The State of the Global Economy (Non-SC)

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Phoenix King: 90% US Equities, 10% US Energy Market, Natural Gas bought at 1.95, April.


3-5 years from now we will see who is correct and who is wrong.
Copy and repaste

then we'll see who is wrong in 15

hahaha! Yes Shamus, quite alright that you don't have the book! Just look into legitimate sources writen by real economists. Although I myself am critical of an Austrian perspective, it serves as a much more solid economic reference than these pseudo theories.

Look into the two different groups of economist that we have today. The "saltwater" and "freshwater" economists. When we listen to what politicians promulgate as "good" for the economy, we find that their theories are more or less pernicious towards economic growth. These policies disregard years of economic theory and thought and surrender to the vicissitudes of fickle public opinion. But I suppose that's politics.

Tom Morgan. Let me respond to the very first post you made a time back which for some odd reason was actually about economics.

I believe that what we have experienced over the last four years qualifies as an economic depression. N

BTW king is right in 3-5 or in 15.

May I point out Ceebass that your solution runs into the problem of how "the government can successfully mimic the actions of a regular consumer". Given the essentially complex situation, the only people that can mimic the actions of consumers are the combined economic decisions of each consumer. Decisions made by a centralized authority will necessarily be arbitrary and without sufficient knowledge to determine which goods or services to purchase, at what price, or from which companies. It seems silly to have a centralized authority attempt to mimic the actions of consumers when the consumers (be them individuals, businesses, or organizations) could accurately "mimic" their own actions without error every time. I find it surprising that anyone would think that the public sector could mimic the economic actions of the private sector better than the private sector.

If I may be so bold, I would like to counter-propose that ea

Perhaps I should not have said mimic. And I certainly do not believe that the government can act as well as the private sector!

What I'll be talking about now is what happens in the middle of a typical economic predicament. I'll diregard the causes of this depression.

What I am trying to explain here is something called the spending multiplier. The spending multiplier will calculate how many times any dollar amount will be spent in the economy after the initial expenditure.
(for this disregard all tax for now please)
Example:

I have $1,000. I take this money to the furniture store and spend it on a very nice sofa. This $1,000 is now the store's. The store must buy new inventory and pay its workers. Let's say they spend $500 dollars on new inventory, $400 on wages, and save $100 as profit. Our original $1000 spent into the economy has added $900 more into the economy for a total of $1900 in total e

Until the Govt has such large debt it cannot spend anywhere and has to CUT spending...

Just because this is how things work doesn't mean it accounts for things that are invisible in the system.

It is foolish to think that it doesn't matter what sells as long as it sells.

Building roads costs money, it doesn't make money.

If a mile of road costs 10k and the suppliers make 9k and and the employees make .5k. Then 500 dollars is lost. Our planet is moving into this deficit where the things we create don't add value. Roads may not be the best example, because they improve infrastructure (but it was an example given). As long as roads sell though for the price market demands economists won't see a problem.

Our society will see a problem if the value added model doesn't get extended to every exchange of goods and services. This gets sped up even moreso without regards to the negative effect of debt people or society will be able to justify purchases that add even less value to

People, please! Keep your posts small and short on cuckiness!

First, economics is a complex subject. Brevity will be of no use.

Second, If a mile of road costs 10k I can hardly believe that the company that builds the road has a profit margin of 90%! A great profit margin is more like 5%! That profit of course goes to the owner. That is his or her income that they spend or save like anyone else. The rest goes towards purchasing whatever the heck a road is made of.

Profit isn't bad it's just someone's income.

And a massive point that I think you are missing Drew is that the usefullness of something is totaly subjective. Microeconomics has tried to objectify it with the concept of utility but it is still highly subjective. Value can and is only determined by the consumer.

Finally...Really Crafty? The government will run up such a large debt that it will cut spending? Tell that to the U.K.. In WWII they racked up a deficit over 200% of GDP. The U.S. went to about 120% of

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First, economics is a complex subject. Brevity will be of no use.<!-/Quote-!>

Here, have a tip from Krugman:

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And the simplicity is actually an essential part of the insight. If you don't work hard to express your concepts in as simple a model as possible, you all too often, I'd say usually, end up with a much cruder (not to say more confused) view of the world than the one you get by trying to get at the essentials of the story. That's why "simplify, simplify" is a key part of my own research creed.<!-/Quote-!>

Applauds Laguna for stating to KEEP IT SHORT! I've got a headache now! THX ALLOT!!! you long posting people with too much time on your hands! :P

~A friendly message from your neighborhood Spiderman

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Really Crafty? The government will run up such a large debt that it will cut spending? Tell that to the U.K..<!-/Quote-!>

Indeed. Here in the UK essential services are being slashed to the bone. Health, police, fire, education, pensions, transport... and on and on, because there is no money. They even try printing more, "quantative easing" - have you ever heard of such a bull shit name for something? We have another bull shit word here too - "Austerity", or - 'go without people, the coffers are empty'.

