Let's talk about Economics

a reply to: Flyingclaydisk

In reality, if you watch the price of a big stock offering the price per share will drop initially immediately following the offering. This is the same principle.

Hmmm, you sure about that? What principle?

Big stock offerings (can only assume you consider an IPO the same?) are rarely underwritten in-house -- buyback plans or splits are entirely different -- and nominally underpriced by the underwriter. Several studies have shown that IPOs do incredibly well "initially immediately following the offering."

At any rate, this seems a lot less about "economics" and more like 'spit-balling' -- I ain't hating, but this is one of those instances where knowing a subject 3 miles wide but only 3 inches deep bites you...I like economics and nerdy conversation, so I am just saying.

Usufruct is something you may want to research, it worked for millennia and has always fascinated my interest.

originally posted by: ScepticScot
a reply to: BeefNoMeat

The money multiplier erect is largely a Myth. Money creation by banks is driven by demand for credit, reserves are taken care of after the fact.

No, it's not. Not even remotely. Want the multiplier effect of in-kind payments? The multiplier effect of defense spending? I could go on and on, but I'll let you present me with the "erect is largely a Myth"...

a reply to: Flyingclaydisk

That extra $100 was derived from 'perceived' value, not from 'actual' value.

And therein lies your problem: you haven't even defined 'value'. Is it utilitarian/functional value (e.g. investing in stocks such that a company could invest in physical capital)? Is it intrinsic value (e.g. a beautiful sunset on the beach)? Lots of holes here in your understanding of economics...just sayin. Want to understand it better, don't start with 'history of economics' (the whole barter economy to buying stocks economy spiel) and leave out mercantilism....and a helluva lot more that preceded the whole "keep the stock value at $1 and conversely you now have a company worth $200, right? But is it really "worth" $200?" fallacious argument.

a reply to: ScepticScot

Not having a backed currency makes it easier to deal with financial crises and minimise the effect on the real economy. That's why 2008 was a financial crises not a second great depression.

Lol, wut?

The US dollar is absolutely backed -- by explicit guarantees decreed by the US Treasury. So you assert that the '08 great recession was minimized because principals and agents' of the economy had zero confidence in the legal tender-ability of the US to make good...sound reasoning. You can still buy gold with dollars. As you did note, currency is simply a means of exchange, but 'fiat' currency was developed for all kinds of conspiratorial reasons, the biggest of those conspiracies is that of the efficiency of exchange. But hey, I did see where you can buy gold sold in one-ounce packages that you can break off (looks like a gold Mr Good candy bar) and present to your local florist selling those Dutch tulips.

That is the Keynesian multiplier which is a different concept from money multiplier. One describes the effect of fiscal spending the other deals with fractional reserve banking.

originally posted by: BeefNoMeat
a reply to: ScepticScot

Not having a backed currency makes it easier to deal with financial crises and minimise the effect on the real economy. That's why 2008 was a financial crises not a second great depression.

Lol, wut?

The US dollar is absolutely backed -- by explicit guarantees decreed by the US Treasury. So you assert that the '08 great recession was minimized because principals and agents' of the economy had zero confidence in the legal tender-ability of the US to make good...sound reasoning. You can still buy gold with dollars. As you did note, currency is simply a means of exchange, but 'fiat' currency was developed for all kinds of conspiratorial reasons, the biggest of those conspiracies is that of the efficiency of exchange. But hey, I did see where you can buy gold sold in one-ounce packages that you can break off (looks like a gold Mr Good candy bar) and present to your local florist selling those Dutch tulips.

No I didn't assert that at all. The 2008 financial was minimized by the ability of government to both directly spend and introduce liquidity into the financial system (they should have done more of the former). This was done without any constraint based on amounts of shiny metal.

I am reasonably sure you understand what is meant by a backed a currency and no it doesn't just mean you can by stuff with it.

Where's that circular argument meme at when I need it? Ugh.

Carry on, remind me about the steady-state assumption that doesn't exist in reality and then remind me about the semantics of your 'Keynesian' versus 'Fractional Reserve Banking' multipliers.

Sorry, bucko, google is your friend, but it's also an indictment of your attempts to play semantics and duck the reality of true macroeconomics. I mean, we can talk about the dearth of first-order solutions in normative policy and what are the most cost-effective second-order solutions that we deal with in mixed-economies, or you can keep banging on google for simple retorts. I'd rather talk economics, but it's your move.

originally posted by: BeefNoMeat
Where's that circular argument meme at when I need it? Ugh.

