seb146
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 10:43 pm

aviationaware wrote:
seb146 wrote:

If 1,000,000 low income people have an extra $200 a month each, they will spend it driving consumer demand. If 1,000 wealthy people have an extra $100,000 a month each, they will put it in the bank driving nothing.


Congratulations - you just proved in a breathtaking manner that you understand nothing about how money works. Money never just "sits in the bank doing nothing"


If it sits in the bank collecting interest, that is certainly NOT creating jobs, is it?
You bet I'm pumped!!! I just had a green tea!!!
 
MSPNWA
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 10:55 pm

seb146 wrote:
If it sits in the bank collecting interest, that is certainly NOT creating jobs, is it?


You're making the faulty assumption that money in the bank sits there doing nothing.
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 11:56 pm

seb146 wrote:
aviationaware wrote:
seb146 wrote:

If 1,000,000 low income people have an extra $200 a month each, they will spend it driving consumer demand. If 1,000 wealthy people have an extra $100,000 a month each, they will put it in the bank driving nothing.


Congratulations - you just proved in a breathtaking manner that you understand nothing about how money works. Money never just "sits in the bank doing nothing"


If it sits in the bank collecting interest, that is certainly NOT creating jobs, is it?


Okay, let's go REALLY basic:

https://www.youtube.com/watch?v=DWTjJZxS64Y
 
seb146
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 12:17 am

aviationaware wrote:
seb146 wrote:
aviationaware wrote:

Congratulations - you just proved in a breathtaking manner that you understand nothing about how money works. Money never just "sits in the bank doing nothing"


If it sits in the bank collecting interest, that is certainly NOT creating jobs, is it?


Okay, let's go REALLY basic:

https://www.youtube.com/watch?v=DWTjJZxS64Y


Or you could go and talk to people who have to work two and three jobs just to get by....
You bet I'm pumped!!! I just had a green tea!!!
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 12:21 am

seb146 wrote:
Or you could go and talk to people who have to work two and three jobs just to get by....


Nobody "has" to work two or three jobs to get by. Very few people do that, and those who do did so out of choice. Nobody held them back from getting better training to get a single job that can sustain them and their family. You don't need to go to college for a job like that.
 
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WarRI1
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 1:29 am

My basic understanding of the system is that we are getting screwed over by the government and the financial system, the bank gives us 1.5% interest and then loans that same money out at say at 5% interest. Such a deal for the banks, certainly not us. The word exploitation comes to mind.
It is better to die on your feet, than live on your knees.
 
Spar
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Re: Educating Airliners.net

Mon Jun 17, 2019 1:50 am

aviationaware wrote:
Aesma wrote:
Out of 100 years of Fed control, the country has had 22 recessional years, including one depression. The 100 years before the Fed saw 44 recessions and six depressions.


You do realize that there was central banking in the US before the Federal Reserve Act of 1913, yea?

"Central Banking" sounds like slipperiness on your part. There was no central bank before the Federal Reserve Act of 1913.
JP Morgan used to act as a central bank of sorts. But he was just out for himself and his crony's.

Before 1913, it was a regular occurrence for large numbers of people to be wiped out by bank failure and as a result people would keep their money hidden at home rather than to trust a bank.

And you want to go back to that kind of pandemonium.
 
anrec80
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 2:21 am

WarRI1 wrote:
My basic understanding of the system is that we are getting screwed over by the government and the financial system, the bank gives us 1.5% interest and then loans that same money out at say at 5% interest. Such a deal for the banks, certainly not us. The word exploitation comes to mind.


Except that you are guaranteed by government (via FDIC) that you will get up to 250K of this money under 1.5%, but the bank does not have similar guarantees for the money they loaned under 5%. Those risks are up to the bank, and the bank uses its expertise to screen these 5% borrowers before loaning them the money it has in possession. And then - you can withdraw your 1.5% deposit at any time, and the bank almost always cannot call back the 5% loan it wrote.
 
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Re: Educating Airliners.net

Mon Jun 17, 2019 2:52 am

Spar wrote:

And you want to go back to that kind of pandemonium.


