The Bi-Polarization Effect

It all started when as a kid I started learning about the water cycle in geography. Water cycle happens because energy from the sun gets captured in the water and turn it into water vapour which eventually gets cooled and comes lower. The water then comes down the rivers in to the sea and causes minerals and soil at higher locations to come to the level to the sea. Matter has ended up in a vicious cycle to come to an equilibrium. The connection was so obvious. Every system works on the model of the water cycle. Or the water cycle works in the same principle as any other system. Every system in the universe has the same underlying principle.

Let us now define a few terms.

System: Any structure or entity which can or has the capability to exchange matter, energy, information or any other type of existence within the space-time fabric.

Dynamic System: Any system where an exchange is happening due to some reason

Source: The origin of the transfer or exchange

Sink: The destination of the transfer or exchange

To give you an example assume a ball which is on a hill - it has potential energy due to gravitational force. If you let it go it come down with an increase in Kinetic Energy. The system is dynamic because the ball has moved physically down the hill. Here the Source becomes the potential energy. The Sink is the Kinetic energy.

Now lets take it one step forward. The Kinetic energy now acts as the source. The sink would be temperature of the ball which would increase due to the friction, the wear and tear of the ball, the sound that gets generated. All these acts as sinks in their subsequent dynamic systems. Eventually the size of the systems breaks down. The sound gets dissipated in the air. The heat is lost into the atmosphere.

Now lets get to our theory.

Bi-polarization Effect: Any "dynamic system" has a natural tendency to form polar entities/systems which act as Sources and Sinks. The Source and Sink exchange matter or energy or information or any other possible entity which can brink the Source and the Sink back to equilibrium.

At the time when I initially came up with the idea of the Bi polarization effect, I wasn't aware of the rules of thermodynamics. To put it simply, Bi-polarization effect is an extension of the second law of thermodynamics but which is applicable to not to to the material world but can also explain other metaphysical concepts. 2nd Law of Thermodynamics states that the entropy in the world is always increasing. To put it in more simple words: lets say you have a beautiful sculpture and you really love it. But for some god forsaken reason the sculpture slips from your hand and breaks in to a 100 pieces. Now the process of putting back the sculpture together would lead to the over all entropy (or disorder) increasing more than it was before. So basically what ever creation we do, it is leading to more disorder in the entire scheme of things. Fortunately, the universe is large enough to not make us feel these increases in entropy. But had you been present at the time of the birth of the universe or the creation of the space time, all creation has been possible because of an increase in entropy (or disorder). So life and everything else in the universe might actually be an anomaly or an error in God's programming which he just couldn't control and has gone haywire.

The Bi-polarization effect even works in even non material concepts. The financial systems work in way where the market psyche acts as the source and tries to fuel economic bubbles. Some of these systems may not even have any real impact but can provide to perplexing explanations to social behavior.

Because the Bi-polarization effect works on almost every system in the universe, I tried to ponder on some of the unexplained phenomena in the world. Something basic which we have still not figured out. Some thing like Gravity.

Unfortunately, its one force which we experience all the time, yet, in spite of all the geniuses putting their heads together, its still not explained. or at least we are looking in the right direction.

Lets now get into a thought experiment. Lets imagine an artificial world (somewhere in space) where we have placed small intelligent bots on one pole of a giant magnet. Lets assume the robots can't see beyond their own world. The giant magnet would create a magnetic field which would make the bots stick to their world. Although the robots are intelligent and capable of problem solving, would they ever be able to make out what force was making them stick to their world. Would it be possible for them to figure it out that they live on magnetic pole which has another end. Now lets assume that their artificial world is moved to a planet and as we approach the planet, the magnet is de-magnetized gradually so that the bots can never make out that the force that was putting them together had ever changed its nature. Would that ever change their perception of reality. I could only wonder.

The basis of the above thought experiment is to bring forth the possibility that the observable universe might just be another pole of a magnet. The other pole being invisible (at least at the moment).

Basis the above assumptions, we can conjecture (without trying to discredit existing theories of existence) that there is an invisible and untraceable field running through our universe which is giving all matter its matter like properties. Its even possible that we just a dent in the middle of a giant magnet and the invisible fields were there all the time. Just that space and time got created in middle. Could this also mean that we have another pole where gravity works outwards. Could it mean that the entropy there is almost zero. Could it be possible that there could be an alternate universe where the same rules of physics don't apply. Could there be "White Holes" from where all matter escapes at the speed of light? 

Only time can tell. 

