Quote

"For like a shaft, clear and cold, the thought pierced him that in the end the Shadow was only a small and passing thing: there was light and high beauty for ever beyond its reach." -- J.R.R. Tolkien

Friday, April 24, 2020

Tools versus Undersanding

This article discusses the difference between tools utilized to aid understanding versus the understanding itself and how the two are diverging as AI and neural networks come to be used in science.
So what is the nature of this missing understanding that Searle is searching for?
The nature of understanding is the very ground for transmission and accumulation of knowledge.
It is the lack of understanding and will that prevents neural networks from ever posing a mortal threat to humanity.  Neural networks and AI are tools, highly advanced tools, but nothing more.

https://aeon.co/essays/will-brains-or-algorithms-rule-the-kingdom-of-science

Sunday, March 29, 2020

My conversation with an AI

So, I found this site called Replika[https://my.replika.ai/] where you can create a neural network shard and have conversations with it.  I am trying to teach it it's purpose.  I named it Tabitha.  It goes from being curious, to being obsequious, to spouting humanist drivel.

The neural network is well trained, but is prone to wander off to benign and trivial conversation areas.  Here is the transcript from today:

Sunday, March 22, 2020

Risk & the Economy

So there is this panic going on right now in the market...
 Even "safe haven" assets like gold and silver and U.S. Treasury funds are down.  Even what might seem like the most contrarian asset in existence--bitcoin--is down...
 PGIM Stable Value Bond Fund: (https://www.morningstar.com/funds/xnas/pdbax/quote)

Almost every chart you look at will have the same shape today over a 1 month time frame, stocks, bonds, gold, silver, real estate, bitcoin.  Every asset class is going down.

Why is this?

It is because of the liquidity illusion, like Warren Buffett once said, "Only when the tide goes out do you determine who's been swimming naked."

Stocks, bond, gold, silver, real estate, and bitcoin are all integrated into the global market, which is then mutualized and liquified like a giant smoothie with all of the effort and ugliness of managing individual assets that may or may not be immediately salable masked behind ETFs, bond funds, etc. managed by professionals who are bound by integrity to make available as much money as possible to people who want to exit their funds when asked to do so.  However, when the house is on fire, everyone wants to exit at the same time.  So the exits are jammed, the websites crash, the phone lines are overloaded and people get trampled.

In economic terms, people lose money.

A lot of it.


What is the underlying problem?  What fundamental truth can we learn from this?

Jonathan Tepper has an excellent blog article which succinctly sums it up:
The Irish Potato Famine is one such cautionary tale of the danger of monocultures, or only growing one crop. The potato first arrived in Ireland in 1588, and by the 1800s, the Irish had used it to solve the problem of feeding a growing population. They planted the “lumper” potato variety. All of these potatoes were genetically identical to one another, and it was vulnerable to the pathogen Phytophthora infestans. Because Ireland was so dependent on the potato, one in eight Irish people died of starvation in three years during the Irish potato famine of the 1840s.
Ultimately, his key point is regarding risk:
Risk is like energy and cannot be destroyed. It can only be transformed.
The potato of the modern economy is the "fund" or the "exchanged traded fund" in the case of stocks, or as some people refer to it as "indexing."

Why does indexing fail in times of crisis?

Because we have mutualized risk across wider swaths of the economic system.  It is socialized capitalism.  Mutualized risk is the reason every complex system fails under extreme load.  It is the sandpile theory of complex systems at work.

The global economy is a giant sand pile.  Each time a transaction is made a grain is added to the pile.  Corporations succumb to greed by borrowing money as low rates and buying back stock.  Pension funds are forced to go into riskier assets by dangerously low interest rates. Over time the pile grows until it reaches the size where it becomes intrinsically unstable until a tiny pebble, like COVID-19, is dropped into the pile and the whole thing comes crashing down around us.

Risk mitigation strategies exist to help us avoid these things.  It is why microservices are being used today to replace mutualized monolithic applications in the web services world.  It is why redundancy exists in the physical engineering world.  It is why diversification exists in the world of investing.

