them deep Q-networks though...,

wikipedia |  Q-learning is a model-free reinforcement learning technique. Specifically, Q-learning can be used to find an optimal action-selection policy for any given (finite) Markov decision process (MDP). It works by learning an action-value function that ultimately gives the expected utility of taking a given action in a given state and following the optimal policy thereafter. A policy is a rule that the agent follows in selecting actions, given the state it is in. When such an action-value function is learned, the optimal policy can be constructed by simply selecting the action with the highest value in each state. One of the strengths of Q-learning is that it is able to compare the expected utility of the available actions without requiring a model of the environment. Additionally, Q-learning can handle problems with stochastic transitions and rewards, without requiring any adaptations. It has been proven that for any finite MDP, Q-learning eventually finds an optimal policy, in the sense that the expected value of the total reward return over all successive steps, starting from the current state, is the maximum achievable.

Delayed Q-learning is an alternative implementation of the online Q-learning algorithm, with Probably approximately correct learning (PAC).^[11]

Because the maximum approximated action value is used in the Q-learning update, in noisy environments Q-learning can sometimes overestimate the actions values, slowing the learning. A recent variant called Double Q-learning was proposed to correct this. ^[12]

Greedy GQ is a variant of Q-learning to use in combination with (linear) function approximation.^[13] The advantage of Greedy GQ is that convergence guarantees can be given even when function approximation is used to estimate the action values.

Q-learning may suffer from slow rate of convergence, especially when the discount factor  is close to one.^[14] Speedy Q-learning, a new variant of Q-learning algorithm, deals with this problem and achieves a provably same rate of convergence as model-based methods such as value iteration.^[15]

A recent application of Q-learning to deep learning, by Google DeepMind, titled "deep reinforcement learning" or "deep Q-networks", has been successful at playing some Atari 2600 games at expert human levels. Preliminary results were presented in 2014, with a paper published in February 2015 in Nature.^[16]

a quantum associative memory based on grover's algorithm?

arvix |  This paper combines quantum computation with classical neural network theory to produce a quantum computational learning algorithm. Quantum computation uses microscopic quantum level effects to perform computational tasks and has produced results that in some cases are exponentially faster than their classical counterparts. The unique characteristics of quantum theory may also be used to create a quantum associative memory with a capacity exponential in the number of neurons. This paper combines two quantum computational algorithms to produce such a quantum associative memory. The result is an exponential increase in the capacity of the memory when compared to traditional associative memories such as the Hopfield network. The paper covers necessary high-level quantum mechanical and quantum computational ideas and introduces a quantum associative memory. Theoretical analysis proves the utility of the memory, and it is noted that a small version should be physically realizable in the near future.

searching a database?

wikipedia |  Grover's algorithm is a quantum algorithm that finds with high probability the unique input to a black box function that produces a particular output value, using just O(N^1/2) evaluations of the function, where N is the size of the function's domain.

The analogous problem in classical computation cannot be solved in fewer than O(N) evaluations (because, in the worst case, the Nth member of the domain might be the correct member). At roughly the same time that Grover published his algorithm, Bennett, Bernstein, Brassard, and Vazirani published a proof that no quantum solution to the problem can evaluate the function fewer than O(N^1/2) times, so Grover's algorithm is asymptotically optimal.^[1]

Unlike other quantum algorithms, which may provide exponential speedup over their classical counterparts, Grover's algorithm provides only a quadratic speedup. However, even quadratic speedup is considerable when N is large. Grover's algorithm could brute force a 128-bit symmetric cryptographic key in roughly 2⁶⁴ iterations, or a 256-bit key in roughly 2¹²⁸ iterations. As a result, it is sometimes suggested that symmetric key lengths be doubled to protect against future quantum attacks.

Like many quantum algorithms, Grover's algorithm is probabilistic in the sense that it gives the correct answer with a probability of less than 1. Though there is technically no upper bound on the number of repetitions that might be needed before the correct answer is obtained, the expected number of repetitions is a constant factor that does not grow with N.

