Posted by the kid On March 17, 2021
There’s an old saying, “Does art imitate life or does life imitate art?”. I have a new old saying, does tech imitate life or does life imitate tech?” This question becomes more and more relevant everyday. The next “Big Thing” or current “Big Thing” in all of society, apparently are Non-Fungible Tokens…NFTs. Just one more item on the list of the ever expanding blockchain universe. Our technology is defining our entire society more or less in its own image, particularly among “Post-Millennials” many of whom grew up entirely behind a computer screen or cell phone. This is THEIR world. Trading pokemon cards doesn’t necessarily have to lose its value as we grow into adulthood. NFTs are just “signed” data blocks on a blockchain. Why would someone pay millions for the privilege of “owning” a piece of data on the nebulous blockchain? Remember there is still a large majority of our society that still thinks a “blockchain” is used to weigh anchor. But not the PMs! They ALL know the deal and have for some time.
For example take the latest poster child for NFT riches, Elise Boucher, better known as Grimes. Her NFT artwork is selling like hot cakes for thousands of dollars at a pop, millions made in practically minutes. Craze or crazy? If you want the answer to that take a look at the company she keeps. Elon Musk is her boyfriend. Can you imagine the digital groupies that run in that circle? This kind of “In” crowd makes their own rules and, hence, their own economies of scale.
But let’s look at a broader perspective, the “common” folk. Crypto-Kitties and CyberPunks are more for the “common” main, yet these digital icons can run into the thousands of dollars. If someone buys a CyberPunk, I bet 2 CyberPunks that he/she knows someone who has also bought a CryptoPunk, or a few…and so on and so on. In this CyberPunk universe people just make up their own economy…if they can afford it. If a CyberPunk is worth $15000 or more to one individual in this cozy little world, then it’s probably worth that much to a few, if not many, others. For those who occupy this world, for whatever reason, that price is a bargain. Who are we to argue?
However, from an economics point of view, it’s a mistake to just look at NFTs as an investment, I’m sure some see them that way…but they are not a single kind of “thing”, like a painting or a photograph. Anything digital can be freely copied over and over again with a simple “cut and paste” command. I can simply grab all the Grimes artwork or CryptoKitties I want straight off the Internet. It happens all the time. This is just as true in the NFT universe. So what gives?
The difference is the very subtle distinction between “having” and “owning”. I can move to Arizona and have thousands of square miles to live in without any dramatic impact on my life. However, if I OWN thousands of square miles, well that’s an entirely different story! An NFT is just a wrapper. The value comes from the ever-present “network effect” that blockchain technology exemplifies and harnesses. Look at it this way, you collect baseball cards, you’ve been collecting them for years, you have expensive cards and inexpensive cards. You regularly attend baseball card conventions with your buddies. You keep your most precious cards in a safe deposit box. Baseball cards are your WORLD. Somewhere along the line you find yourself with $1000 to spend on a “high-end” card of your choice. You have the opportunity to buy an original 1968 Topps Willy Mays, unsigned and in good shape, for $1000. You also have the opportunity to buy a teammate’s card, Don Mason (whoever he is), signed by Willie Mays himself, also for $1000. Which one would you buy? First, ask yourself which one of these cards would you want to OWN and that you want people to KNOW you own. Answer that on your own terms and you’ll understand what NFT’s are really all about.
Posted by the kid On March 8, 2021
Chain…chain..chain…! But unlike Aretha Franklin’s anthem, this is not a chain of fools…but of the very wise. The rest of the 21st century will be a marvel of new technologies changing how we live our lives, and I don’t mean in that dated, Disney World’s Fair sort of way…because it is no longer the “future” but the here and now. The
electronic television was available as a commercial item in 1939, but it would take another 20 years until it was a household item. But that was 60 years ago when “digital” meant using your fingers to count to ten. But the point is new technology usually needs a little time to “catch on”…with the possible exception of the iPhone. Just 30 years ago, no one was sure that the “Internet” was viable, 20 years ago, whether Amazon could compete and survive against the brick and mortar stores. 10 years ago…I can go on and on but I’m obviously inferring that the time span for society-changing tech adoption is getting shorter and shorter. One year ago, blockchain technology as a whole was still the realm of nerds, propellerheads and crooks. Now blockchains are popping up everywhere and will continue to do so.
