Economics 101 (discussion)

[drummer4now]

54 minutes ago, Nuxfanabroad said:

Good questions/thread, JIHN.

 

An interesting scientist I like talks of the 5 stages of grief(environmental context), in homage to Eliz Kubler Ross, & her wonderful 1960's insight: denial, anger, bargaining, depression & acceptance.

To these he added: gallow's humour. Finally he added stage 7: F**k it!

 

This was a wonderful intellectual-leap.. & I'd say, in an economic-sense, we're likely meandering into stage 7 decline, & subsequent, wanton destruction!

 

& the mug's query?.. If Big Gov & Megabanks(stock market, etc..) are makin it work in this economic quagmire, why were we ALL dutifully workin/payin taxes for all 'dem decades prior?! It's a F***ing shell game, & elites will surely rig things to keep the 99% hamsters runnin' on the wheel. I haven't read 'Animal Farm' since I was 14 yrs old, but strangely passages come back, & make more & more sense, as the SHTF!

Finally someone is in the know. 

 

Wake up people economic slavery is real! but unfortunate for the pipes to run smooth it requires a steady supply of slaves with fancy job titles to make them feel better.

I have always wondered why they never teach modern finance in school. 

If more people were financially sound it would hurt the elite badly.... 

 

Just yesterday I witness someone purchase $115 worth of stamps  at the post office. Stamps I tell you.

 

Please teach your children and loved ones the value of money even if you're wealthy or not. 

There are people literally busting their backs for it everyday. 

 

/end rant.

[Boudrias]

11 hours ago, nuckin_futz said:

In normal economic theory printing money is inflationary. You increase the monetary supply. The economy will balance that by increasing prices as demand increases. Runaway inflation is the death knell for any economy.

 

Central Banks have been increasing monetary supply at a rapid rate since the Great Recession 2008. And yet this has not resulted in inflation. In fact, not one major Central Bank has managed to hit their internal targets of 2% inflation. So they just keep on running deficits and expanding the money supply. Common sense dictates that at some point in the future this will result in runaway inflation. Until then every Central Bank is gonna party like it's 1999.

Last I read Canada is running a current account deficit of + $50 billion. In essence the Canadian economy has an obligation + $50 billion to the Bank of International Settlements. The simple process of printing money suggests there are no international ramifications to the value that a currency represents. How many times in history have we seen this process carried out by governments who were not prepared to conduct their fiscal affairs in a prudent manner. South American countries were famous for this. Inevitably it led to much higher cost for carrying debt and loss of investment capital in those countries. IMHO it is a classic example of a failing financial policy. I am no expert but the history of printing money exhibits failed governance. 

 

As you accurately point out inevitably inflation will happen. Almost every country is adding to their national debt. It is a bit of a ponzi scheme, the emperor has no clothes, if you will. Another common fallacy heard on the streets is that there will be a 'great reset'. All debt will be washed away and everyone will start even again. The world has never worked like that. It is not solely about political philosophy. For me it has always been geopolitics. The fallacy of globalization is the suggestion that winners and losers can be evened out. I suggest that geography dictates much of the winner/loser scenario. Winners have to extend help in an ethical way but also for global sustainability. 

 

Canadians, as much as many would disagree with me, think they are equal to Americans. Canada has no where near the same economic capacity of the USA. I am not referring to the size of the economy but to the nature of the $'s created in the GDP. Canada is fundamentally a resource based economy that makes her living primarily thru sales to the USA. While it is the USA national interest to maintain this relationship of Canada being a store house of these resources it is not so for Canada. IMO this relationship is a national security risk. Never in my life time has there been a serious national debate on this over riding threat. A national economic plan for the future of Canada has never been realized. Harper had Canada on a course to be a major oil supplier to the world. The income from that industry could have allowed Canada to diversify from American market dominance. It could have allowed a more independent political role in the world. Another Norway, if you will, only much larger. Canada is a price taker in world markets, the Americans generate far more value in a $1 of their GDP than we do. In otherwards more profit and a greater ability to take on debt. IMHO Canada is in serious trouble and there is not a political party in the country that is willing to be honest about that fact.          

[smithers joe]

wow, i have a ways to go, i’m still on economics .05, interesting thread though. all i know is that several times in my life, when we struggled financially, we re-morgaged our house. in the end we paid it off for 3 times as much money as what we should have.  economics .01...

[BoKnows]

It'll be interesting to see how Trudeau's CERB is going to affect Canada's CPI.

[Dazzle]

8 hours ago, drummer4now said:

Finally someone is in the know. 

 

Wake up people economic slavery is real! but unfortunate for the pipes to run smooth it requires a steady supply of slaves with fancy job titles to make them feel better.

I have always wondered why they never teach modern finance in school. 

If more people were financially sound it would hurt the elite badly.... 

 

Just yesterday I witness someone purchase $115 worth of stamps  at the post office. Stamps I tell you.

