Hide your kids, hide your wife!

[deisik]

Now to the point (let's forget about you being a douchebag)

Your country exports 1000 units of goods (in money terms) and imports 500 (typical export oriented economy). Due to depreciation of its currency it can now export twice as many, i.e. 2000 units, and given initial conditions, import twice as less, i.e 250 units. But since it has got the net surplus of 1000 units through exports, it can now easily buy missing 250 units and still have a surplus of 750 units

I can think of not a single case when such an oversimplification could be useful. You have disregarded almost every variable and initial condition possibility. There are more countries, timescales are involved, natural resources. This is so absurd I will not bother to go on. Please just stop.

I didn't expect anything different from you (but I was ready). You can't prove me wrong mathematically here (that is what you were bragging about). I gave you arithmetics you required. In reality, there are a myriad of things that complicate matters and can change everything dramatically, but you can't beat the principle which is still there. You can overwhelm it but simply can't get rid of it...

These are the basics of macroeconomics

[1715215118]

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[FenixRD]

Now to the point (let's forget about you being a douchebag)

Your country exports 1000 units of goods (in money terms) and imports 500 (typical export oriented economy). Due to depreciation of its currency it can now export twice as many, i.e. 2000 units, and given initial conditions, import twice as less, i.e 250 units. But since it has got the net surplus of 1000 units through exports, it can now easily buy missing 250 units and still have a surplus of 750 units

I can think of not a single case when such an oversimplification could be useful. You have disregarded almost every variable and initial condition possibility. There are more countries, timescales are involved, natural resources. This is so absurd I will not bother to go on. Please just stop.

I didn't expect anything different from you (but I was ready). You just can't prove me wrong mathematically here (what you were bragging about). I gave you arithmetics you required. In reality, there are a myriad of things that complicate matters and can change everything dramatically, but you can't beat the principle which is still there...

You didn't give me math, you gave me words, based on fantasy values, completely devoid of any applicability to a world other than one in your mind. The only logical premise I can sort of try and infer is that you believe export-oriented economies should be inflationary. Reversing the values, consumer economies should be deflationary. So, the US should be deflationary?

I've also taken the liberty of reviewing your posts, which seem primarily to be advertisement-for-pay for PrimeDice. I should have known better, with such an astronomical (note: not astrological) ratio of posts relative to your registration date. Dozens a day, all meaningless, often combative, insulting, and always simple. If only this forum had a signal-to-noise indicator below the Ignore button.

Please, please, stop replying. I can't stop you, but I can promise this will the the last reply of yours in this thread I answer. Feel free to use the most trollish reply you can muster to draw me back. It is doubtful you will succeed.

[solarflare]

You two should fix the issues you have with yourselves before fixing the issues you have with others.
Anyway, you don't need mathematics, arithmetic or human psychology to understand that QE is shit. Common sense is enough.

And we should rename this thread... I'm thinking of "Nomad vs Sedentary" or "deisik the tree vs FenixRD the wind".

[Erdogan]

Focus on raising export, reducing import, that is focus on the trade balance, is a fallacy called mercantilism. It is rampant today. Free trade is all about removing it.

The fallacy comes into the clear when it is explained this way:

Imagine first that you have world money, or, which is the same thing, the two countries' money is stable in regard to each other. It does not matter if the units have different value, just that the exchange rate is stable. Now, the people in one country wants the wares of the other country. To get that, they trade their own products. The more they can produce and export, the more they can import. The purpose of producing is to consume, either what they produce themselves, or imported goods traded for their own. The money is just oil in the machinery, the imports are paid with exports. There does not have to be any net inflow or outflow of money. Now if money flows out, the people in the country will want to repair their money loss, because they have a certain preference for holding money in reserve. Therefore they will produce more and export. Thus the balance is restored.

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books.

Now imaging that to reduce the value of a currency, there is in the end really one way to do it - to dilute the money with increasing the money supply. And where does the new money go? Whoever gets them, this is the people who wants the devaluation to happen. So for personal gain, they are willing to reduce the wealth of a whole population. That is evil.

[FenixRD]

Focus on raising export, reducing import, that is focus on the trade balance, is a fallacy called mercantilism. It is rampant today. Free trade is all about removing it.