No, I want to go to a hard currency. The US Dollar was not backed by gold or other commodities back then. And when I say hard currency, I certainly do not mean some Bretton Woods fake backing.

anrec80 wrote:
and the bank uses its expertise to screen these 5% borrowers before loaning them the money it has in possession.


Banks don't loan money they have "in possession". All money banks lend is created from credit as they extend it. Banks do not loan out their deposits. That's an unfortunate misconception that most people have.
 
Spar
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Re: Educating Airliners.net

Mon Jun 17, 2019 3:33 am

aviationaware wrote:
I want to go to a hard currency.
Oh, OK you're a complete kook who wants to throw the United States into a depression. Good luck with that.

aviationaware wrote:
The US Dollar was not backed by gold or other commodities back then.
You just make it up as you go along. Yes the dollar was backed up buy gold or silver from 1792 on except during the Civil War era; have you ever heard of solver dollars or $20 dollar gold pieces, or Coinage Act of 1873?
https://en.wikipedia.org/wiki/Coinage_Act_of_1873

BTW
You owe Aesma an apology over your claim that there was a central bank in the US before the Federal Reserve Act of 1913.
aviationaware wrote:
Banks don't loan money they have "in possession". All money banks lend is created from credit as they extend it. Banks do not loan out their deposits. That's an unfortunate misconception that most people have.
That is an esoteric bit of utterly meaningless trivia that you are trying to promote to everyday reality. Just like your gold standard, good luck with that.
 
anrec80
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Re: Educating Airliners.net

Mon Jun 17, 2019 4:46 am

aviationaware wrote:
Banks don't loan money they have "in possession". All money banks lend is created from credit as they extend it. Banks do not loan out their deposits. That's an unfortunate misconception that most people have.


And nonetheless there almost always are ratios of how much a bank can lend vs deposits is has on hand.
 
aviationaware
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Re: Educating Airliners.net

Mon Jun 17, 2019 6:16 am

anrec80 wrote:

And nonetheless there almost always are ratios of how much a bank can lend vs deposits is has on hand.


That's true, however there are transaction constellations that can circumvent that easily.
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 6:22 am

aviationaware wrote:
petertenthije wrote:
Contrast that with 1.000.000 x 200$. A good chunk of that money will likely be used to pay of debts... thus going back to the banks thus making more money available for investments. Thus still benefitting the entrepeneurs. The money not spend on paying of debts will be spend on consumer goods and luxury items. Since a large amount of people are unlikely to go abroad if you give them a 200$ "windfall", most of that money gets spend locally directly benefitting the US economy. Also, that money will benefit US entrepeneurs running the shops, car dealerships, bars, hotels etc.


You seem to suffer under the delusion that there is a finite amount of money. That's wrong. Banks have no hard cap on how much money they can create from credit. Their only cap is the demand for more credit. So anyone paying back credit will not increase the amount available for others.
Also, of course some of the money in the well heeled people's pockets will be invested overseas. But don't think even for a second that money spent by consumers benefits the US economy in full. The might buy a TV, and most of that is not produced in the US. And that's just one example.


Banks have all kinds of ratios they have to conform to. So there is a cap, you can debate if it is enough, the relaxing of these caps contributed to the crisis of 2007 as did combining investment banking with retail banking.

aviationaware wrote:
Dutchy wrote:
Aviationaware is an ideologist and I do not feel like debating with him and coming to the inevitable conclusion that he and I have a different vision on society at large.


What I believe is the better way to run a society has very little bearing on whether or not you realize that fiat money is bad. Even in a hard money economy, you can still decide to tax the wealthy. The only thing you can't do is shaft future generations for your lack of spending discipline, which I would say is a rather social thing to do, don't you?


Fiat money isn't an inherently bad thing, nowadays we let banks create most of the money and let them have the interest on it, if it goes wrong we bail them out. So banks have too much take on society without creating anything and stearing money in directions which isn't too helpful and creating bubbles.
I always liked the example of garbage men and bankers. In the 1970's - I think - the bankers in Ireland went on strike, they demanded more wages, the society said no and let them go on strike, they gave up after 6 months: people at bars gave IOUs to the bars and the bars paid their bills with that and everyone just excepted it as currency. When garbage men went on strike in New York, within a week a city-wide emergency was declared. That must make anyone more humble whom works in the financial industry.
You could go back to the golden standard if you want, but in the end, it doesn't do you much good. I like the idea of the greenback.
Many happy landings, greetings from The Netherlands!
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 6:26 am

aviationaware wrote:
Dutchy wrote:

Do you believe in the perfect market theory?


