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    The Math Bomb: Revision 2
    The Math Bomb: Revision 2
    The Math Bomb: Revision 2
    Ebook139 pages1 hour

    The Math Bomb: Revision 2

    By Mark Nyman

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    About this ebook

    Beginning with a few prerequisite comprehensions, it presents a complete paradigm to explain what Economic Depressions are. Which is currently unknown to professional Economists.
    It makes absolute predictions, some of which have already occurred.
    It explains what we can know absolutely and what we can't, based on fundamental engineering principles.
    It also explains what we can do about it.
    LanguageEnglish
    PublisherBookBaby
    Release dateSep 18, 2014
    ISBN9781483566443
    The Math Bomb: Revision 2
    Author

    Mark Nyman

    Mark hails from Willesden, London, has a BSc honours degree in Maths and Stats from Bristol University, spent 10 years as Producer of Channel 4's Countdown and now lives in Knutsford, Cheshire. He was the first Countdown 'Champion of Champions', first UK player to win the World Scrabble Championship in 1993 in New York, and was World Scrabble runner-up in 1999 and 2016. He is also 4-time UK Scrabble Champion. He has 2 fantastic children Max and Kizzy, and is a long-suffering supporter of QPR.

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      Book preview

      The Math Bomb - Mark Nyman

      © 2016

      All Rights Reserved

      ISBN: 978-1-4835664-4-3

      Dedicated to my dad, Bart Nyman

      Who told me from the day I could walk

      "The most important thing to understand

      is when you don’t understand"

      Because, that gives one the opportunity to repair and improve one’s own paradigm.

      It’s difficult to communicate an entire comprehension and supporting paradigm

      while keeping it as simple and compact as possible.

      Most of this was written in Spring 2014.

      In Sept-Oct 2014 I tweaked a few things and added a bit, making Revision 1.

      In Early 2016 I tweaked a few more things and added more, making this Revision 2.

      Foreword

      This book explains the simple Mathematical Identity of the Monetary System, its progression and the consequences for the Economic System and Civilization.

      It has been written in Engineering English, making it accessible to some, but perhaps not directly to the Financial World, as they speak a different language.

      It reads like a thriller, but that is what the Monetary World is today, as we’re walking toward the edge without the policy makers comprehending that.

      Policy makers ought to know.

      They don’t today.

      Rob Breebaart, June 21, 2014.

      Contents

      1Preface

      2The Basics Math and the Function-Implementation Duality

      3What is Money? Credit and Asset Valuation

      4Comprehending what causes Economic Depressions

      5The Basic Operation of the Monetary Progression Function

      6Here is the problem Implementation Compliance Failure

      7The Math Bomb

      8What can we know Absolutely

      9The Central Banks

      10 What have we seen so far

      11 What will we see

      12 Why did we implement this horrific Function in our Monetary System yet again?

      13 What we can do to mitigate the consequences

      14 What should we do next time

      15 Appendices

      A   Science

      B   Expanded explanation of what we know Absolutely

      C   We watched the Depression begin in Real-time, in early 2007

      D   The View as Full Monetary Deflation approaches

      E   2 main things different in this Depression

      F   Misc. comments

      G   Gold

      0. Situation Overview Early 2016

      Depressions are caused by the Monetary System. Legislated Monetary Policy has allowed the Private Sector to create the vast majority of Money of both types.

      Credit and Asset Valuation, which together constitute the Total Money Supply.

      So long as Asset Valuation Inflation is greater than the cost of renting Credit to buy Assets, both total outstanding Credit and Asset Valuation inflate. Thus inflating the Total Money Supply, which shows up in people’s accounts and spent to boost the Economy.

      When that is no longer true, the Total Money Supply implodes, driven by strong positive feedback. Money then disappears from People’s accounts and Monetary Transactions stop. Which in turn stops Economic Transactions.

      Asset Valuation Inflation failed to pay for the Credit rental cost in the US in early 2007. Flipping the distributed US Monetary System into the Monetary Deflation Operational Mode, which constitutes a Depression. The majority of Americans have lived in the Monetary Deflation Operational Mode ever since. With the rest of the World following.