Carry on, remind me about the steady-state assumption that doesn't exist in reality and then remind me about the semantics of your 'Keynesian' versus 'Fractional Reserve Banking' multipliers.

Sorry, bucko, google is your friend, but it's also an indictment of your attempts to play semantics and duck the reality of true macroeconomics. I mean, we can talk about the dearth of first-order solutions in normative policy and what are the most cost-effective second-order solutions that we deal with in mixed-economies, or you can keep banging on google for simple retorts. I'd rather talk economics, but it's your move.

Not a circular argument and not semantics. Keynesian and money multiplier are two entirely separate concepts, something you apparently didn't understand.

Likewise you don't seem clear on what is meant by a backed currency.

Also my reference to steady state economy was in context of why a fixed amount of currency is not a good thing because that isn't reality.

Quite happy to talk economics but not convinced you are following the conversation.

a reply to: BeefNoMeat

To return to the original point the money multiplier is not an accurate description of how banks create money.

Banks extend loans based on the demand for loans from credit worthy customers. Reserves are taken care of after the fact.

Endogenous rather than exogenous money supply if you want to get geeky.

originally posted by: ScepticScot
a reply to: BeefNoMeat

To return to the original point the money multiplier is not an accurate description of how banks create money.

Banks extend loans based on the demand for loans from credit worthy customers. Reserves are taken care of after the fact.

Endogenous rather than exogenous money supply if you want to get geeky.

Get geeky with me all you want. I encourage it. As I told someone else in a thread, "google 'China global savings glut 2005'"...it speaks exactly of your description, "Banks extend loans based on the demand for loans from credit worthy [sic] customers"...if you pay attention to the chronology of the thread, you'll recognize that the 'loanable supply of funds' is directly related to money supply (again, myriad reasons) and that is the exactly the 'insuation' (maybe the poster knew or didn't -- my guess, they didn't, but that's neither here or there) that was being made*.

I appreciate your response(s), but there are levels to this, and you're not on my level, with all due respect.

*I'll let your inner-John Maynard Keynesian's to figure out the 'claim'.

great work, people will always go where the action is the fastest. Danger is ok if efficiency is the prize. Instant gratification is more important and just like water, the public will chase there action to the path of least resistance. Crypto is a great example of this.

originally posted by: BeefNoMeat

originally posted by: ScepticScot
a reply to: BeefNoMeat

To return to the original point the money multiplier is not an accurate description of how banks create money.

Banks extend loans based on the demand for loans from credit worthy customers. Reserves are taken care of after the fact.

Endogenous rather than exogenous money supply if you want to get geeky.

Get geeky with me all you want. I encourage it. As I told someone else in a thread, "google 'China global savings glut 2005'"...it speaks exactly of your description, "Banks extend loans based on the demand for loans from credit worthy [sic] customers"...if you pay attention to the chronology of the thread, you'll recognize that the 'loanable supply of funds' is directly related to money supply (again, myriad reasons) and that is the exactly the 'insuation' (maybe the poster knew or didn't -- my guess, they didn't, but that's neither here or there) that was being made*.

I appreciate your response(s), but there are levels to this, and you're not on my level, with all due respect.

*I'll let your inner-John Maynard Keynesian's to figure out the 'claim'.

You are right I am not on your level as I actually understand the terminology.

The savings glut theory doesn't in any way support the money multiplier theory (are you sure you get what it is now?).

Tell me what happened to the money multiplier post 2008 with increase in the monetary base?

With all due respect if you are going to try and be as arrogant as you are you need something to back it up.

originally posted by: ScepticScot

originally posted by: BeefNoMeat

originally posted by: ScepticScot
a reply to: BeefNoMeat

To return to the original point the money multiplier is not an accurate description of how banks create money.

Banks extend loans based on the demand for loans from credit worthy customers. Reserves are taken care of after the fact.

Endogenous rather than exogenous money supply if you want to get geeky.