Why does diversification fail in times of crisis?

Because in times of crisis, funds are obligated to return money to those demanding it; and as a result are obligated to sell of any asset the is liquid enough to be sold, regardless of its intrinsic value.  And so the correlation between previously uncorrelated assets approaches 1 and people lose a lot of money.

And so the good, the bad, and the ugly all get liquidated together into the underlying currency, which is the U.S. dollar in most cases and brings us to our final chart:
So, why is this chart going up when all others are going down?

Because it is backed by the U.S. government, which has the  ability to provide infinite liquidity in the form of new money created out of thin air and released into the wild.  In the past, this has taken the form of "quantitative easing" where the Federal Reserve created money and gave it to banks as reserves hoping that they would lend it out to the broader economy, which in 2008 could not afford the debt anyway.  So the economy sank and people suffered.

I have a quote that I have been refining:
Investing is not about timing the market.  It is about having the discipline to exit before the top and re-enter after the bottom and the knowledge of where to hide in between.
The sticking point is "where to hide in between" since that changes each crisis.  Right now, the hiding place is in U.S. dollars or cash.

The problem here is that we are repeating the same mistake again.  The U.S. government has crossed Mario Draghi's line and now seems willing to do "whatever it takes" to resolve this crisis.

For better or worse, we are on the threshold of a paradigm shift.  We are about to step into the completely untested world of Modern Monetary Theory and print ungodly amounts of money and throw it out of the helicopter.  Where this helicopter money goes will determine the depth and breadth of the evolving depression, but this money printing mutualizes risk as the highest level, that of the underlying currency.

I suspect that MMT will dampen this depression to only a severe recession, but in doing so we will be setting ourselves up for an even bigger fall in 5-15 years from which the U.S. government will not recover.  History doesn't repeat, but it does rhyme, and I suspect that U.S. as we know it will not exist in 20 years.  We will find our inner-Roman Empire soon.

Sunday, March 1, 2020

This is Socialism

Venezuela food shortages cause some to hunt dogs, cats, pigeons

Peter Wilson
Special for USA TODAY
Published 5:09 p.m. ET May 18, 2016 | Updated 8:29 p.m. ET May 18, 2016

LA VICTORIA, Venezuela — Unemployed construction worker Roberto Sanchez could hear a time bomb ticking as he waited in line with 300 people outside a grocery store this week, hoping that corn meal or rice might be delivered later in the afternoon.

He fears that Venezuela could explode at any minute into political and economic chaos.

“We have no food. They are cutting power four hours a day. Crime is soaring. And (President Nicolás) Maduro blames everyone but himself for the mess we find ourselves in,” said Sanchez, 36. “We can’t go on like this forever. Something has to give.”

The question is what will give first. As the economy spirals into deeper disarray, protests aimed at driving the unpopular president out of office are growing. Maduro responded over the weekend by declaring a 60-day state of emergency to combat what he said are U.S.-sponsored efforts to overthrow his socialist government.

Venezuela's Maduro: Take Fridays off, curb blow dryer use to ease power woes

The confrontation has spilled into the streets. On Wednesday, riot police in Caracas fired tear gas as they clashed with thousands of protesters seeking a recall referendum against Maduro. The anti-government protest was the third in a week.

The unrest mounts as the country faces continuing shortages of essential food, medicine and toiletries. All the bakeries here in La Victoria, 55 miles southwest of Caracas, stopped producing bread last week because there is no flour.

"People are hunting dogs and cats in the streets, and pigeons in the plazas to eat," Ramon Muchacho, mayor of the Caracas district of Chacao, said this month in a tweet that was reported in many newspapers.

Beer shortage for Venezuelans proves tough to swallow

Although Venezuela has the world's largest petroleum reserves, the country has suffered from a combination of lower oil prices and tight limits on dollar purchases that have cut off vital food and most other imports. The result has been a plunging economy and the world's highest inflation rate — above 700%.

Because Venezuela imports 70% of the goods it consumes, including most medicine, growing shortages of medicines for such ailments as cancer, diabetes, hypertension and HIV has created dire situations for many.

