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Economics 101


Economics 10122-04-2020 20:30
James___
★★★★★
(3429)
This s for the haters in here. It's very basic calculus, er math.

If you have 100,000 people in a society that value is P.
And if there is $1,000.00 per capita (per person, individual) then that value is K.
Then the amount of money in circulation is PK = C (the money in circulation).
If the population increases by 10,000 people ie., 10% then we go from
PK = C and in this instance P is considered as 1P we go to C divided by 1.1P to know the amount of money in circulation per person. It will decrease to 1K divided by 1.1 which would be about $909 per capita.
Then let's say that everyone obtains the same loan for $200.00. Then we have 1.1P x 200 + C = Cn (new value of money in circulation).
And when all of those loans are paid off, that money is no longer in circulation. It returns to where the loans originated from which is not from within the economy.
Yet there will be more goods or services in circulation. To prevent the economy from contracting either inflation is necessary or a devaluation of all goods and services.
And gfm, since I pick on Harvey a little, as you see, if money comes from nowhere, it's value returns there without inflation. And if goods and services as a whole are valued more, then that government does print more money rather than devaluing it's currency.
This is where trade allows other economies to determine the actual value of competing currencies and economies. Myself, I do not approve of this because then some economies/countries become basically the modern version of a vassal state. I don't think Democracy should encourage servitude in this regard.
And you'll try to nitpick this but you can't. The maths clearly show that what I posted is correct. What people do with something is up to them. And at the moment, the world economy is basically dependent on both the US and China. I have nothing to do with that. I'm not a politician and I do not determine economic policy. But understanding the maths involved demonstrates the basis of an economy.
Edited on 22-04-2020 20:31
22-04-2020 20:56
IBdaMannProfile picture★★★★★
(7570)
James___ wrote: If you have 100,000 people in a society that value is P. And if there is $1,000.00 per capita (per person, individual) then that value is K.

Great ... and then you create a population of 1,000 people that have no money ... zero ... absolutely none whatsoever. Let's call them illegal immigrants.

Of course they want to go where there is money and leach off that population.

If the wealthy population lets the illegal immigrants in and allows the government to redistribute the wealth to the illegal immigrants then yes, we will have the scenario you depict.

However, if the population builds a wall with leftover materials and keeps the illegal immigrants out then you remain with a population of 100,000 people with $1,000 per capita ... and the illegal immigrants return to their country of origin.



.


A Spaghetti strainer with the faucet running, retains water- tmiddles

Clouds don't trap heat. Clouds block cold. - Spongy Iris

Printing dollars to pay debt doesn't increase the number of dollars. - keepit

If Venus were a black body it would have a much much lower temperature than what we found there.- tmiddles

Ah the "Valid Data" myth of ITN/IBD. - tmiddles

Ceist - I couldn't agree with you more. But when money and religion are involved, and there are people who value them above all else, then the lies begin. - trafn

You are completely misunderstanding their use of the word "accumulation"! - Climate Scientist.

The Stefan-Boltzman equation doesn't come up with the correct temperature if greenhouse gases are not considered - Hank

:*sigh* Not the "raw data" crap. - Leafsdude

IB STILL hasn't explained what Planck's Law means. Just more hand waving that it applies to everything and more asserting that the greenhouse effect 'violates' it.- Ceist
22-04-2020 21:22
James___
★★★★★
(3429)
IBdaMann wrote:
James___ wrote: If you have 100,000 people in a society that value is P. And if there is $1,000.00 per capita (per person, individual) then that value is K.

Great ... and then you create a population of 1,000 people that have no money ... zero ... absolutely none whatsoever. Let's call them illegal immigrants.

Of course they want to go where there is money and leach off that population.

If the wealthy population lets the illegal immigrants in and allows the government to redistribute the wealth to the illegal immigrants then yes, we will have the scenario you depict.

However, if the population builds a wall with leftover materials and keeps the illegal immigrants out then you remain with a population of 100,000 people with $1,000 per capita ... and the illegal immigrants return to their country of origin.



.


And oh so quickly you go off topic on a personal rant. This post was in response to gfm7175 saying he understands how an economy works. I was merely pointing out to him that when there is an initial determination that there is an economic system with defined parameters, it cannot increase it's perceived valuation.
23-04-2020 04:45
HarveyH55
★★★★★
(2702)
Textbook, and real life are often two very different things. People steal...

