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Entropy production delusion

It is common in knowledgeable circles to talk about the development of civilization in terms of entropy discussion. The term 'entropy...

Monday, December 23, 2013

Fun and Games with Bitcoin

The ups and downs of the digital currency, Bitcoin, is generating a vast amount of speculation in financial circles. Most people will have been bewildered by this innovation. They have been used to dealing with real money and have a degree of understanding of how inflation and deflation affects their decisions. The volatility of Bitcoin is beyond their comprehension. Many of those who have tried this digital currency have had their fingers burnt while others are hoping that the price of the Bitcoin they have acquired will make them rich by growing exponentially.

Intangible money is a means of buying tangible goods and services. Speculation in dollars, euros and other real currencies by investors, banks, financial managers and governments does not hide the fundamental usage of money to pay for those goods and services that are available. These goods and services are produced by irreversibly using up the limited supply of natural material resources, including those providing the necessary energy to do the work. That is an unsustainable process. So potency of real money will decline as these resources become scarcer. Economic contraction will set in, despite the protestations of economists.

Bitcoin will inevitably share the fate of real money after causing a lot of confusion amongst those who fallaciously believe it can cope with reality.

Sunday, December 22, 2013

The Grand Delusion

The proposal to build a high speed rail link from Melbourne to Brisbane via Canberra and Sydney is being discussed in government and industrial circles with support from the media. The success of such ventures in a number of countries is put forward as a good reason to improve transportation between these major eastern Australian cities. Financial, economic, employment, social and environmental factors have been weighed up in these considerations. The lessons learned in other high speed rail implementations have been taken into account in the proposal. They convey the impression that Australian economy would be markedly boosted by the link without any serious deleterious environmental or social consequences.

This proposal is a typical example of the myopic view of the powerful in society. It takes into account only the practicalities of its installation and the perceived benefits. It does not mention the consumption of vast amounts of the limited stored natural resources for its construction, operation and maintenance. It blithely ignores the fact that the rail system would have a limited lifetime. But, of course, that failure to take into account reality is not an Australian characteristic. It is a global disease. The powerful in society have the grand delusion that technological systems can everlastingly provide human beings with services by conjuring natural resources out of thin air!