Sunday, August 12, 2018

If The FT's Izabella Kaminska Doesn't Start Posting To Alphaville....

We will be forced to take drastic measures.
I'm thinking of reposting older pieces. e.g. explainer journalism. As a taste, here's a tutorial on flows and stocks:

The Parable Of Water
FT Alphaville:

Presenting an economic journey in felt, looking at whether the system’s ails have more to do with an abundance of goods than a shortage of credit because of the system’s technological advances and efficiencies. Move ahead to slide 20 for a snapshot of where we *think* we are today.
  • For water, read goods.
  • For receptacles, read money.
  • For receptacle production, read bonds.
  • For receptacle loans, read credit.
  • For ultimate receptacle authority, read government/central bank.
1) The water source.

Whilst the water flows, those who live nearest or those who have exclusive access to the water source are richest.

2) The water source stops.

When the water stops flowing all are equally unhappy. No one has an advantage.

3) Stores of water – receptacles – are invented.

While the water flows, those closest or with exclusive access are still richest.

4) Receptacles have value.

When the water stops flowing — in a scarcity environment — the man with the receptacles becomes richest and most powerful. He obtains his power and riches from having everything at a time when others have nothing.

5) Receptacles, receptacles, receptacles…

Those who live close to the water source, copy him and make their own receptacles. While the water flows, everyone near the source is equally happy.

6) My kingdom for a receptacle…

When the water stops, those with receptacles have an advantage over those who don’t. Those with the most receptacles (including our original receptacle man) are the richest and most powerful.

7) The receptacle business

When everyone’s receptacles run dry, only the man with the most receptacles is left in a position of power through his ownership of water. While the water has true value, the receptacles also develop value in their own right. Those with empty receptacles believe they are better off than those with no receptacles, since they can store water if and when it comes back. Those with surplus receptacles or the ability to create receptacles, meanwhile, induce demand for their own receptacles....
...MUCH MORE (you won't believe what happens next, #12 will shock you!)

In the above she joins a long line of modeler's including William Phillips (he of the curve) and Irving Fisher:

"The computer model that once explained the British economy (and the new one that explains the world)"
Liquidity: Irving Fisher's Hydraulic Computer
Like Phillips, Irving Fisher Was a Plumber: Hydraulic Models of the Economy