Thursday, November 07, 2013

Boltzmann brains: politeness means misunderstanding

In August 2013, I discussed a crazy paper by Boddy and Carroll that has argued that a Higgs instability that will destroy the Universe soon is a good thing because it will save us from a paradox – namely from the unexpected conclusion that there will be many people after us so we're special because we're among the relatively early ones.

If no friendly apocalypse arrives, the Universe might exist indefinitely which, Boddy and Carroll believe, is a bad thing because the Boltzmann Brains will be formed many times in this infinite future and such a cosmology automatically predicts that we should be Boltzmann brains, too.

I have explained several reasons why this is plainly nuts. Later, I saw a reaction by Jacques Distler titled "Zombies" where Distler says that it is plainly nuts, too.

In the discussion on that blog, Sean Carroll adds an irritated reaction without any substance. He just claims that his claims had been misinterpreted except that he doesn't offer a tiny glimpse of an inaccuracy in Jacques' interpretation of his and Boddy's paper. People like Carroll love to say the lie that their views have been misinterpreted which is almost the never case.

The main exchange in that discussion occurs between Mark Srednicki of Santa Barbara and Jacques Distler of Austin. In the blog post and the discussion, Jacques makes the same points as I did, using slightly different words:
  • We have clear evidence that we are not Boltzmann brains because our observations are not chaotic and we may verify additional predictions that our observations are not chaotic, which rules out the Boltzmann Brain hypothesis at any confidence level we want. The confidence level grows very quickly; the \(p\)-value pretty much exponentially drops in time expressed in microseconds.
  • This observation means that if we also assume a cosmology that does imply many Boltzmann brains, we may quickly determine that we are not "typical" among the conglomerates of matter locally identical to a brain. We may prove that the "typicality" assumption is just wrong.
  • Assuming a cosmological model without many Boltzmann brains, we can't deduce anything new.
  • Our observations implying that we are not Boltzmann brains can't allow us to favor Boltzmann-brain-free models and disfavor the Boltzmann-brain-containing models because both classes of models are compatible with our existence (assuming that they don't have some other, more serious bugs aside from the Boltzmann brains).
  • It would be crazy if we could learn about our origins from the assumptions about the number of brains or people in the future because such an implication would be acausal. In the real world, the number of people or brains in the future is a consequence of the laws of physics combined with the initial conditions. You can't revert this causal relationship (even though Sean Carroll believes that there is a symmetry between the causes and their logical implications – he misunderstands the logical arrow of implications). The future is unknown, it will be whatever it will be (probabilistically calculable from the laws of physics and the initial conditions) and it is not teleologically constrained. If the mankind dies out soon, we (or our timing) may be close to generic; if it doesn't, we are among the early folks; the outcome is yet to be seen and it's nonsensical to suggest that we know the answer in advance. The only valid way to learn about the future (aside from waiting) is to predict i.e. to learn something about the present or past (the initial conditions) and about the laws of physics that will (probabilistically) determine the future. There is no valid statistical argument that would imply – while avoiding arguments based on the laws of physics entirely – that you can't have trillions of descendants in the future – just like there was no valid argument that a tiny seed of space at the beginning of the cosmic inflation couldn't expand to a huge space in the future (Sean Carroll arguably misunderstands this fact about inflation, too).
What was a bit surprising to me was that Mark Srednicki seems to disagree with Jacques Distler (and with me) about some rather essential things. It was a surprise because when Srednicki and Hartle wrote about the xerographic distribution back in 2009 (see the discussion on this blog), I thought that their paper was just the right answer to the insane attempts to pick cosmological models according to their Boltzmann brain behavior.

I thought that they were simply saying the same thing that I was saying for years, namely that the "typicality assumption" is unjustified by anything; we may scientifically prove that most of its particular realizations are false; and we shouldn't pretend that demonstrably false assumptions belong to the scientific axiomatic system.

Hartle and Srednicki said that theories make assumptions about "who we are" within a cosmological model and Carroll and similar folks were assuming that we have to be "generic" – they assume that some distribution about "who we are" among the candidates who could "be us", something they called the xerographic distribution, has to be uniform. However, we may also assume other xerographic distributions and the models that happen to predict Boltzmann brains are rehabilitated.