In my opinion this is a good thing. Decentralizing (DeCe) can only help humanity fulfill its own potential by sifting out greed, racism, ignorance and mistrust from, if nowhere else, the digital realm. Instead of the world using technology to keep tabs on people, blockchains allow people to keep tabs on the world. At least in theory…
In any case, when we think of a blockchain, for the layman that’s just Bitcoin and, maybe, Etheruem, but only in terms of how much they’re worth. But very few understand the basis for that worth. As I mentioned in my last article…that value is based upon trust. There are many ways to display trust, a scampish wink, a firm handshake, a warm hug…think of each of these as a “separate” blockchain. Like Ethereum, Cosmos or Flow, they pretty much do the same thing but in much different ways. Eventually we’re going to have to stop looking at tech as a kind of zero sum game. Granted the success of any technology platform in the long run is based on the infamous “Network Effect”, the real driver behind the amazing impact just a few technologies have made on our lives. But the Effect is somewhat fickle, not everything popular will be good and not everything good will be popular, but that’s more in the field of sociology and psychology than it is technology.
For now, there is a plethora of blockchain smart contract networks to choose from, Ethereum, PolkaDot, Cardano, each having its own means of building trust. After all you wouldn’t hug your mailman or wink at your mother (maybe you would…) but you get the point. Sooner or later all these block chains, no matter how they’re built, will learn to communicate with each other. Will this create a dystopian world where DOA’s rule without interference from the masses? Hardly, but it is ironic that it’s easier to trust a few lines of code than a real live human being. Now that’s something to think about.
Posted by the kid On February 20, 2021
I recently tried to deploy a simple “Hello world” dapp on all the testnets. When I got to the Mainnet a deployment would cost roughly $76 in gas fees to complete. Nine lines of code; I decided the testnets were enough. Blockchain “gas” fees are literally the fuel behind the Ethereum blockchain. Ethereum is behind every crypto coin you can think of that’s not Bitcoin. If you invest in it…great. If you program blockchains with it…damn! Just a couple of years ago you could deploy the exact same contract for pennes. Those of you in the business know what I’m talking about. It could be dismaying if it didn’t actually make sense. The block chain is a real boon to economics because for the first time in all of history, we can examine pure mathematical models sans the most corrupting factor in all purely mathematical models…human nature.
Yep. That’s always been a tough one. In any economic system to date has always found weaknesses when things like greed, selfishness and downright meanness, come into play …as they do from time to time. Models aren’t perfect because people aren’t perfect. And although blockchains aren’t perfect either…they do enjoy one liberating factor…none of those pesky human emotions to create and justify slanted points of view. Keeping it simple, economics always starts with a market system, preferably a free market but a free market is akin to a free lunch. More on that later. For now based on the first axiom that a fair price for any item on that market will be based on Supply and Demand. That’s all you need. Price represents value, the value placed upon it by the marketplace. Remember “it” can be just about anything but in this case it is Ethereum.
Value is determined by agreement. Agreements are based upon trust. It is the trust that creates the value. When someone trusts something, they use it. When more people use it, more people trust it, the more people trust it the more valuable it becomes…and on and on and on. Usually this kind of logic would be used to explain the boom and bust cycles of the fiat financial system. But those systems are laden with the human factor and all its weaknesses. Buyers get skittish, sell shares, run on banks..etc. All those horrible things fiat systems try desperately to avoid. Ethereum has nothing to do with any of that and could care less. Humans worry and fret and need to buy their own shares to drive up the share price. Market forces are only as good as the will of the people comprising that market. The only “pure” market therefore is a market without people.