Grover's original paper described the algorithm as a database search algorithm, and this description is still common. The database in this analogy is a table of all of the function's outputs, indexed by the corresponding input.

ironically enough...,

NYTimes |  Marvin Lee Minsky was born on Aug. 9, 1927, in New York City. The precocious son of Dr. Henry Minsky, an eye surgeon who was chief of ophthalmology at Mount Sinai Hospital, and Fannie Reiser, a social activist and Zionist.

Fascinated by electronics and science, the young Mr. Minsky attended the Ethical Culture School in Manhattan, a progressive private school from which J. Robert Oppenheimer, who oversaw the creation of the first atomic bomb, had graduated. (Mr. Minsky later attended the affiliated Fieldston School in Riverdale.) He went on to attend the Bronx High School of Science and later Phillips Academy in Andover, Mass.

After a stint in the Navy during World War II, he studied mathematics at Harvard and received a Ph.D. in math from Princeton, where he met John McCarthy, a fellow graduate student.

Intellectually restless throughout his life, Professor Minsky sought to move on from mathematics once he had earned his doctorate. After ruling out genetics as interesting but not profound, and physics as mildly enticing, he chose to focus on intelligence itself.

“The problem of intelligence seemed hopelessly profound,” he told The New Yorker magazine when it profiled him in 1981. “I can’t remember considering anything else worth doing.”

To further those studies he reunited with Professor McCarthy, who had been awarded a fellowship to M.I.T. in 1956. Professor Minsky, who had been at Harvard by then, arrived at M.I.T. in 1958, joining the staff at its Lincoln Laboratory. A year later, he and Professor McCarthy founded M.I.T.’s AI Project, later to be known as the AI Lab. (Professor McCarthy left for Stanford in 1962.)

Professor Minsky’s courses at M.I.T. — he insisted on holding them in the evenings — became a magnet for several generations of graduate students, many of whom went on to become computer science superstars themselves.

Mr. Hillis said he had so been taken by Professor Minsky’s intellect and charisma that he found a way to insinuate himself into the AI Lab and get a job there. He ended up living in the Minsky family basement in Brookline, Mass.

Among them were Ray Kurzweil, the inventor and futurist; Gerald Sussman, a prominent A.I. researcher and professor of electrical engineering at M.I.T.; and Patrick Winston, who went on to run the AI Lab after Professor Minsky stepped aside.

Another of his students, Danny Hillis, an inventor and entrepreneur, co-founded Thinking Machines, a supercomputer maker in the early 1990s.

supertools?- quantum computer science so frosty, they ain't even tryna tell you what he's up to...,

iarpa |  Mathematics (algebra, number theory and algebraic geometry), cryptology, quantum information science (theoretical and experimental), computer science-theory of algorithms, symbolic computation, complexity theory, machine learning, computer-human interfaces, scientometrics, geology

The biggest breakthrough would be if NSA could build a quantum computer that could implement Shor's algorithm using the Quantum Fourier Transform (QFT). This breaks RSA and Diffie-Hellman. The quantum research program at NSA used to be headed up by Mark Heiligman who is now at IARPA:

RAVEN	Microelectronics, nondestructive analysis, nanoscale imaging, hardware assurance	Dr. Carl McCants
SCITE	Engineering enterprises that detect low probability events with low accuracy sensors, innovative research methods to evaluate analytic and forecasting tradecraft, innovative statistical methods to estimate performance of systems addressing complex analysis and forecasting problems, scientific research on organizational lessons-learned methods, evidence-based forecasting methods, inductive logic, probabilistic reasoning and its application to analytic tradecraft	Dr. Paul Lehner
SHARP	Cognition, psychometrics, fluid reasoning and intelligence, neuroscience, human performance	Dr. Alexis Jeannotte
SILMARILS	Chemical detection and identification (including standoff, remote, and ultra-compact/low power approaches), spectroscopy/spectrometry/chromatography, optical sensors, novel laser designs, frequency combs, nonlinear optics, fiber optic sensors/lasers/devices	Dr. Kristy DeWitt
SLiCE	Communication systems, geolocation, electromagnetics, radio frequency	Dr. Chris Reed
SuperTools		Dr. Mark Heiligman
TIC	Cybersecurity and information assurance, hardware assurance, microelectronics	Dr. Carl McCants
TRUST	Interpersonal trust, neurophysiology, behavioral science, advanced data analytics, social science	Dr. Alexis Jeannotte

