Economic Idiocy

[pjviitas]

One of the reasons a lot of people on these forums don't care about economic theory is because it doesn't work.

Like everything to do with money once someone figures how to manipulate the system, the system stops working and ends up being something it was never intended to be.

The beauty of bitcoin is that once someone starts to manipulate it and it stops working right, people can simply abandon it for a different altcoin of some kind.

It's that simple...conventional economic theory is so yesterday.

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[brush242]

One of the reasons a lot of people on these forums don't care about economic theory is because it doesn't work.

Like everything to do with money once someone figures how to manipulate the system, the system stops working and ends up being something it was never intended to be.

The beauty of bitcoin is that once someone starts to manipulate it and it stops working right, people can simply abandon it for a different altcoin of some kind.

It's that simple...conventional economic theory is so yesterday.

Brilliant, yet another person who doesn't understand simple economics at all ("economic theory...doesn't work"), then states an ignorant conclusion without any support whatsoever.

Economics works regardless of the monetary system because it is how human beings live their lives, whether they are conscious of it or not. Every single decision, no matter how small, no matter how many each day, is made using cost/benefit analysis. You state that "it doesn't work", might I ask why you believe such a thing?

It's that simple...cost/benefit analysis is so every day.

[thepostman]

@brush242:
Please understand that debating people who take pride in their ignorance is no more productive than debating a rusty bucket.  Neither is likely to change, regardless of the strength or the eloquence of your argument.

No offense to anyone.  ~~Merry Christmas~~

[bythesea]

One of the reasons a lot of people on these forums don't care about economic theory is because it doesn't work.

Like everything to do with money once someone figures how to manipulate the system, the system stops working and ends up being something it was never intended to be.

The beauty of bitcoin is that once someone starts to manipulate it and it stops working right, people can simply abandon it for a different altcoin of some kind.

It's that simple...conventional economic theory is so yesterday.

Brilliant, yet another person who doesn't understand simple economics at all ("economic theory...doesn't work"), then states an ignorant conclusion without any support whatsoever.

Economics works regardless of the monetary system because it is how human beings live their lives, whether they are conscious of it or not. Every single decision, no matter how small, no matter how many each day, is made using cost/benefit analysis. You state that "it doesn't work", might I ask why you believe such a thing?

It's that simple...cost/benefit analysis is so every day.

Economy works in a modern life to some degree. It looks on system of production and trade and a need to satisfy the needs of millions. In a modern way it does work as I said, but economy is in the eye of beholder. Bitcoins are perfect example of a thing called Giffen good where as the price raises the demand gets higher and as price drops so does the demand. That's a thing that doesnt follow normal rules in economy and that is why economists dont agree that Giffen goods exist.

You can't apply rules you find in economy to everything in a real life. That is the reason what one day you can be worth billions and the next day lose everything.

[thepostman]

...
 Bitcoins are perfect example of a thing called Giffen good where as the price raises the demand gets higher and as price drops so does the demand. That's a thing that doesnt follow normal rules in economy and that is why economists dont agree that Giffen goods exist.
...

Bitcoin is a currency -- money.  Not goods.

Yes, the more money is worth, the more people want it.  All money, not just bitcoin.  Price of goods rising is the exact opposite of the price of currency rising.  If a bitcoin is worth twice as much today as it was worth yesterday, of course people would want it more -- it buys twice as much stuff (goods).  That's not called Giffen, that's called common sense.  And that's why it helps to know a bit about economics.

[bythesea]

...
 Bitcoins are perfect example of a thing called Giffen good where as the price raises the demand gets higher and as price drops so does the demand. That's a thing that doesnt follow normal rules in economy and that is why economists dont agree that Giffen goods exist.
...

Bitcoin is a currency -- money.  Not goods.

Yes, the more money is worth, the more people want it.  All money, not just bitcoin.  Price of goods rising is the exact opposite of the price of currency rising.  That's why it helps to know a bit about economics.

Money in fact is a good that is used in transactions.. In economics good is describes something that satisfy human need, that needs to be obtained only difference is that bitcoins are intangible goods, like information... Bitcoins are goods in that way since atm they satisfy our need and greed, same as everything else before invention on money as a payment for a good. In the time when people used to trade items. So now you trade bitcoins for money or you use it to by something else.

