing. The idea was that we suffered lasting demand from a housing crash in 2006, a downturn in housing that did not show up until 2008! And that lack of demand shows up as an oil shortage, yet oil imports to the USA were running at an all time high, indicating no lack of demand, until the crash.  The ruse was necessary in order to cover up the blunders of the stimulus and to further extract more useless spending in DC. Yet the facts obviously indicate otherwise as we can see from the oil price movements in the chart above.

The monetary ruse:

The nonsensical idea that the Fed somehow helped in lowering interest rates in 2007? All evidence indicates the bond market has been setting rates since 2003. Further there has been no mechanism for the fed to raise rates since Volcker used the reserve requirements mechanism.  Likely in the 40 years since Volcker the Fed has been basically ineffective in raising rates, and only effective in lowering rates to bail out an indebted government. Most of the secular stagnation is due to mis-management in DC. To this day monetary theory is ass backwards, mainly due to Keynes. Keynesians resort to some expectation function, essentially a fake function in which they pile in their priors, then pick the  output meets their priors.

Massive fraud perpetuated by Berkeley:

Not only this the stimulus crowd out and cause harm, it likely prolonged the entire recession and caused lasting damage.  Further, in an effort to protect the Keynesian club, the Berkeley demanded up to 30 economists sign the McCarthy Keynesian loyalty oath claiming exactly the opposite effect.  One of the greatest frauds in academic history. Professors from California, pursued policies in California that likely precipitated much of the recession (it started in California). These same professors made it worse, covered up their damage, and have never stopped causing havok.

John Keynes, an academic horror show:

From monetary theory stimulus and the ludicrous national accounts scheme, this man was mathematically incompetent in his time.  He was a nightmare in the American academic community only gaining a foothold because of American ignorance about the developing science of statistics.  Milt Friedman performed yeoman's work to try and get this stuff corrected. His theory should be abolished from undergraduate school completely, and young students should beware of professors teaching it.

DC is effectively bankrupt :

Ignorant central bankers are simply pawns,  The Treasury department cannot make a move without the express rate fixing required by Goldman Sachs and a group of primary dealers. The market could simply not absorb the debt load of 17T without market fixing the rates up.  QE had nothing to do with juicing the stock market, DC would have simply failed it it needed to cover all that interest.  Congress cannot function with interest costs exceeding 20% of the budget, Reagan tried it an we crashed.  Clinton managed it only by a rapid deficit reduction.  Today, Obama is simply incapable of managing the budget the way Clinton did it, and I doubt any  president can get Congress through a session without direction and control from the Wall Street Banks.  We live at the end of the DC era, regions of the US should look locally for new money and new government.

How do we split the government pie

Here is the ratio of government spending given to the states. At the end of the Clinton regime, the state and local government had 47% of the spending.  It looks like state and local government now gets 4% less when stabilized.  Golly gee whiz, my ballot had only 2% of space devoted to federal choices, 49 of my choices were what to do with the 44% of the pie California is allocated. 2% devoted to the other 53%, and one of my federal choices was where do we want to keep Feinstein's corpse, DC or here.

Brad Delong thinks the Federal should take more of the pie, and I presume, dilute my puny little vote even more. I suggest we send the salaries of the Berkeley economics departnment to DC  and Brad can figure out what he wants to do using his 2% of the ballot, like the rest of Californians.

Berkeley liberales quieren enviar el dinero de nuestros impuestos a DC bastante y luego nos dejan tenerlo aquí en casa. No tengo idea por qué los Californianos pagamos su sueldo.

Mr. Kocherlakota has actually never seen the Fed raise rates

WSJ Blogs: In his formal remarks, Mr. Kocherlakota repeated his belief that a U.S. central bank rate increase next year would be a mistake. Inflation is unlikely to reach the Fed’s 2% target until 2018, and because of this outlook, “it would be inappropriate for the [Federal Open Market Committee] to raise the target range for the fed funds rate at any such meeting” occurring in 2015, he said.

I checked his career and checked the Fed history of raising rates.  The only time the Fed actually raised rates was Volcker who raised the reserve requirements.  Since then the only tool the Fed has used to raise rates was the target and the market.  It actually has no method to intervene since it has never had a deposit rate system. The Fed cannot raise rates above market rates, at least that is my understanding of sequential numbers.

