A bit about economics

[China Diapers]

I don't know much about economics, well I know a tiny bit, and being somebody who doesn't like to owe money myself I have always assumed it was (or should be) a priority for the government to decrease the deficit.

This girl I work with is really into economics, in fact she is a big Paul Krugman fan, and we sometimes have discussions to pass the time. Her view is that the government needs to spend to get the economy going and once we have achieved a certain level of growth we can start paying off the deficit. She says a country can never go bankrupt they just refinance their debt. I get the impression she genuinely feels money is make-believe and can and should be conjured at will.

I come back with what little I know, or think I know, that borrowing/printing money devalues the currency, peoples savings and their purchasing power, the debt will eventually need be paid back, increased cost of borrowing, and the fact the government seems to be reluctant to pay debts even in the good times. I also think that her view requires a constant "ponzi" scheme type growth, constantly having to grow the economy to pay the backlog of debt.

Anyway she is walking all over me, and I have found myself reassessing my beliefs.

Clearly there are no right or wrong answers but the problem has caught my interest. I got hold of some books on the subject (I may have subconsciously selected books backing my viewpoint),and would be interested to hear the views of the learned scholars of T2W

Any thoughts?

 

[Pento]

The beauty of economics is that you can prove both sides of the argument with different models.

Shes clearly wrong on the point that a country can't go bankrupt. A few examples in the last few decades show this. Well actually I guess it depends on the definition of bankruptcy, I would call a country defaulting on its debts close enough.

They can't keep on refinancing their debt if no one will lend money to them. Last week the cost of insuring Irish government debt was around half of the value of the bonds. So say if I lent Ireland £10 it would cost me £5 to insure that I don't lose my £10. This sounds extortionate so could I be completely wrong.

 

[China Diapers]

They can't keep on refinancing their debt if no one will lend money to them. Last week the cost of insuring Irish government debt was around half of the value of the bonds. So say if I lent Ireland £10 it would cost me £5 to insure that I don't lose my £10. This sounds extortionate so could I be completely wrong.

The theory seems to be that their creditors would be more likely to refinance if the economy is growing even if it means gazillions in debts have been run up in the process, whereas they would look less favourably on a country which has less debt but zero growth.

http://m.youtube.com/watch?desktop_...e.com/watch?v=PTUY16CkS-k&v=PTUY16CkS-k&gl=GB

 

[robster970]

Personally, I believe her view is one founded on a short term, politically oriented view of ecomonic policy - this is common for 'coffee table' economics.

<removed because I can't explain anything coherently - will try again tomorrow but it goes along the lines of (a) all debt has to be paid through taxation so refinancing is horesh1t and (b) goverment is the 'lender of last resort' and is not interested in returns so deploys capital very badly.>

My opinion? She knows jack about economics but probably wants to sleep with you and you're ok with that thought.

 

[HowardCohodas]

This girl I work with is really into economics, in fact she is a big Paul Krugman fan

Paul Krugman may once have been worthy of the Nobel Prize he received. He has now degenerated into a political hack and a caricature of what he may have once been. The fact that he is still given a forum in the newspaper and on television news is a travesty.

 

[counter_violent]

Higher growth through the injection of printed worthless paper money and higher taxation on the other side with the pretence of paying down the debt in future simply will not work because this involves more control by an ever expanding govt and tax regime. Slimming down govt, tax, rules, regulation and allowing the people the freedom to find their own level in society will encourage the entrepreneurs to seek out the opportunities which if they are right will lead to more activity, more jobs and more revenues as a result of making conditions more favorable for business to take place. Presenting the right kind of conditions also attracts inward investment from overseas and so the upward spiral can begin.

Thatcher, possibly our greatest principled leader of modern times started down this road, but didn't go far enough in her pursuit of these goals. She had to trample over a lot of people who were resisting these changes and in the end lost her way a bit.

I mention Thatcher not from a political standpoint, but as a rather mild watered down version of what is to come.

At some point in the not too distant future, the people of this country and the west generally will need to reject the main idea that nanny statism govt is a good thing and wrestle back their own destiny. If this does not happen then they can only blame themselves for not acting when they knew they should.


http://www.trade2win.com/boards/new...036-what-sad-state-britain-2.html#post1323530

Some interesting stuff on this thread perhaps.

 

[Splitlink]

Countries will not go into debt if they have something to sell to other countries.

The reverse is a country like Haiti, always waiting for handouts, just like a beggar on the corner.

Countries like Greece and Ireland are like spoiled children who spend on the family credit card. ie the EU. They will drag the EU down if the EU allows it.

My view on economics is very simplistic but, basically, that is all it is.

 

[China Diapers]

My opinion? She knows jack about economics but probably wants to sleep with you and you're ok with that thought.