So yes it helps to know a bit about economics....

[empoweoqwj]

One of the reasons a lot of people on these forums don't care about economic theory is because it doesn't work.

Like everything to do with money once someone figures how to manipulate the system, the system stops working and ends up being something it was never intended to be.

The beauty of bitcoin is that once someone starts to manipulate it and it stops working right, people can simply abandon it for a different altcoin of some kind.

It's that simple...conventional economic theory is so yesterday.

So the world will just switch altcoins every few years. What a future to look forward to

[thepostman]

...
 Bitcoins are perfect example of a thing called Giffen good where as the price raises the demand gets higher and as price drops so does the demand. That's a thing that doesnt follow normal rules in economy and that is why economists dont agree that Giffen goods exist.
...

Bitcoin is a currency -- money.  Not goods.

Yes, the more money is worth, the more people want it.  All money, not just bitcoin.  Price of goods rising is the exact opposite of the price of currency rising.  That's why it helps to know a bit about economics.

Money in fact is a good that is used in transactions.. In economics good is describes something that satisfy human need, that needs to be obtained only difference is that bitcoins are intangible goods, like information... Bitcoins are goods in that way since atm they satisfy our need and greed, same as everything else before invention on money as a payment for a good. In the time when people used to trade items. So now you trade bitcoins for money or you use it to by something else.

So yes it helps to know a bit about economics....

Wrong.  To begin learning, start with Wikip, here, and continue 'till the end.

...Price of goods rising is the exact opposite of the price of currency rising.

If a bitcoin costs double (in dollars or cows), that means that each bitcoin buys twice as much dollars or cows, and thus is about twice as desirable.  If you find this phenomenon curious, paradoxical, or if this makes bitcoin "Giffen good" in your eyes, i would suggest either affordable counseling or adult continuing education.

[jaekwon]

Economics is a lot like physics.

Probably no theory will ever be able model the economy in its entirety, considering that the economy is grounded on our physical reality.

It's also worth considering that economics is probably less advanced than our understanding of physics. The General Theory of Economics is a lot like Newtonian physics. I suppose Hayek's theories are much more "relativistic", but we have so much more to discover.

Economics is in a way more difficult than physics because you can't throw money and scientists at the problem to create controlled experiments.

In the future we might see more advanced economic model simulators that can predict the outcome of different models. But without the advanced software or hindsight, economic theories are all educated guesses that probably don't fit reality.

The answer to future advancements in economic theory is in simulation software and grand scale experiments. Bitcoin is a grand scale experiment.

[empoweoqwj]

Economics is a lot like physics.

Probably no theory will ever be able model the economy in its entirety, considering that the economy is grounded on our physical reality.

It's also worth considering that economics is probably less advanced than our understanding of physics. The General Theory of Economics is a lot like Newtonian physics. I suppose Hayek's theories are much more "relativistic", but we have so much more to discover.

Economics is in a way more difficult than physics because you can't throw money and scientists at the problem to create controlled experiments.

In the future we might see more advanced economic model simulators that can predict the outcome of different models. But without the advanced software or hindsight, economic theories are all educated guesses that probably don't fit reality.

The answer to future advancements in economic theory is in simulation software and grand scale experiments. Bitcoin is a grand scale experiment.

Economics is nothing like physics. Physics seeks to discover the real laws that govern our universe, our very creation. Economists just argue endlessly and produce models, none of which work very well.

[thepostman]

...
Economics is nothing like physics. Physics seeks to discover the real laws that govern our universe, our very creation. Economists just argue endlessly and produce models, none of which work very well.

You never hung out with phys. grads.   At least economics geeks don't add handfuls of dimensions & creative fudge factors constants to make their models jive.

[traiz]

...
Economics is nothing like physics. Physics seeks to discover the real laws that govern our universe, our very creation. Economists just argue endlessly and produce models, none of which work very well.

You never hung out with phys. grads.   At least economics geeks don't add handfuls of dimensions & creative fudge factors constants to make their models jive.

Umm... They do.
But we're digressing, the strength of any scientific theory is that ultimately, it has to be testable (make predictions).
Some economic theories do, but other have been proven to be flat out wrong and should be
discarded....

