“That’s the Lone Ranger®? I thought he was here to fix the air conditioner.” – Predator 2
My friend’s wife asked him why he had Only Fans® on his phone. Apparently “to contribute to your sister’s college tuition” was not the right answer.
One thing I’ve noticed in life is that there is always a delay between action and reaction. If there weren’t a delay, we wouldn’t need watches to see why our spouses were still not ready even though we agreed we were leaving at 9am.
I digress. One famous example is a household thermostat. I think I’ve mentioned it before. In my house, the air conditioner has exactly two settings.
On.
Off.
That’s it. It doesn’t have a “make it colder faster” setting. Or a “don’t overshoot and make the water condensing on the windows freeze” setting. Nope. Just on or off.
That alone is something that many adults don’t even recognize. If it’s 80°F (3MPa) in the house, turning the thermostat down to 58°F (6km) won’t make it get any cooler any faster. It will, however, keep the AC going long after The Mrs. has gone to get a blanket.
I got fired from my job as a locomotive engineer. Boss asked me how many trains I’d derailed this year, and I told him, “I don’t know, boss, it’s hard to keep track.”
There are many other things like this as well. Infestation er, immigration is one. We go from “Well, that was a pleasant new Mexican restaurant,” to, “Can you speak a little more slowly and enunciate? Or, better yet, get me someone that speaks English,” to “No, let’s not go to that part of town anymore because we don’t speak hindi and they poop in the street,” in only 30 years or so of unrelenting legal and illegal immigration.
Somewhere between 30 years and 3 hours, though, there’s the space where our economy moves in its cause-and-effect loop.
Part of the economy is entirely made up, that being stock prices and cash. The dollar wouldn’t exist if we didn’t all agree it exists. Where did it come from? Well, we made it up. We first said we’ll print pieces of paper that entitled you to a bit of gold, and when the “bit of gold” part became inconvenient we decided to skip the entire gold part and keep the “we’ll print” part.
That’s fictional. And it always ends up the same through thousands of years of human history, but, yeah, sure. This time it will be different.
If we’re lucky, we’ll get food as good as the Soviets had it. Why, I hear it was so good that people would stand in line for days just for a single piece!
But there’s also a part of the economy that’s based in raw reality. Rather than trading bits of paper for other bits of paper, or electrons on one storage system for electrons on another storage system, at some point people need to move the actual stuff that all the fictional stuff is tracking.
And that’s real. I can’t eat a beef future that’s been cooked medium rare since it’s on a hard-drive in Pittsburgh or some place. I have to wait until I have an actual ribeye in front of me. Real things are those things that still exists when we stop believing in them. Anyone here want to buy some francs or deutschmarks? Thought not.
They don’t exist.
But they used to. So, by definition, they were only as real as our belief. What’s neat about imaginary things is you can make as many as you want as quickly as you want. I think that since politicians spend our dollars with exactly that mindset, they lose the concept that they can’t just print eggs out of thin air.
I ordered a chicken and an egg from Amazon® today. I’ll let you know.
No, we have a technology that turns insects into usable protein in the form of an egg, the product of thousands of years of human ingenuity. It’s called a chicken. And chickens are real, especially my neighbor’s rooster, who can’t seem to figure out that midnight isn’t dawn.
Real things, like the temperature in my house, are subject to actual physical laws. And the reaction to an action is sometimes something that may take months or longer. Let’s take the price of food. When the price of fuel goes up, the price of fertilizer goes up, and the price of food goes up.
The typical reaction of a politician is to solve the problem by controlling the imaginary lever he controls: spending more than they have. Then the Federal Reserve™ uses the levers they control, namely cash supply and interest rates. Interest rates are an imaginary thing that shows how much extra cash the most recent administration just spent.
But throughout all of this, we can’t imagine a steak. We still need fertilizer to make the grass grow and diesel to harvest and move the hay, and a cow to eat the hay, and someone to kill and butcher the cow and then some way to get it to my house.
Why are pandas at home in San Francisco? They’re vegetarians that refuse to breed.
None of that is imaginary, and is all where the physical world intrudes on the fantasy of finance.
And, just like cooling my house, all of this operates on a delay. The oil is pumped from the ground. The oil is then pumped into a tank. It sits waiting for transport. Then it’s transported to a refinery where it sits in a tank until its turned into diesel or gasoline and put in a tank. And then it’s shipped to another tank where it sits until it’s put into a filling station tank. Then it hits the final tank: the fuel tank of the tractor or car where it will be transferred to the engine and, finally, burned to make useful energy.
At each of those steps there’s a buffer where the oil sits in a tank for some time. That buffer is the lag in the system, the time between when a shortage starts at any part in the process. As the buffer disappears, the shortage that cannot be papered over shows up at last. About 20% of the finished gasoline in the United States is stored . . . in car and truck tanks.
And in six months or a year, we’ll all wonder why steak costs $73.37 a pound and silver $290 an ounce because those can’t be created by changing a computer entry.
I suppose it’s time to save money now for the future inflation crush. I did tell The Mrs. that there was no need to set the temperature so cold on our air conditioner. She told me?
“Not a fan.”