Now look to some other countries in Europe, they find it hard to borrow, and thats at ridiculous interest rates.

Dunno, but if you're American then maybe you should join the amazing low percentage of Americans that hold a passport (30%, up from the teens a few years ago) and get out to see whats going on in reality. Your co

Once again, stop with the theory,

Place your bets here:

Phoenix King: 90% US Equities, 10% US Energy Market, Natural Gas bought at 1.95, April.


3-5 years from now we will see who is correct and who is wrong.

if the world goes back to the basics, there will be less stresses

if you don't have $1 to buy my dozen eggs now, then you cannot take it with you. sorry, you cannot take my eggs and pay me tomorrow, or sometime in the future, even if you will pay me $2.

keep things simple and stupid, everyone will be better off.

the cleverness of taking something you don't have the money for is what's causing so much stresses in the world.

Alright I concede that I am long winded. I'll make it short. Sorry

Crafty. In Europe they needn't commit to austerity! Although I recognize that the Euro puts you in a tight squeeze. QE is rather a joke and has created little help. Europe needs more fiscal and monetary solidarity if they are to even begin to aliviate their economic woes.

Please tell me further why the U.K. cannot find money though. I am curious. Their bonds seem cheap, and I don't think that the U.K. is nearly as frightening as the GIPSI countries.

This cure works fine in the U.S.. (I am American) We can and regularly do make more money to be able to function.

I'm sure you know the downsides of devaluing your currency. I guess the current UK policy is to shy away from this course (though the UK has had several rounds of QE since 2008). Probably a good policy although the alternatives are painful. Too much easy life living, the world needs to respect the true value of its assets and get away from the numbers some.

I read some off the wall stat that said if Americans were prepared to accept 1% tax increase, your national debt or borrowing or something would be eliminated in a matter of a few years (something like that anyway, cant remember the source). Would you be willing to accept that?

I'm not going to stop with my theory because it's not a theory it is common sense. Common Sense that the economy decides to ignore.

I'll stick with my point. Correction I meant that 9k goes to the road maker, that would further get divded of course into labor material etc. But I phrased it funny.

Anywho if a society doesn't create more value then the consumption costs of its production it is doomed. If I shift away from roads and refer to diamond teeth on rappers, or collars on dogs. It doesn't matter what individuals value it at, those are just non-important exchanges. All of the consumed time, energy, and material that can't be salvaged is lost. Making robots that use resources but save resources have to be higher than the resources wasted on diamond teeth. This concept is ignored by economics. If we waste more resources then we generate we are moving towards an inflated economy. Personal value doesn

the amazing views from different people on sc

i highly doubt that increaing the tax rate will eventually eliminate the deficit of the country. doesn't this mirror sc countries already, that if your tax rate is too high then no one wants to be in your country? otherwise the people in government would just find other things to spend the new tax amount, rather then pay off the deficit of the country. in sc, you are the decision maker for your people, and higher tax rate doesn't help. imagine on an earth country where every one has different ideas of how to use the money.

in the USA, perhaps it's time to revisit the industrial revolution of the nation. what did america done to elevate it to be a top country on earth? or even look at a country like japan, how did it become what is today since it was atomic bombed?

it's just reality, that you c

xiong, it isn't easy to become rich. America only became "super wealthy" after the Texan Oil Boom of the early 20th Century, and then again during WW2, when they supplied the Allies with everything. Unless the US sets the Germans against the Russians again, don't expect them to become a manufacturing powerhouse.

The Industrial Revolution made the rich richer and the poor relatively less poor. It did improve things, but only slightly.

Japan, as a country, was flushed with American investment after the war. China today is basically what Japan was back in the 1960s and 1970s.

Ceebass. You are very optimistic. But then most money motivated people are. What makes you think there will be a recovery? The World has never gone through such a intensely interlinked financial realisation that its all Bull Shit. And that the only thing that seems to work in this Bull Shit situation is manipulation and lies (which in-turn makes the Bull Shit worse)
The fly has hit the window and trust in freedom, for the fly and truth for us has been shattered and the lube for the financial machine (peoples trust and assets) has dried up.

I guess by now you would have heard of the phrase being used to sum up the situation the banks are in? The tobacco moment. The realisation that you are going to have to admit the things you have been fighting so hard to keep concealed.
For the tobacco companies it was admitting that smoking causes cancer and for the banks its admitting that the banking system and financial syste

+1000

Crafty, I read in the Enquirer that the Queen shafted William of the throne!!! What is up wif that?!!!

Jan

If you read it in the Enquirer it must be true.

Nice play on the Nat Gas Phoenix! I shorted at 2.32 and it stayed +/- .05 for a week so I moved on. Next day it started its move down to near where you bought. Now it has just shot up like crazy. I am never patient enough