Exponential growth, finite resources, Bell Curve and The Wave

[Mikey]

Laura shared this very interesting Youtube video on facebook today:

The Collapse and Emergence of Eras, Dollars and Sense, Show 26

Darryl Robert Shoon is presenting the book of economist/historian David Hackett Fischer, The Great Wave, explaining that price hikes (actually: steady rise + rapid fall = Wave) have happened repeatedly in the world's history, and that each of these Waves have started a new era. He also said that the current Wave is bigger than all of the Waves in the past.

This reminded me of the lecture of Dr. Albert Barlett about the exponential curves of demand in the face of finite resources, that was a Best of the Web article on Sott some time ago (highly enlightening!):

Sustainability 101: Exponential Growth - Arithmetic, Population and Energy

We meet exponential functions very frequently in all aspects of Nature, also in Economics. When you look at economical charts of our age, you will notice that most of them are rising exponentially. Prices, populations, speed of computers, etc., all of it rises. But as the second half of the video lecture explains, nothing can sustain exponential growth for a long time. There will be, with certainty, an exponental "fall" on the other side, all the way down. When you draw this principle into a graph, you get the famous Gaussian Bell Curve.

Now, it is interesting that the C's have described the coming changes as a Wave. A wave is something that comes and goes, rises and falls. I think the parallels of this idea and the two mentioned videos are fascinating to say the least. From both videos you'll get the picture that we are either at the peak of the curve, or have surpassed the peak already, and that the effects of moving all the way down are imminent.

Does one aspect of The Wave look maybe something like this cartoon? (Not mentioning the other aspects of The Wave that seem to have to do with evolution, amongst other things.)

How smooth or rough will the descending side of the curve be? Maybe it is not a symmetric, pretty Bell Curve, but something that falls a lot more violently than it ascended, like a water wave or a bubble burst, like the ones we see in the stock markets frequently?

In any case, for me personally, those two videos added another huge confirmation of the material presented by SOTT, all our writers, first and foremost, Laura.

 

[dant]

How smooth or rough will the descending side of the curve be?
Maybe it is not a symmetric, pretty Bell Curve, but something
that falls a lot more violently than it ascended, like a water wave
or a bubble burst, like the ones we see in the stock markets frequently?

A sudden break/shock/spike. As with a bubble-pop,
exploding bolides, earthquakes, EMP, explosives, Novas
and so on?

Perhaps to illustrate "shocks/breaks" is Tensile strength:
_https://en.wikipedia.org/wiki/Ultimate_tensile_strength
Can the breakpoint (in metals) be predicted with absolute
certainly? In reality, probability, statistics, and testing are
heavily used to ensure that bridge bolts do not suddenly
break and kill people. We hear about these disasters in
the news once in awhile, as in today, as I write.

The Guassian Wiki is interesting, has code examples written
in GNU Octave (Mathlab equivalent) of which is available for
download especially with Linux distros. :)

A Great Post!

edit: added corrections / comments.

 

[Anthony]

Laura shared this very interesting Youtube video on facebook today:

The Collapse and Emergence of Eras, Dollars and Sense, Show 26

Darryl Robert Shoon is presenting the book of economist/historian David Hackett Fischer, The Great Wave, explaining that price hikes (actually: steady rise + rapid fall = Wave) have happened repeatedly in the world's history, and that each of these Waves have started a new era. He also said that the current Wave is bigger than all of the Waves in the past.

This reminded me of the lecture of Dr. Albert Barlett about the exponential curves of demand in the face of finite resources, that was a Best of the Web article on Sott some time ago (highly enlightening!):

Sustainability 101: Exponential Growth - Arithmetic, Population and Energy

We meet exponential functions very frequently in all aspects of Nature, also in Economics. When you look at economical charts of our age, you will notice that most of them are rising exponentially. Prices, populations, speed of computers, etc., all of it rises. But as the second half of the video lecture explains, nothing can sustain exponential growth for a long time. There will be, with certainty, an exponental "fall" on the other side, all the way down. When you draw this principle into a graph, you get the famous Gaussian Bell Curve.

Now, it is interesting that the C's have described the coming changes as a Wave. A wave is something that comes and goes, rises and falls. I think the parallels of this idea and the two mentioned videos are fascinating to say the least. From both videos you'll get the picture that we are either at the peak of the curve, or have surpassed the peak already, and that the effects of moving all the way down are imminent.