And the democrats don't call them illegal immigrants, they are just immigrants now, fleeing poverty, and infecting our country with it, as they enjoy all the 'free stuff', intended to buy votes.
23-04-2020 04:59
GasGuzzlerProfile picture★★★★☆
(1875)
I think it is supposed to $1200 per capita.
23-04-2020 06:00
keepit
★★★★☆
(1740)
I think we're in severe danger of deflation if these stimulus checks don't go out. Just like we're in serious danger of a resurgence of covid19 if we stop distancing. It's funny how the same people that deny climate change are the same people that deny covid dangers and also fear inflation. The fear mongering about inflation is overwrought. However, even if we suffer some inflation it is better than severe deflation.
23-04-2020 08:25
Amanbir GrewalProfile picture★☆☆☆☆
(123)
Japanese inflation should release your freedom from a 110th floor.

?


making boiled rice pudding and saving some for tomorrow's party is the same stuff if you're going to eat it all by yourself.


AUGUST COMTE AN EMPLOYED SOCIALIST BEFORE A PANEL OTHERWISE A SIMPLE PLANNER OF GUISES AND POTIONS
23-04-2020 10:12
HarveyH55
★★★★★
(2702)
keepit wrote:
I think we're in severe danger of deflation if these stimulus checks don't go out. Just like we're in serious danger of a resurgence of covid19 if we stop distancing. It's funny how the same people that deny climate change are the same people that deny covid dangers and also fear inflation. The fear mongering about inflation is overwrought. However, even if we suffer some inflation it is better than severe deflation.


Funny, how all the things you listed, are all panic driven... Stock market is going to crash, get out fast. Banks are failing, get your savings out fast. Climate is changing, vote for socialism. A cold will kill you all, hide under your beds.
23-04-2020 13:43
keepit
★★★★☆
(1740)
Harvey,
I didn't say anything about the stock market. Nor anything about your savings. Nor anything about voting for socialism. I didn't say anything about a cold killing you. I didn't say anything about hiding under your bed. These are just you projecting your misconceptions on to me. Get real.
23-04-2020 16:11
James___
★★★★★
(3429)
GasGuzzler wrote:
I think it is supposed to $1200 per capita.



When the loan is repaid, the money is no longer in the economy. It would be as keepit suggested, when more goods and services are available than there is money then prices are lowered. Gas prices are one example of this. Production was not lowered enough.
Yet food prices could increase because of a lack of supply.
With the original post, the government does increase the amount of money in circulation. It would be like with the loans. If the amount of money in circulation is not increased then deflation would occur. And it's probably because of this that those loans are accepted as increasing the amount of money in that economy which is the $1,200.00 you mentioned.
23-04-2020 18:23
gfm7175Profile picture★★★★☆
(1322)
keepit wrote:
I think we're in severe danger of deflation if these stimulus checks don't go out.

Still batting 0.000 regarding economics, and everything else for that matter.

keepit wrote:
Just like we're in serious danger of a resurgence of covid19 if we stop distancing.

Social distancing is not preventing the spread of, nor is it stopping, covid19.

keepit wrote:
It's funny how the same people that deny climate change

Define "climate change". Describe how you are quantifying a "change" in climate? Do we have more climate now than we did thirty years ago? Do you know how ridiculous you sound?

keepit wrote:
are the same people that deny covid dangers

covid19 is nothing to fear monger over.

keepit wrote:
and also fear inflation. The fear mongering about inflation is overwrought. However, even if we suffer some inflation it is better than severe deflation.

What happens when a numerator stays the same but a denominator increases?
23-04-2020 19:00
HarveyH55
★★★★★
(2702)
keepit wrote:
Harvey,
I didn't say anything about the stock market. Nor anything about your savings. Nor anything about voting for socialism. I didn't say anything about a cold killing you. I didn't say anything about hiding under your bed. These are just you projecting your misconceptions on to me. Get real.


Every thing I listed were the panic-triggers, that manipulate behavior, to create the outcome you are afraid of happening. You obviously didn't read, or it didn't register.

When you have savings in a bank, and people panic, afraid the banks are going to fail, they rush to the bank, and withdraw all their money. A fail bank, doesn't mean you will actually lose all your money, but it could be months, even years, before your recover any of it.

The stock market was impacted recently, that paused trading a few times, to give traders time to calm down.