Anyone who doesn't is hopeless. Market laws are laws of nature. They will always prevail over state interventions and when they do, it all comes crashing down. That has been shown to be true time and time again in history.


Ok, economic science isn't a bata science it is a gamma science, or social science. The perfect market theory believes that everything is transparent, every person on the market knows all and people act in their own best economic interest, this is a flawed theory as we have known for quite some years now. If this is the basis of your economy lesson there is something truly wrong with your understanding of the economy and my advice to you, pick up on another trade, because giving economic advice is not your thing and certainly not in the best interest of your clients.
Many happy landings, greetings from The Netherlands!
 
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Dutchy
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Re: Educating Airliners.net

Mon Jun 17, 2019 6:32 am

aviationaware wrote:
No, I want to go to a hard currency. The US Dollar was not backed by gold or other commodities back then. And when I say hard currency, I certainly do not mean some Bretton Woods fake backing.


Ok, what do you mean then by a hard currency? And when was this?
Many happy landings, greetings from The Netherlands!
 
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Aesma
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 10:02 am

There is a limited supply of gold, so a gold standard is deflationary. It can work in theory, but explaining to people that since the economy is doing well, their salaries must go down, will be a tough sell.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 12:47 pm

The way I see it, everything can be broken down to a very simple formula of how much you are willing to trade to me for an item I have that you want, and how much I am willing to accept in order to part ways with it. Beyond that is just expansions and corollaries to that formula.
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 1:43 pm

Aesma wrote:
There is a limited supply of gold, so a gold standard is deflationary. It can work in theory, but explaining to people that since the economy is doing well, their salaries must go down, will be a tough sell.


That's where productivity comes into the equation.
 
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casinterest
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 1:53 pm

aviationaware wrote:
This thread is valuable for anyone really, but particularly directed at certain Dutch and German members of our forum who are living in economic lalaland and are in dire need of some basic understanding of economic principles.

I have searched for quite a while and have finally come across a great video on the internet:

https://www.youtube.com/watch?v=PHe0bXAIuk0

In this video, it is very plainly and graphically explained why...
- boom-bust cycles are created by central banks
- those boom-bust cycles can not over the long term outperform productivity growth (making central banks rather pointless in essence)
- our current low interest rates are a big problem
- social tensions result from central banking boom-cust cycles.

In summary, the video (unintentionally I am sure considering who had it produced) makes a very good argument for abolishing the Fed.

Watch and learn.


I am going to have to highlight the hypocrisy present in this opening statement

1. Boom -Bust cycles are not created by central banks, they are created by supply and demand. When supply is low, demand is high, and suppliers work to increase supply. If the demand is inelastic or elastic (underwear) eventually equilibrium is reached, and the suppliers stop producing as much. However all of this presents winners and losers, and potentially boom and busts , which a central bank or legislation if run correctly can help smooth out.

2. Long term is subjective. In the long term breaking up AT&T did no good, but it sure helped in the 80's and 90's

3. The current low interest is a problem, as coupled with the tax cuts it threatens to create much of the same issues that led to the 2007 recession.
4. Social tensions are magnified under boom bust cycles. They are not the result of them. Social tensions are the result of people not paying attention to what others are doing, and then not caring when they stomp on other's rights.

Abolishing the Fed makes no sense, as monetary policy has to be there for the short term to fix overheated markets where demand is outstripping supply, and when supply is outpacing demand.
Where ever you go, there you are.
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 2:08 pm

casinterest wrote:

1. Boom -Bust cycles are not created by central banks, they are created by supply and demand.


That's not even remotely mutually exclusive and certainly doesn't refute my point.
 
