Geological Hazards n+1: Caldera eruptions

Sorry about the title, bandwidth is too slow to go back and check what number I'm on.

Spent a few days at Axim, on a hotel on a hill where several years ago another geologist and I were digging a hole through a pyroclastic deposit full of doubly terminated quartz. The hotel was just being built at the time--only a few of the huts were in place. The workers pointed out a man dressed in rags just dismounting from a hammock slung between two coconut trees. "There's Rastaman," they said. A certain distinctive odor commonly associated with Jamaica (and Canada for that matter) wafted up from the shore. I thought the man a vagrant, but it turned out that he was the hotel owner.

Our view as we toiled in the sun.

We panned through the pyroclastics looking for a hint of diamonds. Diamonds in Ghana can be associated with pyroclastic flows, even though this model is somewhat at odds with the more typical kimberlite model.

Anyway, this association with volcanic flows is a good starting place for today's topic.

At the beginning of last year I gave a brief geological lesson to the grade four classes at my daughter's school. The first topic I decided to discuss was the age of the Earth. So I asked the class how old they thought the Earth was.

Most of them knew it was very old, but had no idea of the number. But to these kids, even ten thousand years seemed tremendously old. To be fair, most adults can't really conceive the concept of a billion years except as a one followed by nine zeroes.

One girl boldly stated, "According to my calculations, the Earth is exactly 699,998 years old." Well, I thought that was a fascinating answer, both for its length and its precision. Naturally I was curious as to the nature of her calculations.

She said that she knew the Earth was destroyed every 700 thousand years, and since it was going to end in two years (2012), it was 699,998 years old.

Well, that wasn't as involved a calculation as I had hoped, but that business of the Earth being destroyed every 700 thousand years was very interesting. Very interesting indeed.

Seven hundred thousand years is roughly the recurrence interval of supereruptions of the Yellowstone Caldera.

A caldera is a massive volcano, larger than anything seen in our lifetimes. Beneath the suface is a magma chamber that is so large that after it empties itself, the ground over the chamber collapses into it, leaving an enormous crater. Krakatau and Tambora (1815) are recent examples of calderas.

Caldera eruptions are so large they have the potential to destroy civilizations. The eruption at Santorini at about 1628 BCE devastated Minoan civilization. It also left a very picturesque crater which I hope to visit before the next one.

The Tambora eruption was even larger than that at Santorini, and had a devastating effect on local agriculture. It also affected global climate. Crops failed throughout the northern hemsiphere, leading to the worst famine in the 19th century.

While Santorini, Krakatau, and Tambora were all impressive, Yellowstone is on a completely different scale. The supereruptions spewed out about ten times as much magma as the Tambora eruption.

 Yellowstone is a particularly big one, which erupts leaving a crater tens of km in diameter, spewing out thousands of cubic kilometers of debris.

USGS map of Yellowstone caldera craters (click here to enlarge).

Ash from these supereruptions has covered up to half of North America to a depth of a metre. Imagine an event of that magnitude happening now. It would be a civilization-ending event.

Not to alarm you, but there has been a lot of recent activity, suggesting that the magma chamber is once again being filled. But one should remember that the majority of eruptions from the Yellowstone hotspot are smaller than the supereruptions, so the recent activity may be a precursor for an eruption but not necessarily a supereruption.

OWS should become PWS

It was interesting seeing the Occupy Wall Street movement trying to occupy the stock exchange.

It would have been a lot more interesting if it had happened a couple of decades ago, in the days of floor trading. Imagine the last part of "Trading Places" with protestors on the floor screaming out fake orders.

What they should do now if they want to shut down the market is borrow as much money as they can (from a major bank), stick it in a stock account (at the same bank), and short everything. When the margin call comes, declare bankruptcy. A few million people doing that would have a much bigger effect than occupying the place.

Government by fiat

I see Italy has a new government (maybe). The news is a little sketchy here--the newscasters seem very happy to tell us that this will be a government of technocrats (when did they stop being bureaucrats?)

It doesn't seem very democratic. Is this a glimpse of the future? A string of financial crises precipitated by the banks which in turn are used to justify placing the bankers in charge?

A day in Ghana

Internet is very slow and intermittent, so posting will be unpredictable until sometime next month.

A day in Ghana

The heat sets in early. Kwame informed me that the shipment was ready for pickup, so we waited until the worst of the morning traffic was finished and began the journey to Tema. Kwame drove, and Kabi came along to help load the truck. There were a few administrative details to take care of--primarily the licence sticker on the truck had expired and had to be renewed. We drove the broken road up to Barrier, onto Winneba Road (a six-lane highway), headed west one junction to SCC and drove along a decent road to the licencing office. We were only mistaken for a trotro once, near the police barricade in SCC.

The licencing office was a series of simple buildings around a rough parking lot. After a few minutes we were on our way. Back on the Winneba Road, east in to Accra.

