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Traders can't even drive .... (pg. 3)
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| Brahman |
| quote: | Originally posted by Kinezi
This is a not a place for religious fanatics, Yo, Ima let you finish.. but before that why dont you go and be terrorist somewhere else? |
You'll be the first one I blow up. |
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| Brahman |
| quote: | Originally posted by DOOMBOT
You need the money to buy the product, which allows you to act on the demand. |
But doesn't necessarily cause demand. |
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| DOOMBOT |
| quote: | Originally posted by Brahman
But doesn't necessarily cause demand. |
You can demand anything if you want. If you don't have the means of acting on it, what good is it going to do you? Which goes back to my example of the homeless person. |
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| DOOMBOT |
| quote: | Originally posted by Brahman
Post-World War II, the American economy had exponentially more than it did in the 1800's. Compounding interest is an exponential effect of investment, therefore, the American economy saw exponentially more growth post-World War II than it did in the 1800's. Refer to chart below...
http://ichart.finance.yahoo.com/z?s=%5EDJI&t=my&q=l&l=off&z=m&a=v&p=s
Your facts are wrong. |
The DOW isn't exactly the greatest tool to use to determine how good or bad the economy is doing. Hasn't it been climbing most of this year? |
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| jerZ07002 |
| quote: | Originally posted by DOOMBOT
The DOW isn't exactly the greatest tool to use to determine how good or bad the economy is doing. Hasn't it been climbing most of this year? |
search GDP stastics. 1950 saw 20%+ rise in GDP. During no period in the 1800s did GDP grow that quickly.
As for inflation, it's real simple: If we purposefully create inflation, as you suggest, we can't increase consumerism (all else equal) because inflation, by definition, is a loss in purchasing power. How can we reduce purchasing power and increase consumerism? What you're thinking about is the availability of cheap financing, which is NOT inflation. Inflation may result from cheap financing if the supply of dollars is greater than demand. Nevertheless, inflation by-product of cheap financing (and many other factors, including demand, input prices, interest rates, etc...)
I'm not trying to be a dick, but I suggest you read about inflation and the factors effecting inflation before you have an intellectual conversation regarding the topic. |
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| DOOMBOT |
| quote: | Originally posted by jerZ07002
search GDP stastics. 1950 saw 20%+ rise in GDP. During no period in the 1800s did GDP grow that quickly. [/b] |
GDP figures, first of all, are cooked. GDP can and has risen due to a lot of things, one of which, consumer spending. That's not necessarily a good thing, when the spending is fueled by foreign credit, which we can't pay back now because of the fact we've driven ourselves into the ground with all of this debt. But that's another discussion.
| quote: | | As for inflation, it's real simple: If we purposefully create inflation, as you suggest, we can't increase consumerism (all else equal) because inflation, by definition, is a loss in purchasing power. How can we reduce purchasing power and increase consumerism? |
Simple, you spread out what you are trying to buy into fixed payments. How do you think houses and cars, for example, are bought? Look at Brazil, their dollar is so weak that they resorted to this exact type of system for buying goods that us US citizens would consider very common purchases, such as clothing or electronics. Funny because as I write that, we have resorted to this type of payment for some electronics as well.
| quote: | | What you're thinking about is the availability of cheap financing, which is NOT inflation. |
It can definitely be the cause of inflation. If a banks lending practices are loose and the interest rates are low, you've just made money very easy and cheap to come by. So when the loan is made, the money supply increases, otherwise known as inflation.
| quote: | | Inflation may result from cheap financing if the supply of dollars is greater than demand. |
You just helped proved my point.
| quote: | Nevertheless, inflation by-product of cheap financing (and many other factors, including demand, input prices, interest rates, etc...)
I'm not trying to be a dick, but I suggest you read about inflation and the factors effecting inflation before you have an intellectual conversation regarding the topic. |
You're not being a dick by having this conversation and suggesting to read a book. I'm more concerned with why, when the question "What is inflation" is asked, people answer with "rise in consumer goods", without thinking further, or, how that is made possible. If you dig deeper you find that it happens because the money supply was increased and if it is increased too much, you have what happened Argentina or Zimbabwe take place, to name a couple examples. |
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| Lebezniatnikov |
| quote: | Originally posted by DOOMBOT
It can definitely be the cause of inflation. If a banks lending practices are loose and the interest rates are low, you've just made money very easy and cheap to come by. So when the loan is made, the money supply increases, otherwise known as inflation. |
That's not inflation.
I think what you're hinting at is depreciation of the dollar, which isn't the same thing as inflation. As jer has pointed out, inflation is tied to the price of a basket of goods and its change over time. Aggregate supply and demand are the two critical components that change the price index. And in any case, this is on a macro level, so your homeless person example isn't really a parallel one. |
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| DOOMBOT |
| quote: | | Originally posted by Lebezniatnikov I think what you're hinting at is depreciation of the dollar, which isn't the same thing as inflation. |
How does the value of any dollar depreciate?
http://dictionary.reference.com/browse/inflation
| quote: | in⋅fla⋅tion
/ɪnˈfleɪʃən/ Show Spelled Pronunciation [in-fley-shuhn]
–noun
1. Economics. a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency (opposed to deflation ).
2. the act of inflating.
3. the state of being inflated. |
Not sure why many feel the need to complicate this. The prices will rise if the money supply is increased. It's just a fact that we must deal with when you inflate the supply of money! |
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| Atmos |
| quote: | Originally posted by DOOMBOT
How does the value of any dollar depreciate?
http://dictionary.reference.com/browse/inflation
Not sure why many feel the need to complicate this. The prices will rise if the money supply is increased. It's just a fact that we must deal with when you inflate the supply of money! |
Yea after reading many posts, I can't see why you guys are arguing over the little details of what text-books define inflation as. An increase in the printing and distribution of money leads to the devaluation of the currency, therefore causing prices to rise which then hands it off to the "textbook" definition of inflation. |
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| Brahman |
| quote: | Originally posted by DOOMBOT
You can demand anything if you want. If you don't have the means of acting on it, what good is it going to do you? Which goes back to my example of the homeless person. |
I can have money and not choose to spend it. |
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| Brahman |
| quote: | Originally posted by DOOMBOT
The DOW isn't exactly the greatest tool to use to determine how good or bad the economy is doing. Hasn't it been climbing most of this year? |
The stock market reacts the fastest to economic data than anything else. When the economy slumps, the stock market reacts first. When the economy starts to recover, it reacts first. The market is not independent of the overall economy.
If that's not good enough for you then look at industrial output or GDP. Our economy had exponentially more industrial output and GDP after World War II than the entire 19th century. I'm still waiting for that stat of yours about our greatest economic growth happening in the 19th century. Did we have any billionaires in the 19th century? |
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| DOOMBOT |
| quote: | Originally posted by Brahman
Did we have any billionaires in the 19th century? |
http://www.johndrockefeller.org/
| quote: | | he became the world's richest man and first American billionaire, and is often regarded as the richest person in history. |
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