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casinterest
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 2:12 pm

aviationaware wrote:
casinterest wrote:

1. Boom -Bust cycles are not created by central banks, they are created by supply and demand.


That's not even remotely mutually exclusive and certainly doesn't refute my point.


Boom-Bust cycles happen without central banks. They are are not created by them . Supply and Demand can create some brutal consequences without a central banks or legislation controlling the flow of money.
Where ever you go, there you are.
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 2:14 pm

casinterest wrote:
1. Boom -Bust cycles are not created by central banks, they are created by supply and demand. When supply is low, demand is high, and suppliers work to increase supply. If the demand is inelastic or elastic (underwear) eventually equilibrium is reached, and the suppliers stop producing as much. However all of this presents winners and losers, and potentially boom and busts , which a central bank or legislation if run correctly can help smooth out.
3. The current low interest is a problem, as coupled with the tax cuts it threatens to create much of the same issues that led to the 2007 recession.


At the risk of being pedantic; aren't items 1 and 3 here somewhat contradictory? Fed keeping interest rates low is artificially driving higher demand in the nearterm while supply is unable to keep pace.
 
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casinterest
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 2:17 pm

trpmb6 wrote:
casinterest wrote:
1. Boom -Bust cycles are not created by central banks, they are created by supply and demand. When supply is low, demand is high, and suppliers work to increase supply. If the demand is inelastic or elastic (underwear) eventually equilibrium is reached, and the suppliers stop producing as much. However all of this presents winners and losers, and potentially boom and busts , which a central bank or legislation if run correctly can help smooth out.
3. The current low interest is a problem, as coupled with the tax cuts it threatens to create much of the same issues that led to the 2007 recession.


At the risk of being pedantic; aren't items 1 and 3 here somewhat contradictory? Fed keeping interest rates low is artificially driving higher demand in the nearterm while supply is unable to keep pace.



How is it contradictory.?
"if run correctly"
Where ever you go, there you are.
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 3:15 pm

casinterest wrote:
trpmb6 wrote:
casinterest wrote:
1. Boom -Bust cycles are not created by central banks, they are created by supply and demand. When supply is low, demand is high, and suppliers work to increase supply. If the demand is inelastic or elastic (underwear) eventually equilibrium is reached, and the suppliers stop producing as much. However all of this presents winners and losers, and potentially boom and busts , which a central bank or legislation if run correctly can help smooth out.
3. The current low interest is a problem, as coupled with the tax cuts it threatens to create much of the same issues that led to the 2007 recession.


At the risk of being pedantic; aren't items 1 and 3 here somewhat contradictory? Fed keeping interest rates low is artificially driving higher demand in the nearterm while supply is unable to keep pace.



How is it contradictory.?
"if run correctly"



So, then yes, a central bank can generate a boom-bust cycle.
 
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casinterest
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 3:30 pm

trpmb6 wrote:
casinterest wrote:
trpmb6 wrote:

At the risk of being pedantic; aren't items 1 and 3 here somewhat contradictory? Fed keeping interest rates low is artificially driving higher demand in the nearterm while supply is unable to keep pace.



How is it contradictory.?
"if run correctly"



So, then yes, a central bank can generate a boom-bust cycle.


Central Banks don't generate them though, Unless they have a product people are demanding. They can only ramp up or slow down the supply of money to fuel or dampen the cycle.
Where ever you go, there you are.
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 3:34 pm

casinterest wrote:
trpmb6 wrote:
casinterest wrote:


How is it contradictory.?



So, then yes, a central bank can generate a boom-bust cycle.


Central Banks don't generate them though, Unless they have a product people are demanding. They can only ramp up or slow down the supply of money to fuel or dampen the cycle.


Sure. And to be clear, I'm not subscribing to the notion that a central bank does generate boom-bust cycles. Central banks, as we know them in the western world, are largely reactionary. Adjusting monetary policies to create a more stable economic environment. I get that. But it is also true that their monetary policies influence consumer and investor sentiments. Left unchecked, I would argue they could drive those sentiments to extremes.
 
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casinterest
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 3:39 pm

trpmb6 wrote:
casinterest wrote:
trpmb6 wrote:


So, then yes, a central bank can generate a boom-bust cycle.


