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I don't think your argument attacks simulation at all. Take the n-body problem; it's analytic solutions that fail against it, not simulations. I have a hard time accepting any non-computability of physics when our computation devices are made out of physics. We can include it.
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Replying to and
that was going to be my comment as well - n-body and fluid dynamics are very computable, they just don't have nice closed forms (or alternatively, have singularities if you choose the wrong formalisms, like newtonian dynamics)
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