From: John Conover <john@email.johncon.com>
Subject: Re: The Death of Rational Knowledge
Date: 12 Sep 1999 22:24:51 -0000
ilya@speakeasy.org writes:
>
> It is against this theoretical background that we must view the events
> currently unfolding in the economies of the world. In particular, we must
> concentrate on the "bubble" that has been created in the United States, a
> bubble that is without comparison in it's all-encompassing scope and
> severity. The term "bubble" may be difficult to quantify, but suffice it
> to say that it refers to events that cause economy's to move away from a
> position of solid fundamentals, that is, conditions that are sustainable
> in the long run.
>
The term "bubble" may be difficult to quantify, (depending on one's
POV, but it is done every day with reasonable success,) but to say
that it refers to events that cause economy's to move away from a
position of solid fundamentals, is a logical contradiction.
If there are solid fundamentals, then there can not be stochastic
bubbles. If there are stochastic bubbles, then there can not be solid
fundamentals, since the mean of the fundamentals becomes undefined for
all except Brownian motion types of stochastic systems.
Humanity and civilization would have never got off the ground if it
was a Brownian motion type of stochastic system, (or more correctly,
the chances would be very small-less than 2.3%-that it is a Brownian
motion type of thing that lasted this long.)
One has to be very careful when mixing the metaphors and paradigms of
inductive interpretations of complex systems-they are frequently
contradictory, and mutually exclusive.
John
--
John Conover, john@email.johncon.com, http://www.johncon.com/