Why India Inc is optimistic and why they are wrong

Disclaimer: Only pun intended

Before I had started working on the Bi-polarization theory, I always found it difficult to explain the patterns that I experienced in daily life. Why would we continue to sway between our moods of hope and despair? Why do markets fall and rise? Why do some people always make money and some always lose? 

What happened yesterday proved to be a classic example of the bi polar effect. The ex RBI governor Dr. Subbarao made way for the Raghuram Rajan who also happens to have immense international experience. There are multiple conspiracy theories that run in our circles regarding the entire change but I would keep that for another day. The entire shift was such a big media event, it surprised me to see how the people had become so obsessed with the personality rather than the actions and what it really meant in the long run, they forget basic mathematics.

Unfortunately this is the basic principle of bi-polarization. People tend to attribute bad times to the person who seems most associated with it, even if it was never his/her fault to begin with. For all you know, all the good things that person might wrongly get attributed to his/her substitute which brings us to the core reason behind the existence of the bi polarization. Bi-polarization exists because we don't want our brains to work and we are just too lazy to think and find solutions to problems. We just want some one else to guide us out of a crisis. Even if the advice/guidance turns out insignificant, it still gets a better audience than what the original guy would have got even if he made sense.

RBI decided to offer a window to the banks to swap FCNR (B) dollar funds, mobilized for a minimum tenor of three years and over at a fixed rate of 3.5 per cent per annum for the tenor of the deposit. Another measure included swapping dollar funding at 100 bp below the market  levels. Although the problem here gets deferred temporarily, thereby reducing the panic in the market, this has hardly solved the problem. The money that comes in now has to be returned back so in the whole scheme of things, there are no extra dollars in the system. The most important question- who funds the loss here. Does it mean we are throwing away money to the foreigners just so that the rot in the system gets more time to survive?

Probably Dr. Subbarao understood the fundamental problem here, that you can't clean a system without purging it out. You need to clean it inside out. 

                                                 phew- can't believe I pulled it through!

Why the media and everyone is wrong about Moilly!!

The problem with economists is that they are extremely theoretical and extremely distant from their real emotions. While I was just making up my mind about getting Accord for refueling, the news channel started flashing the news of a new weird proposal by the government- A time limit on the working hours of petrol stations!!
Well how weird could that get. How could any one in his sane mind talk like this. Its preposterous, outrageous, without any semblance of sanity and lacking basic common sense. 
That's exactly how I thought about it instinctively. Hell I would have continued to think that way had I been a little younger and not discovered the "Bi-polarization Theory".

For starters, this proposal may not even have been Moilly's original idea. Even if it would have been, it may have come through one of the many brainstorming sessions that he would have been sitting through. It may have well been one of the few ideas that might have survived in those Cabinet meetings. To be extremely critical about an idea without really understanding its origins and reasoning is like trying to judge a book by its cover. Most of us don't get to choose the circumstances we want to be in.

The more smarter economists and the media would argue that it could lead to hoarding, longer queues in petrol stations and more inefficiencies in the system. Moreover consumption would remain the same. The problem with the entire situation is that Moilly has hit the nail on its head. He has unassumingly described the problem in a very simple way. Its the oil. Oil which is our single largest import is making us poorer day by day. Somehow the more effluential and influential class don't want to realize and accept the fact that we are consuming more than we can produce. It the price of luxury.

Had it been another day when Nymex was trading at 220 USD per barrel and INR was trading at 85, the step that Moilly suggested would probably make much more sense. Unfortunately that step comes after many other steps would fail and Moilly couldn't have timed it better. He has indirectly tricked the media and the public to assume such a situation as a possibility and thereby making them outrageously ridiculous and hence giving the market a new bottom which is undesirable. Markets need to be regularly sensitized of these levels because our environments are constantly changing. Thus market tries to re-balance and correct itself to more sustainable model and thereby attaining equilibrium. 

Moilly has clearly been misunderstood. The poor guy would now be hounded for his seemingly harmless comment which if looked at logically would possibly lead to a real reduction in consumption. Think about it. If you control the time for the petrol stations working, it is definitely going to reduce consumption. The US did it during the Oil price shock- they actually rationed their petrol. If India is in a crisis, its equally everyone's responsibility to contribute and reduce consumption and save some for tomorrow. 

Ultimately any economist would agree that consuming less today keeps more wealth for tomorrow.

Poor Moilly has been asked to mix his words now. Tough luck Moilly!!

                                                                                                 I hate my job :(