It seemed to me that they were saying the same thing. However, there was still an important part of their paper that was missing: a section explaining why the likes of Sean Carroll are idiots. Papers prepared for journals may be expected to avoid the word "idiots" although it's the most accurate description of what's going on in this case. However, I couldn't find any diplomatic equivalents of these assertions, either. So I wasn't sure whether this absence was due to some censorship and excessive politeness; or because of Hartle's and Srednicki's genuine confusion manifesting itself as an uncertainty about things that are completely certain.

At least in the case of Mark Srednicki, the answer turned out to be that the answer is "some genuine confusion". Srednicki really does propose that what I call the "basics of rational reasoning" represent just one possible scientific attitude among many. So Srednicki's views may be "more moderate" than Carroll's views but they're still crazy.

The first comment by Mark Srednicki more or less agreed with Jacques and mentioned the 2009 Hartle-Srednicki paper. Jacques Distler replied by his own comment that offered a clear Bayesian derivation of the fact that we're simply not Boltzmann brains. Srednicki added the first reply where the tension became manifest:
Jacques, I believe Sean would agree with everything you say. But you haven’t addressed the crucial next step in his argument: if we agree that we’re not Boltzmann brains (on the basis of the calculation that you just presented), can we tolerate a cosmology that nevertheless predicts the existence of a lot of Boltzmann brains (with precisely our data/memories as of right now)?

Sean says no, those BBs can’t exist, because if they did, we would have been equally likely to have been any one of them, and then it’s overwhelmingly likely that we would no longer exist. But we do still exist. So we’re not BBs, and so therefore we must insist on a cosmology that prevents the existence of a lot of BBs anywhere in spacetime.
Jacques replies and locates the sentence "we would have been equally likely" as what he considers to be the mistake in the would-be argument above (and so do I). The words "equally likely" mean the same thing as "having the same probability" so to use such a sentence, we need a definition of the probability and an argument that some probabilities are equal to each other.

If we adopt the frequentist understanding of the probability, the probability that we are a Boltzmann brain would be defined as the percentage \(N_b/N\) where \(N\) is the total number of repetitions of the experiment (the whole life of the Universe) and \(N_b\) is the number of those repetitions in which we were Boltzmann brains. However, if we start a Universe from scratch, we can't identify who is "we" from a previous repetition of the Universe. The new Universe contains new objects and events. So unless we believe in reincarnation that maps the souls from the previous life of the Universe onto souls in a new life of the Universe ;-), the phrase "probability that we are a Boltzmann brain" is completely meaningless for a frequentist.

For a person who prefers the Bayesian understanding of the probability, the question about the "probability that we are Boltzmann brains" is potentially meaningful because the probability reflects his or her or its belief about his or her or its own identity. However, an essential part of the Bayesian probability is that it is being adjusted by the Bayesian inference using the evidence. Once we do so, we can quickly prove – even in a model which implies the existence of infinitely many Boltzmann brains – that the probability that we are Boltzmann brains is pretty much zero. So it is not equally high as the probability that we are a copy of the brain that evolved from a largely organized, well-behaved evolution process.

Again, for a frequentist without reincarnation, the phrase "equally likely" in that sentence is completely meaningless. For a Bayesian, it is potentially meaningful but easily demonstrable to be false. For a frequentist believing in reincarnation, the statement may be true but there is no evidence that our souls are "more identical" to some particular souls in other Universes than to others so all the conclusions derived from this reincarnation-dependent reasoning are bound to be unphysical, anyway. I am planning another blog post about reincarnation and after life in quantum gravity, by the way. ;-)

It's all very clear to us but Mark Srednicki remains ambiguous. First, he promotes the silly non-reasoning by some ad hominem comments:
Sean (and many other well known physicists, including Page, Linde, and Vilenkin) firmly believe that the only xerographic distribution that can be considered is a uniform one.
That's great that they are well-known but if they're confused about the fact that we may prove that we are not Boltzmann brains, regardless of their predicted existence in some distant future, they're still nuts. This is a feature by which science differs e.g. from religion or politics. In religion, the truth may be determined by what the well-known people say. But in science, the relationship is directed in the opposite way: people are well-known and/or nuts and/or both according to how many important and/or new but correct things they may say about the Universe.

Srednicki decided that their understanding of the probability was Bayesian but he was instantly going to obscure this point, anyway:
You can think of it a Bayesian prior that gives the probability that “we” are any particular one of the copies. (For various reasons, Jim and I prefer not to call the xerographic distribution a prior, but that’s just semantics.)
In 2009, I thought that their "xerographic distribution" was exactly the prior probability that we're here or there. But we're told that they had "various reasons" not to interpret the distribution as priors. I have no clue what the reasons could be if they were legitimate. In other words, I am confident that the reasons must be demagogic, silly, and irrational, and this subtle "semantics" is essential for Srednicki to maintain the irrational attitude to these questions as a possibility.

