The Financial Riddler -- 6-22-23

Surprising Facts about the global, our national, and your personal economies

1. What’s the current annual inflation rate in Argentina?

   a. 3 percent

   b. 11 percent

   c. 29 percent

   d. 61 percent

   e. 100 percent

   f. 230 percent

And the answer is …

The answer is 100 percent. That’s actually moderate for Argentina. In March 1990, Argentine inflation was 20262 percent per year. In the postwar, Argentina’s annual inflation rate has averaged close to 200 percent.

2. How much higher is Social Security’s long-term red ink than its 75-year red ink on which our politicians focus?

   a. 7 percent higher

   b. 20 percent higher

   c. 98 percent higher

   d. two times higher

   e. three times higher

The answer is three times higher. The system’s true unfunded liability is $65.9 trillion. It’s 75-year horizon unfunded liability is $22.4 trillion. The 75-year unfunded liability assumes the world will end in precisely 75 years and that the system won’t owe any benefits thereafter. This is first-order stupid. Based on this logic, one can argue that we should focus on the system’s 1-year unfunded liability. As John Mitchell famously said, “Figures lie and liars figure.” Mitchell, Nixon’s Attorney General, was an expert in lying. He went to jail for lying to Congress during Watergate.

3. Can Quantum Computers Outperform Super Computers?

   a. Yes

   b. No

And the answer is …

The answer is yes at least for one extremely computationally intense calculation. A new study by IBM and scientists at Berkeley and the Lawrence Berkeley National Labor, published in Nature, reports this feat. Not only was the quantum computer faster to the answer, as the researchers up’d the complexity of the calculation, the quantum computer continued to produce the right answer. The super computer did not. For those worried about AI taking control of our world and, indeed, extinguishing our world because we humans are getting in the way, this is not actually good news. In this regard, let me relate a story that was recently featured on, I believe, CNN. An AI-driven drone was tasked with destroying a target. Meanwhile, someone in the control tower started interfering with the drone’s ability to complete its mission. The drone’s AI brain, all on its lonesome, figured out that the way to get to mission accomplished was to first take out the control tower, which it proceeded to do. Fortunately, the person in the tower was not human, but a computer that had been programmed to play this ultimately deadly game with the drone.

4. How long does it take Antropic’s Generative AI to read, i.e., process a regular length book?

   a. 1 day

   b. 1 hour

   c. 1 minute

And the answer is …

The answer is 1 minute.

5. What’s the probability of a U.S. recession in the next 12 months according to Goldman Sachs'?

   a. 5 percent

   b. 25 percent

   c. 43 percent

   d. 67 percent

And the answer is …

The answer is 25 percent. The unemployment rate is currently only 3.7 percent. That’s just slightly higher than a year ago.

6. What’s the current average 30-year mortgage rate?

   a. 4 percent

   b. 5 percent

   c. 6 percent

   d. 7 percent

   e. 8 percent

And the answer is …

The answer is 7 percent. Since inflation is running at 4 percent per year, this represents a 3 percent real rate.

7. How many states have totally banned abortions?

   a. 3 states

   b. 5 states

   c. 7 states

   d. 10 states

   e. 13 states

   f. 17 states

And the answer is …

The answer is 13 states. They are Idaho, West Virginia, North and South Dakota, Texas, Alabama, Mississippi, Oklahoma, Louisiana, Arkansas, Missouri, Tennessee, and Kentucky. Another state, Georgia, has a six-week ban. Another ten states, including Florida, have banned abortion either in full or in part, but aren’t enforcing their bans.