The fallacy comes into the clear when it is explained this way:

Imagine first that you have world money, or, which is the same thing, the two countries' money is stable in regard to each other. It does not matter if the units have different value, just that the exchange rate is stable. Now, the people in one country wants the wares of the other country. To get that, they trade their own products. The more they can produce and export, the more they can import. The purpose of producing is to consume, either what they produce themselves, or imported goods traded for their own. The money is just oil in the machinery, the imports are paid with exports. There does not have to be any net inflow or outflow of money. Now if money flows out, the people in the country will want to repair their money loss, because they have a certain preference for holding money in reserve. Therefore they will produce more and export. Thus the balance is restored.

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books.

Now imaging that to reduce the value of a currency, there is in the end really one way to do it - to dilute the money with increasing the money supply. And where does the new money go? Whoever gets them, this is the people who wants the devaluation to happen. So for personal gain, they are willing to reduce the wealth of a whole population. That is evil.

And without any arithmetic at all 

[Erdogan]

Focus on raising export, reducing import, that is focus on the trade balance, is a fallacy called mercantilism. It is rampant today. Free trade is all about removing it.

The fallacy comes into the clear when it is explained this way:

Imagine first that you have world money, or, which is the same thing, the two countries' money is stable in regard to each other. It does not matter if the units have different value, just that the exchange rate is stable. Now, the people in one country wants the wares of the other country. To get that, they trade their own products. The more they can produce and export, the more they can import. The purpose of producing is to consume, either what they produce themselves, or imported goods traded for their own. The money is just oil in the machinery, the imports are paid with exports. There does not have to be any net inflow or outflow of money. Now if money flows out, the people in the country will want to repair their money loss, because they have a certain preference for holding money in reserve. Therefore they will produce more and export. Thus the balance is restored.

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books.

Now imaging that to reduce the value of a currency, there is in the end really one way to do it - to dilute the money with increasing the money supply. And where does the new money go? Whoever gets them, this is the people who wants the devaluation to happen. So for personal gain, they are willing to reduce the wealth of a whole population. That is evil.

And without any arithmetic at all 

Feel free to dress it in numbers, if you think it is necessary.

[FenixRD]

Feel free to dress it in numbers, if you think it is necessary.

No, no! You misunderstand my perspective. You've stated it quite nicely. Perhaps numbers can be used to prove you right — and of course they can, or something is wrong! — but your premise is free of logical contradiction and stands well, numbers or not. Indeed, I read your words and see numbers, and they are right. I was merely admiring that, while I see it all with numbers, that you managed to state the truth clearly without breaking out a whiteboard. Not a popular trick at dinner parties, I assure you.

[bambou]

Focus on raising export, reducing import, that is focus on the trade balance, is a fallacy called mercantilism. It is rampant today. Free trade is all about removing it.

The fallacy comes into the clear when it is explained this way:

Imagine first that you have world money, or, which is the same thing, the two countries' money is stable in regard to each other. It does not matter if the units have different value, just that the exchange rate is stable. Now, the people in one country wants the wares of the other country. To get that, they trade their own products. The more they can produce and export, the more they can import. The purpose of producing is to consume, either what they produce themselves, or imported goods traded for their own. The money is just oil in the machinery, the imports are paid with exports. There does not have to be any net inflow or outflow of money. Now if money flows out, the people in the country will want to repair their money loss, because they have a certain preference for holding money in reserve. Therefore they will produce more and export. Thus the balance is restored.

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books.

Now imaging that to reduce the value of a currency, there is in the end really one way to do it - to dilute the money with increasing the money supply. And where does the new money go? Whoever gets them, this is the people who wants the devaluation to happen. So for personal gain, they are willing to reduce the wealth of a whole population. That is evil.

dammm you good! i really wish i had some economics teacher like you
glad we came basically to the same conclusion (FED=EVIL). be sure i will be using your flawless statement when arguing this subject

thx buddy.

[ScaryHash]

England, France and Germany defaulted during the 1930's, meaning they could not pay their debts.

The 1930's will happen again, and it will be called the 2nd Great Depression.

The only open question is, how many people will die due to the war that will result because of the renewed financial crisis?

It won't be in the hundred million range this time, it will be in the 1-3 billion deaths range.

That's the scary part. The financial pain ALWAYS causes subsequent deaths. It's the only constant in human history.

[Kungfucheez]

England, France and Germany defaulted during the 1930's, meaning they could not pay their debts.

The 1930's will happen again, and it will be called the 2nd Great Depression.

The only open question is, how many people will die due to the war that will result because of the renewed financial crisis?

It won't be in the hundred million range this time, it will be in the 1-3 billion deaths range.

That's the scary part. The financial pain ALWAYS causes subsequent deaths. It's the only constant in human history.

