I Hate Math But the £ is Getting Pounded

Saturday, December 19, 2009 , , , , , 1 Comments




It's not just a math aversion, it's that I can't stand the stuff. Like moonshine to Bill W. But I don't mind it so much when someone else makes sense of it.

Skeptical CPA gives us a lesson in currency devaluation that even the least mathletic among us can easily understand. (It's almost too obvious):

The US double eagle coin had .9675 ounces of gold, thus the dollar was .048375 ounces of gold. The British sovereign coin had .2354 ounces, the pound's dollar value. .2354 / .048375 = $4.866. The current dollar price of pounds is $1.6487. The pound fell 66.12% against the dollar since 1792. On 5 December 2009 the pound "price" price of gold was 704.45, or .00142 ounces per pound, therefore today's gold pound is .00603 1792's pound, down (1 - .00603) or 99.4%. That's a bear market. Pounds, dollars, gold, it all "arbitrages" out.

I don't necessarily believe you can net everything indefinitely, mostly because I'm not a CPA and don't really think like an accountant (sorry. WTF did you think Jr was, anyway?). There's a 0 at the end of all of this because one way or another it all will have to balance out, regardless of the wands FASB pulls out to wave at it.

In kind of related news, I might not like the stuff but it pays my bills so I do tend to nerd out on math-related t-shirts. Whatever. You don't get it.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.

1 comments:

Junior:

Any time you see an economist or CPA exhibit a "proof" of something using math beyond fifth grade algebra, be suspicious. There is no end of bad economics "justified" through "fancy math" like say, partial differential equations. I took enough math in college to recognize when I'm be fed nonsense.

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