Does one aspect of The Wave look maybe something like this cartoon? (Not mentioning the other aspects of The Wave that seem to have to do with evolution, amongst other things.)

How smooth or rough will the descending side of the curve be? Maybe it is not a symmetric, pretty Bell Curve, but something that falls a lot more violently than it ascended, like a water wave or a bubble burst, like the ones we see in the stock markets frequently?

In any case, for me personally, those two videos added another huge confirmation of the material presented by SOTT, all our writers, first and foremost, Laura.

What I've learned from 2 great books by the author Nassim Nicholas Taleb is that the world isn't as stable as that.
It doesn't just rise and fall - unless you stick data into the bell curve - which according to him ignores events that are outside the model.
I like what you said at about descent - that it could fall violently. But consider also this, it starts to fall violently, then stops for a period of time
giving us an illusion of stability, and the next time it starts going down (or up) we suffer even more due to ignorance or lack of preparedness.
We should learn from the past, but not be blinded by it.


http://en.wikipedia.org/wiki/Black_swan_theory

Taleb: "I don't particularly care about the usual. If you want to get an idea of a friend's temperament, ethics, and personal elegance, you need to look at him under the tests of severe circumstances, not under the regular rosy glow of daily life. Can you assess the danger a criminal poses by examining only what he does on an ordinary day? Can we understand health without considering wild diseases and epidemics? Indeed the normal is often irrelevant. Almost everything in social life is produced by rare but consequential shocks and jumps; all the while almost everything studied about social life focuses on the "normal," particularly with "bell curve" methods of inference that tell you close to nothing. Why? Because the bell curve ignores large deviations, cannot handle them, yet makes us confident that we have tamed uncertainty. Its nickname in this book is GIF, Great Intellectual Fraud."

What we call here a BlackSwan is an event with the following three attributes.

First, it is an outlier,as it lies outside the realm of regular expectations,
because nothing in the past can convincingly point to its possibility.
Second, it carries an extreme impact. Third, inspite of its
outlier status,human nature makes us concoct explanations for its
occurrence after the fact, making it explainable and predictable.

You subsequently derive solely from past data a few conclusions
concerning the properties of the pattern with projections for the next
thousand,even five thousand, days. On the one thousand and firstday—
boom!A big change takes place that is completely unprepared for by the
past.

Consider the surprise of theGreat War.After the Napoleonic conflicts,
the world had experienced a period of peace that would lead any observer
to believe in the disappearance of severely destructive conflicts. Yet,
surprise!It turned outto be the deadliest conflict, up until then, in the history
of mankind.

We worry too late—expost.
Mistaking a naïve observation of the past as something definitive or
representative of the future is the one and only cause of our inability to
understand the BlackSwan.

Those who believe in the unconditional benefits of past experience should
consider this pearl of wisdom allegedly voiced by a famous ship’s captain:

But in all my experience, I have never been in any accident…of any sort worth speaking
about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck
and never have been wrecked nor was I ever in any predicament that threatened to end in
disaster of any sort.

E. J. Smith, 1907, Captain, RMS Titanic

Captain Smith’s ship sank in 1912 in what became the most talked about ship wreck in history.

 

[Shinzenbi]

I’ve not read this book but would be really interested in knowing what the author calls a « new era ». A paradigm change ? The current one could be called the “Bank era”. Banks and the financial world seem to have the power to rule everything. Is there anything else than violence to subjugate them ? Then if Bank era ends, what’s next ?

I would like to ask a couple of questions here, related to the current era :

- What is the system ? Most of us here must have heard/read or think that the system is about to collapse, but what is it exactly ? It rules our lives, feeds us, sends our children to school, gives us comfortable homes (for the lucky ones) … and remains abstract.
- The system has never been that strong. How could it collapse ? Maybe this is why David Hackett Fischer says that the current Wave is bigger than all of the Waves in the past.

Something that comes to my mind when I think about a collapse from the inside is “I’ve changed everything to change nothing” (can’t find who said that). I believe that the era/system can change, but only because of an external shock.

 

[Anthony]

I’ve not read this book but would be really interested in knowing what the author calls a « new era ». A paradigm change ? The current one could be called the “Bank era”. Banks and the financial world seem to have the power to rule everything. Is there anything else than violence to subjugate them ? Then if Bank era ends, what’s next ?

