Laundry Economics .
6 Nov 2014
Taking in each other's washing as an economy . It works near the Singularity !
1.Comparative Advantage .
http://en.wikipedia.org/wiki/Comparative_advantage See Appendix A for wiki example .
“The data of the following list comes from The Conference Board and Eurostat. GDP is measured in purchasing power parity, normalised to 2013 US dollar (comparable to a 2013 international dollar). It is calculated from 2005 EKS PPPestimates from Penn World Tables (PWT 7), updated with GDP deflator changes. Work is measured as hours actually worked during the year in employee and self-employment jobs.”
This is the value of the currency (ie work produced by the good citizens per hour) before QE got too bad .
We take just two :
If USA diluted it’s currency by 43.77/67.32 = 0.65 then it would have parity in Comparitive Advantage .
This means no incentive to trade .
The currency in circulation in 2013 (M2 most relevant) http://en.wikipedia.org/wiki/Money_supply
USA 2.8 Tr . Printing (QE) an extra (2.8/0.65 – 2.8) = 1.5 Tr dilutes the $US to parity with YJapan .
This was the original intention of Quantitive Easing .
Trade in some comparative advantage for economic growth .
This gives roughly 17 months of QE at 85Bn a month . This what actually happened .
2.Japanese Response :
They were not too charmed . Essentially , it meant there was no reason for the US or any Dollar country to trade with them .
They retaliated with two measures :
2.1 Diluting the yen slightly faster than the dollar (I would have simply done it one dump . Shock and awe .)
So-called Abenomics . To buy time .
2.2 Development of clathrate energy sources .
Something they seem to have done ,
The largest treasure of all has just been unlocked and is bubbling to the surface .
What actually happened and is happening as we speak :
Japan has done another Pearl Harbour .
This time against the major oil producers .
The Smoking gun of Clathrate mining .
Theyr'e using tailored archaeobacteria to release methane in a controlled fashion .
Very cheap . Seed the clathrate bed , then harvest the bubbles .
A high wastage percent , but it costs nothing .
This is what you are seeing in the
We're just seeing the leakage .
The Japanese Yen is going to laugh last .
This news is already breaking .
3.What about the rest of the world ?
This is simple to describe : they’re waiting for the tumble dryer in anticipation of youth
Now simply use "money" as the good and we have the present situation . Capital sloshes around , following the cheapest printing presses .
Tried and tested .
"... Scilly Islands. The natives of that
group, before Mr. Smith's time, are popularly said to have eked out a precarious livelihood by taking in each other's washing. "
4. What does all this mean ?
Well , it means that if the rate of wealth creation per time unit is faster than the demand growth , then taking in each other’s laundry makes perfect sense .
A civilization-ending crash probability has suddenly receded to the zero regions .
But profound changes are on hand , which might seem as bad as a crash .
(“What ! An AI wants to marry my daughter in a multiply progressive fractal marriage ! And which one is my daughter ?” )
A cry of “ Oh my daughter ! Oh my ducats !” Both seems to be transforming into something rich and strange .
5.Market correction .
Clathrates are going to force a major civilization correction .
Species bifurcations as well .
Like the Philistines , it is upon Samson . And things are going to get hairy .
“When things get hairy , get a wigmaker . “ Delilah .
You heard her .
6. This is not what I expected .
What shampoo does God use ?
7. In a universe where Mrs Simpson deserts King Edward VIII and elopes with toyboy Alfred E Neumann , truth becomes a quantum foam
The happy couple .
Things are not as bad as they seem .
They solve each other in incestuous stews in neighbouring universes .
8.The birthplace of modern economics .
Note the ergonomic design of the doors to facilitate the large fat behinds of politicians coming in for a quick rinse .
And so it goes .
In a famous example, Ricardo considers a world economy consisting of two countries, Portugaland England, which produce two goods of identical quality. In Portugal, the a priori more efficient country, it is possible to produce wine and cloth with less labor than it would take to produce the same quantities in England. However, the relative costs of producing those two goods differ between the countries.
Hours of work necessary to produce one unit
In order to produce an additional unit of cloth, England must commit 100 labor hours, which could have instead produced units of wine. Although Portugal can produce a unit of cloth with fewer hours of work (90 hours) than England, it must forego producing a greater amount of wine ( units) to do so. Accordingly, England is said to possess a comparative advantage in cloth even though Portugal possesses an absolute advantage in cloth. A similar argument would show that Portugal has both an absolute and comparative advantage in wine.
In the absence of trade, England requires 220 hours of work to both produce and consume one unit each of cloth and wine while Portugal requires 170 hours of work to produce and consume the same quantities. If each country specializes in the good for which it has a comparative advantage, then the global production of both goods increases, for England can spend 220 labor hours to produce 2.2 units of cloth while Portugal can spend 170 hours to produce 2.125 units of wine. Moreover, if both countries specialize in the above manner and England trades a unit of its cloth for to units of Portugal's wine, then both countries can consume at least a unit each of cloth and wine, with 0 to 0.2 units of cloth and 0 to 0.125 units of wine remaining in each respective country to be consumed or exported. Consequently, both England and Portugal can consume more wine and cloth under free trade than in autarky.