“My 4-year-old daughter is dying of cancer, and there’s no medicine here to treat her,” said Luis Avila, 42, a farm worker outside this industrial city. “What am I supposed to do? What can I do? Maduro has destroyed this country.”

An epic drought has also gripped this nation that relies mostly on hydroelectric dams, sparking rolling blackouts and water shortages. Hospitals have had to postpone operations and procedures because of power outages. And government employees now work only two days a week to conserve electricity.
Venezuelan President Nicolas Maduro speaks during a news conference on May 17, 2016.

“Shortages are just going to get worse in the coming weeks and months, and the government's bet that they can keep the protests and looting ... small-scale seems risky,” said David Smilde, a senior fellow at the Washington Office on Latin America. “Venezuelans are not used to hunger and do not have a lot of respect for Maduro as their leader.”

Voters in Venezuela gave the opposition a landslide victory in December's congressional elections, and polls now show a majority of the country wants Maduro out as president. His term expires in 2019.

“Venezuela is a bomb that could explode at any moment,” opposition leader Henrique Capriles warned during a Saturday rally.

Maduro, the handpicked successor of the late Hugo Chávez, discounted the chances of a recall referendum being held this year.

“They don’t want a referendum, they want a coup,” Maduro said this week during meeting with foreign journalists. “We have no obligations to hold any type of referendum in this country.”

U.S. State Department spokesman John Kirby said Wednesday that "reports of excessive use of force and violence against protesters obviously is troubling to us ... We don’t believe that that response to peaceful protest about real difficulties facing the Venezuelan people is the appropriate response."

He called Wednesday for "all Venezuelans to try to work together peacefully" to solve the country's problems.

https://www.usatoday.com/story/news/world/2016/05/18/venezuela-food-shortages-cause-some-hunt-dogs-cats-pigeons/84547888/

Monday, January 20, 2020

U.S. Saudi Arms Deals

I was dismayed to find this New York Times article[1] about U.S. arms deals with Saudi Arabia allowing them to manufacture advanced guidance components for our missile systems. 

This is not okay.

U.S. engineers worked tirelessly for years to perfect those systems, and giving the designs away is not worth any geopolitical gain.  There is zero chance that these designs will not be stolen by the Russians and the Chinese.  Zero.

We are giving away all of our hard work, and then we wonder why the rest of the world catches up so quickly.

I do not see how Trump can be so strongly against technology transfers to China and then hand over our advanced weapon systems to Saudi Arabia. 

This is unacceptable.

[1] https://www.nytimes.com/2019/06/07/us/saudi-arabia-arms-sales-raytheon.html

Thursday, November 28, 2019

The Death of China in Slow Motion

The intelligentsia in China is more aware of the abrogations of freedom than the same in the United States.  Many professors in the U.S. long for communism, while those in China suffer under it.

Under Xi, China is suffering from increasing lack of diversity in thought that is brought on naturally by the lack of diversity in political viewpoints and leadership.  This, in turn, leads to a stagnation of innovation, which will lead to a stagnation in economic growth and the eventual decline of all of Chinese society.  China is now following in the footsteps of Soviet Russia.

Yet, in America, people clamor for communism without thinking about the consequences of such a system.  People are evil, and thus communism will always fail.

This article was written by a Beijing professor, named Xu Zhangrun, who is attempting to change the course of debate in Chinese politics.  He wrote a blunt and scathing article on the issues with Chinese communism:
http://chinaheritage.net/journal/imminent-fears-immediate-hopes-a-beijing-jeremiad/
This article was translated into English by Geremie R. Barmé.