I would like to ask a couple of questions here, related to the current era :

- What is the system ? Most of us here must have heard/read or think that the system is about to collapse, but what is it exactly ? It rules our lives, feeds us, sends our children to school, gives us comfortable homes (for the lucky ones) … and remains abstract.
- The system has never been that strong. How could it collapse ? Maybe this is why David Hackett Fischer says that the current Wave is bigger than all of the Waves in the past.

Something that comes to my mind when I think about a collapse from the inside is “I’ve changed everything to change nothing” (can’t find who said that). I believe that the era/system can change, but only because of an external shock.

You know what I've asked myself that countless times, I never understood it.
I've heard friends and acquaintances talk about it as if they understood it, but later
turned out to be victims of it.
Another word I also never like using or seeing is the ego. Especially the sudden rise
in New Age to quiet or drop it. They talked as if they where seperated from it, as if it
wasn't their modus operandi as with most of us.

 

[obyvatel]

I liked Nassim Taleb's latest book "Antifragile: Things that Gain from Disorder". He puts forward the notion of "antifragility" as a measurable quantity in mathematical terms (using convexity functions) for financial systems about which he appears quite knowledgeable. He also applies the same notion of antifragility in other areas of life not so readily amenable to description through equations.

According to Taleb, things/systems can be classified into three categories - fragile, robust and antifragile. Fragile things suffer from external stressors and great care needs to be taken to protect them from such events just like a glass jar. Robust things are resilient to external stressors to a limit, but they do not incur any benefit from such events. Antifragile things tend to benefit from external stressors and random events. Ayn Rand inspired objectivism and the way the capitalist financial system works are examples of extremely fragile systems. To take some of Taleb's examples, a centralized nation state is fragile, a decentralized system of city states is more antifragile. Corporate employment (like a mid-level bank employee) is fragile - in contrast an artisan or a taxi driver is more anti-fragile. Classroom learning is fragile, real life learning based on heuristics and empirical tinkering is antifragile.

In the medical field, he writes

[quote author=Antifragile]
Removing medication, or some other unnatural stressor - say gluten, fructose, tranquilizers, nail polish or some such substance by trial and error is more robust (moving along the line from the fragile side over to the antifragile) than adding medication with unknown side effects, unknown in spite of of the statements about evidence and sham evidence.
[/quote]

Taleb has a lot more to say about the health field and medical iatrogenics.


Antifragile systems have redundancy - human body is a good example. Driven by greed and short-sightedness and mistaken notions about so-called "efficiency", the financial system has long been divested of such redundancy. Risk management in fragile financial systems tries to compute probabilities of very rare events without accounting for the fact that such risks are not measurable and suffer from significant computation errors. They fail to take into account the fact that the worst event by definition has not happened before - so trying to compute effects of "worst case scenarios" stands on shaky ground. Taleb calls people like Greenspan "fragilistas".

[quote author=Antifragile]
Fragilista Dr Alan Greenspan, in his apology to Congress offered the classic "It never happened before." Well nature (as an antifragile system with redundancy) , unlike Fragilista Greenspan, prepares for what has not happened before, assuming worse harm is possible.
[/quote]

While black swan (rare) events are not mostly foreseeable, it is possible according to Taleb to gauge whether a system is fragile or antifragile. The banking industry is fragile while the restaurant industry as a whole is antifragile.

[quote author=Antifragile]
[A]ntifragility gets a bit more intricate— and more interesting— in the presence of layers and hierarchies. A natural organism is not a single, final unit; it is composed of subunits and itself may be the subunit of some larger collective. These subunits may be contending with each other. Take another business example. Restaurants are fragile; they compete with each other, but the collective of local restaurants is antifragile for that very reason. Had restaurants been individually robust, hence immortal, the overall business would be either stagnant or weak, and would deliver nothing better than cafeteria food— and I mean Soviet-style cafeteria food. Further, it would be marred with systemic shortages, with, once in a while, a complete crisis and government bailout. All that quality, stability, and reliability are owed to the fragility of the restaurant itself.

So some parts on the inside of a system may be required to be fragile in order to make the system antifragile as a result. Or the organism itself might be fragile, but the information encoded in the genes reproducing it will be antifragile. The point is not trivial, as it is behind the logic of evolution. This applies equally to entrepreneurs and individual scientific researchers.
[/quote]

Competing small units in the restaurant business do not individually threaten the system and make it jump unexpectedly. The banking industry however has just the opposite effect. One bank failing makes it easier for other banks to fail.