That may sound inhumane, but actually, it’s not. It’s a good thing in my opinion. Along with the absence of people there is an absence of doubt. The blockchain is based on its own immutable data. It’s as certain as anything made by man can be… at least for now. I’m sure pretty much everyone on the planet has heard about the price of Bitcoin and Ethereum reaching all time highs practically every day. Sure the bubble must burst somewhere along the line and we’re back to square one..right? Well not necessarily. In a system based upon certainty there is absolutely no doubt, that allows infinite room for trust, that is, absolute trust. If you have infinite trust, you have the possibility of infinite use. Infinite use means infinite VALUE. In other words doesn’t it make sense that trust could be, perhaps, should be, the most valuable thing on Earth? Makes sense to me…
Posted by the kid On February 16, 2021
It is a digital currency secured by cryptography, which makes it almost impossible to double-spend or counterfeit. … In other words, cryptocurrency is an asset class with the potential to democratize access to wealth – currency by the people, for the people. – https://www.thestreet.com
There has been a lot of fuss about Democracy, political and social change amid, of course, the world’s current MOST favorite topic..covid, covid and more covid. But let’s peek under the covers a bit. There’s a financial revolution going on that seems to be quietly slipping under the radar. I grew up in Boston and there’s a popular saying among the “common folk” there that says when you want to find the truth…follow the money!
With the deprivation of the middle class in the West, that’s become easier and easier to do. No one seems to mention that all that political calamity and social injustice over the last few years is directly because of the disappearance of the economic “middle class”. There’s no question that the world is aware of it. It’s been written about endlessly across the globe, but I’ve noticed that in my little corner of the world, it is very seldom “talked” about as if the disappearance of an entire economic sector of society and the possession of almost the entire world’s wealth residing in the hands of a very few is somehow as natural as clouds in the sky.
This article is not a political or even a social perspective, I’ll leave all that to the politicians and sociologists of the world. I’m just a simple engineer, my point of view is strictly a pragmatic one. As an individual who has dealt with the complexity of the US financial system from the proud moment my father took me to the local bank to buy my first US savings bond as a child to now, where you have to have an “inside track” ( or an online Fidelity account) to get a hold of one, the financial system has not only gotten more convoluted but in the worst possible way, its less “democratic”. In today’s, world money can only be created by getting as many people into debt as possible. That would make my father turn cartwheels in his grave. But here we are.
I don’t know if Satoshi Nakamura is real or fictitious. I assume Prometheus was fictitious since he is part of Greek “mythology” but his gift of fire to mankind is on par to Satoshi’s gift of the blockchain. ALL mankind will benefit from this gift of binary cryptography, no matter what race, creed, color or place of birth, in one way or another. A year ago the mere mention of “Decentralized Finance” aroused suspicion, promoted by agitators and conspiracy theorists. Today it is all the rage. After the Game Stop debacle, it downright makes sense, even to the benefactors of the status quo to hop on board. Somewhere, somehow “money” has to be based on trust. Something the current financial system seems to have completely forgotten. Trust has been based solely on manipulating the free market with impunity making it not so “free”. Now DeFi, crypto, what have you, are all the rage, and rightfully so. True, there will still be haves and have nots, but the haves will have what they actually deserve and the have nots will have no one to blame but themselves. I know that’s a bit of an oversimplification, but that doesn’t mean it’s not true.
I could go into great detail about how we’ve become the society we live in today. I can wax philosophical about the world we face tomorrow, but I sense that whoever is reading this knows there’s a fundamental truth to what I am saying. You don’t have to be a software engineer, or an economics or one of the 1% to know that something has been “wrong” with “money” for quite some time, and I don’t just mean in the West, but everywhere. There’s a reason why capitalism has become more socialist and socialism more capitalist. These are ideologies meaning they’re just that…ideas. Like any idea, some are good in some circumstances, not so good in others. I have never understood the need to be rigid about any “ism” being the sole standard of truth. That’s simply ridiculous. The only ideas that really count are the ones that work.