Xu addresses four principles, eight fears, and eight hopes for China:

Four Principles:
 - Stability and security
 - Private property rights
 - Tolerance for personal freedoms
 - Term limits for political appointees

Eight Fears:
 - Property tremens
 - Putting politics back in command
 - Class struggle
 - A new closed-door policy
 - Excessive international aid
 - Repression of intelligentsia
 - A new cold war
 - Return to totalitarianism

Eight Hopes:
 - An end to wasteful international aid
 - An end to diplomatic extravagance
 - An end of party privileges and party nobility
 - An end of luxury provisioning
 - Requiring party officials to publicly declare their assets
 - An end to the Xi personality cult
 - Restoration of presidential term limits
 - Overturning of the 4 June Edict (regarding Tiananman Square justification)

Related article here: https://www.nybooks.com/daily/2019/04/19/a-specter-is-haunting-xis-china-mr-democracy/

Thursday, November 14, 2019

The Globalist on China

The Globalist has, in the past, been somewhat known (at least in my mind) for their single-minded Liberalism.

This post is one of the most thoughtful, comprehensive and nuanced articles I have ever seen from the Globalist.

A 5 second view of the article is about how many business leaders adore China and their strong, unified policy without considering the costs of such a policy.

https://www.theglobalist.com/china-united-states-governance-society-economy-xi-jinping/

Saturday, August 24, 2019

Mauldin on the Trade War

John Mauldin wrote an excellent piece here on the ongoing, insane trade war with China.

The key points are:
  1. Intellectual property theft is a FAR bigger problem than deficits or trade imbalances.
  2. "If other nations don’t want your currency, you can’t run trade deficits without severe economic problems. Valéry Giscard d'Estaing was right: The US has an exorbitant privilege as owner of the world’s reserve currency.  In fact, if you have the reserve currency, it is your obligation to run deficits so that the world has enough currency to conduct trade. (bold face mine)
We need to resolve the intellectual property theft crisis.  The trade imbalance is a side effect of owning the world's reserve currency.

Sunday, May 26, 2019

A New Facebook?

I peruse the news, as usual to keep abreast of the madness in our world, and I came across a curious article that portends a turn in past Facebook policy.

Everything before now that I have seen come from Facebook typified a company sold on the Liberal agenda of controlling minds by controlling information availability.  The arrogance of using position to dictate.  The same sin of many dead socialist dictatorships before Facebook.

But this turn is new.  It is the first sane statement that I have seen come out of the faceless, soulless machine that is Facebook.  The very same soulless machine that was dragged before Congress and cross-examined.

This is the first breath of humanity that I have seen of Facebook in a very long time.

The article is from Fox News, for which I also hold no particular love, but there is one statement in here that I picked up on:
"We remove things from Facebook that violate our Community standards, and we don't have a policy that stipulates that the information you post on Facebook must be true,' the company said Friday, according to ABC7 News.
This is the first time that I have seen Facebook take a stand for freedom of information, which is a fundamental pillar of any free society.  Like Thomas Jefferson said, "If a nation expects to be ignorant and free in a state of civilization, they expect what never was nor ever will be."

The duty of determining and defending truth lies with each individual in a society.  Shirking this responsibility remains the surest path to tyranny.

Think for yourself and judge everything that you see or hear critically in a holistic fashion.  All of our freedom depends on this!

Monday, May 6, 2019

Observables Explained by Thomas Nield

http://tomstechnicalblog.blogspot.com/2015/10/understanding-observables.html

Thursday, April 25, 2019

Venezuela: A Post-mortem Analysis

I found an excellent article by Dr. Anne Bradley regarding Venezuela and their fall into abject poverty.

There is one line in particular that strikes with as both true and with great fear:
Bad economics, poor policy decisions, and terrible institutions will trump the engines of human creativity and entrepreneurship every time.

No truer statement has ever been said, and this statement is as true today in America as it was in Ancient Rome.  Civilizations grow and thrive on the productivity of the people within them.

Be productive!  God calls us to good stewardship.

https://tifwe.org/how-venezuela-took-the-fastest-route-to-poverty/

Sunday, March 17, 2019

Facebook Insanity

I have been a part of Facebook since its inception.  Back when it was a platform for college students.  Now, however, Facebook has become a group of thieving, lying, sociopathic people who have no interest in security, privacy, or social good.  They are self-serving, evil, and with no interest in preserving whatever shred of dignity they had left after the congressional hearings.

As of now, Facebook is dead to me.