While one may not agree with everything Taleb has to say, I believe that the book "Antifragile" is worth a read. If your interest is mainly in understanding financial systems, Taleb's book will give a good foundation and tools (including simple mathematical ones) to analyze information produced by other sources. However, Taleb's notion of antifragility extends beyond the financial markets. Stoic philosophy (and Taleb mentions it briefly in the book) which shares the same psychological foundation as the 4th Way of Gurdjieff provides practical suggestions for making oneself more "antifragile" in life. Many of the approaches taken in this forum and the work that is done here falls in such a similar "antifragile" category.

 

[Louis Morelli]

He also said that the current Wave is bigger than all of the Waves in the past.

How smooth or rough will the descending side of the curve be? Maybe it is not a symmetric, pretty Bell Curve, but something that falls a lot more violently than it ascended, like a water wave or a bubble burst, like the ones we see in the stock markets frequently?

Hi, Data,

Now I am a little bit confused and maybe we can clarify it. I think that there are waves related to our physicality and waves related to our "conscious state", or spirituality. I don't know what this new wave is about. If it is about our physicality, our material life, the descending side can not be rough, abrupt. For illustration I will insert the following image:

I think that every time Nature develops a new shape of a universal system that is coming evolving since the Big Bang, Nature applies a kind of life's cycle equal the light wave. And our physicality is all about a new system's shape: biological system, which comprehends all our living ancestors, till amoebas. If I am right, the modern state of biological systems are located at the middle or the end of this wave spectrum. At this region, there is no more rough or abrupt descending. The vibrations does not reaches the high peaks as they reached at the beginnings. Do you agree?

By another hand, maybe this wave that changes our life maybe is related to our spirituality, which I prefer to call " conscious state" . I understand that consciousness is a new shape of the same universal system, the most lately top evolved system. And I think that consciousness is still recently formed, maybe a kind of fetus, embryo, yet. It even did not opened its own eyes for to see its own body, its shape, its substance. It was born a few minutes ago, in relation to cosmological times. If I am right, then, the location of consciousness is at the beginning of a new wave, where the frequencies of vibrations reaches the top peak, so, it is presumably that the fall will be rough, abrupt. So, the problem is: this wave is about physicality or mindedness evolution? (sorry mistakes in English, not my native language).

 

[obyvatel]

Hi Louis,
Welcome to the forum. We suggest that new members provide a brief introduction about themselves in the newbies board . You can look at other posts in the board to see how others have done it.

Now I am a little bit confused and maybe we can clarify it. I think that there are waves related to our physicality and waves related to our "conscious state", or spirituality. I don't know what this new wave is about. If it is about our physicality, our material life, the descending side can not be rough, abrupt.

In the context of this forum, the Wave is used in a special sense and is related to both physical and spiritual dimensions of our existence. The topic is treated in detail in Laura's book "The Wave" which is available both in electronic ( found here ) and print format. It is essential reading for members of the forum.

 

[Buddy]

I would like to ask a couple of questions here, related to the current era :

- What is the system ? Most of us here must have heard/read or think that the system is about to collapse, but what is it exactly ? It rules our lives, feeds us, sends our children to school, gives us comfortable homes (for the lucky ones) … and remains abstract.
- The system has never been that strong. How could it collapse ? Maybe this is why David Hackett Fischer says that the current Wave is bigger than all of the Waves in the past.

In general, "the system" is the status quo, or the way things are. One aspect of the system that is the subject of a lot of talk and a lot of denial is the U.S. dollar as the world's reserve currency. Currently the dollar is the world's reserve currency and the U.S. is the only country that can print them. So we do. We print whatever money we need with little concern about our debt because we believe that countries will always buy them due to the fact or belief that the dollar is the world's reserve currency and dollars will always be needed.

This situation is changing though, and lots of smart people in high places are in denial about it. What would happen if the dollar was displaced? At the very least, I would expect to need to trade my inflated dollars for some other currency or precious metal before I could buy anything or pay any debt.

Probably 10 years ago the possibility that the dollar could or would be displaced as the world's reserve currency was practically unimaginable. Today, not so much.

The signs that this is already happening could be thought of as a wave. It starts with examples of mistrust in the dollar:

Germany (and a couple other countries moving silently) moving their currency into other currencies and into gold. Also loading up the gold they have store-housed around the world and bringing it home.

China and South Korea has reached an agreement to settle debts in one of the two country's currencies.