quantum computation, quantum theory, and AI

sciencedirect |  The main purpose of this paper is to examine some (potential) applications of quantum computation in AI and to review the interplay between quantum theory and AI. For the readers who are not familiar with quantum computation, a brief introduction to it is provided, and a famous but simple quantum algorithm is introduced so that they can appreciate the power of quantum computation. Also, a (quite personal) survey of quantum computation is presented in order to give the readers a (unbalanced) panorama of the field. The author hopes that this paper will be a useful map for AI researchers who are going to explore further and deeper connections between AI and quantum computation as well as quantum theory although some parts of the map are very rough and other parts are empty, and waiting for the readers to fill in.

let's play what if?

What if during the 1990s Stuart Kauffman was involved in classified research for DARPA to develop, via synthetic biology techniques, a physical quantum neural network capable of performing quantum computations (e.g. Shor's Algorithm) suited for cracking public key cryptography?

What if the basic substrate was anyon quasiparticles interacting in a two-dimensional electron gas 2DEG , specifically a 2DEG environment in the common Field Effect Transistor?

What if the result of this project was a highly successful form of advanced nanotechnology best described as a winner-take-all-style of teleportation-based recurrent topological quantum neural network which could then be trained and optimized to solve particular problem sets?

What if this hypothetical new technology (only available to NSA, GCHQ, etc) was the real reason for President Bill Clinton's 1996 Executive Order 13026, legalizing export of the mathematical concepts behind public key cryptography?

What if some of the project scientists realized, to their great surprise and horror, that their new technology posed an existential threat to humanity comparable to the invention of atomic weapons?

What if some of the project scientists therefore formed a secret cabal to manipulate events in a way that *forced* humanity, including all governments, to forever relinquish control of this technology?

What if the story of just how they accomplished this has not yet been told, and will cause great consternation (huge understatement!) when it is finally understood?

What if in order to protect their (probably posthumous) reputations, members of the cabal published an essay explaining why they had done what they did?

Kauffman is into his seventies. While certainly forbidden to speak honestly about this work due to ironclad Non-Disclosure Agreements, what if he tried by sneaking past his censors a paragraph at the end of Chapter 8 of the first hardcover edition of *At Home In the Universe* that explicitly describes a global-scale teleportation/entanglement quantum neural network, and that this paragraph was forcibly redacted in all future published versions of this book?

Other scientists probably involved in this project include Steven Wolfram  (probably project leader), Brosl Hasslacher, possibly the great Murray Gell-Mann at an early stage before his 1991 ailment rendered him unable to participate, and possibly Danny Hillis.

order for free?

edge |  What kinds of complex systems can evolve by accumulation of successive useful variations? Does selection by itself achieve complex systems able to adapt? Are there lawful properties characterizing such complex systems? The overall answer may be that complex systems constructed so that they're on the boundary between order and chaos are those best able to adapt by mutation and selection.

Chaos is a subset of complexity. It's an analysis of the behavior of continuous dynamical systems — like hydrodynamic systems, or the weather — or discrete systems that show recurrences of features and high sensitivity to initial conditions, such that very small changes in the initial conditions can lead a system to behave in very different ways. A good example of this is the so called butterfly effect: the idea is that a butterfly in Rio can change the weather in Chicago. An infinitesimal change in initial conditions leads to divergent pathways in the evolution of the system. Those pathways are called trajectories. The enormous puzzle is the following: in order for life to have evolved, it can't possibly be the case that trajectories are always diverging. Biological systems can't work if divergence is all that's going on. You have to ask what kinds of complex systems can accumulate useful variation.

We've discovered the fact that in the evolution of life very complex systems can have convergent flow and not divergent flow. Divergent flow is sensitivity to initial conditions. Convergent flow means that even different starting places that are far apart come closer together. That's the fundamental principle of homeostasis, or stability to perturbation, and it's a natural feature of many complex systems. We haven't known that until now. That's what I found out twenty-five years ago, looking at what are now called Kauffman models — random networks exhibiting what I call "order for free."