Central Banks don't generate them though, Unless they have a product people are demanding. They can only ramp up or slow down the supply of money to fuel or dampen the cycle.


Sure. And to be clear, I'm not subscribing to the notion that a central bank does generate boom-bust cycles. Central banks, as we know them in the western world, are largely reactionary. Adjusting monetary policies to create a more stable economic environment. I get that. But it is also true that their monetary policies influence consumer and investor sentiments. Left unchecked, I would argue they could drive those sentiments to extremes.


I agree completely. The polices of 2001-2007 , coupled with some lax regulations and tax cuts, led to one of the worst recessions ever. I truly fear that the current tax and regulatory policy and the political pressure Trump is putting on the Fed while they try to control a red hot economy could lead to the next bust.
Where ever you go, there you are.
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 3:49 pm

casinterest wrote:
trpmb6 wrote:
casinterest wrote:

Central Banks don't generate them though, Unless they have a product people are demanding. They can only ramp up or slow down the supply of money to fuel or dampen the cycle.


Sure. And to be clear, I'm not subscribing to the notion that a central bank does generate boom-bust cycles. Central banks, as we know them in the western world, are largely reactionary. Adjusting monetary policies to create a more stable economic environment. I get that. But it is also true that their monetary policies influence consumer and investor sentiments. Left unchecked, I would argue they could drive those sentiments to extremes.


I agree completely. The polices of 2001-2007 , coupled with some lax regulations and tax cuts, led to one of the worst recessions ever. I truly fear that the current tax and regulatory policy and the political pressure Trump is putting on the Fed while they try to control a red hot economy could lead to the next bust.


Ok, sorry for being a little pedantic.

The Fed honestly is kind of stuck between a rock and a hard place. If they try to adjust interest rates at all right now it's going to tank the market. It's a peculiar problem of their own creation imo. And they reneged on their original rate hike plans. I actually have a few friends who are going in to refinance this month with the drop we've seen. Smart move, I don't think interest rates will hold at this secondary low for long.

The weird thing is I haven't really heard any rumblings of inflation at this point.

I looked at a technical analysis of the market today. It is suggesting we're in a slightly leans bullish market in the medium term up to 1 year. The analysis looks at various 200 day historical trends and what their medium and long term outlooks were compared to what we are in right now. It's mostly anecdotal, right, because it doesn't account for various outside influences of those periods. Though he does attempt to control some of that (but it's impossible to do it across the board). You can argue we're in a pattern that looks eerily like 2007 right now. But you can also change your tracking period and say we also look like 2016 right now. But in general, based on similar 200 day periods we lean slightly bullish right now. Doesn't mean it'll happen, but it's an interesting dataset to look into.

https://seekingalpha.com/article/427059 ... -2007-2016
 
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casinterest
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 4:08 pm

trpmb6 wrote:
casinterest wrote:
trpmb6 wrote:

Sure. And to be clear, I'm not subscribing to the notion that a central bank does generate boom-bust cycles. Central banks, as we know them in the western world, are largely reactionary. Adjusting monetary policies to create a more stable economic environment. I get that. But it is also true that their monetary policies influence consumer and investor sentiments. Left unchecked, I would argue they could drive those sentiments to extremes.


I agree completely. The polices of 2001-2007 , coupled with some lax regulations and tax cuts, led to one of the worst recessions ever. I truly fear that the current tax and regulatory policy and the political pressure Trump is putting on the Fed while they try to control a red hot economy could lead to the next bust.


Ok, sorry for being a little pedantic.

The Fed honestly is kind of stuck between a rock and a hard place. If they try to adjust interest rates at all right now it's going to tank the market. It's a peculiar problem of their own creation imo. And they reneged on their original rate hike plans. I actually have a few friends who are going in to refinance this month with the drop we've seen. Smart move, I don't think interest rates will hold at this secondary low for long.

The weird thing is I haven't really heard any rumblings of inflation at this point.

