Excellent Article

Kevmeister · Nov 6, 2003

http://www.financialsense.com/stormwatch/oldupdates/2003/1003.html

Real wealth comes from savings and investments along with the production of real goods. It doesnât come from financial and stock speculation. The policy of printing money and expanding leveraged financial assets that trade the markets is paper wealthânot real wealth.

Any comments?

Kev

maxpi · Nov 6, 2003

Oh shit, the business cycle is not going to happen. What now?

citizennobody · Nov 6, 2003

Quote from Kevmeister:

http://www.financialsense.com/stormwatch/oldupdates/2003/1003.html

Real wealth comes from savings and investments along with the production of real goods. It doesnât come from financial and stock speculation. The policy of printing money and expanding leveraged financial assets that trade the markets is paper wealthânot real wealth.

Any comments?

Kev

You are a goldstandardtista too, right?

http://www.elitetrader.com/vb/showthread.php?s=&threadid=24264

Jezzzzzzzussss, are you just trying to crush all logical constructs of our economy with one broad ignorant stroke or are you making a play in precious metals. Wealth is created through consumption (NRGDP) and any other explanation is ignorance. Growth in consumption (output) is NARROWLY calculated through a refined measure of GDP (NRGDP) and our myopic view of our economy also has embedded contributing output factors that are not included, i.e. the capital markets. Where there is smoke there is fire and believing that wealth is created only in small niches of the economy while excluding "hobbies" such as the capital markets is foolishness. Thank you, come again...

fan27 · Nov 6, 2003

Quote from citizennobody:

Wealth is created through consumption (NRGDP) and any other explanation is ignorance.

Interesting...I guess if I want to be wealthy I better go blow all my money down out Best Buy. Wealth is created through savings. You must share the same view as Fed Gov Ben Bernanke that all we need to do is just keep spending money and our economy will be just fine. What a joke.

ChaosNSX · Nov 6, 2003

Do not title something excellent article if the content sucks, save your self some face.. Capital Markets create real net worth, get over it

Quote from Kevmeister:

http://www.financialsense.com/stormwatch/oldupdates/2003/1003.html

Real wealth comes from savings and investments along with the production of real goods. It doesnât come from financial and stock speculation. The policy of printing money and expanding leveraged financial assets that trade the markets is paper wealthânot real wealth.

Any comments?

Kev

citizennobody · Nov 6, 2003

Quote from fan27:

Interesting...I guess if I want to be wealthy I better go blow all my money down out Best Buy. Wealth is created through savings. You must share the same view as Fed Gov Ben Bernanke that all we need to do is just keep spending money and our economy will be just fine. What a joke.

You wouldn't be more wealthy but society as a whole would be through the multiplier effects of your foolish spending. You knowledge of economics is a joke and you should go buy a macroeconomics book, then read it...

BTW, how much is your savings if Best Buy could absorb it all. I mean one can only own so many plasma tvs, dvds, etc... Will you buy me a plasma TV and help the economy to boot?

Pabst · Nov 6, 2003

Quote from ChaosNSX:

Do not title something excellent article if the content sucks, save your self some face.. Capital Markets create real net worth, get over it

The article made "Excellent" points. Someday you'll learn that nothing happens in a vacuum. Always a Ying and Yang, bro.

Peace and Good Trading!

fan27 · Nov 6, 2003

Quote from citizennobody:

You wouldn't be more wealthy but society as a whole would be through the multiplier effects of your foolish spending. You knowledge of economics is a joke and you should go buy a macroeconomics book, then read it...

BTW, how much is your savings if Best Buy could absorb it all. I mean one can only own so many plasma tvs, dvds, etc... Will you buy me a plasma TV and help the economy to boot?

so if everyone spends like fools, then society benefits? doesn't sound very logical to me. I get most of my economic information from www.mises.org. They have some good articles. The Austrian school seems to make more sense to me. I found my college macro econ book to have a lot of neat theories, but they don't make sense in the real world. I like the assumption that people make rational decisions. whoever came up with that certainly never traded the S&P 500.

citizennobody · Nov 6, 2003

Quote from Pabst:

The article made "Excellent" points. Someday you'll learn that nothing happens in a vacuum. Always a Ying and Yang, bro.

Peace and Good Trading!

I too read the article and was swayed by some points until I read the conclusion.

"Real wealth comes from savings and investments and the production of real goods. It doesn'tât come from financial speculation. Printing money and expanding leveraged financial assets that trade the markets is paper wealthânot real wealth."

That statement alone, in my opinion, invalidates the paper...

When you draw a graph with two choices for the consumer they can either consume (x axis) or save (y axis). Choosing to save rather than consume is not necessarily a bad thing given the fact that savings tends to matriculate to the capital and equity markets. But this author is attempting to connect inflation to the lack of wealth creation which is not true given the implications of the BUSINESS CYCLE and inflationary/deflationary contributions. I could argue how inane the authors argument is because connecting monetary policy to financial speculation and an inplausible outcome is quite a stretch but why bother.

As far as Ying and Yang are concerned, I might agree depending on what you define as equal and opposite, but for the vacuum comment... Nothing happens in a vacuum and that atmosphere has already been accounted for in earlier colloquies that economists had decades and centuries ago...

citizennobody · Nov 6, 2003

Quote from fan27:

so if everyone spends like fools, then society benefits? doesn't sound very logical to me. I get most of my economic information from www.mises.org. They have some good articles. The Austrian school seems to make more sense to me. I found my college macro econ book to have a lot of neat theories, but they don't make sense in the real world. I like the assumption that people make rational decisions. whoever came up with that certainly never traded the S&P 500.

David, is that you...? If it isn't, GOD help us all, there is another Misestista out there.

For the uninitiated the Austrian (Mises) Interpretation of the Classical Liquidity Cycle (CLC) is the CLC combined with the Austrian economic model. This model sometimes does a good job of explaining exchange traded intangible assets and their wave cycles. For most other parts of the economy, especially the industrial sector which has a much longer time horizon in their decision environment this cycle is moot, especially since the industrial sector is subject to the "Informational Acquisition and Search Problem" among alternative production techniques. This issue alone is what the finance geeks spend much time and consternation when trying to plan production periods.

I hate to be so technical but I hate Misestistas. They spend more time watching shows like "THE O.C." than learning and when they finally speak it is only to regurgitate someone elses perspective...