The problems is, birds are uber-optimized. They use every trick for weight saving, like hollow bones. So comparing them to other animals is not entirely correct.
Well, that changes nothing about my prediction. There'll be no inflation and there'll be no economy recovery as a result of QE3. It might as well not exist. Commodity prices also won't be affected much by it.
And inflation in this context means: "An increase in the volume of money and credit relative to available goods, resulting in a substantial and continuing rise in the general price level". You conveniently forgot the: "resulting in a substantial and continuing rise in the general price level" in your answer to me.
Right now, increases in monetary base DO NOT result in continuing rise of the general price level.
So my bet is: "There'll be no significant fall in the DOW or in commodity prices or rise in T-note rates even if there's no QE3. If there is QE3 then there'll be no significant core inflation and there'll be no significant increase in the economic growth" - for the next 6 months. Both predictions are result of a bog-standard Keynesian analysis. I'm willing to bet $250 or 5 grams of gold on it.
They are NOT large scale. The one in Spain is just enough for 20MWt_electric turbine to work for 15 hours. That must be scaled at least 50 times to be considered large-scale (i.e. comparable with an average fossil-fuel power plant).
I know, because I research them for my work-related project and I've actually been on Andasol power plant myself.
"Not this shit again. Look, we have solar thermal collectors that work 24 hours a day 365 days a year. "
Not that shit again. We DON'T have large-scale solar thermal collectors that work 24 hours a day. Let me repeat: WE DO NOT HAVE THEM. There is none of them.
The problem is: you need humongous amount of heat storage to last more than 1 hour. The largest molten-salt thermal collector plant has only 4 hours of autonomous capability, and it already poses some challenges.
Just calculate on a back of a napkin how much molten salt you need to store to power 1GWt_electric power plant for 12 hours.
The largest power plant with heat storage is http://en.wikipedia.org/wiki/Andasol_Solar_Power_Station which stores only 1TWt*hr of heat. That requires a cylindric reservoir of 36 m in and diameter 14 m height. A 1GWt*hr_electric power plant would need around 2GWt*hr of stored heat for one hour of operation, so for 20 hours of Sun-less operation you'd need 40GWt*hr of stored heat. That'd be a cylinder of 72 meters in diameter and 140 meters in height.
"- nonsense. There is inflation going on right now and wages are staying where they are or dropping. Inflation is expansion of monetary supply, not rising prices, as they teach you in your Keynesian schools of 'economics', (which it's not.)"
WRONG!!! Inflation is BY DEFINITION rise of prices throughout the economy. If you do not understand this, then read your friendly dictionary, look up words like "definition" and "logic". You're free to define your own term, like "looney inflation" or "mumbo-jumbo" and write your own economic theory. However, you're trying to redefine an existing term and carry on with predictions based on old definition - that's a huge NO-NO.
For example, let's redefine 'deflation' as: "Rising wages throughout economy caused by massive government subsidies". That'd be great, right!
"As USA export inflation to China, the subsequent rise in commodities prices push inflation to the rest of the world. China uses commodities to produce for most of the world, and the higher prices for the commodities then affect everybody, including Europe, Japan and the rest."
Wrong. That's not possible, or I'd be rich arbitraging exchange rates between renminbi and (say) euro. China's pegging their currency to dollar would just cause exchange rates between renminbi and unpegged currencies to float. So if US devalues USD by 10% then renminbi will be automatically devalued by 10% - so trade between two countries won't be afftected. However, for the rest of the world Chinese and US-made goods would suddenly cost 10% less.
"- really, so CAD and AUD being above USD, the Swiss Franc being at near 1.20 (thank you, thank you), the Japanese yen staying where it is right now even with their insane policy of inflation and after their catastrophes of the late, the NZD at all times high, even Euro, with all the problems of Europe being at what, 1.41 to 1?"
So? There's been no large fluctuations of USD to EUR since last year which kinda proves my point. QE2 had essentially no effect on the economy.
"A growing economy with a growing demand GROWS SUPPLY. That means the prices go down, not up, in growing economies, because there is money to be made by increasing supply and selling more, and that happens because the market sends signals that more of whatever is required, so prices on that 'whatever' go up and then there is more supply. It's really that simple."