As CNN and Fox and all the rest tell about all the troubles of the world, they are bereft of ideas and care only for responses. Fine. That’s their job, to entertain the masses. But you can’t keep a good idea down for long. And although the “Haves” will do everything in their power to suppress ideas that are not their own, there is something about human nature and humanity in general, that fundamentally knows right from wrong and, in the end, will act accordingly. It’s just a matter of how much grief one has to endure to implement that one good idea. I can understand why Nakumura dropped off his white paper and disappeared into the fog of obscurity. After all, look what happened to Prometheus!
Posted by the kid On December 7, 2020
I’ve been in advertising for almost 20 years now, starting with traditional brand advertising but in those days, in the unique and new position of digital developer. Way back when, that meant the cutting edge technology of Adobe Flash. Archaic now, but at the time a good Flash developer could roll out money by the wheel barrow on Madison Avenue. In those days, during and post “Dot.com” bubble, digital meant Photoshop and Illustrator. Add Microsoft Project and that was your typical “technology stack”.
After all, brand agencies come up with ideas and strategies but when they want an actual commercial they find a production company to do the scripting, shooting and editing. They do not keep actors, directors and cameramen on staff. The agency just hands them the script, more or less. In any case, you get the idea. If a client wants an interactive web site, with cool transitions and flashy animations, just hand it off to those up and coming “digital shops” with their snotty little propellerheads and geeks. As long as they meet their deadlines, more power to them. But a funny thing happened on the way to the Internet. Clients, finding out it was these little geeky startups under the Brooklyn Bridge that were creating all those cool, flashy sites, at a fraction of the overall budgets they were paying their big brand agencies by the way, they began to skip the middleman. Now those little “geeky” shops became the RG/A, the Huge, the Big SpaceShips of the world.
Simultaneously, with the rise of the banner ad, this fueled their tremendous growth even more as the banner ad has become ubiquitous in all Internet marketing. And then, last but not least, the real fuel being added to the fire…social networks! Back in the 2000s, News Corp, tried selling ads on MySpace the same way they did for their magazines. It didn’t work. Bad tech, bad attitudes and bad timing eventually did them in. But these were lessons not lost on the next generation of “digital” advertisers, Google, Instagram and, yes, Facebook, Myspace’s heir apparent and winner in the social market sweepstakes.
That brings me up to today. Recently, the almighty Facebook has shut down my ad accounts for both Facebook and Instagram, stating that I am not a legitimate advertiser. These are accounts I’ve had since Facebook’s inception when I was working at agencies trying to convince my directors this was the future of advertising. Some believed me, most didn’t, but here we are. Now Facebook, in all their daunting glory, now wields the soul power over who is an advertiser and who is not, at least, in Facebook land.
Fair enough, it is their platform, they built it, they own it. They have enough problems dealing with the Dunning & Kruger effect, extreme partisanship over the simplest issues and censorship. Hey, it is media afterall, and even during the brand agency error there were always Do’s and Don’ts, but although there were always rules as to how you can advertise no one ( with the possible exception of the Ad Council) could say who or could not be an advertiser!. Is Facebook really so over-blown and conceited with billions of dollars and billions of users that they have the audacity to tell me that I am NOT an advertiser. To be blunt, Facebook can kiss my astrological sign! How dare they!? How dare anyone?! Yes, in one short stroke, they have cut off a sizable and important source of revenue for me (And many thousands of others I’m sure) and a smaller less significant source of revenue for themselves. They obviously could care less about me or other small advertisers like me. I can only assume it’s because being the gargantua that they are they see themselves as simply too big to fail! They crush little guys like me like ants and just keep going, oblivious to any damage they may cause. But I suspect that soon, perhaps, sooner than they think, they will actually find themselves too big to SUCCEED! I certainly hope so. Remember, before Facebook, MySpace was the largest social network on the planet, however, briefly. When Facebook’s days are numbered I, little old me, a veteran of the ad wars, the tech wars and the internet wars, will dance on their grave. As someone somewhere one said, “Power corrupts, absolute power corrupts absolutely!”
