Economic self-education

G

GatlingGun

As a lifetime engineer, I'm sometimes confused by real and potential economic developments... for example, let's suppose the Fed starts publicly leaning closer and closer to QE2... that would drive the markets to react... but I don't understand how they should be expected to react when the US is printing dollars out of control, and then we use our own money to buy our own debt... I think this means our currency devalues more, but I don't really understand the mechanics and math behind it all.

Is there a book or another reference that provides great coverage of market dynamics (including the underlying math theory)? I'm not looking for a book that's all theory... I would like to see example calculations and real numbers... preferably based on the American economy, if possible... but I'd also like to understand how to apply this to Russia, China and other economies as well.

Thoughts?
 
How about a macroeconomics textbook (e.g. Mankiw or Dornbusch, Fischer et al)? Moreover, there's not that much math out there in the world of macroeconomists.
 
Federal Reserve prints money.
The treasury prints Bonds.

Federal reserve prints money to buy bonds which the government then gets that money and spends it on whatever it wants. When you have lots of dollars chasing a few goods, the price goes up.

For example, Imagine 2 guys on an island. One guy has an orange he wants to sell and another guy has a $1 bill. How much is the orange likely going to be? $1.

Then imagine another guy washes up on shore and sees the transaction going on and wants to buy the orange too. The guy that washed up has $3 in his pocket. How much do you think the orange is going to sell for now? Alot more than 1 dollar because now there is more money on that island.

If another guy washed up with 5 dollars in his pocket, again the price of the orange is going to go up because now there are more dollars in the economy.

Of course thats a very simplified explanation.
 
Seems we're going through another wave of economic loonies running through here like streakers on crank, but given the way the OP framed his question, he'll probably be right at home with the bunch.

Welcome to ET, GG. Looks like you'll enjoy the place.
 
Quote from trefoil:

Seems we're going through another wave of economic loonies running through here like streakers on crank, but given the way the OP framed his question, he'll probably be right at home with the bunch.

Welcome to ET, GG. Looks like you'll enjoy the place.
More...

Thanks trefoil,

Technical Analysis certainly has its place in my short-term trading... but when I think about strategic decisions like inflation hedges, solid economics lights my path.
 
Quote from GatlingGun:

As a lifetime engineer, I'm sometimes confused by real and potential economic developments... for example, let's suppose the Fed starts publicly leaning closer and closer to QE2... that would drive the markets to react... but I don't understand how they should be expected to react when the US is printing dollars out of control, and then we use our own money to buy our own debt... I think this means our currency devalues more, but I don't really understand the mechanics and math behind it all.

Is there a book or another reference that provides great coverage of market dynamics (including the underlying math theory)? I'm not looking for a book that's all theory... I would like to see example calculations and real numbers... preferably based on the American economy, if possible... but I'd also like to understand how to apply this to Russia, China and other economies as well.

Thoughts?
More...



Yes there is ... but first, if you have an MBA, right-click\send to\recycle bin

then contact Prof. Charles Bassetti at GGU, San Francisco. Have him read your op.
 
Quote from trefoil:

Seems we're going through another wave of economic loonies running through here like streakers on crank, but given the way the OP framed his question, he'll probably be right at home with the bunch.

Welcome to ET, GG. Looks like you'll enjoy the place.
More...



Further proof of your worthlessness. All the big talk about helping each other.

SMD.

The op has a perfectly legitimate problem. He's come to a place called ELITETRADER looking for help - or should it be renamed to ELITE COCKSUCKERS ... ?
 
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