Uh, Yeah.

Hmmm

Charging your cell out of thin air?

Egg-cellent Hotel Cooking

Speaks for itself.

This Ain't True, Neither!

The other way of saying "a near-doubling of the U.S. price level over the next decade" is "The value of your savings will be cut in half over the next 10 years."

Uh, no. That would only happen if you stuffed your entire savings under a mattress in cash. And his "hyperinflation" of 7% was actually meant to be a scare compared to what he calls an "uncomfortable 5-6%. What a stooge.

Blodget-Flation

OK. I won't mention the fact that Henry Blodget was charged with securities fraud, and settled for $4m. in penalties and a ban from ever trading again. Oops.

Starting over, he's been worried about "hyperinflation," but he doesn't know what hyperinflation is. That, or he can't do math. By "math" I mean the simple arithmetic involved with the finance "rule of seventy." I'm worried about hype. Anyone with an undergrad B-school degree should know the Rule of 70, which approximates an asset's doubling time (here goods prices). Blodget fears high-end estimates of inflation meaning prices doubling in 10 years. Specifically, Years to double = 70/rate of change. Since exponential growth is not linear (hey, it's exponential in fact!) it's only an approximation, but it's a decent one as they go. So, some very elementary algebra tells us that prices doubling in 10 years means 7% inflation annually. Uncomfortable, but not "hyper." By contrast, hyperinflation is usually reserved for situations like Argentina in the mid-80s (about 650%, or doubling every 39 days) or Weimar Germany (3,000,000%, or doubling every 5 days or so).

To say doubling in 10 years is hyperinflation is simply false. Prices in the US more than doubled between 1973 and 1982, and while it was uncomfortable, it was not "hyper."

Trade is Dead. Long Live Trade!

Is free trade passe?

Summer Thoughts

Interesting, but not really answering the more relevant question, which is, "why has a long summer vacation persisted?"

A greener middle class

Like any new thing, green is not something that people are going to care much about until it is economical and practical for the middle class on the demand side (that, in large part is why the industrial revolution took off in UK, some have argued). So, this is a neat little piece.

Water, Property, and Conflict

Since water is the driving force behind Darfur, it's interesting to see how water rights get defined. This is sort of an interesting legal change. Is rainwater a public good that should be regulated or is what falls on your own property your own? How far can you go to keep it for yourself instead of letting it feed streams and riverbeds?

Multiple equilibria

Check this out.
Equilibrium One: No Dancing
Equilibrium Two: (Almost) Everyone Dancing
Purturbation: One person dancing
Result: Cascade

Talk is Cheap

China puffed its chest out with a call for a "new reserve currency." Never minding the fact that China was never forced to buy dollar-denominated assets with its surpluses, and a collapse of the dollar appearing to be most harmful to US creditors, there is some interesting analysis from Free Exchange. Developing countries' actions belie the notion that they are not willing to finance our debt. It's even less clear that our total net external debt is increasing (public debt is increasing but private debt is decreasing). If emerging markets do have "a greater incentive ... to move to a new system," the question I ask is: move to what, and how?