Optimization Theory, Inflation (devaluation of the dollar), and Ron Paul

When I was in school, I was taught that some Economist came up with a proof
that some small amount of inflation makes the Economy grow faster. I
accepted this as true and good. Who wouldn't want the Economy to grow
faster, it must be good for society.

Now that I'm older, a Rocket Scientist (of the Aerospace Engineering
variety), and have dealt with optimization theory in my work. I've found
that being at optimal is usually not the best place to be. Optimal for a
Rocket trajectory or optimal for the Economy, optimizes only one thing. It
actually can costs a lot with respect to other parameters that maybe be
important also.

The problem with optimal is that it is a very narrow view of the problem,
optimal for one parameter but not others. Slightly off optimal is actually
better in the majority of cases, because for a very slight cost to the
optimized value, some other parameter is improved greatly. The cost for the
variable being optimized is always small, because the first derivative of
the dependant variable to the independent variable is zero for optimal.
dD/dI = 0.0, moving slightly off optimal costs almost nothing. But the
first derivative of some other important variable may not be zero, dD/dI is
large for this variable.

Even if slight inflation is optimal for economic growth, slightly off
optimal does not significantly decrease economic growth. But being slightly
off optimal can have huge effects on other issues, other than economic
growth. That is exactly what zero inflation would be, slightly off optimal,
but having huge benefits in other areas of our society. Moral implications,
not taking the value of money (stealing) from people's savings, would be
one.

Anybody saving money in the United States today? Not really, and this is an
important parameter when considering interest rates, computerized printing
of money. The lack of savings is probably due to the derivative
dSavings/dInflation 0.0. while we are at optimal dEconomy/dInflation =
0.0

There are many more ill effects that none zero inflation brings to society.
It maybe be good for the Economy, but it isn't good for the Country.

Ron Paul is the only candidate proposing fixing the dollar, returning to the
Gold Standard so to speak, zeroing inflation, stopping the devaluation of
the dollar. Other candidates are just proposing band-aids to stop our
economic hemorrhaging, bubble and burst economy.

Ron Paul in 08!
--
Craig Fink
Courtesy E-Mail Welcome @

On Feb 4, 3:06 pm, Craig Fink wrote:
When I was in school, I was taught that some Economist came up with a proof
that some small amount of inflation makes the Economy grow faster. I
accepted this as true and good. Who wouldn't want the Economy to grow
faster, it must be good for society.

Now that I'm older, a Rocket Scientist (of the Aerospace Engineering
variety), and have dealt with optimization theory in my work. I've found
that being at optimal is usually not the best place to be. Optimal for a
Rocket trajectory or optimal for the Economy, optimizes only one thing. It
actually can costs a lot with respect to other parameters that maybe be
important also.

The problem with optimal is that it is a very narrow view of the problem,
optimal for one parameter but not others. Slightly off optimal is actually
better in the majority of cases, because for a very slight cost to the
optimized value, some other parameter is improved greatly. The cost for the
variable being optimized is always small, because the first derivative of
the dependant variable to the independent variable is zero for optimal.
dD/dI = 0.0, moving slightly off optimal costs almost nothing. But the
first derivative of some other important variable may not be zero, dD/dI is
large for this variable.

Even if slight inflation is optimal for economic growth, slightly off
optimal does not significantly decrease economic growth. But being slightly
off optimal can have huge effects on other issues, other than economic
growth. That is exactly what zero inflation would be, slightly off optimal,
but having huge benefits in other areas of our society. Moral implications,
not taking the value of money (stealing) from people's savings, would be
one.

Anybody saving money in the United States today? Not really, and this is an
important parameter when considering interest rates, computerized printing
of money. The lack of savings is probably due to the derivative
dSavings/dInflation 0.0. while we are at optimal dEconomy/dInflation =
0.0

There are many more ill effects that none zero inflation brings to society.
It maybe be good for the Economy, but it isn't good for the Country.

Ron Paul is the only candidate proposing fixing the dollar, returning to the
Gold Standard so to speak, zeroing inflation, stopping the devaluation of
the dollar. Other candidates are just proposing band-aids to stop our
economic hemorrhaging, bubble and burst economy.

Ron Paul in 08!
--
Craig Fink
Courtesy E-Mail Welcome @

Very good points.

I have also found that a large number of parameters makes it
impossible to get everything in optimal position. This makes such a
system look like clutter.

But knowing that very reasonable middle roads can be found the
contraption can be made to work before even tuning one of it's
variables.

I'm designing a rotorsailing, wind/solar charged electrically assisted
bicycle with 4 wheels.

Driving it at night with dead batteries and zero wind it would be far
from an ideal bicycle. With a full battery, good wind and lots of sun
it would go hundreds of miles on a single charge. Making a super light
4 wheeler doesn't make it very safe. I was planning to "cheat" that
parameter by making the cabin inflatable. This in it's turn makes it
tempting to make the vehicle foldable.

Not one value on the vehicle is fully optimized.