The main chokepoint is Malam Junction, where Winneba Road, which continues on toward the centre of the road, meets Kwame Nkrumah expressway, which leads off towards the airport. When the road was first built, it skirted the outside of the city, but since then the city has grown across the roadway and exploded into the virgin ground beyond. So now the expressway is wholly inadequate for the weight of traffic that tries to pass each day. Furthermore, as you approach the junction, Winneba Road (itself three lanes wide plus a dedicated lane for trotros separated by a concrete barrier) narrows to two lanes.

Making matters worse is the massive construction project whereby the junction will be made into an elevated interchange. Once completed this will greatly improve the flow of traffic through the junction (although without improving the rest of the road network, the jams will simply move elsewhere).

Improbably, we passed smoothly through the junction, being stopped only for a few moments by police to allow work vehicles to cross the road. We stopped for gas and discovered the truck was leaking oil. Next door was a fitting shop, but the mechanic advised us he would have to wait some hours for the engine to cool enough to open it up. So Kabi and I caught the trotro back to Barrier ("Kasoa! Kasoa direct!") and from there a shared cab back to the compound. The trotro cost 90 p (about 55c) and the taxi another 85 p for the last part of the trip. And with that, the day was done.

Ghana and Cote d'Ivoire and other marine boundary disputes

There's nothing like the discovery of a new marine resource to bring a marine boundary dispute to a head.

The recent discovery of oil off the coast of Ghana has naturally lead to a boundary dispute with their neighbour, Cote d'Ivoire. The confusing thing was that the dispute centred around not the discoveries that were closest to the official border--it seemed that Cote d'Ivoire was claiming jurisdiction over a portion of the seafloor well within Ghanaian maritime space, and clearly directly offshore from Ghana. The details are sketchy, especially here in Ghana where internet connectivity is painfully slow, but supposedly the two governments are to meet early in the New Year.

Maritime border issues tend not to be as clear as land disputes.

Oil has been the cause of disputes in the Aegean Sea between Turkey and Greece, so this is by no means an unusual development.

From memory, I can recall a significant dispute between Canada and the United States over Georges Bank, which was a significant scallop resource at the time. The Canadian position was that the border would be equally distant from both countries, which would give Canada the seaward portion of Georges Bank (which had the best scallop fisheries). The American position was that Georges Bank was connected to the US continental shelf, and separated from the Canadian continental shelf by a deep trough, and so should be entirely American.

Now this discussion is entirely from memory, so any inaccuracies are mine. There were precedents for both positions. But when the case came up for arbitration at the International Court of Justice, the US presented a proposal in which the maritime boundary was extended seaward in a straight line from the last segment of the land boundary. The Canadian proposal was as described above. The Americans presented a map showing only the continental US, and the position of their proposed boundary. The Canadians projected the  American's proposed boundary onto a world map, revealing that the proposed boundary cut through Nova Scotia. Since the case was up for arbitration, the court had no choice but to accept the Canadian boundary, which is how we ended up with the good part of Georges Bank. At least this is how the story was related to me.

Inference of dynamics for complex systems: Examples, part 2

A few more examples, as I have been under the weather and am also in last minutes of preparing to return to Ghana.

This chart, composed from monthly closing prices, covers the last fifteen years of the gold-silver ratio. As feared, the gold-silver ratio has reverted to its long-term (~10 year) area of stability, so regrettably we can only characterize the past year's action in silver as an excursion.

Once again, from The recent drop in the price of copper shows up well here at the right of the graph. In contrast to the first figure, this plot suggests that the fun with silver isn't over yet, and that silver is still doing great things in phase space. We may finally be seeing a long-term change in the relationship between silver and other commodities. We will have to wait and see how it unfolds over the next year or so.

Inference of dynamics for complex systems: Examples, part 1

This article continues from the theoretical discussions here, here, and here.

Today we begin looking at some reconstructed phase space portraits (in two dimensions). These are all figures that have been shown here.

All three of today's examples show multistable behaviour. As discussed last time, the implication of multistability is that there are two (or more) equilibrium states in the system, as opposed to just one (the most common assumption).

Stability arises from negative feedback. The instability results from positive feedback. Complex adaptive systems with many participants commonly exhibit both and are thus prone to multistability.

The Case-Shiller index is an inflation-adjusted measure of house prices (for houses of constant quality) in the United States. The reconstructed phase space (above) shows two areas of Lyapunov stability.

The tick marks on the trajectory mark the states at one-year intervals. As the lag is four years, the first point on the graph is the plot of the 1890 value against the 1894 value. The point is labelled as representing the state in 1894--consequently the 1894 state is the first one that can be plotted despite available observations going back to 1890.

The larger of the two areas of stability is occupied over two long stretches totalling nearly 70 years. The smaller of the two areas is occupied for 30 years. Thus of the 116 states (at one-year intervals), 100 of them occur in one of these two areas of stability. There are two short transitions, in about 1915, where inflation-adjusted housing prices suddenly fell, and again at about 1945, when they rose.