[Hawker]

There isn't.

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"  - Upton Sinclair wrote this about people who sold adulterated food over 100 years ago.  Its still true today.

Which strikes me as funny--an ignorant ideologue stating something very true, while at the same time writing books that suggest he has no idea what his own phrase means.

Well perhaps he, and the century of people who read him, didn't have your brains   

[bythesea]

...
 Bitcoins are perfect example of a thing called Giffen good where as the price raises the demand gets higher and as price drops so does the demand. That's a thing that doesnt follow normal rules in economy and that is why economists dont agree that Giffen goods exist.
...

Bitcoin is a currency -- money.  Not goods.

Yes, the more money is worth, the more people want it.  All money, not just bitcoin.  Price of goods rising is the exact opposite of the price of currency rising.  That's why it helps to know a bit about economics.

Money in fact is a good that is used in transactions.. In economics good is describes something that satisfy human need, that needs to be obtained only difference is that bitcoins are intangible goods, like information... Bitcoins are goods in that way since atm they satisfy our need and greed, same as everything else before invention on money as a payment for a good. In the time when people used to trade items. So now you trade bitcoins for money or you use it to by something else.

So yes it helps to know a bit about economics....

Wrong.  To begin learning, start with Wikip, here, and continue 'till the end.

...Price of goods rising is the exact opposite of the price of currency rising.

If a bitcoin costs double (in dollars or cows), that means that each bitcoin buys twice as much dollars or cows, and thus is about twice as desirable.  If you find this phenomenon curious, paradoxical, or if this makes bitcoin "Giffen good" in your eyes, i would suggest either affordable counseling or adult continuing education.

Lol. Wiki. And you wanna be taken serious? I can write a topic on wiki, that doesnt mean it is true...
http://economics.about.com/cs/studentresources/f/money.htm

Read this, same thing..
Bitcoin is a mean of obtaining items you need. Money is the same thing right. But can you make your own print your own money? No, but you can " print " bitcoins without the government help ( or so we think it is now ).

You are looking it wrong. BTC has a value, atm thats lets say 700$ and the trade is lower then it was when it was 1100$. When it drops to lets say 300$ you can by close to 4x more for the same amount of money when it was 1100$ but the trade won't be as good as back it was before. So yes, you my little boy need to go back to school...

[Kokomoka]

I like to think of economics today as like medicine in the middle ages. Everyone could empirically see that bleeding people didn't cure them, but they carried on doing it regardless because it was the best idea they had. Sometimes, the best economic policy a government can do is to do nothing. Recession? do nothing. That's my advice to any world leaders who happen to be reading this Economics is also rife with cognitive biases. The action bias for example can lead governments to run huge stimulus programs even though they only make the situation worse. I've also noticed a lot of non-sequitur arguments. The unemployment rate fell so such and such a government policy obviously worked. This is like saying giving women the vote caused world war 2.

Economics is wrapped up with politics. The main message of economics is that people should be free to make their own decisions. This undermines the need for government. As a result, it is difficult for young people to hear this message. Keynesianism is a notable exception. It teaches that we need a powerful government to push us around and tell us what to do. I was taught Keynesianism at school under the guise of teaching economics. It suits the governments position, (I grew up in a socialist country).

Another nice comparison I have seen is Soviet genetics. In the Soviet Union genetics research was repressed as it undermined communist ideology. Soviet genetics was developed as a counterpoint. This doesn't change the fact there is one and only one genetics. I believe that there is one and only one economics, and Austrian economics is the best understanding of economics that we currently have. The fact that is undermines the state is irrelevant. It doesn't make it any less accurate.

[eternaluniverse]

Theories have views on how economics work, none of them are necessarily right and in uncharted territories it would be impossible to decide on which school of thought to use. I know investing from the gut is not encouraged but I don't think its any worse than what you're doing, as long as they abide by basic investor guidelines, eg; dont invest what you cant lose, don't play with all of ur investment in day trading, etc.

[phiche]

The problem with this particular forum is that it seems that many (most?) of the posters don't really know the slightest thing about basic economics. Not the Austrian School, the Chicago School, Keynesian economcs, Paulsy Krugmanian, Bastiat, Hayek, Mises, Prescott, Lucas, zip. Nada. Nothing.

