Electricity-free refrigerators

Via the blog Inhabitat (and Reuben Miller and the Danish Ministry of Foreign Affairs):

Scientists have been able to drop the temperature of a room from 20° C to 11° C by taking the heat energy from opposing magnetic fields and thermodynamically reversing it to a cooler temperature. DTU researchers will use this technology to create a prototype refrigerator that cools itself using only magnets. According to research from Risø National Laboratory, magnetic refrigerators would be silent and their cooling cycles could be up to 60% more efficient than traditional refrigerators.

The science of it:

The magnetocaloric material is magnetized by a magnet and the temperature increases. The material cools by giving off heat to the surroundings through a heat exchanger. The magnetic field is removed and the temperature of the material drops further.
Finally, the material takes up heat from the cold side heat exchanger (”the inside of the refrigerator”) thus cooling it. Then the cycle starts over again.

Such a magnetic refrigerator has a number of advantages compared to conventional refrigerators, e.g. environmentally hazardous refrigeration gasses such as HFC (hydroflourocarbons) or ammonia are avoided, and higher efficiencies are possible.

I get the impression, from reading it, that the emission of heat is less, but not removed. It is not, for a start, a cooling engine, as to which we are used. It still, though, is transferring heat out, just not generating it as well. A very elegant solution to the problem of cooling, though – allowing for, as usual, the risk that (assuming this replaced out window-box a/c units) everyone would get these and use them constantly. At least it doesn’t look like they can be turned up.

In a perfect world, of course, we’d have all of these plugged directly into hot ‘fridges, heating our food, washing our clothes, heating the water for our showers.

Bloomingdales might have to settle for being only as cool indoors as everyone else (their store is kept psycho-crazy-freezing in the Summer. Lunatics).

Central Banks digging trenches, part 2

The news today:

The Bank of England relaxed restrictions on the amount of money financial institutions need to hold with the central bank, encouraging them to lend more to each other as it tries to reduce overnight borrowing costs.

Commercial banks, which agree to hold a specific amount of money at the Bank of England at the end of each month-long maintenance period, can now undershoot that target by 37.5 percent and still earn interest at the benchmark interest rate, the central bank said today. That compares with a previous restriction of 1 percent.

This is a simple deposit multiplier story. The “Money Supply” is M1 and M2 money. Call it cash in our pockets, and money in the bank.

As measured, for example, for the US in September of 2005:

Fractional deposit banking occurs most commonly: banks take in your $1,000, keep, say, $100 and re-lend (or deposit in other banks) the $900. So the actually supply of money is not $1,000, it is $1,900. Then the next bank will take that $900, keep $90 in their deposits and re-lend $810. The Simple Deposit Multiplier says the increase in the money supply from that $1,000, with a 10% reserve requirement, will be ().

Thus, if the Central Bank In Question wishes to increase the money supply (say, if there is a credit crises, crunch, etc.) it can “just” lower the Federal Reserve Requirement. If we lower the Reserve Requirement to, say, only 8%, we get , a 25% increase in the total money supply.

The Downside?

This is economics: there is always a downside. The downside is that the security of your deposits is now lower. The banks have, in reserve, less money to make good on their promise to give you back your money when you want it. Moreover, as we saw, there is more money – i.e. more of those promises. It also encourages banks to lend more money to one another, as they find themselves lumped with more of the debt they used to be selling on to the bond markets.

One does not like to draw parallels with Japan because, frankly, one does not wish to see them. However, England is now joining the likes of the United States and Australia, going beyond pushing money back and forth in overnight markets to deal with overnight rates, and changing the rules of the game.

By changing them, more importantly, they are giving financial agents an ‘out’, and further encouraging risky behaviour. You throw compulsive gamblers out of casinos: you don’t let them leave their debt to ride, hoping that the next throw will save them. What we’re seeing our Central Banks enacting are rule-changes that encourage banks to fill in the public face of bad debt with new lines of credit.

Meanwhile, you and your neighbour own those deposits. If we go under, you lose your job and your savings might go missing – are you getting a higher rate of interest, to compensate you for that extra risk? You are not, and this is one of my biggest problems with this. Financial problems are always caused and never solved by letting financial agents take risks with Other People’s Money to cover their own asses (or savings, or stock portfolios).