Saturday, September 4, 2021

cycles around us


Assume the the big bang theory is correct, our universe is one of the big bangs. It is the cycle defines our basic life experience. Is the bubble expanding, contracting or motionless? Scientists think we are in an expanding universe. The space is increasing, which could shape fundamental physics law, such as entropy increases.

Next, what is our position in the bubble. If we are in the center, the materials around us are likely symmetrical, the forces from all directions are homogenous. If we are at the edge, the direction facing the center might not be the same to the other directions. Most likely the angular momentum from the big bang makes the universe rotate around the center. So the direction bias goes in a cycle.

The same thing applies to our position in galaxy, there could be a cycle.

Next, in the solar system, earth rotates around the sun, we get 4 seasons.

Earth rotates, we get day and night.

There are other cycles, sun's black spot, earth's rotating axis tilts, moon's rotate around earth for example, could change the climate, tidal pattern etc. on earth.

Now we come to the human realm.

Imagine our economy is in one of the big bangs. After the previous bubble bursts, what's left starts to form a new bubble. In an expanding economy, opportunity emerges, risk increases. Ample fundings fuel scientific research and technology advancement, business is booming. The energy for next technology big bang is accumulating.

The industries in the economic universe are not the same. The industry directly benefits from the technology breakthrough grows faster than the other. Different technology breakthroughs lights up and fades away wave by wave during history.


An industry itself has cycles. Finance for example, cycles around the interest rate. When policy makers lower the interest rate to stimulate economy, we saw stock market hot, bond market cold. Easy cash/loan creates lots of derivatives. House price increases, business expands. When economy expands too fast, inflation rate raises into dangerous zone, policy makers will increase the interest rate to suck out money supply. Bonds get higher coupon rate, thus attracts capital from riskier stock market, cool it down. In cooling down economy, interest rate raises, cash supply decreases, business contracts, safer investments such as TIPs, bills, notes, bonds, gold, CDs  and savings are favorable.

Due to these cycles, the world we live in is always changing and dramatic.


 


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