Complex systems have evolved which may have learned to balance divergence and convergence, so that they're poised between chaos and order. Chris Langton has made this point, too. It's precisely those systems that can simultaneously perform the most complex tasks and evolve, in the sense that they can accumulate successive useful variations. The very ability to adapt is itself, I believe, the consequence of evolution. You have to be a certain kind of complex system to adapt, and you have to be a certain kind of complex system to coevolve with other complex systems. We have to understand what it means for complex systems to come to know one another — in the sense that when complex systems coevolve, each sets the conditions of success for the others. I suspect that there are emergent laws about how such complex systems work, so that, in a global, Gaia- like way, complex coevolving systems mutually get themselves to the edge of chaos, where they're poised in a balanced state. It's a very pretty idea. It may be right, too.

My approach to the coevolution of complex systems is my order-for-free theory. If you have a hundred thousand genes and you know that genes turn one another on and off, then there's some kind of circuitry among the hundred thousand genes. Each gene has regulatory inputs from other genes that turn it on and off. This was the puzzle: What kind of a system could have a hundred thousand genes turning one another on and off, yet evolve by creating new genes, new logic, and new connections?

Suppose we don't know much about such circuitry. Suppose all we know are such things as the number of genes, the number of genes that regulate each gene, the connectivity of the system, and something about the kind of rules by which genes turn one another on and off. My question was the following: Can you get something good and biology-like to happen even in randomly built networks with some sort of statistical connectivity properties? It can't be the case that it has to be very precise in order to work — I hoped, I bet, I intuited, I believed, on no good grounds whatsoever — but the research program tried to figure out if that might be true. The impulse was to find order for free. As it happens, I found it. And it's profound.

One reason it's profound is that if the dynamical systems that underlie life were inherently chaotic, then for cells and organisms to work at all there'd have to be an extraordinary amount of selection to get things to behave with reliability and regularity. It's not clear that natural selection could ever have gotten started without some preexisting order. You have to have a certain amount of order to select for improved variants.

self-organization and far from equalibrium dynamics

wikipedia |  Stuart Alan Kauffman (born September 28, 1939) is an American medical doctor, theoretical biologist, and complex systems researcher who studies the origin of life on Earth.

In 1967^[1] and 1969^[2] Kauffman proposed applying models of random boolean networks to simplified genetic circuits. These were very early models of large genetic regulatory networks, proposing that cell types are dynamical attractors of such networks and that cell differentiation steps are transitions between attractors. Recent evidence strongly suggests that cell types in humans and other organisms are indeed attractors.^[3] In 1971 he suggested that the zygote may not access all the cell type attractors in the repertoire of the genetic network's dynamics, hence some of the unused cell types might be cancers.^[4] This suggested the possibility of "cancer differentiation therapy".

In 1971, Kauffman proposed the self-organized emergence of collectively autocatalytic sets of polymers, specifically peptides, for the origin of molecular reproduction.^[5][6]Reproducing peptide, DNA, and RNA collectively autocatalytic sets have now been made experimentally.^[7][8] He is best known for arguing that the complexity of biological systems and organisms might result as much from self-organization and far-from-equilibrium dynamics as from Darwinian natural selection as discussed in his book Origins of Order (1993). His hypotheses stating that cell types are attractors of such networks, and that genetic regulatory networks are "critical", have found experimental support.^[3][9] It now appears that the brain is also dynamically critical.^[10]

$50,000 worth of phosphates and/or chalk would have prevented all this spastic, disingenuous political flailing...,

usatoday | Now that the leaching of poisonous lead into the tap water of Flint, Mich., has been declared a national emergency, it might be time to dial back the panic just a notch (or two).

Flint's 8,000 children have not had their lives destroyed. Jesse Jackson can roll up his crime tape. Michael Moore can go back to promoting his latest film. Taken as a whole,  in fact, Flint's kids are better off than the previous generations of Michigander kids in at least one important way. Even after Flint’s disaster, the city’s children have far less lead in their blood than their parents or grandparents did at the same age.

