The Orals

Imagine being thrown into a room with five of the smartest people in the county. They grill you for a solid 1-2 hours on intricately technical matters. You must, on the spot, answer their questions which you have never seen before.

This ancient right of passage tests your knowledge and ability to think on the spot. If things go poorly, your childhood dream of becoming a scientist may destroyed.

Not a nightmare, not an audition to 'American Idol Scientist', this is your Oral Examination.

If we shadows have offended

The revised economic stimulus package is set to fly through the congress and senate for approval. It is a complicated measure, but there is at least one aspect of this and the treasury bill which appeals to me.

The US government is poised to print money, and lots of it (up to ~$350 BILLION if I'm reading things correctly). Normally, printing money can result in inflation, hyperinflation and possibly a crash in currency. So your $1000 in the bank could be worth about as much as 1,000 pesos.

However, from what I can tell we are already experiencing deflation, where money increases in value as time goes on. You probably noticed the great holiday sales, or substantially lower gas prices. Your money is worth more than it used to be.

Despite the initial advantages of deflation, it can also lead to serious consequences. The Great Depression experienced about 10% deflation per year. Why is it bad? There are two main reasons. First, if people know that prices for goods are going down in the future, they will be inclined to wait to purchase goods. So manufacturers will have to reduce the price of their products in order to sell them, not break even and possibly go out of business. This will result in even less money in the system. Second, most investments will not pay-off during times of extreme deflation. For an investment to 'break even', it would need to grow at a rate faster than deflation. If not, it is better to put your money in the bank and let it sit there. This also results in less money in the system. And when there is less of something, it means that it will be worth more*.

* with the exception of new songs or re-arrangements of songs or dances to the re-arrangements of songs by ABBA.