Ha ha ha, yes that's probably true, however it's gone beyond a debate with a girl at work now I am really curious about all this.

I mention Thatcher not from a political standpoint, but as a rather mild watered down version of what is to come.

I hope you are right, I see socialism making a comeback.

Thanks for all the reponses, for a moment I was feeling like a heartless capitalist for arguing that debts need to be repaid. I started reading "A History of Banking and Money in the united States", more interesting than it sounds, it explains the birth of fractional reserve banking and fiat currency.

 

[DionysusToast]

Sup Dipes, wassgoindown baby.

Just bang this ho, she hot for it. When she all satisfied and pantin', then you lay the free market small government truth on her a$$.

Post of the month ! :clap::clap::clap::clap::clap:

 

[Badass Futures]

Post of the month ! :clap::clap::clap::clap::clap:

Yo Toast, you know I gots mad love for you baby.

You still kickin' it in the eminis?

Check it. Back in the day, Toast a stone cold G in de index futures. You want to know how to read the order book fool? This man, he know.

He eat the motherf***in' oderbook, and sh1t out profits, pure f***in' kwan. True dat.

 

[China Diapers]

Post of the month ! :clap::clap::clap::clap::clap:

Yes it is rather humorous

 

[HowardCohodas]

This place gonna finally see some real tradin' wisdom now you around? Sure could use it.

Listen to this guy peeps. He know his sh1t.

Thanks for the complement. However, whatever trading wisdom I may have is limited to areas where I have actual experience and where I have done extensive research. Compared to the entire subject of trading, my "wisdom" is pretty limited. That's one of the reasons I continue at T2W. I've still a lot to learn.

 

[robster970]

Post of the month ! :clap::clap::clap::clap::clap:

Agree. Genius. This is what the place needs. Less jive talkin and mo badass action.

 

[Hilarymannah]

The monied system, which has been forced on the populations of the planet for millenia by a few in the know, is a means to control and manipulate all things material.
The system as we know it, is in a transition period (by design), and will morph into the most totalitarian system ever experienced on this earth.
The sad part of it, is,..most folk born into the "new" system will think it perfectly "normal",.as the old generation die off,.. and the wheels, they just keep on'a turnin',... Wuahahahaha

 

[HowardCohodas]

The monied system, which has been forced on the populations of the planet for millenia by a few in the know, is a means to control and manipulate all things material.
The system as we know it, is in a transition period (by design), and will morph into the most totalitarian system ever experienced on this earth.
The sad part of it, is,..most folk born into the "new" system will think it perfectly "normal",.as the old generation die off,.. and the wheels, they just keep on'a turnin',... Wuahahahaha

You should write a book. Oh wait. I think it was called Nineteen Eighty-Four.

 

[Badass Futures]

Thanks for the complement. However, whatever trading wisdom I may have is limited to areas where I have actual experience and where I have done extensive research. Compared to the entire subject of trading, my "wisdom" is pretty limited. That's one of the reasons I continue at T2W. I've still a lot to learn.

Life a journey, no doubt. We stop f***in' learnin', we f***in' die.

You king a the f***in' barrio, but you still humble. You gonna skool these b1tches in bein' a trader, and in bein' a man.

 

[DionysusToast]

The monied system, which has been forced on the populations of the planet for millenia by a few in the know, is a means to control and manipulate all things material.
The system as we know it, is in a transition period (by design), and will morph into the most totalitarian system ever experienced on this earth.
The sad part of it, is,..most folk born into the "new" system will think it perfectly "normal",.as the old generation die off,.. and the wheels, they just keep on'a turnin',... Wuahahahaha

You should write a book. Oh wait. I think it was called Nineteen Eighty-Four.

I am rather banking on a Huxley future myself...

Bring on the Soma

 

[DionysusToast]

The monied system, which has been forced on the populations of the planet for millenia by a few in the know, is a means to control and manipulate all things material.
The system as we know it, is in a transition period (by design), and will morph into the most totalitarian system ever experienced on this earth.
The sad part of it, is,..most folk born into the "new" system will think it perfectly "normal",.as the old generation die off,.. and the wheels, they just keep on'a turnin',... Wuahahahaha

and the silver spoon is replaced by the tin foil hat...

 

[counter_violent]

But it has been confirmed that US regulation as of October 25th prevents any US citizen from trading Gold or Silver with an overseas broker. At least that is what the Bank is telling me. So that effectively prevents any US citizen from using any other currency but the USD to trade gold or silver. The writing is on the wall folks. Get the bulk of your money out of the USD! I will post a link to the actual regulation here soon. I'm awaiting an email back from the Swiss bank who relayed this information to me.

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Any truth in this story ?

 

[Pento]

Why has Badass Futures been banned????

Those are some of the best posts I've seen on this forum in a long time.

Hilarious stuff. Need more characters like that around here!