Posted by the kid On November 15, 2020
On Wednesday, the US Justice Department proposed that Congress take up legislation to curb protections given to large digital technology companies by the Communications Decency Act. President Trump has been clashing with the digital technology industry because he believes the industry has a bias against free expression by conservatives.
The President was particularly frustrated by Twitter’s decision to put a warning on one of his tweets, one which appears to advocate police brutality.
To limit the ability of social media companies to control the content on their platforms, Trump is seeking to “remove or change” Section 230 of the 1996 law. It’s an element of the law that exempts platforms from responsibility for what their users post while allowing them to moderate the content of their sites as they wish.
“These reforms are targeted at platforms to make certain they are appropriately addressing illegal and exploitive content while continuing to preserve a vibrant, open and competitive internet,” said Attorney General William Barr.
Facebook policy chief Nick Clegg told reporters that Section 230 allowed Facebook to remove hate speech and that the proposed changes would “in the end, mean less speech of all kinds appearing online.”
General counsel of NetChoice Carl Szabo said that the proposal would create so many obstacles to removing content that the House of Representatives would not consider it.
Some observers fear that if the US alienates its big technology companies, it could lose its position as the world’s leader in the sector. Shortly after Trump’s threat, Thomas Jarzombek, the point person for Berlin’s startup economy, published the following tweet, “Hey @Twitter & @jack, this is an invitation to move to Germany! Here you are free to criticize the government as well as to fight fake news. We have a great startup and tech ecosystem, your company would be a perfect fit and I will open any doors for you! @realDonaldTrump”
Posted by the kid On November 3, 2020
While it sounds like the stuff of dystopian science-fiction, quantum supremacy is actually a very real milestone for a super-computer. It’s achieved when such a processor can perform a calculation in a matter of seconds that would take a normal computer several years.
Google recently claimed that its 54-qubit Sycamore processor achieved quantum supremacy when it cracked a calculation in 200 seconds that would have taken the world’s leading super-computers 10,000 years. Though Google’s declaration has been disputed by some, it’s worth taking a look at what the real-life applications of such quantum capability could be.
Currently, any hacker or entity trying to use brute-force on an encrypted password could waste years trying to gain access. But quantum computers have the potential to gain brute-force entry in a matter of seconds, eviscerating encryption as we know it. On the other hand, quantum computers would also be able to create even more complex forms of encryption, ultimately making passwords even stronger.
Currently, in order to see the effects of a drug, scientists must synthesize the molecule and observe its interactions with other molecules. This takes a lot of trial and error time and resources. But quantum computers could model and run simulations of drug interactions in record time. While this would save researchers time and money, it would also save lives in the log run as the trial periods of life-saving medications could be aggressively shortened – sounds like a pandemic must-have.
Quantum computer’s ability to solve complex problems involving hefty amounts of information in a matter of seconds is sure to bolster the rise of artificial intelligence, which will need to process data at lightning-speed to reach its true potential.
Trading and risk assessment involve large-scale models and simulations, and quantum computers have the potential to give investors a huge edge. The Monte Carlo simulation, for instance, which visualizes the impact of risk and uncertainty in an investment, could be drawn-up in just a few seconds by a quantum super-computer.
Earth is a complex ecosystem made up of hundreds of smaller systems. Mapping out the interactions and synergistic relationships between them is a tall order. This complexity is what makes it hard for current climate models to be perfectly accurate. With quantum computing, we could create more accurate models that could handle more variables, which could give us a better idea of how we can realistically slow or reverse the effects of climate change.
Posted by the kid On October 28, 2020
Only days after President Trump and Chinese leaders announced a tentative deal over TikTok, things are becoming muddled.
