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Banking analogy of Linux memory managementBanking analogy of Linux memory managementPosted Feb 6, 2010 3:59 UTC (Sat) by bronson (subscriber, #4806)In reply to: Banking analogy of Linux memory management by giraffedata Parent article: Quotes of the week
Agreed, a capitalization ratio of 50% would be insane. Even the ancient Greeks didn't require that.
Cap ratio only deals with how money moves from place to place so it's more like the virtual memory / buffer management system. Overcommit talks about exactly what is BACKING the memory or currency.
Basically:
200 years ago, to print a $1 bill, a government first need to find $1 worth of gold to back it. No gold, no money. This is safe but glacially slow -- you can only grow your economy as fast as you can mine gold.
In 1933, the United States moved to fiat money where nothing at all backs the currency -- nothing except the faith that one can redeem it for physical value (i.e. goods and services) in the future.
Pretty similar to overcommit, where nothing backs a memory allocation -- nothing except for the faith that it can be redeemed for physical memory in the future. Call it fiat memory.
And that's about as deep as the analogy goes, best not to look too close. :)
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Banking analogy of Linux memory management Posted Feb 6, 2010 4:24 UTC (Sat) by giraffedata (subscriber, #1954) [Link] Thanks for the banking background.However, I don't think we're talking about capitalization ratio, which has to do with how much a business borrows to fund its operation (its leverage), but rather the reserve ratio, which is how much cash a bank keeps on hand to pay back depositors who wish to withdraw their demand deposits. Overcommit off is a 100% reserve ratio. Wikipedia says the legal minimum reserve ratio in the US is 10%. I heard it was once 3%.
Reserve ratios Posted Feb 7, 2010 22:02 UTC (Sun) by man_ls (subscriber, #15091) [Link] You are probably right. Note that if banks were required to have 100% reserve ratios then they would not be able to invest the money that people deposit there, not even to lend this money to other people. So essentially the money would be frozen and would generate no wealth at all. What Cox calls "proper banking" would be a disaster.Also note that money deposited in a bank has a non-linear behavior that memory does not have. The Wikipedia article shows why: lent money can be deposited again, and then lent again, and so on. As others have pointed out, maybe Cox naïvely refers to the gold standard, not noticing that the price of gold is an arbitrary measure, as artificial as any other. Nowadays money creates itself and is properly accepted by all as the imaginary magnitude it really is.
Banking analogy of Linux memory management Posted Feb 6, 2010 15:13 UTC (Sat) by nix (subscriber, #2304) [Link] This is safe but glacially slowAsk the Spanish about that sometime. What it really means is that your money supply is out of the hands of politicians. That's a good thing, in a sense, but the downside is that if someone makes a big gold discovery (e.g. Spain) you suffer massive inflation; if your economy needs to grow, it can't; and if your economy suddenly *shrinks* the gold standard will throttle it and stop it recovering. The Great Depression is of course the canonical example of this. The gold standard works great when things are going well, but if there's a sudden shock it's a disaster, and it can be the source of sudden shocks. In this it is very similar to every other scheme for backing money yet discovered.
Banking analogy of Linux memory management Posted Feb 7, 2010 0:41 UTC (Sun) by pflugstad (subscriber, #224) [Link]
Our current problems are that the US banking industry was deregulated (back in the mid 80's) and allowed to basically start gambling with EVERYONE's money, taking ridiculous bets and doing other absolutely insane things. There were alternatives:
http://www.nytimes.com/2010/02/01/opinion/01krugman.html
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