The dumbed down state of financial reporting on TV

[new_trader]

Really, how so..?

Let's make it fun!

 

[brettus]

Inflation is an expansion of the money supply, the consequence is rising prices.

Ok so inflation is nothing to with rising prices. So prices of commodities appreciating on weak supply isn't inflationary?

 

[Black Swan]

Let's make it fun!

You really expect me to watch that? A couple of paragraphs of your *thoughts* would have sufficed..but heh, never mind..

 

[new_trader]

Ok so inflation is nothing to with rising prices. So prices of commodities appreciating on weak supply isn't inflationary?

Economists, deflationists and inflationists will argue forever and a day about this. However, strictly speaking, inflation is a growth in the money supply and it is velocity of money which impacts prices.

Think of it this way, imagine 10 people at an auction where the most money any single person has in their pocket is £110 and if you added up all the money in the room it totals £1000. The most any item can be sold for is £110. But, if Ben increased the money supply by creating another £500 out of thin air and lent it out to a few people at the auction then the money supply is now £1500. The price of any item would/could now be bid up higher than £110 depending on who got the money and how much 'demand' they had for the items on offer.

 

[dmt257]

Ok so inflation is nothing to with rising prices. So prices of commodities appreciating on weak supply isn't inflationary?

In that situation, one or a combination of the following occurs....

- The increase in price is temporary as higher prices result in greater supply.

- The higher price causes in a shift to alternatives

- If economic activity is adversely affected because of the higher price, demand falls. The price falls.

Prices always fluctuate around the 'equilibrium'. Ie, oil was over-valued at $150, but just a few months later it was under-valued at $38. Hence, it didn't stay at any of those prices for very long.


When you increase the money supply, it shifts the demand curve. That is exactly the reason why we have seen a boom in commodities since the financial crisis, and central banks began their money printing.

 

[new_trader]

In that situation, one or a combination of the following occurs....

- The increase in price is temporary as higher prices result in greater supply.

- The higher price causes in a shift to alternatives

- If economic activity is adversely affected because of the higher price, demand falls. The price falls.

Prices always fluctuate around the 'equilibrium'. Ie, oil was over-valued at $150, but just a few months later it was under-valued at $38. Hence, it didn't stay at any of those prices for very long.


When you increase the money supply, it shifts the demand curve. That is exactly the reason why we have seen a boom in commodities since the financial crisis, and central banks began their money printing.

Also, don't forget that commodities are priced in $US which is being devalued the most. If you are buying commodities with gold or silver then commodities have got cheaper.

 

[brettus]

Economists, deflationists and inflationists will argue forever and a day about this. However, strictly speaking, inflation is a growth in the money supply and it is velocity of money which impacts prices.

Think of it this way, imagine 10 people at an auction where the most money any single person has in their pocket is £110 and if you added up all the money in the room it totals £1000. The most any item can be sold for is £110. But, if Ben increased the money supply by creating another £500 out of thin air and lent it out to a few people at the auction then the money supply is now £1500. The price of any item would/could now be bid up higher than £110 depending on who got the money and how much 'demand' they had for the items on offer.

Yea i understand velocity of money supply. Every buck is lent out 4 times creating 4 bucks, which is the cause of recessions, and the only way round it is pumping more money into the economy.

 

[brettus]

In that situation, one or a combination of the following occurs....

- The increase in price is temporary as higher prices result in greater supply.

- The higher price causes in a shift to alternatives

- If economic activity is adversely affected because of the higher price, demand falls. The price falls.

Prices always fluctuate around the 'equilibrium'. Ie, oil was over-valued at $150, but just a few months later it was under-valued at $38. Hence, it didn't stay at any of those prices for very long.


When you increase the money supply, it shifts the demand curve. That is exactly the reason why we have seen a boom in commodities since the financial crisis, and central banks began their money printing.

I haven't done economics in ages, but what you're saying makes sense to me.

 

[counter_violent]

Also, don't forget that commodities are priced in $US which is being devalued the most. If you are buying commodities with gold or silver then commodities have got cheaper.

Yeah of course we're all in the habit of going around buying commods with nuggits.

I mean just how much nonsense can you come out with ffs.

 

[new_trader]

You really expect me to watch that? A couple of paragraphs of your *thoughts* would have sufficed..but heh, never mind..

OK. Keynes’ underlying principle is that the Government is better at spending your money than you are. This is the premise of the thread and explains why the media is dumbing down the public. The media are either unbelievably clueless and/or servants of the state which wants to keep the public docile and ill-informed so that they can be controlled, subjugated and robbed willingly. To actually believe that demand needs to be ‘stimulated’ is too incredibly stupid for words.

 

[new_trader]

Of course, counter_violent has just proven how successful the dumbing down campaign is.

 

[Black Swan]

OK. Keynes’ underlying principle is that the Government is better at spending your money than you are. This is the premise of the thread and explains why the media is dumbing down the public. The media are either unbelievably clueless and/or servants of the state which wants to keep the public docile and ill-informed so that they can be controlled, subjugated and robbed willingly. To actually believe that demand needs to be ‘stimulated’ is too incredibly stupid for words.

Oh dear..I think I *preferred* your first attempt..

 

[cr6196]

OK. Keynes’ underlying principle is that the Government is better at spending your money than you are. This is the premise of the thread and explains why the media is dumbing down the public. The media are either unbelievably clueless and/or servants of the state which wants to keep the public docile and ill-informed so that they can be controlled, subjugated and robbed willingly. To actually believe that demand needs to be ‘stimulated’ is too incredibly stupid for words.

you appear to have mistaken keynes' underlying principle for what you want keynes' underlying principle to be. i'm sure your ability to dispose of straw men makes you feel very clever. you also don't do service to criticisms of QE2. Prof. Beck has failed another student.