Get geeky with me all you want. I encourage it. As I told someone else in a thread, "google 'China global savings glut 2005'"...it speaks exactly of your description, "Banks extend loans based on the demand for loans from credit worthy [sic] customers"...if you pay attention to the chronology of the thread, you'll recognize that the 'loanable supply of funds' is directly related to money supply (again, myriad reasons) and that is the exactly the 'insuation' (maybe the poster knew or didn't -- my guess, they didn't, but that's neither here or there) that was being made*.

I appreciate your response(s), but there are levels to this, and you're not on my level, with all due respect.

*I'll let your inner-John Maynard Keynesian's to figure out the 'claim'.

With all due respect if you are going to try and be as arrogant as you are you need something to back it up.

That's gold. ....literally...

a reply to: ScepticScot

With all due respect if you are going to try and be as arrogant as you are you need something to back it up.

I did, unfortunately, you're playing in the minor leagues...that asterisk wasn't for show. Figure it out, Friedman...or Volker -- prolly a good start.

originally posted by: BeefNoMeat
a reply to: ScepticScot

With all due respect if you are going to try and be as arrogant as you are you need something to back it up.

I did, unfortunately, you're playing in the minor leagues...that asterisk wasn't for show. Figure it out, Friedman...or Volker -- prolly a good start.

As much as I admire your determination to stick with your self proclaimed expertise in spite of the evidence, it isn't really taking this anywhere.

I have explained why the money multiplier isn't an accurate description of the money creation process and twice you have responded with unrelated points.

Again for clarity. The limitation on bank lending comes from the demand for loans, not the supply of reserves. Many countries operate without a reserve requirement at all.

If you would prefer to discuss another part of the OP then please let me know, but simply posting names of economists you googled doesn't really cut it.

a reply to: ScepticScot

If you would prefer to discuss another part of the OP then please let me know, but simply posting names of economists you googled doesn't really cut it.

You're lack of understanding of macroeconomics -- it's a dead give away when 'steady-state' is used as a qualifier -- is, well, telling. But, yeah, I googled a bunch of diametrically-opposed economists to provide context -- no, I didn't. But again, it's indictment of you and your lack of punching back power, not my gainful employment (to make it easy on you, that's a hint...but you haven't acquitted yourself very well outside of ill-informed pot-shots, so I'm not prepared to accept the fact you're cognizant of that fact in the face of your 'arrogance' [irony? probably not in 'your book', but sober reality suggests something entirely and diametrically opposite -- regardless if it's in 'your book']).

C'mon, ScepticScot, remind of the myth of the money multiplier-effect...particularly, as it relates to the linear devaluation of money supplied...that's a myth, that you asserted was counter to what I proved -- albeit, a lazy google search result (just 'being/getting real') about the multiplier effect. Yeah, yeah, you can peruse your undergraduate macro texts and make banal exceptions, but the reality is: once you see the way, you see it in all things. I see you, as a better than critical-thinker, but a green-horn in picking fights with cursory knowledge and the gift of Google (oh, the irony).

*Come at me, bro.

*I've never been a sadist, but you're easy-pickings, so I'm ready to bring the pain.

originally posted by: BeefNoMeat
a reply to: ScepticScot

If you would prefer to discuss another part of the OP then please let me know, but simply posting names of economists you googled doesn't really cut it.

You're lack of understanding of macroeconomics -- it's a dead give away when 'steady-state' is used as a qualifier -- is, well, telling. But, yeah, I googled a bunch of diametrically-opposed economists to provide context -- no, I didn't. But again, it's indictment of you and your lack of punching back power, not my gainful employment (to make it easy on you, that's a hint...but you haven't acquitted yourself very well outside of ill-informed pot-shots, so I'm not prepared to accept the fact you're cognizant of that fact in the face of your 'arrogance' [irony? probably not in 'your book', but sober reality suggests something entirely and diametrically opposite -- regardless if it's in 'your book']).

C'mon, ScepticScot, remind of the myth of the money multiplier-effect...particularly, as it relates to the linear devaluation of money supplied...that's a myth, that you asserted was counter to what I proved -- albeit, a lazy google search result (just 'being/getting real') about the multiplier effect. Yeah, yeah, you can peruse your undergraduate macro texts and make banal exceptions, but the reality is: once you see the way, you see it in all things. I see you, as a better than critical-thinker, but a green-horn in picking fights with cursory knowledge and the gift of Google (oh, the irony).

*Come at me, bro.

*I've never been a sadist, but you're easy-pickings, so I'm ready to bring the pain.

