Capital flows across the US border are positive (that is, more money is coming into the US than going out). The opposite is true for consumer goods: if you buy a product, a lot of the money goes to China (or wherever it was manufactured).
When someone invests money (instead of sitting on it), they increase the velocity of money. When someone invests money (instead of spending it on consumer goods), they decrease the velocity of money.
No, what matters here is how quickly it changes hands to another person, not whether it changes hands in exchange for consumer goods
No, "you can't buy if you don't have money" is not a hypothesis. Nor is "you can't sell if no one can buy".
Hmmmm your reasoning is simplistic, and you can't even state your own hypothesis correctly. Your hypothesis is, "giving money to average people will stimulate the economy." Another way of stating that is, "demand side economics are the way to economic improvement."
No, they didn't. They gave money to "job creators" who promptly hoarded it away because there's no point in investing if no one is buying due to lack of funds.
The only way to get the economy working again is put money into the hands of Joe Hobo and Jane Welfare Queen, since they'll spend it, which becomes credit on some factory's balance sheet
That's the hypothesis, right?
Based on that hypothesis, Bush, then Obama (and earlier Carter) gave money to normal Americans to stimulate the economy. Unfortunately, in each of those cases, the money didn't have a strong stimulating effect on the economy.
So it is likely the economy is more complicated than just "supply side stimulus" or "demand side stimulus;" and it probably involves many factors.
I was hoping you could connect the dots for me explicitly
Yes, actually you want me to give you the education you would get in macro-economics 101 lol.
So, being a rich saver doesn't necessarily reduce money velocity, and can actually increase it.
Indeed. And it doesn't necessarily increase the velocity of money, and can actually decrease it.
No, that doesn't make any sense. When someone invests money, they increase the velocity of money. That is it definitive. If we are talking about decreasing the velocity of money by investing, the only thing you can possibly mean is that it decreased relatively; that is, the rich person wasn't investing as quickly as before.
Just put a magnifying glass over the solar cells. I can't believe you guys fail to see the obvious solution to these things (now if you excuse me, I have a thesis to write on time travel and to prepare for my concert at carnegie hall).
B: "can the robot feel love?"
C: "does it really matter? love is an illusion, after all."
B: "then take me in your arms and kiss me, cause god I'm horny right now."
I don't think it's deceptive. The feature I wanted to draw attention to is the sharp inflection point in 2008, and the graph I linked to shows it clearly.
mmmmm that comment shows poor understanding of what I wrote. I didn't reference anyone spending money on yachts, or anything like that. Work on your reading comprehension.
I discuss it more deeply here, but the short is that even if all the extra money supply went to rich people, as soon as they invest it, money velocity is increased.
The main point was that people don't care about the problem, that's why it's not solved. Not giving a dollar or so to poor people is merely a symptom of people not caring.
MV = PQ is the equation, where PQ is the price of everything, and M is the total amount of money, and V is the velocity of money. This equation, besides making sense intuitively, has also been verified by quite a bit of empirical evidence.
In general, people who save money don't put it in a hole in the ground or wait for it to rot, they invest it, meaning thy give the money to someone who will spend it on things. So, being a rich saver doesn't necessarily reduce money velocity, and can actually increase it. Furthermore, it may be that poor people didn't spend as much because they lost their jobs, but the increase in money supply seems large enough to cover that and still cause inflation. Furthermore, previously (throughout history) when the money supply was increased, it caused inflation ~1.5 years later, almost automatically. This relationship held true when unemployment was high or low.
So those are my reasons for thinking it's probably not the cause of money velocity falling.
The reason inflation didn't happen with that huge money supply increase is because money velocity decreased at the same time (I don't really understand why).
I'm constantly amazed by the fact that americans are all pretty happy to acknowledge that their status quo rather bad, yet they are not willing to look for the reasons nor even talk about changing any aspect of the system.
You're probably talking to Americans who have it alright. So they're saying, "yeah, it's bad (for other people, but I don't have problems)." As soon as it's someone else's problem, there's little motivation to do anything about it.
For example, we can all see that homelessness is a problem in SF, but we mostly ignore it. There are only 7,000 homeless people in SF, amongst a population of a million. If each of us gave a dollar a day, the problem would be easily solved. But when was the last time you gave a dollar to a homeless person? Not very often, if you're average.
tl'dr: the problems in America are the problems of poor people.
Slashdot Mirror
Capital flows across the US border are positive (that is, more money is coming into the US than going out). The opposite is true for consumer goods: if you buy a product, a lot of the money goes to China (or wherever it was manufactured).
When someone invests money (instead of sitting on it), they increase the velocity of money. When someone invests money (instead of spending it on consumer goods), they decrease the velocity of money.
No, what matters here is how quickly it changes hands to another person, not whether it changes hands in exchange for consumer goods
No, "you can't buy if you don't have money" is not a hypothesis. Nor is "you can't sell if no one can buy".
Hmmmm your reasoning is simplistic, and you can't even state your own hypothesis correctly. Your hypothesis is, "giving money to average people will stimulate the economy." Another way of stating that is, "demand side economics are the way to economic improvement."