Well, let me tell you what are the "various reasons" why they try to avoid the word "prior" as a description of the xerographic distribution. The reason is that whenever you say "prior", everyone understands that it's just a "first guess" but the prior probabilities are quickly and gradually being updated and refined by Bayesian inference so that they become "posterior probabilities" whose values are almost always different from the prior probabilities. In particular, by the time we learn that a possibility is almost certainly true, its prior probability that could have been very small at the beginning (but it must have been nonzero, otherwise that would have prevented us from learning the truth) has grown to a large one, e.g. one close to 100%.

The reason why they don't like the word "prior" for these probabilities is that they never want to update them! They don't want to allow us (or anybody else) to offer proofs that we are not Boltzmann brains even if these brains may emerge in the future. They want to ban the Bayesian inference – they want to ban rational reasoning. But if they do so, they can't say that the words "equally likely" had a Bayesian interpretation. An inseparable component of the Bayesian reasoning is that the only probabilities we may talk about are prior and posterior probabilities and these probabilities should always been updated whenever we're finding new evidence! If you violate any of these basic rules, you are not a Bayesian. You are not doing any rational reasoning as understood by the Bayesian methodology.

Srednicki writes several paragraphs that claim that the rational reasoning is equally good as the irrational ones and summarizes them by this sentence:
My own personal philosophical belief (and Jim Hartle’s) is that we should not insist upon a uniform xerographic distribution.
Holy crap. Rational reasoning in physics is not about "philosophical beliefs". If one can prove some proposition to be incorrect, you may take pounds of drugs to "philosophically believe it" but your philosophical beliefs are worthless crap, anyway. Science depends on the evidence. When it comes to some questions, the evidence is not available and the questions may remain undecided. But when it comes to very simple questions such as whether we are Boltzmann brains, we have tons of evidence to settle the question and the answer is simply No. If you prefer "philosophical beliefs" over rocksolid evidence, you are not acting as a scientist.

Jacques agreed with me and wrote the following reply to a sentence by Mark:
Srednicki: You can think of it a Bayesian prior that gives the probability that “we” are any particular one of the copies. (For various reasons, Jim and I prefer not to call the xerographic distribution a prior, but that’s just semantics.)

Distler: The whole point of the Bayesian theory is to provide a degree of robustness against badly-chosen priors. You’re not being Bayesian if you don’t avail yourself of Bayes’ Theorem!
Exactly. You're just not a Bayesian if you don't allow your probabilities (confidence in various propositions) to be updated if and when the evidence becomes available. More generally, you're not thinking rationally. You are being dogmatic in the same sense as the enforcement personnel in the Inquisition. This has nothing to do with science.

Jacques repeats the calculation – an example of Bayesian inference – showing that we are not Boltzmann brains. So the conclusion is that this is not a matter of "philosophical beliefs", it's a question we may easily settle.

Srednicki replied again, claiming that he is a Bayesian because he has used the word "Bayesian". ;-) Was Stalin a democrat because he has used the word "democracy"? Srednicki reiterates his claim that the right and wrong answers are equally good:
Jim and I (and Sean!) are using Bayes’ Theorem. Bayes’ Theorem tells us that we should reject (with high confidence) the joint hypothesis of (1) a cosmological model that predicts lots of BBs, and (2) a uniform prior over the set of all identical copies of us (including the BBs). But Bayes’ Theorem does not tell us which part to reject, (1) or (2) (or both).

You are absolutely sure that (2) should be rejected. Sean (and many others) are absolutely sure that (1) should be rejected.

The main point that Jim and I would like to make is that neither of you should be quite so sure, since there is no way to test anything except the combination of (1) and (2). (Except, of course, by trying to find other consequences, unrelated to BBs, of any competing cosmological models.)
Jacques (and I) are absolutely sure that (2) should be rejected because we may present – and Jacques has presented – a full proof that (2) is false. In this proof, it's clear what propositions are used as the input or the empirical evidence and they're taken into account exactly in the right way that the Bayesians call "rational reasoning".