      However, so long as sufficient Negative Effective Interest Credit rental is available, the Total Money Supply can still inflate. Fortunately, Central Banks have provided Credit at Negative Effective Interest to the wealthier portions on the Monetary System. Thus slowing the plunge into full Money Supply Implosion.

      With each Asset Market crisis and trailing Economic slowdown, Central Banks around the world set a new sustained Credit injection rate, at a new lower Negative Effective Interest Rate, using Quantitative Easing (QE). Which is sufficient until the ever falling Monetary Inflation-Deflation Threshold passes by again. Resulting in the next crisis.

      Since the beginning of the Depression in 2007, we have also seen cases where Central Banks thought it was time to lift rates, or slow QE, which raised the average Effective Available Interest Rate up above the Threshold. Precipitating an Asset Market crisis and trailing Economic slowdown.

      In Dec 2015, the Fed raised it’s interest rate to +0.5%. Which requires the Fed to rent Credit from the Private Sector, because it no longer works the other way around. 0% is already too high. Which raises the average Effective Available Interest Rate in the US. Resulting in the next crisis.

      Fortunately Central Banks aren’t out of firepower yet. China’s Central Bank dramatically increased Monetary Injection in early 2016, as have others. Several Central Banks have also finally been driven into Explicit Negative Interest Rates. These are the effects of Legislated Monetary Policy forcing Central Bank Monetary Policy.

      1. Preface

      Just before I turned 6, my father read me a book, which explained the basic principles of Physics, from the principles discovered by Galileo though Einstein’s discovery of Relativity. I spent my life understanding how the Universe works. Realizing early on, that it’s how things function that matters, more than the particular Implementation at hand. Functions are universal while Implementations are case specific.

      My career was designing critical control systems, whose functionality had to be perfect, such that no matter what happened, even things I had never considered, my system would always make the correct decision. The experience honed my focus on verifying that what I had actually designed and built, performed exactly the correct Function and nothing more. And secondly, the Implementation (Machinery and operation) performed those Functions fast enough, accurate enough, reliable enough, etc. or better.

      The Functions have absolute properties,

      while, the Implementation has relative properties.

      Already a few decades ago, I recognized that the Global Monetary System performed, what I now call, the Monetary Progression Function. So long as its operation was throttled by strict regulation, it could operate a long time before the next operational reversal, which is what constitutes a Depression.

      I was alarmed by the deregulation of the Financial Industry, which began in the 70’s and took off in the early 1980’s. I knew it was the unleashing of the Monetary Progression operation, and would accelerate creation of ever more Monetary Machinery for the purpose of performing the Monetary Progression Function. This is always ultimately catastrophic, because it eventually leads to operational reversal due to Implementation Compliance Failure. Which then implodes the Total Money Supply (Money 10).

      Then came the outright promotion of maximum Financial Innovation in the very late 1990’s and mostly in the 2000’s, which meant the approach of Doomsday was being accelerated dramatically.

      I made the call that the next Depression was approaching on Thanksgiving weekend 2004.

      I could know Absolutely that at some point we would see Implementation Compliance Failure. At that point, operation would reverse from the Monetary Inflation Mode to the Monetary Deflation Mode, which would be easy for the Monetary System to comply with. I could not know however, exactly when the reversal would take place.

      The timing was a judgment call, with limited visibility, that the reversal was approaching. It turned out that the next Depression began in early 2007.

      I made the call with deep consternation, realizing the horrors it would bring.

      I’ve explained what a Depression is to many people since Thanksgiving 2004.

      But only a small portion understand it. Partially it was my inability to explain it, which I’ve gotten better at. But mostly it’s because it requires understanding some basic prerequisite Principles of Reality, which are not how most People think.

      It’s not particularly difficult, nor complex. But the comprehension paradigm is very different from the conventional paradigm. Younger people without entrenched, or highly invested paradigms, will likely find it easier to grasp.

      I suspect that many people will need to read this twice, to comprehend it.

      I try to explain it as simply and compactly as I can.

      Beginning with the pre-requisite comprehensions.

      The goal is to convey the core comprehension. As such, I do not

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