I looked at a technical analysis of the market today. It is suggesting we're in a slightly leans bullish market in the medium term up to 1 year. The analysis looks at various 200 day historical trends and what their medium and long term outlooks were compared to what we are in right now. It's mostly anecdotal, right, because it doesn't account for various outside influences of those periods. Though he does attempt to control some of that (but it's impossible to do it across the board). You can argue we're in a pattern that looks eerily like 2007 right now. But you can also change your tracking period and say we also look like 2016 right now. But in general, based on similar 200 day periods we lean slightly bullish right now. Doesn't mean it'll happen, but it's an interesting dataset to look into.

https://seekingalpha.com/article/427059 ... -2007-2016


I can see the bullish market trends. For now inflation is low, and the fed should be upping interest rates to keep it in check while growth continues to be impressive. It will also improve savings. As you stated, the real estate market is heating up, and could cause issues a year or two out as i have noticed a lot of refinance activity and some risky loans going again.

The artificial tariffs though, could start making their way through the markets though, and this could start pushing inflation higher.
Where ever you go, there you are.
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 4:21 pm

It's why it's so hard to really watch trends of various market indicators. you have to look at them all together. For instance, this is making the rounds today as well: https://www.marketwatch.com/story/empir ... 2019-06-17

I believe tariffs are having a short term impact. But long term, you eventually have to fill the demand. In the near term, manufacturers may eat that cost rather than pass it on to consumers. But that's not sustainable long term either.

And while auto maybe declining, overall, large trucks are climbing which is generally an indicator of a bullish market. So it's really a mixed bag right now.
 
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casinterest
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 5:57 pm

trpmb6 wrote:
It's why it's so hard to really watch trends of various market indicators. you have to look at them all together. For instance, this is making the rounds today as well: https://www.marketwatch.com/story/empir ... 2019-06-17

I believe tariffs are having a short term impact. But long term, you eventually have to fill the demand. In the near term, manufacturers may eat that cost rather than pass it on to consumers. But that's not sustainable long term either.

And while auto maybe declining, overall, large trucks are climbing which is generally an indicator of a bullish market. So it's really a mixed bag right now.


The scary part of manufacturing is it could be a precursor to a major demand failure, but we will have to wait that one out.
I for one am scared of the 737 Max fallout as the no fly is extended. Boeing may have to slow down production big time.
Where ever you go, there you are.
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 6:20 pm

casinterest wrote:
trpmb6 wrote:
It's why it's so hard to really watch trends of various market indicators. you have to look at them all together. For instance, this is making the rounds today as well: https://www.marketwatch.com/story/empir ... 2019-06-17

I believe tariffs are having a short term impact. But long term, you eventually have to fill the demand. In the near term, manufacturers may eat that cost rather than pass it on to consumers. But that's not sustainable long term either.

And while auto maybe declining, overall, large trucks are climbing which is generally an indicator of a bullish market. So it's really a mixed bag right now.


The scary part of manufacturing is it could be a precursor to a major demand failure, but we will have to wait that one out.
I for one am scared of the 737 Max fallout as the no fly is extended. Boeing may have to slow down production big time.


They already have. And it's impacting their suppliers already. Of course, the problem is Boeing was planning on stepping up their rate. And now they're cutting it back. So it's not even as simple as slowing their rate from a constant rate. They get hit twice from the fact that instead of the planned step up they're now stepping backwards.

Of course, it's within its own aviation cycle and will ultimately not have a huge impact. Will certainly hurt this year's financials. But should rebound quickly next year.

https://www.flightglobal.com/news/artic ... ms-457283/

https://www.kwch.com/content/news/Spiri ... 31571.html
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 9:15 pm

casinterest wrote:
aviationaware wrote:
casinterest wrote:

1. Boom -Bust cycles are not created by central banks, they are created by supply and demand.


That's not even remotely mutually exclusive and certainly doesn't refute my point.


Boom-Bust cycles happen without central banks. They are are not created by them . Supply and Demand can create some brutal consequences without a central banks or legislation controlling the flow of money.