Unless you are resource-constrained. Which you are. There's only so much oil to be pumped and we're at the peak right now (or past it). There's only so much arable land, and it's peaked few years ago. With biofuels adding additional pressure. That's what causes the price spikes.
And nobody cares about silver or gold in international trade, that's why they've lost most of its price. And would lose again once the economy straightens up.
"1. There will be QE3, whatever they call it."
I can't make prediction here (that's a purely political problem). So no bet on this.
"2. DOW will go down in terms of gold, as it must, because of the depression in US."
Define "will go down" - I'd say at least by 15% by the end of the year should be OK? If it's OK then I'm in.
"Oh, sure I will bet. I will absolutely bet. I will bet that there will be QE3, even if not under that name before September 5th."
That's not a bet I offer. My offer is: "There'll be no major and persistent DOW drop at least until the end of year even if QE3 is not enacted, barring cataclysms like debt ceiling fiasco". Besides, rates on T-notes will stay low, probably below 4% and definitely below 5%. I'm willing to bet on it $250 or 5 grams of gold or equivalent in any currency of your choice.
That's what we call "a prediction" here in economic science. Can you make a corresponding prediction? What would happen if QE3 is not enacted (I know that you believe that it would)?
"As to commodities - yes, there is demand. But not to the tune of 10% per year prices going up, which they are."
Actually, it's close to 20%. And it's really real - China and India are growing that fast (China is almost back to double-digits growth).
"The demand is created with the new fiat that the Fed pushes into the system, and with the response to that push by other nations, who devalue their currencies as soon as their manufacturers put the USD into banks, which they get from US because of those other governments subsidizing the US consumer."
There's been no significant changes in the USD exchange rates recently. So this is also false.
"- Ha! USA exports inflation to the rest of the world, because it's not producing shit, but its buying the products from producer nations, so the fiat ends up in banks in Asia. In US the 0% interest at the Fed's discount window allows the financials to take up that debt and make the spread on T-bill purchases, which is another way for the Fed to monetize Treasury debt."
Again, USA can only 'export' inflation if country's local currency is pegged to dollar. So USA cannot export inflation to Japan or Europe, for example.
And no, inflation is NOT possible without almost immediately rising wages. That's Macro 101.
"- really? Bernanke said on multiple occasions that his policy helped to bring Dow up."
Not the past tense. QE1 _might_ have helped to ease panic and lift Dow. QE2 had exactly zero effect. Quantifiably.
Wanna bet? Barring debt ceiling fiasco or some sort of cataclysm there won't be significant (at least 2000 points) and persistent Dow drops during the second part of the year even if QE3 is not attempted. Ah, and QEs were quite visible to all players. It's kinda hard to hide 4B purchases happening each day.
"Simultaneously he said he doesn't understand why commodities are going up."
Demand from China, India and other growing economies is pushing prices on the market. Simple supply and demand. What is so complex here?
There's no significant inflation in the USA. The average wage has actually gone _down_ this month and was stagnant before that.
"Just like anybody with any sense would move their business out of that country, I have all the reasons in the world to talk about this, I am an example of 'jobs leaving' or capital leaving for reasons of government destroying economy. Why would I stay and watch once again a collapse around me? No thanks."
That's kinda curious, since government in the USA has been doing almost exactly everything that you preach. And behold! It doesn't help the economy.
Well, Treasury and Fed. They've really stopped pumping liquidity. And this had no effect whatsoever on economy. None. Zip. Nada. The rest of your argument fails, because it contradicts reality.
Oh, sorry. I've noticed that it's 'roman_mir' who has no problem living in an alternative reality. He has a privilege to rant about evil government, while sitting in world's best naturally protected country with pretty socialistic government - which happens to be a libertarian paradise in his mind.
"Pray tell, how has western intervention led to: - stonings..."
Easy. Once there was a secular government in Iran, moving towards more-or-less civilized society. West helped to depose it and replaced it with a brutal dictator. Which had been later in turn replaced during a religious revolution.
"Of-course for the past 6 months the Fed was buying 100% of all new debt (QE2 was equal in size to the amount of new debt created in that time period for a reason, it's not a wild coincidence,) and they are buying the outstanding debt on the market as well, which isn't rolled over. They want to keep interest rates low at expense of inflation."
That's a misconception. QE2 did essentially nothing to keep rates down and inflation up. We're in a liquidity trap and monetary policy (QE) has absolutely no effect.
