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Author:  nanningbob [ Mon Mar 03, 2014 11:57 pm ]
Post subject:  Economics
At least its a conversation. I thought a thread like this would cause some interesting discussion but so far I feel like I am talking to myself.

My mother's side is from Illinois (DeKalb area) and I have many fond memories of my childhood playing with my cousins. My grandmother was from Creston and ended up being the oldest person alive in the USA when she turned 107. So long life may come your way. She got a letter from President Bush (the first one) she died about 6 months after that. I havent been in Illinois in 30 years but I am probably one of the few human beings alive who has ever been on a 'one horse sleigh'. My Uncle Bill would take us out on his sleigh at Christmas time when we went to visit them. We always prayed for snow before Christmas so we could go. So my thoughts of Illinois are usually happy ones.
Author:  nanningbob [ Wed Mar 12, 2014 8:02 am ]
Post subject:  Economics
OK lets try this. Should stocks employ the same as Forex, each trade must start in the hole with a spread??

Financial firms deploy sophisticated algorithms to battle for fractions of a cent. Designed by the physics nerds and math geniuses known as quants, these programs exploit minute movements and long-term patterns in the markets, buying a stock at $1.00 and selling it at $1.0001, for example. Do this 10,000 times a second and the proceeds add up. Constantly moving into and out of securities for those tiny slivers of profit—and ending the day owning nothing—is known as high-frequency trading.

http://www.motherjones.com/politics/201 ... all-street
Author:  nanningbob [ Thu May 08, 2014 10:57 pm ]
Post subject:  Economics
Every once in a while a good article is written on the Fed policy that flies in the face of the typical doomsday scenario of the internet gurus. What many people dont understand is the Fed has been buying assets that now total 4.7 Trillion dollars. As the economy recovers these assets appreciate and as they slowly sell them back into the market over the next 5-10 years it keeps inflation at bay and decreases the debt building up. Good article and why the doom and gloom guys are going to be wrong. Of course this works if the economy recovers and Congress ever does its job of cutting deficit spending. The economy is picking up, it never was going to stay on the bottom, but Congress, thats another story. Anyway good article about asset buying.

http://www.reuters.com/article/2014/05/ ... QE20140508
Author:  dispell [ Fri May 09, 2014 12:55 am ]
Post subject:  Economics
nanningbob » Fri May 09, 2014 6:57 am wrote:Every once in a while a good article is written on the Fed policy that flies in the face of the typical doomsday scenario of the internet gurus. What many people dont understand is the Fed has been buying assets that now total 4.7 Trillion dollars. As the economy recovers these assets appreciate and as they slowly sell them back into the market over the next 5-10 years it keeps inflation at bay and decreases the debt building up. Good article and why the doom and gloom guys are going to be wrong. Of course this works if the economy recovers and Congress ever does its job of cutting deficit spending. The economy is picking up, it never was going to stay on the bottom, but Congress, thats another story. Anyway good article about asset buying.

http://www.reuters.com/article/2014/05/ ... QE20140508

Ahh.. I thought this thread was dead when I visited 2 weeks ago, great to see its still moving!
Are there any websites you could recommend me for more stuff like this?
Regarding the news and economics in particular.
Author:  nanningbob [ Fri Jul 25, 2014 1:03 am ]
Post subject:  Economics
I wasnt quite sure where to put this article but here seems a good location. Are traders a dieing breed??

What once was the main event is now just a sideshow. There are many fewer traders now, and they’re making much less money. And there are going to be even fewer very, very soon.

http://www.marketwatch.com/story/trader ... genumber=2
Author:  astral77 [ Mon Jul 28, 2014 3:25 pm ]
Post subject:  Economics
IMHO the traders we used to see in the news frantically shouting orders are already extinct. However, traders and trading are growing on a daily basis and what was the domain of a select few is now open to everyone As the article correctly states the hedge funds are now a more attractive option for the professional traders. With expansion and growing speed of the internet, more and more people have access to online trading. Age and wealth is no longer a barrier. Here in the UK you can open a spreadbetting account with as little as $50 and trade World markets. In the old days the minimum commission was around $35 alone.

Kind regards
Author:  rocketman99 [ Wed Jul 30, 2014 1:53 am ]
Post subject:  Economics
Any thoughts on USD outlook for the rest of the week? I was caught totally off guard with NZD interest rate hike which was a sure thing but caused the NZD to reverse resulting in a nice fat DD for me.