Hopefully you're the first to go

[deisik]

Focus on raising export, reducing import, that is focus on the trade balance, is a fallacy called mercantilism. It is rampant today. Free trade is all about removing it.

The fallacy comes into the clear when it is explained this way:

Imagine first that you have world money, or, which is the same thing, the two countries' money is stable in regard to each other. It does not matter if the units have different value, just that the exchange rate is stable. Now, the people in one country wants the wares of the other country. To get that, they trade their own products. The more they can produce and export, the more they can import. The purpose of producing is to consume, either what they produce themselves, or imported goods traded for their own. The money is just oil in the machinery, the imports are paid with exports. There does not have to be any net inflow or outflow of money. Now if money flows out, the people in the country will want to repair their money loss, because they have a certain preference for holding money in reserve. Therefore they will produce more and export. Thus the balance is restored.

The balance is restored through adjusting the exchange rates of the trading countries as well as increasing national debt (Japan is the second largest holder of U.S. government debt, if I'm not mistaken). Your first assumption is incorrect since currencies are actually floating against each other

[deisik]

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books

The whole story is not that simple as you tell it here. It can actually be better as you don't take into account that the exporting country can in fact sell more (since the importing country pays less and thus can pay for more volume), so producing more wealth and profits, providing higher employment and fuller utilization of productive capacities even at lower prices...

[Marduc]

thanks to that nuclear disaster in japan there will only be about a 5th of its population less than 25 years by that time they will be lucky to make 40 let alone retire

[FenixRD]

Yep, time to go on an ignore spree. Reviewing deisik and kungfu's posts, it's pretty clear, their true colors and purposes.

…
It won't be in the hundred million range this time, it will be in the 1-3 billion deaths range.

That's the scary part. The financial pain ALWAYS causes subsequent deaths. It's the only constant in human history.

Hopefully you're the first to go

That's one…

And of course Deisik because he is either very slow or deliberately trying to troll Erdogan by misreading his very clear prose. I'll leave these fools to others; I haven't the patience anymore, as you can see from when I lost it earlier. So, that's two.

[Erdogan]

Feel free to dress it in numbers, if you think it is necessary.

No, no! You misunderstand my perspective. You've stated it quite nicely. Perhaps numbers can be used to prove you right — and of course they can, or something is wrong! — but your premise is free of logical contradiction and stands well, numbers or not. Indeed, I read your words and see numbers, and they are right. I was merely admiring that, while I see it all with numbers, that you managed to state the truth clearly without breaking out a whiteboard. Not a popular trick at dinner parties, I assure you.

Thank you, I misread your earlier comments.

[FenixRD]

Feel free to dress it in numbers, if you think it is necessary.

No, no! You misunderstand my perspective. You've stated it quite nicely. Perhaps numbers can be used to prove you right — and of course they can, or something is wrong! — but your premise is free of logical contradiction and stands well, numbers or not. Indeed, I read your words and see numbers, and they are right. I was merely admiring that, while I see it all with numbers, that you managed to state the truth clearly without breaking out a whiteboard. Not a popular trick at dinner parties, I assure you.

Thank you, I misread your earlier comments.

Now you see why I find I'm better off speaking with numbers.

[Erdogan]

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books

The whole story is not that simple as you tell it here. It can actually be better as you don't take into account that the exporting country can in fact sell more (since the importing country pays less and thus can pay for more volume), so producing more wealth and profits, providing higher employment and fuller utilization of productive capacities even at lower prices...

I agree that in practice there are different dynamics, but to describe the phenomenon clearly, it helps to take away some variables, like having a common currency or having a steady exchange rate. Anyway, listen to the politician talk in Europe, they have in fact a common currency. The italians complain that the germans produce quality cars at a good price. They think that this fact makes the germans evil, when in fact both countries profit on it. The italians get good cars, the germans get good money for their effort to import useful stuff from other countries including Italy. Mercantilism is just stupid, and I have problems understanding why the public swallows it. Probably it is only special interest groups that have the necessary budget to drown the public with their publicity. People should just be critical to news and use their own basic reasoning power.

[Erdogan]

Focus on raising export, reducing import, that is focus on the trade balance, is a fallacy called mercantilism. It is rampant today. Free trade is all about removing it.