The claim that (1) should be rejected – the claim that we must demand the Boltzmann brains to be absent in a viable cosmological model – is supported by no evidence whatsoever. There isn't any counterpart of Jacques' calculation of the probabilities that would imply such a conclusion. At most, Srednicki has offered the claim that the people saying that (1) should be rejected are well-known and can't be stupid. Except that they are stupid – or at least they are being stupid when they think about this question, so Mark is just adding another false proposition to his previous false propositions.

It's preposterous to suggest that Carroll's idiotic claims and Distler's calculation are "equally good".

At any rate, this exchange is an example of the fact that even in fundamental physics – at least its "cosmologically flavored" subdiscipline – the evidence and rational reasoning is sometimes being replaced by vague claims and additional unjustified, false claims that are only backed by the political power and references to the wrong people's being "well-known". This is not science, Mark.

And that's the memo.


  1. Can we really use observations to say anything about us being (or not being) Boltzmann Brains?

    The BB hypothesis is solipsistic and non-falsifiable. It's like living in the Matrix. BB is compatible with all observations, because one can always say that whatever we observe at any given time is simply how the BB happened to pop into existence.

  2. It's just not true. Boltzmann brain is a particular, completely well-defined scenario making totally well-defined predictions about all phenomena - in particular, everything outside our brain etc. should be thermal noise maximizing the entropy.

    It's easy to see (and takes tiny fractions of a second to see) that it is not true that everything outside our brains is an entropy-maximizing noise.

  3. You still have to assume that you're actually getting empirical data from "outside your brain" and that your experience of gathering data and doing observations etc. is not just a subjective illusion.

    This is what I meant when I mentioned the Matrix - the idea that the subjective sensation of interacting with the outside world is brain-generated. I could just have easily said "dreaming".

  4. No, I don't have to assume that. I may prove that even if all the experiences were a subjective illusion, they would be extremely unlikely to fit into an organized story with an increasing, far-from-maximal entropy.

  5. I kind of feel like this terminology is unfair to a great 19th physicist.

  6. "This and a lot of other things you say about how much worse off people are today than decades ago proves you are an anti-capitalist nutcase who happens to have managed, fortunately, to redirect his irrational and wrong grievances with the capitalist system towards a Government institution."

    I am the one who is arguing against central planning and manipulation by the Federal Reserve system so that puts me on the side of FREE MARKET CAPITALISM. I make no excuses for manipulation of rates like Lubos does.

    Like I said, we seem to be having two one way conversations here. Like you, I am more inclined to Higgs than the charlatans that Lubos seems to favour.

    "I am not going to take you or the Robert Reichs of the world seriously because you are both equally moronic communists ranting on about how people's lives have been made worse than 30 years ago and deny the progress brought by capitalism. Your just totally fucking insane."

    There you go again, lumping me in with the statists even though I have consistently argued against the central planners. The fact that I disagree with you because I do not think that the Average American is in a 'better' position than s/he was in the 1970s does not put me on the same side as Robert Reich. I argue that it is because of statists like Robert Reich and Milton Friedman that most people are much worse off as the economy teeters on the edge.

    What do we think will happen when the Fed is out of options and continues its QE activities? We just saw Lubos' former country just commit as serious error as the Czech central bank intervened in the currency markets and pushed the koruna down to a four year low. This took place as the EU did its own walk the plank routine and cut rates that drove the Euro lower.

    The Fed is a central planning body just like the ECB and other central banks. But you and I know that central planning does not work very well and can see the pattern that must appear sooner or later. The funny thing is that even after it does well meaning people like Lubos will continue to accept the arguments made by the charlatans and ignore the people who got the story right.

    "Way to take what I said out of context and even then totally misunderstand the context. The context was that I was acknowledging I understood what Lubos was saying about why the exact rate itself is less important than that the rate doesn't change. Even then you completely fucking misunderstand because apparently you believe only the Government could maintain a consistent rate. Now who is the anti free market asshole?"

    I do not believe that the government can hold anything constant without creating shortages or surpluses. In fact, I do not believe that government is legitimate because it has to rely on the initiation of force in order to meet its political and economic goals. That makes me a Rothbardian anarcho-capitalists, not a Monetarist, Public Choicer, Objectivist, Left Libertarian, Mutualist, or Keynesian. Sorry if you understand my points my friend but I do not think that this response can be any clearer.