But something tells me that all combined makes for a fun ride that
works perfectly around town. It doesn't cost anything per mile beyond
the purchase of parts.


http://wind-car.go-here.nl

wrote:

On Feb 4, 3:06 pm, Craig Fink wrote:
When I was in school, I was taught that some Economist came up with a
proof that some small amount of inflation makes the Economy grow faster.
I accepted this as true and good. Who wouldn't want the Economy to grow
faster, it must be good for society.

Now that I'm older, a Rocket Scientist (of the Aerospace Engineering
variety), and have dealt with optimization theory in my work. I've found
that being at optimal is usually not the best place to be. Optimal for a
Rocket trajectory or optimal for the Economy, optimizes only one thing.
It actually can costs a lot with respect to other parameters that maybe
be important also.

The problem with optimal is that it is a very narrow view of the problem,
optimal for one parameter but not others. Slightly off optimal is
actually better in the majority of cases, because for a very slight cost
to the optimized value, some other parameter is improved greatly. The
cost for the variable being optimized is always small, because the first
derivative of the dependant variable to the independent variable is zero
for optimal. dD/dI = 0.0, moving slightly off optimal costs almost
nothing. But the first derivative of some other important variable may
not be zero, dD/dI is large for this variable.

Even if slight inflation is optimal for economic growth, slightly off
optimal does not significantly decrease economic growth. But being
slightly off optimal can have huge effects on other issues, other than
economic growth. That is exactly what zero inflation would be, slightly
off optimal, but having huge benefits in other areas of our society.
Moral implications, not taking the value of money (stealing) from
people's savings, would be one.

Anybody saving money in the United States today? Not really, and this is
an important parameter when considering interest rates, computerized
printing of money. The lack of savings is probably due to the derivative
dSavings/dInflation 0.0. while we are at optimal dEconomy/dInflation =
0.0

There are many more ill effects that none zero inflation brings to
society. It maybe be good for the Economy, but it isn't good for the
Country.

Ron Paul is the only candidate proposing fixing the dollar, returning to
the Gold Standard so to speak, zeroing inflation, stopping the
devaluation of the dollar. Other candidates are just proposing band-aids
to stop our economic hemorrhaging, bubble and burst economy.

Ron Paul in 08!
--
Craig Fink
Courtesy E-Mail Welcome @

Very good points.

I have also found that a large number of parameters makes it
impossible to get everything in optimal position. This makes such a
system look like clutter.

But knowing that very reasonable middle roads can be found the
contraption can be made to work before even tuning one of it's
variables.

I'm designing a rotorsailing, wind/solar charged electrically assisted
bicycle with 4 wheels.

Driving it at night with dead batteries and zero wind it would be far
from an ideal bicycle. With a full battery, good wind and lots of sun
it would go hundreds of miles on a single charge. Making a super light
4 wheeler doesn't make it very safe. I was planning to "cheat" that
parameter by making the cabin inflatable. This in it's turn makes it
tempting to make the vehicle foldable.

Not one value on the vehicle is fully optimized.

But something tells me that all combined makes for a fun ride that
works perfectly around town. It doesn't cost anything per mile beyond
the purchase of parts.


http://wind-car.go-here.nl

Wow, that's interesting. Have you considered a vertical rotor windmill.
http://www.aerowinds.com/
I would not think the one you have is too efficient, but could be wrong. You
guys in the Netherlands know a whole lot more about windmills. I see them
in Houston after they are offloaded under the I-610 bridge, waiting for
transportation up North. Generating power when parked to charge the
batteries.

You need a better looking windmill, so that it looks good parked, generating
power.
http://www.treehugger.com/files/2007...ill_sailbo.php

The two things i see that your trying to do are;
1 generate power with the windmill
2 reduce drag while driving, and maybe a little power with it, if possible.
...
# look good when parked.

Are you going to collect performance data on your vehicle?

http://www.treehugger.com/files/2007...ill_sailbo.php

Ron Paul in 08!
--
Craig Fink
Courtesy E-Mail Welcome @

Craig Fink used a stick in the sand to babble
Even if slight inflation is optimal for economic growth, slightly off
optimal does not significantly decrease economic growth. But being slightly
off optimal can have huge effects on other issues, other than economic
growth. That is exactly what zero inflation would be, slightly off optimal,
but having huge benefits in other areas of our society. Moral implications,
not taking the value of money (stealing) from people's savings, would be
one.

But if there was no inflation, savings would earn no incomes and homes
would not increase in value.

Swill

On Wed, 06 Feb 2008 03:52:39 -0500, in a place far, far away, Governor
Swill made the phosphor on my monitor glow
in such a way as to indicate that:

Craig Fink used a stick in the sand to babble
Even if slight inflation is optimal for economic growth, slightly off
optimal does not significantly decrease economic growth. But being slightly
off optimal can have huge effects on other issues, other than economic
growth. That is exactly what zero inflation would be, slightly off optimal,
but having huge benefits in other areas of our society. Moral implications,
not taking the value of money (stealing) from people's savings, would be
one.

But if there was no inflation, savings would earn no incomes and homes
would not increase in value.

What an economically ignorant statement. Interest is not a result of
inflation.