That's of little comfort, of course, to those exposed to higher levels than they should have been because of a nearly bankrupt local government, a scientifically incompetent city water utility, indifferent Michigan environmental regulators and a bumbling federal Environmental Protection Agency. And any lead has a long-terminsidious health impact, even after it has left the blood. But amid the furor, it's important to take a deep breath and put the exposure levels in context.

this useless potatoe head couldn't even get the political ball rolling...,

freep |  Neeley's complaint to the governor came three months before a March 2015 consultant's report that recommended spending $50,000 to add corrosion control chemicals to Flint's drinking water because iron was leaching from the pipes and turning the water brown.

The disclosure of the Snyder e-mail and a second one Neeley to State Attorney General Bill Schuette in September asking for an investigation into the Flint water delivery crisis came two days after Snyder promised in his annual status report to fix the Flint water problem.

Schuette, who declined to investigate last fall, is investigating now.

Could Neeley's complete letter have been omitted because he wrote that "community health could be on the decline as citizens become afraid to even shower or bathe in their homes. The people of Flint bring bottles of brown water full of sediment and other foreign substances to community meetings, asking only to be treated as human beings."

Nobody read that but the press secretary? Michigan deserves to hear those words this week. Flint deserves it.

“It’s really hard to figure out who are the accessories to the crime being committed against this city and who are the allies to fix this massive problem that we facing,” Neeley said. “I think the governor has more to say to the people of Michigan, and he is reluctant to say it.  He’s being selective about what truths he wants to release.”

Understandably, Flint residents and some elected leaders are not sure whom to trust and wonder whether all that needs to be done will be done – for residents and for the children.

"The frustration hasn't subsided yet,” Neeley said. “My frustration has grown with individuals who are very dismissive of the Flint community and their concerns."

The question to be asked now may not be: What did they know and when did they know it?

The question may be:  How could an intelligent, organized millionaire and former businessman have something happening in his state as catastrophic as the Flint water crisis -- and not know about it for 18 months?

Or:  What kind of people did he choose to work for him that they would let this problem, which could have been resolved with a $100 additive or a $50,000 anti-corrosion treatment, get this big? And do they still work there?

And here's a third question: How could this happen to Flint? The Rev. Jeffery Hawkins, pastor of Prince of Peace Baptist Church just blocks from the Flint River, had an idea.

“I believe it’s a city that has been kicked so many times, and when it comes to voting, our numbers are not always the greatest numbers … because of that, I think that the governor just doesn’t care about the city,” Hawkins said. “But there are still human rights afforded, and he could have cared far more than he did. There’s no excuse for what he did, at the end of the day."

EPA had a 160 on staff named Miguel Del Toral who called for proper corrosion control

rollingstone |  After the initial lead readings came back, Walters became desperate. She began calling everyone from activists to random people at the regional office of the EPA. She got the attention of an EPA water expert named Miguel Del Toral, who came to her house, ran more tests and came to a startling conclusion. The water Flint used to buy from Detroit contained orthophosphate, a chemical used to control lead and copper levels in the drinking water. Del Toral wrote that once Flint changed to river water, "the orthophosphate treatment for lead and copper control was not continued." Del Toral warned that there was no chemical barrier to keep lead and copper from infiltrating Flint residents' drinking water. In plain English, Flint lacked a corrosion-control plan, something every water system in America has been required to have for years. To make matters worse, the water from the Flint River contained eight times more chloride than Detroit water. Chloride is a corrosive compound that causes pipes to rust and leach. At a time when Flint water needed more corrosion control than ever, it was getting none.

Walters gave the Del Toral document to the Michigan ACLU, which released it to the press, but it only drew attention from Michigan Radio. There was a reason for this: All of official Michigan denied there was a problem. In February, the EPA asked the MDEQ directly if the state was practicing corrosion control. MDEQ staffer Stephen Busch wrote back: "[Flint] has an optimized Corrosion Control Program [and] conducts quarterly Water Quality Parameter monitoring at 25 sites and has not had any unusual results."

This wasn't true; there was no corrosion control. Still, the state of Michigan launched a counteroffensive essentially calling anyone with concerns about Flint water a crank. "Let me start here – anyone who is concerned about lead in the drinking water in Flint can relax," said Brad Wurfel, spokesman for MDEQ. (He later described Del Toral as a "rogue employee.")