  7. One doesn't have to understand much physics to know Carroll often doesn't have a clue what he is talking about.
    The doomsday argument is obvious nonsense-it's conclusion is in contradiction to it's premises. Basically "if i am typical and the number of future humans can't be large because I should have been born when there were the most humans (with high probability)" Except there is nothing "typical" at all about a human living near the end of human existence, by definition!

  8. Agreed. Boltzmann wrote about these things - fluctuations etc. - because he was the guy who first realized that various thermodynamic laws only hold "with a high probability", not perfectly, and there is always a nonzero probability to realize processes that would be impossible in the classical/thermodynamic limit (this insight got strengthened even more with quantum mechanics).

    On the other hand, Boltzmann realized very well that we are *not* a Boltzmann brain - despite the fact that the prevailing cosmology of his time implies an infinite number of Boltzmann brains over the (supposedly) infinite history of the infinite Universe they believed in the 19th century. The terminology "Boltzmann brain" makes it sound as Boltzmann were an actual believer that this scenario may be relevant to our existence.

  9. kashyap vasavadaNov 7, 2013, 5:39:00 PM

    I think, the whole argument about BB is premature. Science still does not understand how life originated from nonliving chemicals, although, once it originates, theory of evolution describes subsequent evolution pretty well. Once science understands origin of life, all these publications will have to be trashed!!

  10. Exactly agreed. The population growth has been exponential for quite some time, thousands of years, with the doubling time below a century. Because of this growth, it was almost always the case that most of the humans "who have ever lived" were living relatively recently. However, none of the generations that lived was "close to be the last generation". The exponential growth was there already 600 years ago which didn't imply that the 15th century had to be the last one. So there's absolutely no reason why it should be true now, either. The "law" that in the exponential growth, "we" must be near the end (because otherwise we will be made atypical) has been shown invalid. It's shown invalid in pretty much any exponential process that lasts long enough! That's why I mentioned cosmic inflation, too.

  11. Marcel van VelzenNov 7, 2013, 5:41:00 PM

    Dear Lubos,

    The situation is actually far worse than you describe:

    From the paper: "the escape
    from this unacceptable situation may be found in known physics: vacuum
    instability induced by the Higgs field."

    So the Higgs field was created with its
    specific properties because Boddy and Carroll find Boltzmann brains an
    unacceptable situation!

  12. OK, if you know the reasons why they will be trashed, why don't you trash them already now?

  13. LOL, right, this is really Intelligent Design on steroids. Not only the avoidance of Boltzmann Brains is the holiest obligation that the Universe has to fulfill; it has to fulfill this obligation using the first possible strategy that two random people notice (although they are extremely far from being the first ones who actually noticed that the Higgs field has an instability at the current values of the parameters if the Standard Model is right up to high enough energies).

  14. I wonder how this intervention by the Czech central bank differs from the 2011 intervention by Switzerland's central bank to keep the Swiss franc from appreciating past 1.20 per euro. Most Swiss, I gather, are in agreement with this policy. Fundamentals -- employment, GDP, inflation etc. -- are looking good in Switzerland. (I vaguely remember, however, that there was a scandal about trading on insider knowledge. The wife of a highly placed central bank official placed a big bet on currency movement just before the intervention, if my memory is accurate.)

  15. Sturgeon's law snipes "90% of everything is crap." Plot technology (unique knowledge that empirically works) divided by terrestrial population versus time. The "90%" grows with population, not shrinks. No Boltzmann problem here - unless we stop charitably feeding idiots and the One True Church embraces contraception.

  16. Dear Eugene,

    one huge difference is that the 2011 Swiss interventions actually didn't intend and didn't create any discontinuity in the rate. The rate just converged towards 1.20 and stayed there.

    Today, the ČNB introduced a 4-percent discontinuity. I don't know whether you realize how much is 4 percent. That's the interest rates people accumulate in 4 years on a pretty good savings account. It's a huge change. The change says that the value of our money is only determined up to a 4-percent error margin, so to say, because insane events like that may occur on any day. One can't really precision plan.

    Another difference is that the exchange rate of the Swiss frank makes the GDP in Switzerland pretty much equal to that in the other Western European countries so the intervention was just a kind of a peg, not too different from Switzerland's entering the eurozone at the immediately valid exchange rate. On the other hand, the undervalued - and now even more undervalued - rate of the Czech crown makes the income per capita about 4 times lower than in those Western countries. Because of these policies, we're still playing the games of being just like China, a country that relies on exports and manipulates its currencies down, keeping people poor. This is not necessary and it is not a good policy.