 

Please teach your children and loved ones the value of money even if you're wealthy or not. 

There are people literally busting their backs for it everyday. 

 

/end rant.

Why do you care what people do with their money? Maybe he has an extended family to write to. Maybe all they can do is write letters? It's none of your goddamn business.

 

No offense.

[J.I.A.H.N]

You know....here are some funny things that happen to me

 

#1.............through this Covid, I have been saving money

 

and

 

#2.............Since I have retired and have a finite income.....when I want something, or want to go somewhere, and can't afford it..........I either save for it or don't go

 

Funny, heh!

[aGENT]

15 hours ago, nuckin_futz said:

That's when you want to own land and gold.

Correction, that's where you want the financial reserves to buy land. For pennies on the dollar.

 

Wait for economic collapse and buy land, businesses, assets etc for CHEAP. Rich get richer.

[Angry Goose]

In the post poc world clamshells will be the new currency

[BoKnows]

CPI inflation was at 0.5 percent in September and is expected to stay below the Bank’s target band of 1 to 3 percent until early 2021, largely due to low energy prices. Measures of core inflation are all below 2 percent, consistent with an economy where demand has fallen by more than supply. Inflation is expected to remain below target throughout the projection horizon.

 

This was a BoC press release in October.  Reading it for school and figured it would help answer your question  

[24K PureCool]

18 hours ago, janisahockeynut said:

Very interesting observations.....

Considering that generally, there is the same amount of money(wealth) in the world as there was 10 months ago.........the problem is to get it moving again

 

The Republicans think that Big business will hire more, therefore starting to spend money

The Democrats think that you give it to the people who will start spending it more

 

One is the trickle down theory (Reps)
One is the trickle up theory (Dems)

 

Funny thing is........one starts with the little guy saving money

One starts with the big guy making money

 

Pretty funny really

That is the dumbest logic there is. No business is just going to start hiring people for the sake of hiring people. You have to increase the demand in the product or service to justify increasing your headcount and the only way to do that is to give the money to the people who will spend more hence increasing demand and justify more hiring.

 

That is why even some conservative economist were like Sander's economic plan is the best for the economy cause it actually make sense. Give the money to the people and they will spend it. The movement of money drives economic growth, not hoarding it like most business would if you just gonna give them a lump of cash.

[Lancaster]

5 hours ago, BoKnows said:

It'll be interesting to see how Trudeau's CERB is going to affect Canada's CPI.

They'll just adjust what's in the basket. 

 

Kind of like how gas and rent aren't part of CPI, thus the government can keep telling people that inflation is low and everybody is better off then 10-20 years ago.  Yet back when I had my first car and was looking at rental units at the West End.... it was like 0.50L for gas and $400/month for a 1BR right off Pacific Avenue.  Now gas 3x is $1.20-1.50/L and 1BR at the West End is probably 5x at least $2000/month.  

The government still say that inflation has always been low.  

[BoKnows]

Just now, Lancaster said:

They'll just adjust what's in the basket. 

 

Kind of like how gas and rent aren't part of CPI, thus the government can keep telling people that inflation is low and everybody is better off then 10-20 years ago.  Yet back when I had my first car and was looking at rental units at the West End.... it was like 0.50L for gas and $400/month for a 1BR right off Pacific Avenue.  Now gas 3x is $1.20-1.50/L and 1BR at the West End is probably 5x at least $2000/month.  

The government still say that inflation has always been low.  

Gas is up about 70% since 2002.  https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000501

[J.I.A.H.N]

26 minutes ago, 24K PureCool said:

That is the dumbest logic there is. No business is just going to start hiring people for the sake of hiring people. You have to increase the demand in the product or service to justify increasing your headcount and the only way to do that is to give the money to the people who will spend more hence increasing demand and justify more hiring.

 

That is why even some conservative economist were like Sander's economic plan is the best for the economy cause it actually make sense. Give the money to the people and they will spend it. The movement of money drives economic growth, not hoarding it like most business would if you just gonna give them a lump of cash.

I am not sure if you are calling me dumb or not..............but, I can be!

 

What I am referring to is a stimulus package..........where US Government takes/Borrows money to give out, which in turn gets money moving again, because Business/people have it again

 

That is what I was referring to

 

The Dems philosophy is to give it to the people

The Rep philosophy is to give it to business 

 

both parties feel that their way is the way to re-start. or  activate the economy

 

That is what I am saying

 

I actually did not think I had to explain that....but there it is

[24K PureCool]

34 minutes ago, janisahockeynut said:

I am not sure if you are calling me dumb or not..............but, I can be!