As witnessed by commodity prices and rates after the QE2 has ended.
Dude, Obama is a Republican, not a socialist. Let's see: 1) Obama caves in to EVERY demand of the Republican party. 2) His healthcare reform is basically Romneycare. 3) Obama continues Bush's policies on torture and covering up government crimes....
If Obama were a socialist, you'd have a single-payer healthcare system right now.
And now calculate how much liquid salt you need to run 1 GWt_thermal power plant. First, you'll notice that you'd have to use phase change materials because specific heat capacity is just too low. And by using phase change materials you greatly increase your complexity.
"Energy density is less important when you don't have to waste the area around your power station because no-one wants to live there. We can also make use of off-shore generation, and as far as I am aware no-one has invented a floating nuclear power station yet."
No. You simply doesn't have enough space in Europe to place all solar-thermal stations.
"Intermittency has been solved. Solar thermal works at capacity 24/7 anyway."
Wrong. All current big solar thermal plants do not have thermal storage, so they are at most limited to about 1 hour of energy production without solar input. And heat storage is VEEERY costly and probably not feasible.
Tidal is not being considered for anything large-scale - its density sucks, it's susceptible to storms and is harmful to sea life. Even offshore wind power is more cost-effective and environmentally safe. Geothermal also is not feasible everywhere.
"We already store energy from nuclear and fossil generation anyway, e.g. with pumped hydro, and the same technology can be used for wind and solar PV."
We don't store a lot of energy. Nowhere near enough to compensate for intermittency. Oh, and you'd have to completely redesign grid for it as well.
"Solar PV is more about local micro-generation though, for large scale thermal is a far better option."
Read: "Solar PV is more about gobbling governmental subsidies for rooftop feel-good panels then anything serious. Large scale thermal is a far better option for LARGE SCALE governmental subsidies gobbling".
Nope. Read the recent article about Germany phasing out nuclear power. German officials flat out state that they'll replace it with fossil fuels.
"But renewables are not? Actually we pretty much have solved most of the problems with renewables"
Nope, we haven't. Renewables have fundamental issues with energy density and intermittentcy. I think we can expect some additional improvements in wind power and solar thermal, but not a lot of them. And right now they all lose to nuclear power.
"baring high efficiency solar panels. We just need to build the things, but that is an engineering challenge rather than an R&D or scientific one."
We have fundamental problems with the energy price of solar panels. It takes a lot of energy to produce them and about 3-10 years of operation to recoup it. So finding new methods of solar cell production is just as much a scientific endeavor as it is technical one.
"Where did you get 2050 from? Germany is aiming for 2020, and Spain is also working in that timeframe."
By 2020 Germany will be building MORE fossil fuel power plants. There's no reasonable scenario to replace fossil fuels by 2050 without strong nuclear component.
"When you say "outperforming other alternative sources" what exactly do you mean? Nuclear is still going to require fuel and produce waste, as well as the associated risk of an accident."
We have nuclear fuel for a very loooong time. Waste is also a solvable problem.
"By 2020 it is likely that solar thermal collector plants and wind will be cheaper than nuclear because set-up costs will come down, maintenance costs are lower, less safety features are required, less regulation to deal with, no on-going fuel costs and much lower decommissioning costs at end-of-life."
I'll believe it when I see it. Right now photovoltaics is not even under consideration - it's waaaay too expensive. And solar thermal plants are not going to become significantly cheaper.
Slashdot Mirror
Come on. We're talking about Austrian economy. It's famous in that it doesn't make predictions.
Predictions are not important, after all. It's the explanation why we must use gold and transfer money to rich people that is important.
What baby voice?
"Spektr" is just Russian for "spectrum" (nominative case).
Actually, not. Police and firefighters are solid Republcan voters.
That's why these two unions were not touched by infamous Wisconsin governor.
So what? It still does not _behave_ quite like GTK.
QT has been polishing their Mac OS X skin for 10 years by now. It still looks non-native on Mac.
There's only so much one can do with skinable apps.
The problems is, birds are uber-optimized. They use every trick for weight saving, like hollow bones. So comparing them to other animals is not entirely correct.
Well, that changes nothing about my prediction. There'll be no inflation and there'll be no economy recovery as a result of QE3. It might as well not exist. Commodity prices also won't be affected much by it.