  17. Weimar Germany. Removing the dashpot from a spring shock absorber leads to wild oscillations. Putting a small cabal in charge of moment-to-moment currency value is explosive insanity. They will eBay their powers, too.

  18. Sean seems to have Boltzmann Brains on his brain.
    It is funny that Mark S. starts nearly every comment on Distler's blog with "Jim and I believe"---was Jim Hartle standing behind him when he was typing this?
    I have heard Hartle talk, and find it hard to credit that he would agree with the arguments Mark makes on the blog. Distler (and Lubos) are obviously correct. Boltzmann brains are in the same category as purple fairies. Stanislaw Lem had a funny tale that deals with this sort of stuff in "The Cyberiad", called "Dragons of Probability."

  19. Dear Luboš

    the 2011 Swiss interventions actually didn't intend and didn't create any discontinuity in the rate

    I don't think that's accurate. According to the Wikipedia article

    The franc fell 8.8% against the euro, 9.5% against the dollar, and at least 8.2% against all 16 of the most active currencies on the day of the announcement. It was the largest plunge of the franc ever against the euro.

    However, what you write about the importance of Switzerland having a [per-capita] GDP similar to the [principal] Eurozone member states whereas Czechia's is much lower strikes me as persuasive.

    Perhaps the main difference is that Switzerland did not devaluate in order to gain a competitive advantage at the cost of others? After all, most of the Swiss franc's appreciation had not come about due to the currency being sought after to pay for the goods exported by Swiss manufacturers. (In that case the SCB should have left the exchange rate alone.) Rather, the rise in the Swiss franc's value was due to people panicked about the dollar and euro shifting their holdings to the Swiss franc. That would seem to provide sufficient justification to intervene. At least, no other country could claim that the Swiss were doing it to keep their currency artificially low for the benefit of export-dependent manufacturers.

    That, at any rate, is how I try to explain it to myself.

  20. OK, I stay corrected on the Swiss plunge. It's still wrong to manipulate the currencies.

  21. The Feedburner that I have been using -- it stopped working for a while but now I can happily report it's back in working order -- is

  22. it's very clear that the intervention didn't introduce any overall trend
    of the exchange rate in 2011.

    Thank you for the link to the Google Finance page. When I click to show the past five years, I see a steady decline from a high of 1.57 CHF to the euro, accelerating rapidly in mid-2011 to just above 1 CHF to the euro. Clearly something had to be done. Since the intervention, and since the ongoing measures by the SCB, the exchange rate flatlined at 1.20 for a long time and now is creeping up above it (presumably due to market forces -- a good sign).

    the graph will look very different for
    EURCZK where a multi-year appreciation was undone in minutes - the rate
    was stable around 26 CZK per EUR for quite some time.

    I can't find the button to give the chart for CZK and Euro, but I have no doubt that it is as you say. If it had been stable for quite some time recently, all the more reason to leave well enough alone, or as someone (Will Rogers? Calvin Coolidge?) said, "If it ain't broke, don't fix it!" ;)

  23. Right. They could. ;-)

    The "independence" of the central bank has been hyped and promoted and there's something good about it. But only to the extent that the policies are sufficiently determined by the law and it is an expert question what to do - e.g. how to set rates.

    But the power to make non-standard, unpredictable one-time events is something else. It's bad that there's no political control over the people with such immense powers.

  24. You just write EURCZK instead of the other combinations over there!

    Right, if it ain't broke, don't fix it.

    Some people say that the low growth rate in the last two years or so is what should be fixed. But this is a poor justification for an intervention now, exactly when the economy began to pick up, see e.g.

  25. Thanks, I've read the praguemonitor article now, and as you say indicators are pointing up, so why did the central bank act now? It's very puzzling.

    According to this Reuters report,

    The decision is a victory for Governor Miroslav Singer who has argued for months for using the crown as the next tool to ease monetary policy but until Thursday was unable to convince a
    majority on the seven-member board to take action.

    I dunno, ego plays strange tricks on the psyche. Did this guy have tunnel vision from months of intense fighting that he was incapable of realizing that even his (questionable) rationale for intervening had evaporated in the meantime? One would think that a central bank governor is above of such psychological malfunction, but with humans you never know.

