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House Price Crash Forum


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Everything posted by sharpe

  1. Is the key to this argument explaining why velocity is equal to fractional reserve effect or money multiplier? I have not understood why you think they are the same?
  2. so government bonds are being fractionally reserved? so for each bond issued say at $100, you are saying a final circulation of $800? - how does that work?
  3. So this must assume no bank lending? if there is bank lending - this goes up as interest rates are lowered
  4. your second point is that it is just new money created, so even if no one borrows, does the money supply still go up? that no one borrows is fairly exceptional? or is it the banks not lending as happened in great depression and more recently
  5. I have probably missed something. If the fed buys 10 year bonds. Say $100 worth. Let's say there is a fractional reserve requirement of 10%, that creates $1000 dollars of cash in the economy. the Money supply rises and so do prices. higher inflation will make longer term bonds less attractive, which would mean as soon as the Fed stops buying bonds the price will fall significantly. What am I missing here? - thanks
  6. It is the best broadcaster in the world - by a long long way. Compare to sky etc... That is total guff. I am happy to pay for it and happy you pay too!
  7. Nicely put! It is pure speculation right now. There may be some indicators for currencies under less turbulent circumstances, but right now it is total speculation
  8. that is an interesting perspective. presumably any item can be used like money. you can swap eggs for runner beans. is the difference that these items are not subject to the fractional reserve banking system? So equities and treasuries are different from cash in that they are limited in quantity and identifiable separately (i.e. so when the government issues £100 of 10 year gilts - there is only ever £100).
  9. I will believe it when CPI goes negative as opposed to 50% over the target. Do you remember how wrong Bill Gross was on gilts? How are your dollar assets doing?
  10. what would competing currencies look like - at your local would there be the price of a pint in 15 currencies?
  11. at the moment the government controls money supply through enforcing a specific currency on the population and then using interest rates and fractional reserve ratios. It is not perfect, but there is a huge element of control. I have not thought through what a world of competing currencies would look like. In the long term - would people prefer hard currency rather than fiat? - so you would end up with a number of commodity backed currencies - which would mean of the two points, 1 would disappear and we would just have 2. Some commodities are more suited than others - experience has pointed to a few notables which cannot be named here for fear of provoking the gods.
  12. For moving prices there are two things: 1 movement in the supply of money 2 movement in the supply of the commodity / good / service most people know very little about item 1. This can be controlled. item 2 cannot be controlled - and all efforts so far have been fairly unsuccessful
  13. Surely all second nature? I would also request differences between these assets and a weather derivative on HDD - which should increase the chances of bringing in the sun spot data.
  14. was it a request on jim'll fix it gone wrong?
  15. presumably the root cause was the big bang at the start of the universe? some people say interest rates were held too low for too long....
  16. In the same way rents stayed relatively unmoved, whereas house prices skyrocketed. You can see the collapse in banking reserve requirements over the same period here: Country 1968 1978 1988 1998 United Kingdom 20.5 15.9 5.0 3.1 Turkey 58.3 62.7 30.8 18.0 Germany 19.0 19.3 17.2 11.9 United States 12.3 10.1 8.5 10.3 http://en.wikipedia.org/wiki/Reserve_requirement This suggests massive credit expansion by 2008 these ratios probably hit around 0. the house price boom did not even start until the end of the above chart
  17. breaking windows and repairing them is what Keynesian-ism is all about. Did I hear someone suggesting dumping ship loads of cars at sea? I am sure someone will come along using long words and scientific sounding reasoning; with an all knowing demeanour to tell us black is white.
  18. I was not able to guess, nor provide any of the requested data. One thing I am learning about economics is adopting a patronising tone, talking about the unknown with perfect certainty, using long, less used words and adopting a vaguely scientific tone will convince a lot of people. I did find some sun spot data - could you put together a theory about why that explains the business cycle? The sophists of old claimed they could get a job interview for a physicians job in preference to the worlds finest physician.
  19. I recall reading this article on hpc about 1 and 2 pence pieces being melted down and disappearing. Copper 1p and 2p are now replaced with steal coated copper. http://news.bbc.co.uk/1/hi/business/4766897.stm Is this an example of "Gresham's law"?: http://en.wikipedia.org/wiki/Gresham's_law I understand this is seen as an indicator of high inflationary periods - would be interested to know thoughts?
  20. There is a dip after 2080, in the graph, this is small relative to the prior 70 years of growth. It is also entirely spurious. Who prior to the agricultural revolution could have predicted its impact on populations 70 years before? Current population 6.5bn UN projections up to 2100: low 5.7bn medium 9bn high 14bn I have no ideology, and never espoused any economic school. I have read some of them and only been impressed by how easy the theories are to pick apart. We already agreed economic activity results in economic growth. We were unable to show any causation the other way around. I know quite a bit about longevity - by looking at Bill Gross's latest output - he does not know much about longevity; i am less sure on what drives birth rates. Was Bill Gross saying that gilts were on a bed of nitro glycerine, shortly before the price rocketed and the pound snapped back 10% - I suspect he took different line in private. What I found most interesting is that the population shape we expect in the future (wrongly or rightly) will be great news for the economy as there will be more people of working age relative to non working age. I see no evidence to support this population change impact on the economy for the worse
  21. it does not matter if it came from Albert Einstein. It is just nonsense. Population projections not credible. The UN gave 3 scenarios, population fall, population stability, population growth. http://en.wikipedia.org/wiki/File:World-Population-1800-2100.png Basically anything could happen What is the agenda for your interpretation?
  22. are there any repeatable experiments in economics? which repeatable experiments have you reached your conclusions on?
  23. Not according the austria school - they claim it is not a science.
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