In the past few years, China has signed international currency agreements with Germany, Brazil, Russia, Australia, Japan, Chile, the United Arab Emirates, India and South Africa.

Japan and India recently signed a currency deal linking their currencies closer together, lessening their dependency on US dollars.

There are many more examples. For instance, Robert Frisk wrote in The Independent about Gulf Arabs planning - along with China, Russia, Japan and France - to end dollar dealings for oil, moving instead to a basket of currencies consisting of several of the currencies of the countries mentioned, along with the Euro and gold.

Even the International Monetary Fund (IMF) has proposed replacing the U.S. Dollar with "Special Drawing Rights" or SDRs. The IMF also proposed creating SDR-denominated bonds which could reduce central banks' dependence on U.S. Treasury Bonds. They also suggested that oil and gold could be priced in SDRs instead of U.S. dollars.

So, to me, this movement away from the U.S. dollar is happening as a wave and will likely bring as much destruction to unprepared people as a tsunami that catches you by surprise because the people who could have warned you couldn't bring themselves to grasp what was happening.

Just my thoughts.

 

[Shinzenbi]

Buddy, thank you for your reply. I do not see how the dollar could collapse.

As you mention, some countries are moving away from the dollar for their bilateral exchanges. I have also heard financials saying that the euro is more reliable than the dollar. This indeed denotes an increasing mistrust in the dollar, but has only limited effects. The petrodollars are in no way threatened. I do not think that any oil selling country will accept another currency. Those who think that it may happen seem to forget that the oil selling countries willing to turn away from the dollar soon have problems with the US army. For instance, Irak and Lybia (see the links below). The attacks on these countries are a strong warning to their neighbors. Saudi Arabia is certainly not to leave the dollar.

_http://www.time.com/time/magazine/article/0,9171,998512,00.html

Europe's dream of promoting the euro as a competitor to the U.S. dollar may get a boost from Saddam Hussein. Iraq says that from now on, it wants payments for its oil in euros, despite the fact that the battered European currency unit, which used to be worth quite a bit more than $1, has dropped to about 82[cents]. Iraq says it will no longer accept dollars for oil because it does not want to deal "in the currency of the enemy."

_http://www.thedailybell.com/2226/Real-Cause-for-Gaddafis-Expulsion-Wanted-Gold-Currency.html
_http://www.thedailybell.com/2228/Gaddafi-Planned-Gold-Dinar-Now-Under-Attack.html

Some believe it [the NATO/US-led Libyan invasion] is about protecting civilians, others say it is about oil, but some are convinced intervention in Libya is all about Gaddafi's plan to introduce the gold dinar, a single African currency made from gold, a true sharing of the wealth.
Gaddafi did not give up. In the months leading up to the military intervention, he called on African and Muslim nations to join together to create this new currency that would rival the dollar and euro. They would sell oil and other resources around the world only for gold dinars.
It is an idea that would shift the economic balance of the world.

Furthermore, on April 12 2013 in his speech about the state of the union, Barack Obama has evoked the Transatlantic market (Transatlantic free trade zone) by 2015. This will create a super block of 800 million consumers. We have a clue on our euro bank notes. There is the European continent with a bridge to the west. This should strengthen the dollar. I do not think that the hidden agenda is to create a single currency for the 2 zones in the near future because here in Europe, the euro is destroying the economies of most of the countries of the Eurozone. Very quickly, there are 3 conditions so that a monetary union works : a common budget, workers mobility and homogeneous economies. The only one we have is something that can be called a common budget. The more we use this inadequate common currency, the higher the social cost. This is a method of torturing the peoples and a common currency would have the same effect in the US.

_http://www.theepochtimes.com/n2/business/transatlantic-free-trade-zone-by-2015-347739.html

President Obama got the ball rolling in his State of the Union address Feb. 12. He proposed to start negotiations about a transatlantic free trade zone. European officials responded favorably to the initiative, which could boost the U.S. and European economies.
“I am delighted to announce today that the European Union and the United States have decided to initiate internal procedures to launch negotiations with the aim of reaching a ground-breaking free trade agreement,” Jose Barroso, president of the European Commission, said in a statement Feb. 13.

_http://www.spiegel.de/international/world/us-president-obama-backs-trans-atlantic-free-trade-agreement-with-eu-a-883104.html

" Those involved in trans-Atlantic issues refer to the agreement as "an economic NATO."