No, they didn't. They gave money to "job creators" who promptly hoarded it away because there's no point in investing if no one is buying due to lack of funds.
You're a moron. Seriously, please go shoot yourself if you're not willing to do your basic research. http://www.nber.org/digest/mar... https://www.irs.gov/uac/The-Ma...
More scary than hackers or ISIS: the IRS. You do not want to get audited, those are the people who took down Al Capone.
The only way to get the economy working again is put money into the hands of Joe Hobo and Jane Welfare Queen, since they'll spend it, which becomes credit on some factory's balance sheet
That's the hypothesis, right?
Based on that hypothesis, Bush, then Obama (and earlier Carter) gave money to normal Americans to stimulate the economy. Unfortunately, in each of those cases, the money didn't have a strong stimulating effect on the economy.
So it is likely the economy is more complicated than just "supply side stimulus" or "demand side stimulus;" and it probably involves many factors.
I was hoping you could connect the dots for me explicitly
Yes, actually you want me to give you the education you would get in macro-economics 101 lol.
So, being a rich saver doesn't necessarily reduce money velocity, and can actually increase it.
Indeed. And it doesn't necessarily increase the velocity of money, and can actually decrease it.
No, that doesn't make any sense. When someone invests money, they increase the velocity of money. That is it definitive. If we are talking about decreasing the velocity of money by investing, the only thing you can possibly mean is that it decreased relatively; that is, the rich person wasn't investing as quickly as before.
Just put a magnifying glass over the solar cells. I can't believe you guys fail to see the obvious solution to these things (now if you excuse me, I have a thesis to write on time travel and to prepare for my concert at carnegie hall).
Are you aware that rich people invest most of their money? They don't just keep it in the ground? Are you also aware that increases money velocity?
B: "can the robot feel love?"
C: "does it really matter? love is an illusion, after all."
B: "then take me in your arms and kiss me, cause god I'm horny right now."
I don't think it's deceptive. The feature I wanted to draw attention to is the sharp inflection point in 2008, and the graph I linked to shows it clearly.
mmmmm that comment shows poor understanding of what I wrote. I didn't reference anyone spending money on yachts, or anything like that. Work on your reading comprehension.
I discuss it more deeply here, but the short is that even if all the extra money supply went to rich people, as soon as they invest it, money velocity is increased.
An offshore tax haven doesn't mean the money stays in a hole in the ground.....as soon as money is invested, velocity is increased.
I have no idea what SF is doing with that money.
The main point was that people don't care about the problem, that's why it's not solved. Not giving a dollar or so to poor people is merely a symptom of people not caring.
It directly answers the question that was asked! A question that was quite personal towards me, I'm sure.
MV = PQ is the equation, where PQ is the price of everything, and M is the total amount of money, and V is the velocity of money. This equation, besides making sense intuitively, has also been verified by quite a bit of empirical evidence.
In general, people who save money don't put it in a hole in the ground or wait for it to rot, they invest it, meaning thy give the money to someone who will spend it on things. So, being a rich saver doesn't necessarily reduce money velocity, and can actually increase it. Furthermore, it may be that poor people didn't spend as much because they lost their jobs, but the increase in money supply seems large enough to cover that and still cause inflation. Furthermore, previously (throughout history) when the money supply was increased, it caused inflation ~1.5 years later, almost automatically. This relationship held true when unemployment was high or low.
So those are my reasons for thinking it's probably not the cause of money velocity falling.
Definitely not lol
No, inflation has been limited because the velocity of money has dropped as the money supply has risen.
the "homeless problem" (which is, to most people, the problem of having to see homeless people)
Those people can die in a fire.
That doesn't seem like it is the cause of money velocity falling.
That's the dumbest reason I've ever heard for not helping a person.
QE freed up the money supply but didn't really expand it in general. QE mostly just exchanged low-liquid assets for higher-liquid assets.
Wow, check out the money supply graph (ignore the political text at the bottom if you like).
The reason inflation didn't happen with that huge money supply increase is because money velocity decreased at the same time (I don't really understand why).
I'm constantly amazed by the fact that americans are all pretty happy to acknowledge that their status quo rather bad, yet they are not willing to look for the reasons nor even talk about changing any aspect of the system.
You're probably talking to Americans who have it alright. So they're saying, "yeah, it's bad (for other people, but I don't have problems)." As soon as it's someone else's problem, there's little motivation to do anything about it.
For example, we can all see that homelessness is a problem in SF, but we mostly ignore it. There are only 7,000 homeless people in SF, amongst a population of a million. If each of us gave a dollar a day, the problem would be easily solved. But when was the last time you gave a dollar to a homeless person? Not very often, if you're average.
tl'dr: the problems in America are the problems of poor people.
Quite often, clicking on a headline with NO POSTS just brings you to the front page of slashdot.
That bug was fixed a while on the front page.
In fact, right now, clicking any link in the Firehose just expands the story, and never takes you into the actual submission itself.
Yeap, that bug is still there, and it's there for journal entries, too.