Internally, the MDEQ seemed more annoyed than concerned. In July, the ACLU's Curt Guyette pushed for more details, and an MDEQ staffer e-mailed co-workers saying of the Flint situation, "Apparently it's going to be a thing now."

Eventually, the MDEQ admitted the city hadn't been doing any corrosion control with Flint's water, and no one seemed overly concerned. Wurfel essentially said they didn't have to address it for a year. "You know, if I handed you a bag of chocolate chips and a sack of flour and said, 'Make chocolate-chip cookies,' we'd still need a recipe," Wurfel told Michigan Radio. "They need to get the results from that testing to understand how much of what to put in the water to address the water chemistry."

mommy not having it LeeAnne Walters set the entire cascade in motion...,

michiganradio |  “The preliminary draft report should not have been released outside the agency,” Hedman wrote to then-Flint Mayor Dayne Walling after the ACLU’s investigative reporter, Curt Guyette, asked city officials about it. The report was a “preliminary draft” she wrote, adding, “it would be premature to draw any conclusions based on that draft.”

The draft report details hazardous waste levels of lead in Lee Anne Walters’ home. In it, Del Toral raises serious red flags about the lack of corrosion control treatment, something that’s required under federal rules.

These days, Del Toral says he hasn’t been keeping up with all the national news headlines about Flint. Since October, he’s been busy working with a water task force to help resolve Flint’s water problems.

Del Toral was first alerted to Flint’s water problems last spring, when Lee Anne Walters called the EPA to complain about high levels of lead in her tap water and warn officials that her child had been diagnosed with lead poisoning.

Flint's 2nd/3rd line inheritor water department didn't know how to handle high pH water, period....,

gregbranchwords | The Recap

1. Flint’s elected leadership makes what is actually a solid, sound decision that will, in the long run, save the city millions of dollars and give it more control over its destiny – and, because it positions Flint as a wholesale supplier of water, possibly enhance revenues for them.


2. Detroit Water Board decides to be spoiled and pissy and leaves Flint with no good options for the two years before its pipeline is built.


3. Flint’s leadership and GOP-appointed EFM make a well-deliberated decision to draw water from the Flint River. 


4. Flint’s water staff – the people in Flint who are the experts on this sort of thing – apparently aren’t up to the task. And the people they count on to oversee and help them


5. The Michigan DEQ, is completely asleep at the switch. And once they discover their mistake, they lie about it and ask Flint to help them lie.


6. US EPA is aware of a problem, but apparently trusted the kids playing in the DEQ sandbox to fix things.

Personally, I think Detroit needs to be held accountable for starting the snowball down the hill. And I think there are people in the DEQ who should be prosecuted for reckless endangerment and fraud.

The Governor? His accountability lies in the creation of the corporate culture that allowed DEQ’s hubris to let it happen.

The Detroit Water Board members, I’m guessing, aren’t Republicans. The Flint water department staff who were in over their heads weren’t Republicans. The DEQ staff is probably a mix.

global unemployment to rise by an additional 3.4 million

theguardian |  More than 3 million people will become unemployed worldwide in the next two years, making existing jobs vulnerable and fuelling potential social unrest as the global economy slows, a report warns.

The International Labour Organization predicts unemployment will rise by about 2.3 million this year to 199.4 million, and that 1.1 million will be added to the global count in 2017, taking joblessness to more than 200 million for the first time on record.

The ILO, a UN agency focused on labour standards and social protection, said the effects of last year’s economic slowdown would play out in higher unemployment in 2016, particularly in Asia, Africa, Latin America and the Middle East.

Developing markets in those areas will bear the brunt of increased joblessness after the prices of oil and other commodities tumbled in response to slowing growth, the ILO said in its World Employment and Social Outlook report for 2016.

The ILO released the forecasts as the global financial elite gathered in the Swiss ski resort of Davos for the World Economic Forum’s annual meeting. The event takes place as oil prices hover near 13-year lows below $30 a barrel, share prices tumble and analysts try to determine the impact of China’s slowing economy.