    Or was it greed? If we find out later that his wife "unbeknownst to him" bought a million euros just before the intervention, that might be an indication. Sounds crazy? I agree... yet Philipp Hildebrand, the SCB's tremendously well-connected and respected governor, had to resign in early 2012 because his wife did buy a big chunk of dollars right before the intervention, as exposed by an investigative newspaper report.

    However, I still maintain that the SCB's intervention was justifiable and the CCB's move today is not.

  26. Sometimes I think that all these bountiful but largely pointless discussions would be impossible if everyone would have to wait for a paper to be reviewed by PRL for half a year or more...

  27. Got to come back to it.


    In the quantitative easing, the long-term bonds are being repaid i.e. bought back i.e. liquidated and the same amount of money is printed.


    Off to wikipedia and the QE page.

    In late November 2008, the Federal Reserve started buying $600 billion in mortgage-backed securities.[38] By March 2009, it held $1.75 trillion of bank debt, mortgage-backed securities, and Treasury notes, and reached a peak of $2.1 trillion in June 2010.


    So the bit about changing the term structure of treasury debt isn't correct. They have done that, but a huge amount of QE is also inflating the balance sheet.

    Just as notes and coins are debts, in the same way, buying assets by creating money by QE is also a debt.

  28. It's good if they have a clear mandate. ie. Preserve the purchasing power of money. In other words, equating money supply to GDP, or in other words controlling inflation or deflation.

    However, what's gone on is they have been given other mandates. Create jobs, which boils down to what every you have to do to keep the money flowing to the state, and bugger the consequences.

  29. Yep, it would be fun to read what Jim Hartle would say if he turned up in the discussion there too :-D

  30. What ... ?!

    First I did not appreciate it, but now it is starting to make me LOL, seing you posting unrelated to the topic and completely nonsensical stuff with an internal coherence length of zero here and at many other physics blogs :-D

  31. Interesting discussion, the notion that everything is equaly valid or true and just a matter of opinion, seems to be some kind of evil New Age spirit of present times ... :-/, It always drives me up the wall and I find it very insulting when certain dimwits who have no clue about the scientific method claim that correctly evaluating experimental evidenc, mathematical and physics reasoning are equaly good or even less worthy (!) than lazy and pointless philosophical babbling etc ...

    "I am planning another blog post about reincarnation and after life in quantum gravity, by the way. ;-)"

    This would be a gread Santa Claus or Chrismas story, please do it Lumo :-D!

    I did not know that Jacques Distler is actively posting again on his site, I will have to add him to my list of friendly blogs :-)

    MOST of us are not Boltzmann brains, but I could write down the names of some evil agressive subjects about their exact nature I am less sure ... :-P

  32. Who owns the CNB? Is it like the US Fed, with shadowy "shareholders"?

  33. Moving the bonds to cash and increasing the balance sheet is *the same thing* and it is irrelevant for the economy. I have already explained why about 50 times.

  34. I am not aware of shadowy shareholders of either of these central banks. They're independent banks - independent of other government institutions - but they're still parts of the government.

  35. Distler's blog is great, but unfortunately he only updates once in a blue moon. Its ambit is much narrower than TRF's. Basically, anyone is welcome to read, but few articles there will be comprehensible to lay people. And if you're a theoretical physicist, think twice before you comment there. Distler can be very cruel when politely explaining to someone what they should have learned as an undergraduate. He does not suffer fools gladly. (You can see how the king troll on the Hudson tries to imitate his concise, superior style but because he is just a mediocrity himself, he routinely falls flat on his face.)

    By contrast, both our host and Matt Strassler are paragons -- angels, really -- of patience. I marvel at how they tirelessly explain, again and again, the fundamentals of life, ice cream and the universe. They each deserve a medal. Actually, more than that. Yuri Milner should fund a Science Blogging award and these two should be the first prize winners.

  36. So...bitcoin anyone?

  37. These events make you more likely to want to join the Eurozone? Lots of people who have joined the Euro want out.

    Note, when there is such deliberate inflation, people will look to gold to keep stability. 3% inflation per year means that people will be paying twice as much in 24 years.

  38. Dear MikeN, inflation is a meaningless number for all practical purposes. One has to subtract the interest rates - i.e. compute the real interest rates to see whether people with money or gold will be better off in 24 years. You don't get paid any interest on gold. The real interest rates are of order minus 1 percent per year so you need 50 years to get to 1/2. Because a sensible investor has some stocks in the portfolio, and those grow by 5-10% in average, he should still see a real growth of the wealth.

    Chances are that the money is still a better place to store the money.