Most financial things happen in the Netherlands first for some reason, also the boom-bust cycle:
Tulip mania (Dutch: tulpenmanie) was a period in the Dutch Golden Age during which contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels and then dramatically collapsed in February 1637


This happened before any central bank and had nothing to do with the money supply. It was all irrational, hence if you see economics as a beta science you will end up believing in your models and will end up broke.
Many happy landings, greetings from The Netherlands!
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 9:18 pm

Dutchy wrote:
casinterest wrote:
aviationaware wrote:

That's not even remotely mutually exclusive and certainly doesn't refute my point.


Boom-Bust cycles happen without central banks. They are are not created by them . Supply and Demand can create some brutal consequences without a central banks or legislation controlling the flow of money.


Most financial things happen in the Netherlands first for some reason, also the boom-bust cycle:
Tulip mania (Dutch: tulpenmanie) was a period in the Dutch Golden Age during which contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels and then dramatically collapsed in February 1637


This happened before any central bank and had nothing to do with the money supply. It was all irrational, hence if you see economics as a beta science you will end up believing in your models and will end up broke.


I haven't read up on the Tulip mania event in a few years, but if i recall, it was a boom/bust cycle based on irrational faith in the tulips as, essentially, a currency. Maybe I should read up on it again just to jog my memory.
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 9:23 pm

trpmb6 wrote:
Dutchy wrote:
casinterest wrote:

Boom-Bust cycles happen without central banks. They are are not created by them . Supply and Demand can create some brutal consequences without a central banks or legislation controlling the flow of money.


Most financial things happen in the Netherlands first for some reason, also the boom-bust cycle:
Tulip mania (Dutch: tulpenmanie) was a period in the Dutch Golden Age during which contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels and then dramatically collapsed in February 1637


This happened before any central bank and had nothing to do with the money supply. It was all irrational, hence if you see economics as a beta science you will end up believing in your models and will end up broke.


I haven't read up on the Tulip mania event in a few years, but if i recall, it was a boom/bust cycle based on irrational faith in the tulips as, essentially, a currency. Maybe I should read up on it again just to jog my memory.


Irrational believe that prices will rise and continue to rise. For the price of a house, you could in the end buy one rare tulip, so the only way was down and down it went, very vast.
Many happy landings, greetings from The Netherlands!
 
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trpmb6
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Re: Basic Understanding of some Economic Principles

Mon Jun 17, 2019 9:27 pm

Dutchy wrote:
trpmb6 wrote:
Dutchy wrote:

Most financial things happen in the Netherlands first for some reason, also the boom-bust cycle:


This happened before any central bank and had nothing to do with the money supply. It was all irrational, hence if you see economics as a beta science you will end up believing in your models and will end up broke.


I haven't read up on the Tulip mania event in a few years, but if i recall, it was a boom/bust cycle based on irrational faith in the tulips as, essentially, a currency. Maybe I should read up on it again just to jog my memory.


Irrational believe that prices will rise and continue to rise. For the price of a house, you could in the end buy one rare tulip, so the only way was down and down it went, very vast.


Now I remember why we talked about it recently. It was discussed at length in one of the bit coin threads last year.
 
LMP737
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 2:36 pm

aviationaware wrote:
This thread is valuable for anyone really, but particularly directed at certain Dutch and German members of our forum who are living in economic lalaland and are in dire need of some basic understanding of economic principles.


.


If your an American you really don't have the right to lecture anyone about them living in economic lalaland.
Never take financial advice from co-workers.
 
LMP737
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 2:37 pm

aviationaware wrote:

In summary, the video (unintentionally I am sure considering who had it produced) makes a very good argument for abolishing the Fed.

Watch and learn.


Say you abolish the Fed, then what? Who fills the role they play?
Never take financial advice from co-workers.
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 9:51 pm

LMP737 wrote:
Say you abolish the Fed, then what? Who fills the role they play?


The market of course.
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 9:56 pm

aviationaware wrote:
LMP737 wrote:
Say you abolish the Fed, then what? Who fills the role they play?


The market of course.


The market? So banks can do whatever they like? Total free market for banks. That is a novel idea, I can't think of anything that would go wrong with that idea. :roll:

But I guess you don't want to answer all the other questions.