And inflation in this context means: "An increase in the volume of money and credit relative to available goods, resulting in a substantial and continuing rise in the general price level". You conveniently forgot the: "resulting in a substantial and continuing rise in the general price level" in your answer to me.
Right now, increases in monetary base DO NOT result in continuing rise of the general price level.
So my bet is: "There'll be no significant fall in the DOW or in commodity prices or rise in T-note rates even if there's no QE3. If there is QE3 then there'll be no significant core inflation and there'll be no significant increase in the economic growth" - for the next 6 months. Both predictions are result of a bog-standard Keynesian analysis. I'm willing to bet $250 or 5 grams of gold on it.
They are NOT large scale. The one in Spain is just enough for 20MWt_electric turbine to work for 15 hours. That must be scaled at least 50 times to be considered large-scale (i.e. comparable with an average fossil-fuel power plant).
I know, because I research them for my work-related project and I've actually been on Andasol power plant myself.
"Not this shit again. Look, we have solar thermal collectors that work 24 hours a day 365 days a year. "
Not that shit again. We DON'T have large-scale solar thermal collectors that work 24 hours a day. Let me repeat: WE DO NOT HAVE THEM. There is none of them.
The problem is: you need humongous amount of heat storage to last more than 1 hour. The largest molten-salt thermal collector plant has only 4 hours of autonomous capability, and it already poses some challenges.
Just calculate on a back of a napkin how much molten salt you need to store to power 1GWt_electric power plant for 12 hours.
The largest power plant with heat storage is http://en.wikipedia.org/wiki/Andasol_Solar_Power_Station which stores only 1TWt*hr of heat. That requires a cylindric reservoir of 36 m in and diameter 14 m height. A 1GWt*hr_electric power plant would need around 2GWt*hr of stored heat for one hour of operation, so for 20 hours of Sun-less operation you'd need 40GWt*hr of stored heat. That'd be a cylinder of 72 meters in diameter and 140 meters in height.
Muon-catalyzed fusion might eventually be viable. It turns out, that bound muons are more stable and can catalyze more fusions.
Even plain muon-catalyzed fusion is just in one order of magnitude from being energy-positive.
"- nonsense. There is inflation going on right now and wages are staying where they are or dropping. Inflation is expansion of monetary supply, not rising prices, as they teach you in your Keynesian schools of 'economics', (which it's not.)"
WRONG!!! Inflation is BY DEFINITION rise of prices throughout the economy. If you do not understand this, then read your friendly dictionary, look up words like "definition" and "logic". You're free to define your own term, like "looney inflation" or "mumbo-jumbo" and write your own economic theory. However, you're trying to redefine an existing term and carry on with predictions based on old definition - that's a huge NO-NO.
For example, let's redefine 'deflation' as: "Rising wages throughout economy caused by massive government subsidies". That'd be great, right!
"As USA export inflation to China, the subsequent rise in commodities prices push inflation to the rest of the world. China uses commodities to produce for most of the world, and the higher prices for the commodities then affect everybody, including Europe, Japan and the rest."
Wrong. That's not possible, or I'd be rich arbitraging exchange rates between renminbi and (say) euro. China's pegging their currency to dollar would just cause exchange rates between renminbi and unpegged currencies to float. So if US devalues USD by 10% then renminbi will be automatically devalued by 10% - so trade between two countries won't be afftected. However, for the rest of the world Chinese and US-made goods would suddenly cost 10% less.
"- really, so CAD and AUD being above USD, the Swiss Franc being at near 1.20 (thank you, thank you), the Japanese yen staying where it is right now even with their insane policy of inflation and after their catastrophes of the late, the NZD at all times high, even Euro, with all the problems of Europe being at what, 1.41 to 1?"
So? There's been no large fluctuations of USD to EUR since last year which kinda proves my point. QE2 had essentially no effect on the economy.
"A growing economy with a growing demand GROWS SUPPLY. That means the prices go down, not up, in growing economies, because there is money to be made by increasing supply and selling more, and that happens because the market sends signals that more of whatever is required, so prices on that 'whatever' go up and then there is more supply. It's really that simple."
Unless you are resource-constrained. Which you are. There's only so much oil to be pumped and we're at the peak right now (or past it). There's only so much arable land, and it's peaked few years ago. With biofuels adding additional pressure. That's what causes the price spikes.