 

What I am referring to is a stimulus package..........where US Government takes/Borrows money to give out, which in turn gets money moving again, because Business/people have it again

 

That is what I was referring to

 

The Dems philosophy is to give it to the people

The Rep philosophy is to give it to business 

 

both parties feel that their way is the way to re-start. or  activate the economy

 

That is what I am saying

 

I actually did not think I had to explain that....but there it is

Lol not calling you dumb. I'm calling the Republican approach to give a lump of cash to businesses for the purpose of growing the economy and jobs dumb. 

Edited November 23, 2020 by 24K PureCool

[Chris12345]

5 hours ago, janisahockeynut said:

You know....here are some funny things that happen to me

 

#1.............through this Covid, I have been saving money

 

and

 

#2.............Since I have retired and have a finite income.....when I want something, or want to go somewhere, and can't afford it..........I either save for it or don't go

 

Funny, heh!

I am a saver myself. Been lucky enough to have decent jobs along the way (knock on wood) but I believe every month you run a surplus. 

 

If you can't run a surplus you work more or cut. Easy. Try not to take on debt.

 

Sometimes big ticket items come up and you can't run a surplus but that hits your savings.

[BoKnows]

1 hour ago, janisahockeynut said:

I am not sure if you are calling me dumb or not..............but, I can be!

 

What I am referring to is a stimulus package..........where US Government takes/Borrows money to give out, which in turn gets money moving again, because Business/people have it again

 

That is what I was referring to

 

The Dems philosophy is to give it to the people

The Rep philosophy is to give it to business 

 

both parties feel that their way is the way to re-start. or  activate the economy

 

That is what I am saying

 

I actually did not think I had to explain that....but there it is

I don't think the government gives money to businesses or people to stimulate the economy.  More common monetary policy may be regarding quantitive easing (gov buying back bonds), increasing/decreasing inflation, increasing the money supply, etc.

 

This is all macro economics.  If you want to learn more there are hundreds of good YouTube videos out there.  I recommend Khan Academy.

[J.I.A.H.N]

1 hour ago, BoKnows said:

I don't think the government gives money to businesses or people to stimulate the economy.  More common monetary policy may be regarding quantitive easing (gov buying back bonds), increasing/decreasing inflation, increasing the money supply, etc.

 

This is all macro economics.  If you want to learn more there are hundreds of good YouTube videos out there.  I recommend Khan Academy.

I don't think they give money directly...but give tax breaks, and employment  incentives

[Lancaster]

3 hours ago, BoKnows said:

Gas is up about 70% since 2002.  https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000501

Depending on region and each tax policy on region.  

 

In the GVRD, there are:

Provincial motor fuel tax
B.C.'s carbon tax
The B.C. Transportation Finance Authority tax 
TransLink tax 
Federal excise tax

 

The extra hands in our collective pockets makes gas prices double/triple what it was less than 20 years ago.  

 

[Boudrias]

12 hours ago, janisahockeynut said:

I don't think they give money directly...but give tax breaks, and employment  incentives

Economic growth is the only way governments can see any light at the end of the tunnel. The rationale for much of the Covid relief appears to be about survival for both people and businesses. People usually spend thru necessity and some businesses as well. The catchall that all businesses are sitting on hoards of ill gotten gains is a fallacy. Businesses often get tax breaks to facilitate investment which improves productivity and thusly sustainability. Governments who take on the same effort have poor records of success.

 

Government debt as an instrument of growth does have limits. Eventually the service costs dominate budgets and eliminate the ability to spend on critical sectors. Since the federal government debt is likely already over $1 trillion consider the interest charges at more conventional rates of 3 - 5%.  That is only federal add in provincial, municipal and crown corps. Then consider the needs of pension plans for returns of 8% to meet their actuarial requirements for sustainable payouts. The reality is that most pension plans are not sustainable now. Again, the emperor has no clothes, IMO.

 

 

[J.I.A.H.N]

34 minutes ago, Boudrias said:

Economic growth is the only way governments can see any light at the end of the tunnel. The rationale for much of the Covid relief appears to be about survival for both people and businesses. People usually spend thru necessity and some businesses as well. The catchall that all businesses are sitting on hoards of ill gotten gains is a fallacy. Businesses often get tax breaks to facilitate investment which improves productivity and thusly sustainability. Governments who take on the same effort have poor records of success.

 

Government debt as an instrument of growth does have limits. Eventually the service costs dominate budgets and eliminate the ability to spend on critical sectors. Since the federal government debt is likely already over $1 trillion consider the interest charges at more conventional rates of 3 - 5%.  That is only federal add in provincial, municipal and crown corps. Then consider the needs of pension plans for returns of 8% to meet their actuarial requirements for sustainable payouts. The reality is that most pension plans are not sustainable now. Again, the emperor has no clothes, IMO.

 

 

Totally agree

 

I think back in the Great Depression, the Government spent their way out of it by, creating massive  projects, where they hired companies to do these projects, which in turn, hired men and women, which in turn spent money at the local grocery store, who then paid the stock boy and the farmer....... It worked!