Again just going I am really really good at something doesn't actually make it so. Repetition doesn't change that.

You are right that I do own some undergraduate texts in economics. They date back from before I graduated with a degree in economics.

The weird thing is that you actually seem delusional enough to believe you are winning an argument here based entirely on you own assertions of awesomeness. It's the online equivalent of my dad is bigger than your dad.

Again make an actual point about economics (hopefully this time getting the terminology correct) and we can discuss it. I have explained why the money multiplier isn't an accurate view of money creation in the real world. Do you have the capability to explain why you think it is?

Flyingclaydisk, you keep writing threads I just have to jump in on! Unfortunately I don't have time tonight, but rest assured I will return tomorrow with a lot of suggestions.

Everything that is happening around us, militarily, politically, and economically, is tied to global economics. Once one understands that, nothing is very surprising (other than the increasing hubris of some). I'll say that much now.

TheRedneck

Back to that circular argument. Oh well, I'll resort to the old adage: "Never argue with a fool, onlookers may not be able to tell the difference."

I'm sure the onlookers will (save for member who can't let a Malthusian population argument sink in) see it for what it's worth: I sure have and played it as such. Sucks being on the inside looking out, but I'm sure you'll figure it out once you start paying attention.

Another adage: "you can lead a horse to water, but you can't make 'em drink". Grab that Circle-K gut-buster 64-oz cup, you're gonna need to drink.

But I'll satiate some of that thirstiness: I advised the OP to take a look at the money multiplier -- in the context that it didn't devalue the (you'll love this) 'steady-state' economy by exactly half. That's all. It's a principle and verified fact -- I bet you want me to go to the FRED and show you the data -- and will prove so, but you called it a myth, so it's on the ever-so-econometrician of this age, ScepticScot, to prove your assertion, first. AGAIN (asked before), show me/the thread the hard, cold facts that it's a myth...I've been waiting. C'mon, ScepticScot, I (through your transparent insinuation) don't have the capability, do you? No, but I'll wait for the equivocation and the fringe websites touting what little proof you can provide.

If you really wanna dig yourself a big hole, fail to produce any peer-reviewed (AER works) studies cementing your assertion this all began with -- it's a myth.

I'm legit on jury duty, beginning April 30th in Federal Court -- I'll get back to your nonsense by early next week. But remember: your assertion, your claim, and your burden to prove it's a myth -- with facts and stuff...not just innuendo and interwebs bravado.

Make me proud, lest you find the difference in myth and fact.

originally posted by: BeefNoMeat
Back to that circular argument. Oh well, I'll resort to the old adage: "Never argue with a fool, onlookers may not be able to tell the difference."

I'm sure the onlookers will (save for member who can't let a Malthusian population argument sink in) see it for what it's worth: I sure have and played it as such. Sucks being on the inside looking out, but I'm sure you'll figure it out once you start paying attention.

Another adage: "you can lead a horse to water, but you can't make 'em drink". Grab that Circle-K gut-buster 64-oz cup, you're gonna need to drink.

But I'll satiate some of that thirstiness: I advised the OP to take a look at the money multiplier -- in the context that it didn't devalue the (you'll love this) 'steady-state' economy by exactly half. That's all. It's a principle and verified fact -- I bet you want me to go to the FRED and show you the data -- and will prove so, but you called it a myth, so it's on the ever-so-econometrician of this age, ScepticScot, to prove your assertion, first. AGAIN (asked before), show me/the thread the hard, cold facts that it's a myth...I've been waiting. C'mon, ScepticScot, I (through your transparent insinuation) don't have the capability, do you? No, but I'll wait for the equivocation and the fringe websites touting what little proof you can provide.

If you really wanna dig yourself a big hole, fail to produce any peer-reviewed (AER works) studies cementing your assertion this all began with -- it's a myth.

I'm legit on jury duty, beginning April 30th in Federal Court -- I'll get back to your nonsense by early next week. But remember: your assertion, your claim, and your burden to prove it's a myth -- with facts and stuff...not just innuendo and interwebs bravado.

Make me proud, lest you find the difference in myth and fact.

Any assertion that you couldn't explain it is based on your earlier posts when you didn't even know what it was.

Here are those crazy cats at the Bank of England explaining why it's not an accurate way of viewing money creation.

www.bankofengland.co.uk...