The fallacy comes into the clear when it is explained this way:

Imagine first that you have world money, or, which is the same thing, the two countries' money is stable in regard to each other. It does not matter if the units have different value, just that the exchange rate is stable. Now, the people in one country wants the wares of the other country. To get that, they trade their own products. The more they can produce and export, the more they can import. The purpose of producing is to consume, either what they produce themselves, or imported goods traded for their own. The money is just oil in the machinery, the imports are paid with exports. There does not have to be any net inflow or outflow of money. Now if money flows out, the people in the country will want to repair their money loss, because they have a certain preference for holding money in reserve. Therefore they will produce more and export. Thus the balance is restored.

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books.

Now imaging that to reduce the value of a currency, there is in the end really one way to do it - to dilute the money with increasing the money supply. And where does the new money go? Whoever gets them, this is the people who wants the devaluation to happen. So for personal gain, they are willing to reduce the wealth of a whole population. That is evil.

dammm you good! i really wish i had some economics teacher like you
glad we came basically to the same conclusion (FED=EVIL). be sure i will be using your flawless statement when arguing this subject

thx buddy.

Thanks for that comment, it makes up for twenty negative comments made by people who is stupid and close-minded.

[deisik]

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books

The whole story is not that simple as you tell it here. It can actually be better as you don't take into account that the exporting country can in fact sell more (since the importing country pays less and thus can pay for more volume), so producing more wealth and profits, providing higher employment and fuller utilization of productive capacities even at lower prices...

I agree that in practice there are different dynamics, but to describe the phenomenon clearly, it helps to take away some variables, like having a common currency or having a steady exchange rate. Anyway, listen to the politician talk in Europe, they have in fact a common currency. The italians complain that the germans produce quality cars at a good price. They think that this fact makes the germans evil, when in fact both countries profit on it. The italians get good cars, the germans get good money for their effort to import useful stuff from other countries including Italy. Mercantilism is just stupid, and I have problems understanding why the public swallows it. Probably it is only special interest groups that have the necessary budget to drown the public with their publicity. People should just be critical to news and use their own basic reasoning power

Yes, this is a common practice which is obviously not applicable here and makes confusion only (and confuses people at that). We were "talking" (lol) about Japan and their counter parties (that would primarily be the USA) in which case the whole picture is aggravated not only by floating exchange rates (this could be dealt with), but also by the discrepancy in the trade balance which from the mid-1960s has been in Japan's favor ($60 billion in 1987). Apparently, this imbalance was made up for by an increasing accumulation of U.S. government debt. If you call that mercantilism, well, let it be so. But where's fallacy here?

Actually, I'm curious whether your post about mercantilism is referred to mine at all

[Erdogan]

Now to devaluation. The government intervenes to reduce the value of their own money. This means that the producers get less value for their production, prices of the products go lower. Basically the importing country pays less, and the loss is on the producers in the exporting country. The corresponding imports will rise in price, making the imported volume lower. So the workers in the devaluing country gets less for their work and pay more for the imports. This is just bad for the people in the devaluing country. How can it be better? A number on the governments accounting books

The whole story is not that simple as you tell it here. It can actually be better as you don't take into account that the exporting country can in fact sell more (since the importing country pays less and thus can pay for more volume), so producing more wealth and profits, providing higher employment and fuller utilization of productive capacities even at lower prices...

I agree that in practice there are different dynamics, but to describe the phenomenon clearly, it helps to take away some variables, like having a common currency or having a steady exchange rate. Anyway, listen to the politician talk in Europe, they have in fact a common currency. The italians complain that the germans produce quality cars at a good price. They think that this fact makes the germans evil, when in fact both countries profit on it. The italians get good cars, the germans get good money for their effort to import useful stuff from other countries including Italy. Mercantilism is just stupid, and I have problems understanding why the public swallows it. Probably it is only special interest groups that have the necessary budget to drown the public with their publicity. People should just be critical to news and use their own basic reasoning power

Yes, this is a common practice which is obviously not applicable here and makes confusion only (and confuses people at that). We were "talking" (lol) about Japan and their counter parties (that would primarily be the USA) in which case the whole picture is aggravated not only by floating exchange rates (this could be dealt with), but also by the discrepancy in the trade balance which from the mid-1960s has been in Japan's favor ($60 billion in 1987). Apparently, this imbalance was made up for by an increasing accumulation of U.S. government debt. If you call that mercantilism, well, let it be so. But where's fallacy here?

Actually, I'm curious whether your post about mercantilism is referred to mine at all

If the difference is just accumulated in foreign debt, it will not affect the exchange rate. I agree that accumulating foreign debt is quite common. It is a problem because it causes the market not to clear, and therefore suppresses changes in prices and therefore the signals to the market actors to change production and consumption.