On Saturday, Trump told reporters he had given his “blessing” to a deal that would result in US-based companies Oracle and Walmart becoming partial owners of the video-sharing app.
But by Sunday, ByteDance, TikTok’s Beijing-based parent company, had already disparaged Trump’s characterization of the proposal. ByteDance clarified that it would hold a majority stake in TikTok Global, the new company that would result from the entrance of Oracle and Walmart. Additionally, the Chinese entity insisted that it would keep the majority stake until TikTok goes public next year. By contrast, Oracle said Monday that ByteDance would lose it ownership stake in the platform as soon as TikTok Global forms.
The disconnect between participating parties only heightened on Monday. Appearing on Fox & Friends, the President was asked about the fact that ByteDance would maintain an 80% stake in the service. In response, he said that the Chinese company would “have nothing to do with it. And if they do, we just won’t make the deal.” Moreover, he said that Oracle would have control over TikTok, adding, “If we find that they don’t have total control, then we’re not going to approve the deal.” The statement came only days after he had expressed his “blessing” for the mixed ownership arrangement.
Anything But Certain
All of this just underscores how malleable the agreement still is, and the lingering possibility that TikTok could still miss the administration’s national security standards. On Saturday, the Commerce Department had announced a one-week delay of a plan to ban downloads of TikTok in the United States, pushing the new deadline to September 27. But if the agreement does not satisfy Trump’s concerns by then, the existence of the app in the US could once again become endangered.
Posted by the kid On October 11, 2020
One of my favorite Youtube channels is Whatifalthist. I’ve been spending a lot of time on Youtube lately, as I’m sure a lot of people are, enthralled with the content and appalled by the horrid advertising. The time when professional advertising comes to youtube, if advertising must come, cannot come soon enough for me. But that’s a topic for another day. This article concerns a video from this channel appropriately titled as follows:
Why is the World Crazy Now?
Youtube Channel: Whatifalthist
This caught my eye because, as you know, if you’ve been reading these articles, I like to bundle up technology, economics and history to make the world a better place, or at the very least, these articles more interesting. But 2020 seems to be a cathartic year for humankind and something about all this feels somewhat familiar. It’s hard to explain, but if you take a different point of view from the “normal” perspective and make one simple assumption as follows:
The world has always been crazy, it has just been a matter of degree and awareness.
My field is the media and one of the most obvious drawbacks to today’s media stream is its “nowness”. We in modern societies find ourselves perpetually drawn into the world of right now.
Not just immediate gratification, which is bad enough, but immediate everything! The individual of today, no matter what age, race or gender, can barely grab the next breath before being swallowed up by CNN or Twitter. We feel frustrated and insecure in a world where we should be satisfied and content, but we’re not. We are constantly being bombarded by bad news and fear, boogie men and pandemics. But believe it or not, this is nothing new. This has been the driving force behind civilization since, well, civilization.
Human beings, no matter how intelligent we think we are are emotional beings. Our instincts for fear and self-preservation are as much a part of us as our fingers and toes, but for some reason, for all our vaunted ability to think, we still rely on primal instinct. An instinct, that almost all forms of media can tap into and manipulate, good or bad, right or wrong, true or false. And the most powerful emotions, at least in the short run, are the negative ones.
“Emotionally satisfying that your one enemy, hopefully with a name of only one or two syllables is the one to blame for all the world’s ills….in reality these are all players struggling in a harsh world beyond their control…”
Whenever every field tries to understand the present to predict the future…they always emphasize the importance of their own field.
Technologists tend to trumpet their own favorite technology while forgetting single technologies usually run out of steam after a generation or two. Economists tend to look at economic factors while ignoring they are entirely dependent on the political and social factors around them.
This I know first hand. Historians too have their biases but they also have one big advantage. Historians see the world over a long period of time, seeing what makes the present differ from the past, but also, how it is so much the same. They too will have their biases; they too will see only what they’re looking for, but at least they have the broad canvas of thousands of years to draw their conclusions.