With all these answers we can conclude that you initial though backslashed spectacular. So perhaps it is best to close this thread.
Many happy landings, greetings from The Netherlands!
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 10:05 pm

Dutchy wrote:
aviationaware wrote:
LMP737 wrote:
Say you abolish the Fed, then what? Who fills the role they play?


The market of course.


The market? So banks can do whatever they like? Total free market for banks. That is a novel idea, I can't think of anything that would go wrong with that idea. :roll:


Nothing can possibly go wrong with that idea so long as banks aren't artificially propped up by the government and allowed to go bankrupt.
 
LMP737
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 10:28 pm

aviationaware wrote:

The market of course.


Who is the "market"? Are you referring to Wall Street, banks, some evil genius in a mountain lair? And are you naive enough to believe that once the Fed is done away with it will all be sunshine and lolly pops?
Never take financial advice from co-workers.
 
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Tugger
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 10:33 pm

Wait, you are wrong. Trump will fill the role and when he leaves office the government will. Trump has said many times he wants the control, the influence.
So you think that is sound economic policy?

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
Productivity isn’t about getting more things done, rather it’s about getting the right things done, while doing less. - M. Oshin
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 10:35 pm

LMP737 wrote:
aviationaware wrote:

The market of course.


Who is the "market"?


Go visit an econ 1.01 course if that question is serious.
 
LMP737
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Re: Basic Understanding of some Economic Principles

Tue Jun 18, 2019 10:45 pm

aviationaware wrote:


Go visit an econ 1.01 course if that question is serious.


You first since you seem to believe indefinite prosperity will occur if we get rid of the Fed
Never take financial advice from co-workers.
 
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Tugger
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Re: Basic Understanding of some Economic Principles

Wed Jun 19, 2019 12:46 am

aviationaware wrote:
LMP737 wrote:
aviationaware wrote:

The market of course.


Who is the "market"?


Go visit an econ 1.01 course if that question is serious.

So you believe the market is perfect? Cuz' that is econ 101 (if you are serious).

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
Productivity isn’t about getting more things done, rather it’s about getting the right things done, while doing less. - M. Oshin
 
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Aaron747
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Re: Basic Understanding of some Economic Principles

Wed Jun 19, 2019 1:15 am

aviationaware wrote:
LMP737 wrote:
aviationaware wrote:

The market of course.


Who is the "market"?


Go visit an econ 1.01 course if that question is serious.


Oh boy, someone propped open the door to the hall where econ and philosophy intersect. Markets are inevitably imperfect since humans participate in them. :stirthepot:
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
seb146
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Re: Basic Understanding of some Economic Principles

Wed Jun 19, 2019 4:39 am

I wonder of the right wingers think capital gains tax is income tax? There are taxes the very wealthy pay that we working people do not. I wonder if "income tax" is just a broad brush term they use? I am just putting it out there. Some right wingers, I am sure, know the difference and make that distinction. Right?
You bet I'm pumped!!! I just had a green tea!!!
 
MSPNWA
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Re: Basic Understanding of some Economic Principles

Wed Jun 19, 2019 6:05 am

LMP737 wrote:
Who is the "market"? Are you referring to Wall Street, banks, some evil genius in a mountain lair? And are you naive enough to believe that once the Fed is done away with it will all be sunshine and lolly pops?


Are you naive enough to believe that it will all go to hell if a private entity didn't control the money supply? If you're seriously asking what the "market" is, then I suspect the answer is yes.
 
THS214
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Re: Basic Understanding of some Economic Principles

Wed Jun 19, 2019 6:50 pm

aviationaware wrote:
LMP737 wrote:
Say you abolish the Fed, then what? Who fills the role they play?


The market of course.


Former Fed chairman Alan Greenspan had that same thought before market collapse 10 years ago. Then he changed his view at least partially.

https://www.nytimes.com/2008/10/24/busi ... panel.html

Mr. Waxman noted that the Fed chairman had been one of the nation’s leading voices for deregulation, displaying past statements in which Mr. Greenspan had argued that government regulators were no better than markets at imposing discipline.

“Were you wrong?” Mr. Waxman asked.

“Partially,” the former Fed chairman reluctantly answered, before trying to parse his concession as thinly as possible.

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