 

[glyder]

NT, I'd describe inflation as a 'persistent rise in prices'.
It might be due to growth in money supply, or it could excessive demand over supply.

I agree with you on the gold though, if you held gold and use it as a currency, which it is,
then inflation is not a problem for you. Measured using a gold index house prices have plunged.

 

[Atilla]

The reason this annoys me more than anything is because the BOE has an inflation target of 2%. Why have a target at all if:

1) There are factors which are out of their control as they keep saying
2) They continually undershoot and overshoot the target. Just make it 0%.

Deflation is not a 'threat' but politicians try to convince us of this lie in order to confiscate our wealth.

Given that we find our selves in a recessionary period and exceptional circumstances; governments have conflicting objectives. Stable prices, economice growth & unemployment. They are not compatible with each other.

1) Targets - baseline is always good to have as a guiding principal... In this case inflation is good - stimulates production and moves money away from savers to spenders. This will help with the payback/reduction of the collosal government debt.

2) We need to keep interest rates low to stimulate investment and keep the pound low. Thus BoE is limited in what it can do. It shouldn't raise rates imho - at least not yet.

Policy being conducted is the correct one as the excess demand should be removed from the economy via taxation to pay off national debt.

Question is one of degree - how much inflation and taxation can the economy bear and that is the real dillema facing policy decision makers imho.

 

[new_trader]

Given that we find our selves in a recessionary period and exceptional circumstances; governments have conflicting objectives. Stable prices, economice growth & unemployment. They are not compatible with each other.

1) Targets - baseline is always good to have as a guiding principal... In this case inflation is good - stimulates production and moves money away from savers to spenders. This will help with the payback/reduction of the collosal government debt.

2) We need to keep interest rates low to stimulate investment and keep the pound low. Thus BoE is limited in what it can do. It shouldn't raise rates imho - at least not yet.

Policy being conducted is the correct one as the excess demand should be removed from the economy via taxation to pay off national debt.

Question is one of degree - how much inflation and taxation can the economy bear and that is the real dillema facing policy decision makers imho.

In other words, just keep doing what they are doing because it has worked so well. I'm sure the 'professors' of economics will agree with you. As for me, more gold please and get rid of those horrible £'s!

 

[Atilla]

In other words, just keep doing what they are doing because it has worked so well. I'm sure the 'professors' of economics will agree with you. As for me, more gold please and get rid of those horrible £'s!

Yes afraid so. I do not agree totally with the way government is opted to tax people with low incomes and working in front line services but short of a revolution not sure what one can do???

As for gold - you are my mentor and I follow your posts around T2W, I think you already know that...

PS Watch out for DOW and Gold making lower highs... mi spider senses tingling...

 

[JRP2891]

Given that we find our selves in a recessionary period and exceptional circumstances; governments have conflicting objectives. Stable prices, economice growth & unemployment. They are not compatible with each other.

1) Targets - baseline is always good to have as a guiding principal... In this case inflation is good - stimulates production and moves money away from savers to spenders. This will help with the payback/reduction of the collosal government debt.

2) We need to keep interest rates low to stimulate investment and keep the pound low. Thus BoE is limited in what it can do. It shouldn't raise rates imho - at least not yet.

Policy being conducted is the correct one as the excess demand should be removed from the economy via taxation to pay off national debt.

Question is one of degree - how much inflation and taxation can the economy bear and that is the real dillema facing policy decision makers imho.

My opinion is that the current government policies of debasing their respective currencies will all end in tears, as although they might be able to wipe off a portion of their foreign debt, it will kill the consumer through high inflation and high interest rates. There's also the possibility of foreign buyers just not turning up to buy anymore treasuries (USA), therefore when the U.S has their Ireland moment it'll be the end of the debt supercycle with dire consequences for the current monetary system. Consequently, Gold and Silver still look good to me now, with grains looking even better longer term.

P.S - I expect 95% of you to disagree with me which is just fine.

 

[glyder]

My opinion is that the current government policies of debasing their respective currencies will all end in tears, as although they might be able to wipe off a portion of their foreign debt, it will kill the consumer through high inflation and high interest rates. There's also the possibility of foreign buyers just not turning up to buy anymore treasuries (USA), therefore when the U.S has their Ireland moment it'll be the end of the debt supercycle with dire consequences for the current monetary system. Consequently, Gold and Silver still look good to me now, with grains looking even better longer term.

P.S - I expect 95% of you to disagree with me which is just fine.

I tend to agree - the fact is noone knows exactly where all the currency debasement is leading but the likelihood is its going to be very bad and will eventually spiral downward out of control. Very quickly when it does too.
And gold will rocket upwards.
To Quote Barry the Baptist "When you dance with the devil, you wait for the song to stop"

 

[Atilla]

I tend to agree - the fact is noone knows exactly where all the currency debasement is leading but the likelihood is its going to be very bad and will eventually spiral downward out of control. Very quickly when it does too.
And gold will rocket upwards.
To Quote Barry the Baptist "When you dance with the devil, you wait for the song to stop"

We've been here before.

£1=$8

What's new?


Anybody interested in fundamental economics - have a read of this old gem of a thread... http://www.trade2win.com/boards/eco...22039-us-dollar-pegged-yuan-2.html#post294919


Forgive me for blowing my trumpet - but check out the date and predictions... :smart: