Sunday, May 3, 2015

Return Of Investment in relationship with the size of the saving, and eigenstates/chaotic attractors Links:

The consumption share from the GDP will fall if the Return On Investment for small savers will be significantly lower than for big savers

Past value of the difference between small saver and big saver ROI can be calculated easily.

Best example the consumption share from the GDP decreased dramatically between 2000-2015 in China.
For a long-time Mr Pettis arguing about that the lower than inflation interest rate was a hidden channel to transfer money from the consumers to  the investors.

If someone try to correlate the average wealth of any individual in China with the average yearly interest then I'm 85% sure it will be highly correlated.

Obviously if we want to calculate it for the future then it is a different kind of matter.

At the moment we are in an eigenstate, chaotic attractor or whatever you wean to call it.

The process periodicity falling back to the eigenstate, so to calculate the ROI easy, it simply following a normal distribution in the given eigenstate.

However as soon we will move out from this eigenstate it will change dramatically
1917 Great October Revolution - need any expőlanation? Prior of it the Czar was a low risk borrower, after it the ROI became 0 :)
-Collapse of the EU
-Change in the interest rate policy in China
-Policy change toward stronger union and worker's  rights in Japan or Germany
and so on.

All of them or certain partial combination of them will bring the system toward a new eigenstate.


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