Tuesday, July 31, 2012

Rates

Another pre-written, post-dated entry. How can you pre write something? There are a bunch of those terms in the lexicon. Pre-audit, etc.

Someone on the radio news was discussing tax cuts, or more correctly, the repeal of tax cuts. I was thinking that the term was a bit misleading. What they are saying is that they either think the current rate is fine or that it should be a higher rate. There is no cutting actually involved. Then, of course, it goes into who gets to pay a higher than present rate and who doesn't.

People tend to not know what that really means. So, often they turn to the easy thing which is to resent those who have a good bit of wealth left over. I'll leave them to it.

In related matters, when we hear of debt reduction and such, what is quite often the reality is that the rate of increase has slowed. It is like acceleration in the realm of Newtonian physics---rate of change of velocity. So if we acquire additional debt at the rate of x billion per month, and then manage to acquire it at the rate of x-.1 billion one month, the would be kings will proclaim debt reduction. Not true. We added debt, but not quite as fast as last month.

Maybe that's why Newton and co. developed calculus--to adequately describe rates of change; usually relatively speaking.

There are many times when statistics are quoted, and figures are bounced about, and people discuss things as if they follow a linear path when, in fact, they follow a curve with an increasing or decreasing slope. Rates.

Of course, if we could reduce the increase of debt by 1% every month, then in 100 months, we'd not be adding any new debt. Of course the accumulated debt might be bigger than the galaxy, but if we then began to accelerate the rate of change in the other direction, we'd be actually reducing it every month. A pipe dream, surely, but that is how it works.

So, any politician discussing the debt under current conditions is only telling the truth if he or she deals in rates of increase. They won't very often because it doesn't sound good, and because people don't really get the whole concept of acceleration vs velocity. Lies are often all that maintains spirits, and always what buys the votes of the greedy, the gullible, the lazy guilt ridden, the angry, and the gimme dolla guys.

Rates of increase and decrease cover all sorts of things in life. Then there are little snafus that come into play which involve rotational dynamics and more. Still, there is usually some sort of rate involved. Static is not the way the universe appears to roll. But the totality of the thing may be so different from what we know that it puts all this on its ear. It is pretty cool that here we are, yet existence and life and beginning and end are still beyond our grasp. And we're smart. We can fly and make artificial joints and make air conditioners. Bears can't do that.

1 comment:

  1. I believe the term is quantitative easing which means the gov't buys their own debtand artificially lowers the rate due to increased demand. Higher bond prices equaling lower rates.

    I believe we have turned the corner and inventory of houses is on the decline in many spots, housing has ticked back up here and you will see "pull demand" by virtue of the lacking inventory...

    This is the bottom. Rates will climb higher from here once inflation kicks hard. Buckle up.Going to be a hammer in 2014 so if you are in fixed instruments be careful. Bond rates are going higher and prices are going lower but it wil be subtle at first.

    ReplyDelete

Can't make comments any easier, I don't think. People are having trouble--google tries to kidnap them. I'll loosen up one more thing and let's see. Please give it a try

About Me

My photo
Ballistic Mountain, CA, United States
Like spring on a summer's day

Followers

Blog Archive