It reminds me of the people who will happily discuss US budgets and monetary policy, but don't know the first thing about fiat money, the Federal Reserve, what the power of the printing press actually means, or anything else. They are the same people that think that there is a Social Security "Trust Fund" and never pause to think what it would mean to loan money to themselves.

As a greater commentary, beyond this board, it's a very sad thing. This stuff is important.

And the problem with "economics" is that none of the models actually reflects what happens in the real world (maybe a silhouette at best until a bubble bursts and they all stand around looking dumbfounded wondering how did that happen because that's not in their model), and that people who call themselves "economists" are complete shams too.

Here is the reason why I'm investing more in bitcoin:

Our monetary system requires an ever expanding debt base in order to sustain itself (because money=debt). The issue is that most people, governments and companies in the western nations are so far in debt that they cannot take on the required loans to continue the expansion of the money supply to the level that is required to keep the system working. This is why central banks have had to step in with Quantitive Easing - to make up the shortfall in debt/money creation that we previously took on ourselves.

So our monetary system essentially behaves like a great big ponzie scheme (which actually broke in 2008 and has been collapsing ever since). Just wait until the Fed starts to reduce QE in 2014 - I predict markets to start going haywire and they will have step back in and actually increase the money printing to $100+ billion every month. That's when the average people (and the media) will finally realise that things have started to go really wrong, and the price of bitcoin will break into 6 figures.

Couple a monetary system that requires infinite growth with the fact that we live on a planet with finite resources and it's pretty easy to predict how it will turn out. There is nothing to be admired about anyone that calls themselves an "economist" or thinks they know about "economics".

Here is a litmus test to try out on someone who claims to be an economist: Ask them if they think economics is a science. If they say "yes", then ask them if they can explain the "scientific method". If they can explain it, then ask them why economics is taught as a "humanity" in school? If they can't explain, punch them in the face.

[johnyj]

OP, the reason people here ignore economics theory is: If you have the right to print money and made that money the only medium of transaction, you can promote any economics theory that you see fit and even award them with a Nobel price of economics with your printed money  

I'm sure one day bitcoin economics theory will thrive and replace mainstream economics theory

[chemicalbruva]

The problem with this particular forum is that it seems that many (most?) of the posters don't really know the slightest thing about basic economics. Not the Austrian School, the Chicago School, Keynesian economcs, Paulsy Krugmanian, Bastiat, Hayek, Mises, Prescott, Lucas, zip. Nada. Nothing.

It reminds me of the people who will happily discuss US budgets and monetary policy, but don't know the first thing about fiat money, the Federal Reserve, what the power of the printing press actually means, or anything else. They are the same people that think that there is a Social Security "Trust Fund" and never pause to think what it would mean to loan money to themselves.

As a greater commentary, beyond this board, it's a very sad thing. This stuff is important.

And the problem with "economics" is that none of the models actually reflects what happens in the real world (maybe a silhouette at best until a bubble bursts and they all stand around looking dumbfounded wondering how did that happen because that's not in their model), and that people who call themselves "economists" are complete shams too.

Here is the reason why I'm investing more in bitcoin:

Our monetary system requires an ever expanding debt base in order to sustain itself (because money=debt). The issue is that most people, governments and companies in the western nations are so far in debt that they cannot take on the required loans to continue the expansion of the money supply to the level that is required to keep the system working. This is why central banks have had to step in with Quantitive Easing - to make up the shortfall in debt/money creation that we previously took on ourselves.

So our monetary system essentially behaves like a great big ponzie scheme (which actually broke in 2008 and has been collapsing ever since). Just wait until the Fed starts to reduce QE in 2014 - I predict markets to start going haywire and they will have step back in and actually increase the money printing to $100+ billion every month. That's when the average people (and the media) will finally realise that things have started to go really wrong, and the price of bitcoin will break into 6 figures.

Couple a monetary system that requires infinite growth with the fact that we live on a planet with finite resources and it's pretty easy to predict how it will turn out. There is nothing to be admired about anyone that calls themselves an "economist" or thinks they know about "economics".