Raymond Torres, one of the report’s authors, said market turmoil at the start of 2016 meant his already gloomy predictions could prove overoptimistic. The International Monetary Fund cut its global growth forecast on Tuesday.

why oil under $30.00 barrel is a predicament...,

ourfiniteworld |  Things aren’t working out the way we had hoped. We can’t seem to get oil supply and demand in balance. If prices are high, oil companies can extract a lot of oil, but consumers can’t afford the products that use it, such as homes and cars; if oil prices are low, oil companies try to continue to extract oil, but soon develop financial problems.

Complicating the problem is the economy’s continued need for stimulus in order to keep the prices of oil and other commodities high enough to encourage production. Stimulus seems to takes the form of ever-rising debt at ever-lower interest rates. Such a program isn’t sustainable, partly because it leads to mal-investment and partly because it leads to a debt bubble that is subject to collapse.

Stimulus seems to be needed because of today’s high extraction cost for oil. If the cost of extraction were still very low, this stimulus wouldn’t be needed because products made using oil would be more affordable.

Decision makers thought that peak oil could be fixed simply by producing more oil and more oil substitutes. It is becoming increasingly clear that the problem is more complicated than this. We need to find a way to make the whole system operate correctly. We need to produce exactly the correct amount of oil that buyers can afford. Prices need to be high enough for oil producers, but not too high for purchasers of goods using oil. The amount of debt should not spiral out of control. There doesn’t seem to be a way to produce the desired outcome, now that oil extraction costs are high.

Rigidities built into the oil price-supply system (as described in Sections 3 and 4) tend to hide problems, letting them grow bigger and bigger. This is why we could suddenly find ourselves with a major financial problem that few have anticipated.

Unfortunately, what we are facing now is a predicament, rather than a problem. There is quite likely no good solution. This is a worry.

there are levels of survival we are prepared to accept...,

Telegraph |  The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned.

"The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up," said William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements (BIS).

"Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief," he said.

"It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something," he told The Telegraph on the eve of the World Economic Forum in Davos.

"The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians."

don't panic, just reload...,

declineoftheempire |  For the first time since 2008, pundits are trotting out Irving Fisher's dreaded "debt-deflation" monster (Ambrose Evans-Pritchard, writing from Davos).

The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned.

"The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up," said William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements... 

Mr White said stimulus from quantitative easing and zero rates by the big central banks after the Lehman crisis leaked out across east Asia and emerging markets, stoking credit bubbles and a surge in dollar borrowing that was hard to control in a world of free capital flows.

The result is that these countries have now been drawn into the morass as well. Combined public and private debt has surged to all-time highs to 185% of GDP in emerging markets and to 265% of GDP in the OECD club, both up by 35 percentage points since the top of the last credit cycle in 2007.

"Emerging markets were part of the solution after the Lehman crisis. Now they are part of the problem too," Mr White said...

In retrospect, central banks should have let the benign deflation of this (temporary) phase of globalization run its course. By stoking debt bubbles, they have instead incubated what may prove to be a more malign variant, a classic 1930s-style "Fisherite" debt-deflation.

Mr White said the Fed is now in a horrible quandary as it tries to extract itself from QE and right the ship again. "It is a debt trap. Things are so bad that there is no right answer. If they raise rates it'll be nasty. If they don't raise rates, it just makes matters worse," he said.

There is no easy way out of this tangle. But Mr White said it would be a good start for governments to stop depending on central banks to do their dirty work. They should return to fiscal primacy - call it Keynesian, if you wish - and launch an investment blitz on infrastructure that pays for itself through higher growth.

In short, the solution to a debt crisis is more debt (fiscal stimulus). It pays for itself!

Markets are signalling that the shit has hit the fan, but economists see no reason for panic

Have you found the beginning, then, that you are looking for the end?

politico |  If I asked you what most defines Donald Trump supporters, what would you say? They’re white? They’re poor? They’re uneducated?

You’d be wrong.

In fact, I’ve found a single statistically significant variable predicts whether a voter supports Trump—and it’s not race, income or education levels: It’s authoritarianism.

That’s right, Trump’s electoral strength—and his staying power—have been buoyed, above all, by Americans with authoritarian inclinations. And because of the prevalence of authoritarians in the American electorate, among Democrats as well as Republicans, it’s very possible that Trump’s fan base will continue to grow.