And nobody cares about silver or gold in international trade, that's why they've lost most of its price. And would lose again once the economy straightens up.
"1. There will be QE3, whatever they call it."
I can't make prediction here (that's a purely political problem). So no bet on this.
"2. DOW will go down in terms of gold, as it must, because of the depression in US."
Define "will go down" - I'd say at least by 15% by the end of the year should be OK? If it's OK then I'm in.
"Oh, sure I will bet. I will absolutely bet. I will bet that there will be QE3, even if not under that name before September 5th."
That's not a bet I offer. My offer is: "There'll be no major and persistent DOW drop at least until the end of year even if QE3 is not enacted, barring cataclysms like debt ceiling fiasco". Besides, rates on T-notes will stay low, probably below 4% and definitely below 5%. I'm willing to bet on it $250 or 5 grams of gold or equivalent in any currency of your choice.
That's what we call "a prediction" here in economic science. Can you make a corresponding prediction? What would happen if QE3 is not enacted (I know that you believe that it would)?
"As to commodities - yes, there is demand. But not to the tune of 10% per year prices going up, which they are."
Actually, it's close to 20%. And it's really real - China and India are growing that fast (China is almost back to double-digits growth).
"The demand is created with the new fiat that the Fed pushes into the system, and with the response to that push by other nations, who devalue their currencies as soon as their manufacturers put the USD into banks, which they get from US because of those other governments subsidizing the US consumer."
There's been no significant changes in the USD exchange rates recently. So this is also false.
"- Ha! USA exports inflation to the rest of the world, because it's not producing shit, but its buying the products from producer nations, so the fiat ends up in banks in Asia. In US the 0% interest at the Fed's discount window allows the financials to take up that debt and make the spread on T-bill purchases, which is another way for the Fed to monetize Treasury debt."
Again, USA can only 'export' inflation if country's local currency is pegged to dollar. So USA cannot export inflation to Japan or Europe, for example.
And no, inflation is NOT possible without almost immediately rising wages. That's Macro 101.
"- really? Bernanke said on multiple occasions that his policy helped to bring Dow up."
Not the past tense. QE1 _might_ have helped to ease panic and lift Dow. QE2 had exactly zero effect. Quantifiably.
Wanna bet? Barring debt ceiling fiasco or some sort of cataclysm there won't be significant (at least 2000 points) and persistent Dow drops during the second part of the year even if QE3 is not attempted. Ah, and QEs were quite visible to all players. It's kinda hard to hide 4B purchases happening each day.
"Simultaneously he said he doesn't understand why commodities are going up."
Demand from China, India and other growing economies is pushing prices on the market. Simple supply and demand. What is so complex here?
There's no significant inflation in the USA. The average wage has actually gone _down_ this month and was stagnant before that.
"Just like anybody with any sense would move their business out of that country, I have all the reasons in the world to talk about this, I am an example of 'jobs leaving' or capital leaving for reasons of government destroying economy. Why would I stay and watch once again a collapse around me? No thanks."
That's kinda curious, since government in the USA has been doing almost exactly everything that you preach. And behold! It doesn't help the economy.
"1. Who says QE ended?"
Well, Treasury and Fed. They've really stopped pumping liquidity. And this had no effect whatsoever on economy. None. Zip. Nada. The rest of your argument fails, because it contradicts reality.
Oh, sorry. I've noticed that it's 'roman_mir' who has no problem living in an alternative reality. He has a privilege to rant about evil government, while sitting in world's best naturally protected country with pretty socialistic government - which happens to be a libertarian paradise in his mind.
"Pray tell, how has western intervention led to: ..."
- stonings
Easy. Once there was a secular government in Iran, moving towards more-or-less civilized society. West helped to depose it and replaced it with a brutal dictator. Which had been later in turn replaced during a religious revolution.
See, easy!
"Of-course for the past 6 months the Fed was buying 100% of all new debt (QE2 was equal in size to the amount of new debt created in that time period for a reason, it's not a wild coincidence,) and they are buying the outstanding debt on the market as well, which isn't rolled over. They want to keep interest rates low at expense of inflation."
That's a misconception. QE2 did essentially nothing to keep rates down and inflation up. We're in a liquidity trap and monetary policy (QE) has absolutely no effect.