All of the above was to back up the idea that the dollar situation cannot get out of control. If the peoples of the world lose confidence in this currency, it can only be after a huge media campaign, controlled by the very same ones who control the dollar. The collapse of the dollar cannot be a “technical inevitability” but a top decision. So, the question remains : how will the wave come ?

Obyvatel, thanks for having mentionned this book. I'm interested in it and had never heard of the antifragility concept.

 

[Buddy]

Buddy, thank you for your reply. I do not see how the dollar could collapse.

Understandable. What do you think will happen once the amount of debt is such that we cannot even pay the interest on it? Do you believe, as some do, that there will always be a workaround?

I say "as some do" because of something Paul Krugman wrote in the New York Times, Jan. 7, 2013:

There's a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector's items - but that's not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling - while doing no economic harm at all."

Also, I think it would be wise not to downplay China's influence on the world economy.

Quote from Xinhua:

"International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country."

In my opinion, the economic context in which this statement was made indicates this was a very diplomatic expression of rage and incredulity at U.S. fiscal irresponsibility.

 

[Rich]

Buddy, thank you for your reply. I do not see how the dollar could collapse.

Understandable. What do you think will happen once the amount of debt is such that we cannot even pay the interest on it? Do you believe, as some do, that there will always be a workaround?

I don't Buddy.:) There never has been a workaround in history:

there is no historical precedence for a fiat currency that has succeeded in holding its value. Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.

The average life expectancy for a fiat currency is 27 years, with the shortest life span being one month. Founded in 1694, the British pound Sterling is the oldest fiat currency in existence. At a ripe old age of 317 years it must be considered a highly successful fiat currency. However, success is relative. The British pound was defined as 12 ounces of silver, so it's worth less than 1/200 or 0.5% of its original value. In other words, the most successful long standing currency in existence has lost 99.5% of its value.

Given the undeniable track record of currencies, it is clear that on a long enough timeline the survival rate of all fiat currencies drops to zero.

A couple of other interesting fiat currency fact articles linked at source: _http://georgewashington2.blogspot.co.uk/2011/08/average-life-expectancy-for-fiat.html

 

[Shinzenbi]

Buddy, thank you for your reply. I do not see how the dollar could collapse.

Understandable. What do you think will happen once the amount of debt is such that we cannot even pay the interest on it? Do you believe, as some do, that there will always be a workaround?

No I do not believe it. I think that the US will never pay off its debt, like Japan, Spain, Greece, Portugal, France… Many debt haircuts are bound to happen. But the existence of the dollar is not jeopardized as long as it is protected by the US army. A generalized payment default is very likely to happen, with the money of the small creditors (among others) stolen. The state bonds holders may never be refunded, like in Russia in 1918 and more recently in Greece. There are such bonds in many savings products here in France, and I think it’s the same in the US. What has happened in Cyprus is interesting (and unfortunate…) and looks like a small laboratory of what may happen on a larger scale. What does the US risk if it publically announces that it will not pay off (which is very unlikely) ? Foreign invasion ? Mass social uprising ? Basically no more loans. Does this threaten the existence of the dollar?

Remark : we are not only paying the interests on the debt, but also the interests on the interests, thanks to a mathematical abstraction called the "compound interests" .

I say "as some do" because of something Paul Krugman wrote in the New York Times, Jan. 7, 2013:

There's a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector's items - but that's not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling - while doing no economic harm at all."

Something alike is happening in Japan, where a new figure has been created : the "unlimited".

_http://www.indianexpress.com/news/bank-of-japan-pledges-unlimited-easing-commits-to-price-goal/1063045/
_http://www.reuters.com/article/2012/12/27/us-japan-economy-abe-adviser-idUSBRE8BQ02320121227

Abe, whose Liberal Democratic Party won a landslide victory in a lower house election on December 16, has called on the BOJ to set a 2 percent inflation target, double the bank's current goal, and to ease policy "without limits" to beat deflation. He has also threatened to revise the BOJ Law if his demands are not met, turning up the heat on the central bank.

What is the result? Further economic doldrums. The yen value is decided by the politicians, not by the market. Using yens is like using monopoly bucks. And the true crisis of Japan, the demographic one, is not solved at all.

I think that someday there will be what Lenine called “the eternal return of the real” and that the abstract mathematical game will come to an end. The dollar alone cannot collapse. If it does, the major currencies will collapse too, which will trigger worldwide chain reaction. Can it be considered a wave ?