Author Archives: rdmyers75@hotmail.com

climate change impact reports

Here are a number of reports on climate change impacts on U.S. cities:

The common thread is that extreme weather is going to be more frequent and more damaging, and we need to be ready.

aging and deflation

This study says the relationship between aging and deflation (as seen in Japan, but possibly coming to many more countries in the future) depends on whether the aging is driven by falling fertility (which shrinks the work force in absolute terms) or longevity (which shrinks it only in relative terms).

Negative correlations between inflation and demographic aging were observed across developed nations recently. To understand the phenomenon from a politico-economic perspective, we embed the fiscal theory of the price level into an overlapping-generations model. In the model, successive short-lived governments choose income tax rates and bond issues considering the political influence of existing generations and the policy response of future governments. The model sheds new light on the traditional debate about the burden of national debt. Because of price adjustments, the accumulation of government debt does not become a burden on future generations. Our analysis reveals that the effects of aging depend on its causes. Aging is deflationary when caused by an increase in longevity but inflationary when caused by a decline in birth rate. Numerical simulation shows that aging over the past 40 years in Japan generated deflation of about 0.6 percentage points annually.
Here is another study that concludes “a larger share of dependents (ie young and old) is correlated with higher inflation, while a larger share of working age cohorts is correlated with lower inflation.” So maybe it depends to what extent the aging population is dependent on the working population, and whether the working population has additional dependents in the form of children (who will become the next working population). It’s complex, dynamic stuff that is hard to puzzle out.

risk and investing

This blog is about looking at possible futures, not necessarily profiting from them. But of course, who doesn’t want to do that if they can? It’s not just about short-term profit, it’s about building a nest egg which is your personal resilience against whatever events the future holds. A nest egg is also about your personal choice to defer some happiness now for the possibility of greater happiness later.

This book looks promising to me. The author breaks risks into “inflation, deflation, confiscation, and devastation”. I haven’t read the book, but presumably he offers portfolio suggestions to deal with these risks.

Since I’m on personal finance today, here is a grab bag of other related topics and links.

One thing everyone can and should do right away is minimize how much the financial industry steals from us in the form of fees. Index funds are one way to do this. The case to go all-index is incredibly strong, but in case you don’t want to take my word for it, Vanguard makes the case every year. If you are the type to dig into numbers yourself, S&P has a free online data set here. Finally, this Economist column mentions a number of smaller startup companies that are providing some competition to the big banks and their ridiculous fees. Among them is TransferWise which says it allows people to transfer money abroad much cheaper than they have been able to in the past. I haven’t tried it yet.

Scratch and Raspberry Pi

Here’s an article about how Scratch (a programming language supposedly any child can learn) and Raspberry Pi (a computer that costs less than $50) fit together.

We’re huge fans of Scratch here at the [Raspberry Pi] Foundation. It was designed to teach young people how to program but it’s a great learning tool at any age: you can build your first program in minutes and pick up fundamental concepts very quickly. Whilst having fun. Sneaky!

If you’ve never tried Scratch before then today is the day to boot up your Pi and have a play. If you are Pi-less then you can use it online, but you’ll be missing out on the best bit of all: physical computing with Scratch. It’s probably the easiest way to hook up sensors, LEDs, buttons and motors to the Pi

400 ppm

Yes, we’re at 400 ppm of carbon dioxide in the atmosphere, consistently now, everywhere. As a reminder, the pre-industrial number was something like 280.

For the first time since we began tracking carbon dioxide in the global atmosphere, the monthly global average concentration of this greenhouse gas surpassed 400 parts per million in March 2015,  according to NOAA’s latest results.

“It was only a matter of time that we would average 400 parts per million globally,” said Pieter Tans, lead scientist of NOAA’s Global Greenhouse Gas Reference Network. “We first reported 400 ppm when all of our Arctic sites reached that value in the spring of 2012. In 2013 the record at NOAA’s Mauna Loa Observatory first crossed the 400 ppm threshold. Reaching 400 parts per million as a global average is a significant milestone.

From a non-scientific sample of people I know, people who thought they were immune from seasonal allergies seem to be suffering them for the first time, and people who have always suffered them, which includes me, are reduced to slobbering insomniac messes. Could there possibly be a connection?

autonomous truck

With all the talk of self-driving cars, I figured self-driving trucks and buses wouldn’t be far behind. And here is a self-driving truck, already licensed in a few U.S. states. It sounds like there is still a human driver in it for now. But in the long term, I imagine this is bad news for human driver as an occupation. It should be good news for the safety of humans on the road in general. It seems like it could favor the economics of road freight vs. rail. Then again, it might make much narrower travel lanes practical, leaving plenty of room in the right of way for other infrastructure like high speed rail, high voltage lines, pipelines, etc. Time will tell.

renewable energy

The renewable energy conversation is starting to change, with talk of renewables driving the market for more traditional energy sources, rather than the other way around.

The BBC on Japan:

Following the Fukushima disaster in March 2011 all of Japan’s 48 other nuclear reactors were shut down. The predicted blackouts did not happen, the country kept running just fine.

But there has been a cost. Prior to the Fukushima disaster nearly 30% of power came from nuclear. That has been replaced by burning lots more coal and gas – Japan is now the world’s biggest importer of liquefied natural gas…

Following the Fukushima disaster, the Democratic Party government enacted a “feed-in tariff”.

Anyone could put solar panels on their roof, connect up to the grid and the power companies would be required to pay them a generous 40 Yen per kilowatt.

The response was dramatic. Money poured in to solar, and not just on people’s rooftops. In 2011 Japan had just 4.9 gigawatts of installed solar capacity. Just three years later, at the end of 2014, that had leapt to 23GW. It put Japan ahead of Italy as the number three solar energy producer in the world.

They go on to suggest that the government may turn the nuclear plants back on, and that may slow down the renewable revolution. But still, renewables were competing favorably with fossil fuels in the meantime.

Meanwhile, NPR actually suggests that renewables may be helping to drive down the price of oil.

“What the Saudis could see was new forms of renewable energy consumption — windmills, tidal power, solar power and the Tesla,” Verleger says.

He says in the longer term, electric cars and those other technologies could mean less demand for oil. Shorter term, the global economy has slowed and that means less thirst for oil right now. At the same time, with fracking the U.S. is now rivaling Saudi Arabia as an oil superpower…

So he says the Saudis now want cheaper oil, in part to slow down the fracking revolution in the U.S. — and to signal to the developing world: Don’t worry — you don’t need to invest in alternative energy. You can buy cheap oil from us.

This is very different than a couple years ago, when we were arguing that renewables were competitive only because of high oil prices.

what’s going on with Star Wars

Were you wondering what was going on with Star Wars? It’s owned by Disney now, which is concerning, but Episode VII: The Force Awakens is supposed to come out on December 18, 2015. There are also some spinoff movies coming out in the next couple years that take place “in the Star Wars universe” but don’t involve the main characters.