Tuesday, July 26, 2005

I have decided to archive my brain farts. Mostly because I find them entertaining, but way too easily forgotten. I am hoping that the continuous writing down of brain farts will lead to a fart avalanche process which might result in a hideously delicious massive brain gas explosion.

Alternately they might just result in a series of smelly brain fart driven posts.

Now that I have made a decision to write down brain farts, my mind seems temporarily out of gas.

Oh, wait, its cycling back..

Brain fart entry # 1.

My brain has been farting all day trying to formulate several gaseous things. The first is in the field of international trade. I am basically trying to figure out how the US economy is managing the whole trade deficit problem. It seems to basically come down to the fact that with the end of the gold-backed currencies, the relative strengths of most currencies are determined by market forces and a country's currency stability in the face of market forces is based on its holdings of currency reserves, which are denominated in dollars. If somebody has euros and they need dollars they go and buy dollars on the currency exchange markets. The going price is the one that somebody is willing to buy/sell euros/dollars. In the case of some countries, mostly in Asia, the central bank steps in and determines what it considers an acceptable exchange rate for its currency and as long as it has the foreign reserves to keep selling its currency for the price it sets then it will succeed in setting the price... Even in places with market-based exchange rates, the central banks will sometimes step in to limit the fluctuations of the currency. The ability of these countries' central banks to defend their exchange rates is determined by the size of their own foreign currency reserves. This, in turn, is generally counted in dollars. Until the mid-20th the relative price of currencies and the ability of a country to defend its currency (should it choose to do so) was determined to a large extent by the amount of precious metals (gold,silver) possessed by countries.

If a country's gold possessions decreased, then the relative value of its currency decreased causing its exports to be more competitive, rebalancing trade and causing parity in a country's current account. Even without the gold standard, freely floating currencies should rebalance based on trade and their economies would readjust accordingly. This would be true in every case except one: the United States. Because you see we have the ability to print gold. This has in fact become our biggest area of competitive advantage. So, lets say the Chinese have the humongous low-paid, relatively low-quality work-force and produce low-capital intensive, high-labor intensive goods. The Europeans have a well-paid, high-quality work-force and produce high-capital intensive, and low-labor intensive goods. We got them all beat. The United States prints gold. Not only do we print it, but we package it and sell it abroad. Its our export. The whole trade deficit thing would make perfect sense if we replace the $ figures with pretend gold amounts. Say everytime you see $20000, you replace that with 50 ounces of gold..
So our accounts would simply look something like this:
Imports: (trade goods - oil, cars, computers, knick-knacks, etc) worth 3150000000 ounces of gold
Exports: (trade goods - airplanes, tanks, chemicals) worth 1786250000 ounces of gold and gold in the amount of 1363750000 ounces of gold

Now as long as you find 1363750000 ounces of gold every year, there is absolutely no problem. And of course there isn't, because we have discovered what alchemists dreamed of for thousands of years and we use printing machines to produce gold. Of course, dollars aren't really gold... However, many countries are currently perfectly willing to hold on to massive amounts of dollar-denominated debt and assets. So the international competitiveness of the US economy consists of its ability to create massive piles of dollar-denominated debts that could be sold abroad as if they were golden. The US consumers of course have no problem in complying with such an interesting demand and gorge themselves on cheap credit...

The US consumer's job is to spend, spend, spend (preferably on credit). Their debts are combined into huge blocks and sold abroad. Whats the point of actually producing something in the United States when all we need to do is to find new and innovative ways of packaging and selling dollar-denominated debt abroad? So, can there ever come a time when the world will not want our pretty green gold anymore? Nah... And even if that day comes, our economy will just simply and rapidly adjust and we will start producing knick-knacks to trade with the rest of the world that might not want to trade their goods and resources for our green gold anymore. Painfull? Nah. I am sure that many real estate agents will quickly and painlessly become engineers and go to work in factories. And the consumers will gladly trade in that 4WD SUV for a reasonably priced compact... No problem, right??

Brain fart entry # 2.

I am trying to figure out what it is that would make a good book. The answer is interesting characters and an interesting story. What however makes characters interesting? What makes their interactions interesting? And what makes the story interesting?

I guess that in order to be interesting characters must arouse some sort of emotions in us. This can be in the form of identification with their thoughts and feelings. Alternatively this could be in the ability of the characters to embody certain traits that we either like or dislike. Probably most effective then would be a character that we can identify with, but which has certain tragic flaws that we can also identify with but that we strongly like or dislike. A character that is similar to us, but wherein elements X, Y, and Z (on which we feel strongly) are somehow different and opposite from ours. Even better would probably be where we can see and even partially understand the flaws of the characters. This would cause some sort of internal contradiction between our understanding of the flaw and our condemnation of the thoughts and deeds resulting from it.

There are also less interesting characters that basically have a perfectly consistent character and off of which the main characters develop and differentiate. There is also a genre of ideal characters - superheroes, supervillains, but from my point of view they are much less interesting and appeal to a very different part of the brain. I'll have to think more about superheroes and supervillains and the whole appeal of completely unconflicted characters. Probably there is an appeal of a clear struggle with a clear and obvious result. An appeal to the ideals behind the superheroes which people aspire to achieve in themselves.

What makes interactions between characters interesting? In my opinion here there are two main aspects. The first is misunderstanding caused by imperfect information and character flaws. The second is deception and the reasons behind it. The more we can identify with the motivations behind deception and the flaws causing misunderstanding, the more entertained we are with the development of the relationships and the outcome of the interactions. This is especially true where the interplay of motivations and flaws has an unclear outcome or where the characters are developing over the course of the book causing the interactions to again have a non-obvious conclusion.

What makes the story interesting? Here I am a bit lost... I'll think about this one tomorrow afternoon while I am swimming in the pool... Probably something to do with uncertainty resulting from multiple narrative strands and multiple flawed characters coming together. This is probably combined with some aspects of a consistent central strand that is running towards an unexpected conclusion, that should in many ways be consistent with the interactions of all the characters and events and at the same time leaves you fulfilled and unrushed. Importantly, probably the conclusion must not kill the meaningfulness of the interactions of the characters that happened in the earlier events. Thus all the interactions and events must consistently lead to an unexpected conclusion. There probably lies the biggest pitfall... Often, either the conclusion is not unexpected, or the chain of events does not consistently lead to it.

Anyways, enough farting for one post... cheers.


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