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Andy_K

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Everything posted by Andy_K

  1. Money is a representation of a claim on a share of resources & labour. For you to spend resources & labour they must exist. You can't buy bread if none has been baked. In other words, you aren't spending the results of your future labour. You are spending the results of someone else's finished labour. That labour is completed, so the claim to it must exist, so the money must exist.
  2. I'm not sure I trust anything published by someone who doesn't understand why you shouldn't make a single web page over 15mb
  3. I don't doubt it's true, but it's crazy. The problem is that the amount of currency in existence is many orders of magnitude larger than the total number of available things to spend it on in the entire world. If even a small fraction of it was spent at once, there would be massive currency devaluation. As the debt bubble grows exponentially, the fraction which can be spent without destroying currencies or wildly inflating asset prices decreases even further. You reach the point where the rich can't actually spend their 'wealth', because in doing so they would destroy it's value. Sooner or later the devaluation can't be avoided any further, and there's a rush to assets before the currency falls apart completely. That capital gains tax is simply a mechanism for further delaying the collapse by encouraging the holding of cash. How long the plates will stay spinning is anybody's guess, but they won't stay forever.
  4. Hoarded food or resources, yes - but they are self-correcting in that the more you try to acquire, the more expensive they'll get. With money, you can hoard as much as you like in a big scrooge mcduck style money bin if you like. It won't make society poorer, it'll just deflate currencies as you remove it from circulation. Money is just a way of determining the relative share of available assets that you can obtain at any particular time. If your money isn't in the system, your share of resources/assets being distributed is zero. Money is not wealth. It's a representation of your potential ability to acquire real wealth, should you choose to spend it. If the rich were spending all their money on real things, they'd be taking a bigger share of the pie, which therefore would leave the rest of us with less.
  5. Was there a cull of all 45-64 year olds that I missed? Why aren't they included? They're surely relevant
  6. All these economic theories are very misleading if you're thinking about money instead of wealth. Like Injin says, you need to abstract away the medium of exchange in order to see what's really going on. Forget the money. Look at what it produces - food, energy, labour, consumable products, housing, etc. There are a finite amount of these resources existing and being produced at any time. Money determines how big a slice of them you get. More money to person X can only result in more stuff for person Y if person X utilises their resources to increase the amount of resources available. In the real world, this means building power plants, factories, housing, farming, etc. On the other hand, if person X just consumes the extra resources, it's detrimental to everyone else In other words, redistributing wealth towards the wealthy can only benefit everyone else if the economy is structured so as to encourage investment into real, productive ventures or research. Since ours seems primarily to encourage financial theft/fraud and litigation, it doesn't work. But it might in a genuine free market
  7. Oh I don't know, I think £20k is about average for a weekly waitrose trip, provided you skip the 'essentials' range
  8. Yes, what fool would keep buying from a massively indebted nation, with the virtual certainty of massive losses by inflation? You are. Though largely not through choice. Around 1/3 of UK debt is held by pension & insurance funds. Bank of England (i.e 'your future earnings') holds another third. The rest is various overseas purchasers (probably largely foreign pension funds) and financial institutions.
  9. When my last car died I got a focus 1.8 td. It does 55+ mpg. It cost less than £2500. It works. Anyone who wants a cheap economical car can find one if they really want to...
  10. A common misconception! Gordon Brown was never motivated by wealth, he was just power-hungy and utterly incompetent. Tony Blair however was very smart, but a greedy underhand liar.
  11. How an Economy Grows and Why It Crashes
  12. What, like RBS shares? It effectively prints it. The bank of england is not allowed to purchase newly issued gilts (google primary issuance) so what it does is buy them from private holders... who then go out and replace them by buying the newly issued ones. The net effect is that the money created by the BoE gets to be spent by the government, with a cut taken out by the financial services in the middle. It also artificially raises demand, and therefore keeps the interest rate on gilts down.
  13. Sadly true... at best we'd be a few years further away from it collapsing if the tories had been in charge. An Italy instead of a Greece, but ultimately facing the same fate. Question: We all know that fiat currencies have gone bust before, as they do every time. Has there ever been a time when so many floundered at the same time? No? Should be an interesting decade or two then...
  14. +1 for this and your other posts. Good to see there are a few people who can see through the fog. As to whether the government should be spending more or less - that depends. Is the government or the private sector more likely to use resources in a way which increases the productivity of the nation most in the long term?