From what I am reading the USD news is a sure thing (will be good), but has already been factored in. EURUSD and USDJPY are both sitting on stiff resistance levels. I have taken profit on EURUSD and USDCHF already. Should I just go away on USD till next week or place pendings some distance away in both directions?
Author:  nanningbob [ Mon Aug 04, 2014 12:59 am ]
Post subject:  Economics
rocketman99 » Wed Jul 30, 2014 9:53 am wrote:Any thoughts on USD outlook for the rest of the week? I was caught totally off guard with NZD interest rate hike which was a sure thing but caused the NZD to reverse resulting in a nice fat DD for me.

From what I am reading the USD news is a sure thing (will be good), but has already been factored in. EURUSD and USDJPY are both sitting on stiff resistance levels. I have taken profit on EURUSD and USDCHF already. Should I just go away on USD till next week or place pendings some distance away in both directions?
Sorry I didnt see this earlier. The USD should move up for the rest of the year but it will be a herky jerky thing. Any big news story of more war would make a mad rush to the dollar. For example Russia going into Ukraine, China against Japan or Vietnam or Philippines or ??? fighting over some rocks in the Pacific would be some examples of a run to the dollar. See my CSS thread for my weekly comments on the market. These questions would been answered there.
Author:  nanningbob [ Fri Aug 22, 2014 11:55 am ]
Post subject:  Economics
I saw this debate between gold and paper money and it was a nice summary so I posted it.

Your central premise is both correct and incorrect. Money by itself is indeed worthless. We currently trade goods and services for green pieces of paper with painted on numbers. However, the worthiness of that is no different than using gold as a trading instrument. Gold by itself also has no value. You can’t eat it, plant it, cover yourself in it to keep you warm, or build with it. The value of it lies in what others are
willing to trade you for it. In that sense rocks or animal pelts could be used, and have been used, to the same effect as gold and our current greenbacks.
The same problems that arise in the current banking system arose in the gold standard regarding inflation and the devaluing of currency. Fractional banking is what allows economies to grow. This is why most developed countries operate under this system. If I deposit $100 into Bank A, I retain $100 worth of purchasing power. If you take out a $100 loan from Bank A, now you have $100 worth of purchasing power. Simplistically, our economy just grew by $100. Now, your argument should be “what if I can’t pay back the $100 loan and you need your $100.” Well, that is why we have multiple banks and multiple banking customers. I concede that if the run is large enough some people would not be able to withdrawal their money. However, I pose that overarching public good served by a growing economy is worth that small risk. Wouldn't you agree?
Author:  dudest [ Fri Aug 22, 2014 12:38 pm ]
Post subject:  Economics
nanningbob » Fri Aug 22, 2014 2:55 pm wrote:I saw this debate between gold and paper money and it was a nice summary so I posted it.

Your central premise is both correct and incorrect. Money by itself is indeed worthless. We currently trade goods and services for green pieces of paper with painted on numbers. However, the worthiness of that is no different than using gold as a trading instrument. Gold by itself also has no value. You can’t eat it, plant it, cover yourself in it to keep you warm, or build with it. The value of it lies in what others are
willing to trade you for it. In that sense rocks or animal pelts could be used, and have been used, to the same effect as gold and our current greenbacks.
The same problems that arise in the current banking system arose in the gold standard regarding inflation and the devaluing of currency. Fractional banking is what allows economies to grow. This is why most developed countries operate under this system. If I deposit $100 into Bank A, I retain $100 worth of purchasing power. If you take out a $100 loan from Bank A, now you have $100 worth of purchasing power. Simplistically, our economy just grew by $100. Now, your argument should be “what if I can’t pay back the $100 loan and you need your $100.” Well, that is why we have multiple banks and multiple banking customers. I concede that if the run is large enough some people would not be able to withdrawal their money. However, I pose that overarching public good served by a growing economy is worth that small risk. Wouldn't you agree?
Hallo Bob,

My humble opinion in response to the summary:


1. True that money / value is what people say it is ( whether paper money, cowrie shells, tally sticks, etc )

2. Gold can be more easily controlled and manipulated, especially when amassed by relatively few people (artificial scarcity), thus making it very easy to trigger inflation/deflation when a currency is 'backed' by gold

3. The 'greenbacks' in current circulation are not the same as Lincoln's greenbacks. Lincoln's greenbacks were printed DEBT FREE for the good of the Union. Today's dollars are printed of Government-issued debt bonds purchased by the Federal Reserve. No comparison

4. Fractional banking is what is KILLING economies. Why should Banks be allowed to lend out money they DON'T HAVE? [ upto x10 in some countries ]. Yet another way to cause periods of boom and bust.

Summary: If the Government can issue a bond, it can issue a dollar [ the quantity of which can be controlled to match the monetary needs of the society ]. Gold is just an excuse to put global wealth in the hands of a few. If not, why is silver coinage banned (e.g in the US)? [ Ans: because it is debt-free currency ]

Cheers
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