Mr. Kocherlakota graduated from school after Volcker, and thus has never seen an actual interest rate hike by the Fed, so he has a sample set of zero elements. I doubt he even knows what will happen when the Fed raises the IOER.

No, not the polar vortex!

USA Today: Arctic air will plunge toward the South and East on Wednesday and Thursday, after as much as 2 feet of record-breaking snow buried portions of the upper Midwest.
Temperatures only made it into the single digits, teens and 20s Tuesday across much of the north-central U.S. — 20 to 40 degrees below average for many areas, the National Weather Service said.
Wind chills were as cold as minus 20 in parts of western Montana. By Wednesday morning, wind chills could drop to minus 35 in some spots — low enough to cause frostbite in 10 minutes.
Weather service meteorologist Paul Kocin said the cold air will reach the Appalachians to mid-South by Wednesday morning and then hit the East Coast by Thursday morning. The East Coast will see cooler temperatures but be spared from the dramatic lows in the middle of the country, Kocin said.
Freezing temperatures are still possible in parts of the South and East, AccuWeather meteorologist Alex Sosnowski said.

Especially the Black Boys, says Ms. Johnson

Daily Caller: Superintendent Bernadeia Johnson told NPR, “I and all of my staff will start to review all non-violent suspensions of students of color, especially black boys, to understand why they’re being suspended so we can help intervene with teachers, student leaders and help give them the targeted support they need for these students.”

 The U.S. Department of Civil Rights thinks Blackies are a problem:

This new policy is part of an agreement with U.S. Department of Education’s Office of Civil Rights announced last week after an investigation into why minority students made up such a high percentage suspended students in the past.

Well, that would be Eric Holder and the Jim Crows in action.

Who is Bernadeia and how did she get a wierd first name?

 Well, ya think we outta have a school program for fat broads?

Me recuerda a idea de Jerry Brown de la escuela de inglés especial para los hispanos. Yo prefiero el español, en realidad.

De hecho, estoy teniendo un poco de diversión con la lengua y en algún momento tipo naturalmente en español. Lo han estudiado bastante, pero todavía utilizar el traductor. Pero más que traducir las noticias, más que vuelve a mí y a menudo tipo a español. Ahora estoy teniendo diversión y necesidad de parar antes de que se convierte en obsesión.

 

Russia declares adversary on the US?!?

Redlion: NATO, U.S. to be openly identified as threats/adversaries in new Russian military doctrine to be published next month, FT reports, citing people familiar.
Current doctrine lists only the following as as “external military dangers”: NATO expansion, foreign troop deployments in neighbouring states, destabilization in certain countries and deployment of missile defence systems, FT says
Russian govt believes it must tie security interests to China because Euro-Atlantic framework is too broken, FT reports citing Russian officials and security analysts
Moscow seeks to build Shanghai Co-operation Organization, founded by China, Russia, Kazakhstan, Kyrgyzstan and Tadjikistan in 1996, as security alliance
Putin speech last month initially contained reference to “Helsinki II”, idea that Russia, U.S., Europe should try to work out new framework for security relations: FT

That's is?  This 2 trillion dollar economy entering a horror of a recession with 11% inflation is going to Adversary with the USA?  I mean, Russians will simply use this as an excuse to drink more vodka. I don't see what the advantage is.

And Russia is going to tie their security interests to China?  What does that mean, a joint declaration of Adversary on Mongolia?  I have nothing against the Chinese, they are OK, I married one.  But the Chinese government should think twice about running around with Putin and going Adversary all over the place. 

Shock waves!

Where u_s is the shock wave speed, ρ₁ and ρ₂ are the mass density of the fluid behind and inside the shock, u₂ is the particle velocity of the fluid inside the shock, p₁ and p₂ are the pressures in the two regions, and E₁ and E₂ are the internal energies per unit mass in the two regions. Wiki

I am looking at these because they have the dreaded time and distance fake variables.  These should be handled by the recursive power series and eliminated.  But it has all the conservations of stuff and these can generally be solved with the tanh finite differences method, naturally. I am just looking, dunno if I will actaully do much work on this.  But the results should obey the circular state system and thus compute Pi over the total system of state.