The Gibbs-phenomenon in economy from jwr47's diary Het einde van de uro (in Dutch)

The Gibbs-phenomenon1

In Fourier-analysis the Gibbs phenomenon is understood as the oscillation pattern at the flanks ofwaveform patterns. I remember to have studied this topic months ago in Hyperinflation starts withan undershoot (The Gibbs phenomenon in economics), in which the Gibbs-phenomenon may beidentified at the start of Argentina's hyperinflation.

Today we may observe a similar dip in the gold-price before it may start rising.

In the Gold/Silver Report Ron Rosen describes a similar wave pattern as the Elliott phenomenon,which is said to generate triangular, declining patterns, which are not really comparable to theGibbs-phenomenon, which also identifies growing wave patterns at the beginning or trailing flanksof signals.

The oscillations also may be identified in controlling a bicycle curve. Bicycle curves are to beconsidered as 3-phased sequences. The second phase is a counter-control phase which is identifiedas a right curve if we aim to wheel to the left (and vice versa of course..). Physically we cannotwheel a 2-wheel bicycle into a curve without a counter-control phase2.

These gradually rising amplitudes of counter-control phases upwards as well as downwards arepreparing the system for the ultimate mayor flank of the movement's waveform. This is how Gibbsdefined his pattern and of course each crisis pattern will also follow the Gibbs-phenomenon.

In fact the pattern is a standard physical phenomenon, which may be derived from bandwidthanalysis. The narrower the system's bandwidth the larger the impulse amplitudes of the leading andtrailing Gibbs-phenomenons will develop. These headers and trailers prepare for the initiating andtrailing sinusoidal impulse waves.

Precious metalsThere is a remarkable difference between precious metals, which are restricted in their availabilityand the common ores like copper, iron, etc. If the demand for precious metals rises the price willalso follow the upward trend because the reserves are to be considered as limited.

In contrast a growing demand may make common ores like copper, iron, etc cheaper for theirunlimited availability and the cheaper methods of large scale processing and transports. Thisdifference between precious metals and common ores seems to be ignored in economics.

Additionally the paper versions of metals complicate the evaluation of metal markets3. Somespecialists also include ETF and other paper versions in the metal market categories. The large scaleproduction of paper gold and silver of course is just as easy and cheap as digging for cheap ores. Infact paper versions may be produced for free. In today's markets with a paper/metallic-ratio of 99%the metal's price however merely represents 1% of the metallic component's price. This effecttransforms precious metals to cheap common ores.

1 Jul 23 Gold/Silver Report Ron Rosen 2 Het nemen van een bocht is een prachtig fysisch experiment3 Misunderstanding Gold Demand

Right now however the price for the physical metals deviates from the paper versions of the metals.Extra premiums have to be paid for the metallic version of precious metals, which cannot beconsidered as common ores anymore.

The deviating premiums signal the preciosity of the physical metals and the cheapness of paperforms. This may be observed in the price-patterns.

The deviating premiums also explains why the gold-price of paper gold dips to the bottom at thetime the US-mint sells a maximal number of golden Eagles. Simultaneously the silver Eagle is soldout although the silver price dips to the lowest levels4. Of course the coins are precious metals andthe paper price is just a cheap piece of paper (name certificate) without any intrinsic form of value.

As soon as investors start understanding the bipolarity in the precious metals' definition they willsell their ETF's and buy the Eagles at the additional price of a small premium. The physical coinsare to be considered at least 100-fold more valuable than the paper ounce of the metal.

The energy consumption of the USFrom 2007 onward the energy consumption of the US has been decreasing by 3%. Industry hasbeen eliminated and working people have been dismissed. In the US and in the EU as well pension-funds have been pumped up at the staggering rate by simply printing free money5.

The profitability of pension funds largely depends on energy consumption rates. The shale oil- andgas-industry cannot be included in profitability plans because the mayor sources (the Bakken- andEagle Oil fields) already have reached their peak levels6.

After the depletion of oil- and gas-energy sources the US will not be able to keep the pension fundsupright at the required levels. Invested capital in the shale sector will have to be considered as lost.The empire is a dead man walking badly kicking the rest of the world with a wooden leg...

4 US Mint Sells Most Physical Gold In Two Years On Same Day Gold Price Hits Five Year Low5 Jul 22 Collapse Of The U.S. Retirement Market & Epic Rise In The Price Of Gold SRSrocco 6 According to the EIAs July Productivity Report, U.S. shale oil production peaked in March this year:

The Gibbs-phenomenon1Precious metalsThe energy consumption of the US