We have protections, so many of the things that happened in the 1930s, won't happen again. Doesn't mean people still can't be manipulated, into doing irrational things with their money. How much toilet paper are you hoarding?
23-04-2020 19:08
James___
★★★★★
(3429)
@GasGuzzler, for what you mentioned, that's probably the reason we went away from the Gold Standard. Possibly why it didn't work was because the depression had lowered the demand for goods and services.

On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money. It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 million of gold certificates. Two months later, a joint resolution of Congress abrogated the gold clauses in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. In 1934, the government price of gold was increased to $35 per ounce, effectively increasing the gold on the Federal Reserve's balance sheets by 69 percent. This increase in assets allowed the Federal Reserve to further inflate the money supply.

https://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard
24-04-2020 02:26
Amanbir GrewalProfile picture★☆☆☆☆
(123)
I do not know how to run the bloody business?

maybe Henry gave it to me on a plate?

maybe i belong to a school?

somebody takes a loan from you and refuses to pay you back or the prices hit your belly so hard that you've got barely bread to eat.

ONE SMALL ADVICE FROM ME: DO NOT GIVE OUT A BLOODY LOAN LIKE A CHAMPION CREDITOR BEHAVING OUT THERE IN A MARKET WHEN YOU'VE GOT A JOB, AND DO NOT EVER EXPECT ANYTHING MORE THAN BREAD FOR FOUNDRY PEOPLE EAT THAT AND NOT CAKE.

brother, try me again. Again!

listen, LISTEN, you're, trying, to, make, a little, cash, in, the KINGDOM,

all, the, very, best.


AUGUST COMTE AN EMPLOYED SOCIALIST BEFORE A PANEL OTHERWISE A SIMPLE PLANNER OF GUISES AND POTIONS
24-04-2020 05:22
Into the NightProfile picture★★★★★
(13776)
keepit wrote:
I think we're in severe danger of deflation if these stimulus checks don't go out.

Speculating.
keepit wrote:
Just like we're in serious danger of a resurgence of covid19 if we stop distancing.

6 feet does not stop a virus.
keepit wrote:
It's funny how the same people that deny climate change are the same people that deny covid dangers and also fear inflation.

Because we understand and accept mathematics, something YOU deny.
keepit wrote:
The fear mongering about inflation is overwrought.

Inflation devalues your purchasing dollar. If wealth is not increasing as fast as the number of dollars being printed, the price of most everything will go up. Is this what you want?

Deflation increase the purchasing power ol the dollar. If wealth is increasing, this means prices will go down, allowing you to purchase more for your dollar. Is this what you want?

If deflation takes place in an industry, such as the computer industry, that means that new and innovative technologies are being developed (wealth) that results in lower prices. That's deflation...and a healthy form of it. The natural result of capitalism is deflation.

Depression is not deflation nor inflation. It is depression of the economy. That is what is happening now.

Writing checks when wealth is not increasing to compensate for it is inflation, and not a healthy movement of the economy. It is here now. It has been part of the economy in the United States for a long time. It punishes savers, since the dollars they are saving are reducing in value. Apparently you think this is what you call a good economy.

keepit wrote:
However, even if we suffer some inflation it is better than severe deflation.


Obviously, you don't understand any of the terminology used in economics, since you are confusing inflation, deflation, depression, and any of there causes. Still batting 0.000.


The Parrot Killer

Debunked in my sig. - tmiddles

Google keeps track of paranoid talk and i'm not on their list. I've been evaluated and certified. - keepit
24-04-2020 05:24
Into the NightProfile picture★★★★★
(13776)
HarveyH55 wrote:
keepit wrote:
I think we're in severe danger of deflation if these stimulus checks don't go out. Just like we're in serious danger of a resurgence of covid19 if we stop distancing. It's funny how the same people that deny climate change are the same people that deny covid dangers and also fear inflation. The fear mongering about inflation is overwrought. However, even if we suffer some inflation it is better than severe deflation.


Funny, how all the things you listed, are all panic driven... Stock market is going to crash, get out fast. Banks are failing, get your savings out fast. Climate is changing, vote for socialism. A cold will kill you all, hide under your beds.


His fear mongering and panic mongering is simply based on his denial of mathematics, his denial of science, and his denial of biology.

His own illiteracy induces his panic. His own otherwise meaningless life is enhanced by this form of gossip. Much the same reasons the newspapers like to lie and fear monger.


The Parrot Killer

Debunked in my sig. - tmiddles

Google keeps track of paranoid talk and i'm not on their list. I've been evaluated and certified. - keepit




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