According to Whatifalthist, there are Four Root Causes of what is happening today based on the cycle of history repeating itself. As the saying goes..”Those who forget their history are doomed to repeat it”. Remember, these events which we consider today, have all happened somewhere, sometime before in human history. Keep that in mind. Even item 4, which seems specific to the US and this specific time, isn’t. Ask Egypt, Greece, Rome…the Romanovs, the Mongols, Exxon …well you get the idea…
Four Root Causes
- Population Growth
- As population grows, more competition for resources
- Governments inflate currencies causing inflation
- Inflation helps the wealthy and connected/negates wages of working and middle class
- Corruption becomes endemic to protect the privileged
- Politics become more partisan and extreme (generally negative)
- Governments try to get an edge on neighbors/Wars become endemic
- These issues CAN be managed but only after some cataclysmic events
- Decline of traditional religion
- Humans have to believe in something
- Every topic and policy becomes a new front in the culture war
- Politics and social issues take on the guise of religious fanaticism
- There just isn’t much to believe in/Inability to truly understand human nature creates false morality
- Few goals to chase other than money/gratification
- The Information Revolution
- Not unique to our era/Printing press vs Internet
- People in poor areas know how poor they are
- Broken social groups/humans need real human relationships/loneliness and anxiety
- Greater irrationality and desperation
- The decline of Western hegemony
- US Golden Age as an aberration
- Rise of China
- US withdrawing from World policing/painful period of self-examination
Posted by the kid On October 4, 2020
I’ve spent a lot of time lately observing the events that are going on around me very carefully. Since my business is business I’ve become particularly fascinated with economic theory. I’ve been into that since college but kind of in the background. I took the freshman classes like everyone else but only cared so far as it was being able to explain what I saw on television news. Not the loftiest of goals but at the time, that was the level of my interest. That was many years ago, life experience has taken that interest to all new levels. At least in my own imagination.
Throughout my own up and down career I’ve subconsciously kept in the back of my mind, so this is what Jonathan Carr and Milten Friedman were talking about. And slowly but surely I could start to see why “statistics” and “indicators” and “benchmarks” are so important..why the “economy” is so important. So much of our individual lives depend on it almost for life itself. This is pretty ominous when you think about it and it also explains a lot. It can easily explain why we treat others as we do, behave and the way we do and believe what we believe. I personally don’t believe any economic model can predict anything remotely useful if there are no “human” elements involved, i.e., humankind’s quirky, excessive and completely irrational side that defies any algorithm.
But still, you can see things coming if you just take a look. I’ve been wondering with all money that being printed out there, I ask two questions:
- Why isn’t any of it coming to me?
- Where’s the inflation that usually comes along with it?
Well, I can’t answer the first question, but I think I can take a shot at the second. Take a close look at the illustration above. It is a screenshot from the US Bureau of statistics Consumer Price Index for August 2020. (https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm#)
Simply put, the things above are what the prices were on what people bought in August neatly broken up into “All Items”, “Food”, and “Energy”. For now we’ll forego the “All items except food and energy”. I have been shopping for a lot of food since covid, like everyone else and noticed a sharp rise in prices over the last 6 months. Isn’t that inflation? Yes, but it’s well within the acceptable 1% – 2% range which is the government’s actual goal. So all that extra money stimulating the economy doesn’t seem to be doing much damage.
But what I didn’t know at first, wasn’t clear until I looked at “Energy” on this graph, it was literally a picture painting a thousand words. Now it all made sense. Now I knew what was really going and I don’t have to be an economist to see it. Basically, gas is still “cheap”.., unbelievably cheap, cheap enough where we can carry on our daily lives, whatever that means to you. To me it means going to the grocery store to constantly buy more food. And just in the nick of time. Next question, is low energy costs the future? How long will it last. What are the benefits. What are the consequences. Again more questions. You gotta love economics!