My finding is the result of a national poll I conducted in the last five days of December under the auspices of the University of Massachusetts, Amherst, sampling 1,800 registered voters across the country and the political spectrum. Running a standard statistical analysis, I found that education, income, gender, age, ideology and religiosity had no significant bearing on a Republican voter’s preferred candidate. Only two of the variables I looked at were statistically significant: authoritarianism, followed by fear of terrorism, though the former was far more significant than the latter.

Authoritarianism is not a new, untested concept in the American electorate. Since the rise of Nazi Germany, it has been one of the most widely studied ideas in social science. While its causes are still debated, the political behavior of authoritarians is not. Authoritarians obey. They rally to and follow strong leaders. And they respond aggressively to outsiders, especially when they feel threatened. From pledging to “make America great again” by building a wall on the border to promising to close mosques and ban Muslims from visiting the United States, Trump is playing directly to authoritarian inclinations.

Not all authoritarians are Republicans by any means; in national surveys since 1992, many authoritarians have also self-identified as independents and Democrats. And in the 2008 Democratic primary, the political scientist Marc Hetherington found that authoritarianism mattered more than income, ideology, gender, age and education in predicting whether voters preferred Hillary Clinton over Barack Obama. But Hetherington has also found, based on 14 years of polling, that authoritarians have steadily moved from the Democratic to the Republican Party over time. He hypothesizes that the trend began decades ago, as Democrats embraced civil rights, gay rights, employment protections and other political positions valuing freedom and equality. In my poll results, authoritarianism was not a statistically significant factor in the Democratic primary race, at least not so far, but it does appear to be playing an important role on the Republican side. Indeed, 49 percent of likely Republican primary voters I surveyed score in the top quarter of the authoritarian scale—more than twice as many as Democratic voters.

Political pollsters have missed this key component of Trump’s support because they simply don’t include questions about authoritarianism in their polls.

we're at the second red arrow again...,

alhambrapartners |  The only difference relevant in this overriding conception is that the eurodollar in 1969 was ready to break free of the shackles of hard money.  Its very existence owed to the fact that central banks were repeating the same processes that they had experimented with in the 1920’s and thus felt that they had learned from those mistakes (they didn’t; blaming gold the whole time when economists, deep down, care little for gold so much as power and control).  The eurodollar imbalance of 1969, which led to the great interruption of the 1970’s, was a faction, the majority faction, of banking following along the lines of monetary flexibility; in short, economists thought they would be replacing gold with themselves when even in 1969 it should have been readily apparent thatbanks were replacing gold with their own designs.

One final note, a haunting warning that was echoed in 1979 (itself an echo of 1964) and seemingly destined to be unheeded and thus the source of our great repetition.  If we are doomed to repeat history, it is because the self-selected “best and brightest” are more enamored with their own credentials than their abilities as critical thinkers in a truly enlightened, scientific discipline.  Mr. Coombs’ words from April 1969 would find application in August 2007, again in August 2011 and in increasing regularity since June 2014 and this renewed “rising dollar.”

European central banks remained apprehensive, however, that a serious crunch in the Euro-dollar market might suddenly develop if intensified U.S. and European competition for Euro-dollars suddenly revealed some vulnerable positions. The situation could be particularly serious because the Euro-dollar market had become an increasingly important source of financing for industrial and commercial enterprises not only in Europe but in the whole world. One bankruptcy could attract a lot of attention, and if it led the European commercial banks that had been supplying funds to the market to reassess the credit risks they faced, the result might be a sudden scramble for liquidity. The chances of such a development were enhanced by the fact that no central bank had formal responsibility for the behavior of the Euro-dollar market; what had been accomplished in that connection had been done through informal central bank cooperation.

As noted through this whole discussion, that “informal central bank cooperation” doesn’t really amount to anything.  That lesson could be applied to the Bundesbank “selling dollars” in 1969, the PBOC “selling UST’s” in 2015 or the worthless, useless Federal Reserve RRP in 2016.  They really don’t know what they are doing, they never have and it truly doesn’t matter fixed or floating.  Adjust accordingly because we know how this ends; we’ve already seen it.