  15. You can't protect the value of money. It is just a means of distributing wealth. All the size of your pension determines is how big your slice of the UK pie will be, relative to how much money everyone else has at that time. Guaranteeing a certain size means necessarily stealing from others in the event that the pie has shrunk in any way. Since we know it is shrinking and will continue to do so, these ideas are at best misguided and at worst deliberate misinformation
  16. Disagree with this. You are confusing money with wealth. There are dozens of different ways to store your wealth - UK sterling, foreign currency, precious metals, stocks, land, and so forth. If you have high inflation, the general trend on most of these, measured in £, is going to be upwards. If house prices are dropping during rampant inflation and therefore they maintain the same nominal value, that doesn't mean you haven't lost wealth via inflation on your savings. If you had a £50k desposit for a £100k house, and the currency halves in value the same time house prices drop in half, you will still have a £50k deposit towards a £100k house, but really you've only got the equivalent of a £25k desposit for a £50k house. Had your savings been inflation-proof, you'd have £50k for a £50k house. Just because the goalposts move with you, doesn't mean you haven't moved.
  17. Money is a means of distributing the finite resources and labour that exist in the world at any one time. Western economies discovered that by borrowing money into existence, backed only by a promise to repay, that they could take a much bigger slice of the pie than they deserved. They got more oil, more food, more cars, and the fruits of labour from other countries. All they had to do in return was get into debt and promise to repay. As production moved abroad, the western nations stopped making much for themselves, and imported almost all their goods from abroad whilst developing 'service' based economies which delivered no real productive value. When the debt started to reach a critical mass, cracks started appearing. National deficits spiralled. Banks needed bailouts. People couldn't pay their mortgages or credit cards. There was simply too much debt in the system. It is yet to be determined how the default happens and the big reset takes effect, but currency devaluation is a likely option. It may take some decades to set it, but ultimately no nation can consume more than it produces. This means we will move, painfully, towards a situation where the west produces a lot more and consumes a lot less. We are all going to become a lot poorer.
  18. +1 We can't have it both ways. People want security in their employment yet they want to be able to change mobile phone contracts, energy suppliers, mortgages etc all at the drop of a hat. If you want a flexible economy, you need to be a part of it. People want their service as an employee to be sacrosanct, yet they want every service they rely on in their lives to be instantly disposable. That sounds like ego and entitlement to me.
  19. Wealth is about production, not money. Money is just a means of distributing wealth. Consumers are poorer when there is less stuff they can afford, not when they're given less money. If you make business more efficient there's more stuff for people to have, or to be exported. Either of which is good for the country.
  20. 1.4% of GDP is a much higher % of tax take, which is what they should be measured against. Measuring against GDP is pointless and purely designed to make the figure look smaller. Current tax take approx £550b, and current public sector pension cost (according to Report of the public sector pensions commission) is £35b That's approx 5.5% of tax take going into public sector pensions.
  21. Because the first thing councils threaten us with when they don't get their 10% annual tax hike, is rubbish piling up in the streets.
  22. The numbers are bigger, but compared to the figures for the last few years both december and january were very good, hence the positive comments. Due to monthly fluctuations, generally figures like this are best compared year-on-year, rather than month-on-month. In this case both dec 2011 and jan 2012 are massive improvements on dec 2010 and jan 2011 respectively.
  23. Just under 23 quid for monthly membership at the local uni gym (with aluminus discount). Anything over 40 is way too much.
  24. More interesting/intellectual games still exist, but they're not mainstream so they're very hard to find. Fate Of The World for example, focuses on the upcoming energy crisis, and involves applying economic policies in different parts of the world to try to prevent mass human extinction, riots, & plummeting standards of living. It's the sort of game that might be of interest to the sort of people that would frequent this forum & play an economic simulator, but you'd never catch a hoodie buying a copy in Game (if it were even stocked)
  25. Great idea, but one big problem. Any such model will only be as useful as the rules it is programmed with. Given the dominance in mainstream economics of neoclassical/keynesian approaches, any such model would be built with those rules in mind and to make those rules work. As such, trying to use any of the popular ideas here, which lean towards the Austrian school, would inevitably either be impossible or fail completely. The only way to make such a simulation work would be to program the economy from the ground up - this means modelling all food production, energy production, (and associated consumption) every transaction of labour/money and so forth. You could then get some more meaningful results out. But nobody's going to program a model which does that when they can write one based on 'known' economic rules which gives their superiors the 'correct' answers
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