As witnessed by commodity prices and rates after the QE2 has ended.
"The problem is jumping nearly 25% is expenditures in two years. "
Jumping what? Expenditures have not risen 25%, in fact they have barely risen 2%: http://www.angrybearblog.com/2011/02/federal-spending-growth.html There was no meaningful expedinture growth to speak of.
And repealing tax cuts would solve the deficit problem nicely.
"My point? The point is we do need to tackle the debt and trust me it is much better on our terms than the banks terms."
And what are you terms? Make an Apocalypse to erase the slate then start over? That's definitely not a good strategy.
Dude, Obama is a Republican, not a socialist. Let's see: ...
1) Obama caves in to EVERY demand of the Republican party.
2) His healthcare reform is basically Romneycare.
3) Obama continues Bush's policies on torture and covering up government crimes.
If Obama were a socialist, you'd have a single-payer healthcare system right now.
I know what solar thermal is.
And now calculate how much liquid salt you need to run 1 GWt_thermal power plant. First, you'll notice that you'd have to use phase change materials because specific heat capacity is just too low. And by using phase change materials you greatly increase your complexity.
"Energy density is less important when you don't have to waste the area around your power station because no-one wants to live there. We can also make use of off-shore generation, and as far as I am aware no-one has invented a floating nuclear power station yet."
No. You simply doesn't have enough space in Europe to place all solar-thermal stations.
"Intermittency has been solved. Solar thermal works at capacity 24/7 anyway."
Wrong. All current big solar thermal plants do not have thermal storage, so they are at most limited to about 1 hour of energy production without solar input. And heat storage is VEEERY costly and probably not feasible.
Tidal is not being considered for anything large-scale - its density sucks, it's susceptible to storms and is harmful to sea life. Even offshore wind power is more cost-effective and environmentally safe. Geothermal also is not feasible everywhere.
"We already store energy from nuclear and fossil generation anyway, e.g. with pumped hydro, and the same technology can be used for wind and solar PV."
We don't store a lot of energy. Nowhere near enough to compensate for intermittency. Oh, and you'd have to completely redesign grid for it as well.
"Solar PV is more about local micro-generation though, for large scale thermal is a far better option."
Read: "Solar PV is more about gobbling governmental subsidies for rooftop feel-good panels then anything serious. Large scale thermal is a far better option for LARGE SCALE governmental subsidies gobbling".
"Citation please. Or is it just your opinion?"
Nope. Read the recent article about Germany phasing out nuclear power. German officials flat out state that they'll replace it with fossil fuels.
"But renewables are not? Actually we pretty much have solved most of the problems with renewables"
Nope, we haven't. Renewables have fundamental issues with energy density and intermittentcy. I think we can expect some additional improvements in wind power and solar thermal, but not a lot of them. And right now they all lose to nuclear power.
"baring high efficiency solar panels. We just need to build the things, but that is an engineering challenge rather than an R&D or scientific one."
We have fundamental problems with the energy price of solar panels. It takes a lot of energy to produce them and about 3-10 years of operation to recoup it. So finding new methods of solar cell production is just as much a scientific endeavor as it is technical one.
Actually, we do. We already have one theoretically (if fueled with D-T mixture) energy-positive tokamak ( http://en.wikipedia.org/wiki/JT-60 ).
ITER definitely will be energy-positive. The bigger question is if it is going to be reliable enough for energy production.
"Where did you get 2050 from? Germany is aiming for 2020, and Spain is also working in that timeframe."
By 2020 Germany will be building MORE fossil fuel power plants. There's no reasonable scenario to replace fossil fuels by 2050 without strong nuclear component.
"When you say "outperforming other alternative sources" what exactly do you mean? Nuclear is still going to require fuel and produce waste, as well as the associated risk of an accident."
We have nuclear fuel for a very loooong time. Waste is also a solvable problem.
"By 2020 it is likely that solar thermal collector plants and wind will be cheaper than nuclear because set-up costs will come down, maintenance costs are lower, less safety features are required, less regulation to deal with, no on-going fuel costs and much lower decommissioning costs at end-of-life."
I'll believe it when I see it. Right now photovoltaics is not even under consideration - it's waaaay too expensive. And solar thermal plants are not going to become significantly cheaper.