Here is a litmus test to try out on someone who claims to be an economist: Ask them if they think economics is a science. If they say "yes", then ask them if they can explain the "scientific method". If they can explain it, then ask them why economics is taught as a "humanity" in school? If they can't explain, punch them in the face.

phiche, agree 100%

As someone who excelled at Economics in high school I have to admit that economic theory (nowadays) is but an excuse for the horrific amount of financial theft taking place in today's system.
It has so little bearing on reality that economics textbooks may as well be sold in the fiction section. As a teenager, economics seemed something so noble. It was the science that explained how people connect through commerce, why currencies exist, why wealth gaps exist and how governments administrate the economy for the good of society.  

When you see the sheer amount of corruption and theft at the highest level, you begin to see that all this is irrelevant.
We are all rats in an economic experiment which aims to test just how low you will go just to be able to consume more so that you can satisfy some manufactured craving. IMO, western society has been reduced to the economic formula: work->consume->die.

Hopefully, people on this forum see how cryptocurrencies can help us break out of this hypnotic cycle and start to change the world around us for the better. I don't think you need to be very knowledgeable in economics to see what is going on.

[pjviitas]

The problem with this particular forum is that it seems that many (most?) of the posters don't really know the slightest thing about basic economics. Not the Austrian School, the Chicago School, Keynesian economcs, Paulsy Krugmanian, Bastiat, Hayek, Mises, Prescott, Lucas, zip. Nada. Nothing.

It reminds me of the people who will happily discuss US budgets and monetary policy, but don't know the first thing about fiat money, the Federal Reserve, what the power of the printing press actually means, or anything else. They are the same people that think that there is a Social Security "Trust Fund" and never pause to think what it would mean to loan money to themselves.

As a greater commentary, beyond this board, it's a very sad thing. This stuff is important.

And the problem with "economics" is that none of the models actually reflects what happens in the real world (maybe a silhouette at best until a bubble bursts and they all stand around looking dumbfounded wondering how did that happen because that's not in their model), and that people who call themselves "economists" are complete shams too.

Here is the reason why I'm investing more in bitcoin:

Our monetary system requires an ever expanding debt base in order to sustain itself (because money=debt). The issue is that most people, governments and companies in the western nations are so far in debt that they cannot take on the required loans to continue the expansion of the money supply to the level that is required to keep the system working. This is why central banks have had to step in with Quantitive Easing - to make up the shortfall in debt/money creation that we previously took on ourselves.

So our monetary system essentially behaves like a great big ponzie scheme (which actually broke in 2008 and has been collapsing ever since). Just wait until the Fed starts to reduce QE in 2014 - I predict markets to start going haywire and they will have step back in and actually increase the money printing to $100+ billion every month. That's when the average people (and the media) will finally realise that things have started to go really wrong, and the price of bitcoin will break into 6 figures.

Couple a monetary system that requires infinite growth with the fact that we live on a planet with finite resources and it's pretty easy to predict how it will turn out. There is nothing to be admired about anyone that calls themselves an "economist" or thinks they know about "economics".

Here is a litmus test to try out on someone who claims to be an economist: Ask them if they think economics is a science. If they say "yes", then ask them if they can explain the "scientific method". If they can explain it, then ask them why economics is taught as a "humanity" in school? If they can't explain, punch them in the face.

phiche, agree 100%

As someone who excelled at Economics in high school I have to admit that economic theory (nowadays) is but a excuse the horrific amount of financial theft taking place in today's system.
It has so little bearing on reality that economics textbooks may as well be sold in the fiction section. As a teenager, economics seemed something so noble. It was the science that explained how people connect through commerce, why currencies exist, why wealth gaps exist and how governments administrate the economy for the good of society.  

When you see the sheer amount of corruption and theft at the highest level, you begin to see that all this is irrelevant.
We are all rats in an economic experiment which aims to test just how low you will go just to be able to consume more so that you can satisfy some manufactured craving. IMO, western society has been reduced to the economic formula: work->consume->die.

Hopefully, people on this forum see how cryptocurrencies can help us break out of this hypnotic cycle and start to change the world around us for the better. I don't think you need to be very knowledgeable in economics to see what is going on.

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