The principal era of instability began in the year 2000, whereupon the system embarked on an impressive excursion through phase space. Had this excursion wound up in another area of stability (this may yet be the hope of Greenspan, Bernanke, et al.) we would not be discussing a housing bubble now, but rather a new paradigm of high house prices. Unfortunately, there is no evidence of any stability--and for topological reasons, it is impossible for the current position in phase space to be an area of stability.

If housing prices were to remain at today's levels (adjusted for inflation), the trajectory of the curve would evolve directly towards a point just to the NE of the tip of the large area of stability--at about (130, 130). It would arrive there in four years.

If prices continue to fall, then the trajectory may fall into either the larger area of stability, or perhaps even the smaller one. Either outcome is more likely than developing a new area of stability at prices equal to or higher than today's prices. (FYI this does not constitute real-estate investment advice).

As for the drop in housing prices after 1915--there are a few possible explanations for that, but the easy one might be the introduction of income tax (about the same time as the Federal Reserve), which would have reduced the money most people had available for such a purpose. Our normal expectation when less money is available for discretionary purchases is that prices will fall. There followed a long period where for various reasons there just wasn't much money--the Depression, and WWII.

Interestingly, one reason there wasn't a lot of money available for buying houses despite scads of it being printed and distributed during WWII was the sale of War Bonds, which helped to draw excess money out of the economy and so prevent inflation. Curtailing this program at the end of WWII allowed inflation of house prices after 1945.

Two areas of stability over the past ten years--one of low unemployment, and more recently, a stable area of high unemployment.

The plot of unemployment vs interest rate also shows two distinct areas of stability in phase space. The existence of (at least) two areas of stability points to (at least) two equilibria in the system of unemployment and interest rates. This is at odds with the assumption of single equilibrium in the system which has informed the Central Bank's policy of lowering interest rates in order to stimulate employment.

A major problem with the relationship between interest rates and unemployment--like economic theory in general, this relationship is simply asserted. A great amount of effort has gone into justifying these assertions--and to be fair, the assertion doesn't seem unreasonable. However economic theory seems to assume that the preferences of the various participants in the system will never change in a way that has not been foreseen by an economist.

For instance, suppose that interest rates are high, around 10%. At such high rates, you had better be borrowing money for some productive purpose or the interest will kill you. Such high rates will make it difficult for a business founded on debt to succeed as interest on the entire debt has to be paid out of the profits. It is easy to see here that any marginal decline in interest rates will increase the likelihood of success of any business. More successful businesses mean more jobs. So lower those rates!

But economists don't consider that if interest rates fall below some level, some participants will see that is easier to try to make a living on speculation rather than productive industry. If real interest rates fall to zero, and you have an unlimited ability to borrow, then why not speculate on, say, the stock market. You just keep borrowing and gambling until you win big, and as interest rates are so low you can easily carry the debt until you win. It's a lot easier than building a factory to make refrigerators. The lower the interest rate falls, the greater the impetus to speculate rather than produce, as the costs of carrying the debt are minimal.

In this scenario, lowering interest rates no longer creates employment, as it simply encourages more speculation. No doubt, there will be a few hardy fools out there trying to start a business, but they are a distinct minority.

The empirical evidence suggests the policy of lowering interest rates to stimulate employment has failed. Unfortunately, because our observations are at odds with classical economic theory, it is unlikely we will see any change in Central Bank policy.

I think the only option is higher interest rates, but this will only be possible after the debt that is currently choking the system is somehow purged.

Canadian Mint launches new gold "ETR"

This was actually announced on Friday but only hit the papers today. The Royal Canadian Mint is proposing to sell a fraudulent product they call an "Exchange Traded Receipt" (ETR), each one of which represents a fixed amount of gold. The initial proposed price is $20 per unit, and the amount of gold represented by each receipt will be determined by the gold price on the Closing Date (not stated if this is the closing price, maximum price, London PM fix?).

The objective is to sell $250 million worth of units, through the usual culprits. The Closing Date is expected to be in late November.

You should note that this is not a good method for holding gold in the long term, as there is a management fee of 35 basis points per year, which is deducted daily from the gold represented by each receipt. So it's a little like buying a bag of gold with a very small hole--each day, a little will leak out.

According to the Mint's announcement, there will be a procedure for taking delivery of the gold represented by each certificate. No word yet on how onerous or time-consuming this procedure will be.

And if by chance the gold represented by your receipt goes missing at the Mint for whatever reason, there is this:

ETR holders will have no recourse to the Mint or the Government of Canada for any loss on their investment.

Of course if you never try to take delivery, you never have to find out if there is any gold backing this instrument.

Congrats to the Toronto Star for spicing up the otherwise bland coverage of this momentous achievement with the following quote from Dr. Moshe Milevsky, a professor at the Schulich School of Business:

“What I worry about is if people somehow think the government is somehow telling them gold is a good investment,” said Milevsky. 

 Oh no, we'd never want people to think that!