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Author Topic: Armchair Economics Thread - Resurrection  (Read 9280 times)

Great Order

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Re: Armchair Economics Thread - Resurrection
« Reply #180 on: September 29, 2022, 12:36:34 pm »

Well, to continue on the theme of Lizzy's idiocy, she's insisting on steering the ship towards the waterfall.

She's acting like a literal child here. She'd rather crash the economy *and* be humiliated later than be humiliated now. It was nice guys, I enjoyed being part of a rich nation while I could. No amount of schadenfreude can overcome the horror of watching the UK economy collapse in real time because 0.02% of the population voted for an actual drooling moron despite being told, repeatedly, that she was an actual drooling moron.
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I may have wasted all those years
They're not worth their time in tears
I may have spent too long in darkness
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McTraveller

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Re: Armchair Economics Thread - Resurrection
« Reply #181 on: September 29, 2022, 01:17:00 pm »

Please stick to economics, not politics, thanks!  We have other threads for political discussion. If you can focus on the economic theory behind it - what is different about this economic cycle than previous ones, for example?
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Great Order

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Re: Armchair Economics Thread - Resurrection
« Reply #182 on: September 29, 2022, 03:10:09 pm »

We've got insane inflation and she's insisting on tax cuts is what it boils down to. She's subscribing to trickle-down economics which, as is well known, doesn't work. Effectively she's pumping money into a system that needs less money, and even worse she's ensuring that the inflation comes from the top, so it's not that poor people get more money but it's worth less, rich people get more money that's worth less AND poor people get the same amount of money that's worth less. The BoE is trying its damndest to prevent the economy from imploding so it's directly contradicting the government's policies, and it's already had to take some pro-inflationary measures to stop everyone's pensions from being wiped out. The markets are reacting accordingly and utterly shitting themselves, and even the IMF is saying that this is unprecedented. There was a guy from there on the news saying this is the sort of thing they've only witnessed in emerging economies, not mature ones. Truss also told everyone else they need to cut taxes to increase growth.

To sum it up: The economy was heading towards a cliff edge. Rather than put on the brakes, Truss and Kwarteng have decided that the better course of action is the press their foot on the accelerator on the basis that we might actually fly instead. Everyone on the planet's calling them idiots because the economy doesn't actually have wings, but they're insisting that it does. In fact, they've told everyone else their economies have wings and will take off if they just press the accelerator down too, which everyone else ignored because it's insanity.
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I may have wasted all those years
They're not worth their time in tears
I may have spent too long in darkness
In the warmth of my fears

McTraveller

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Re: Armchair Economics Thread - Resurrection
« Reply #183 on: September 29, 2022, 03:25:06 pm »

I'd argue they indeed are putting their foot on the wrong accelerator.  For an economy to grow you need production of goods and services; so policies should be encouraging that.  I agree that putting your foot on the "increase money supply" accelerator seems like a foolish policy.

Higher velocity of money is only useful if it produces new goods and services; it only creates inflation if there is static (or falling) real productivity.

For example: I want to buy a new car in the US, but there just isn't enough production for me to buy it.  I can't buy literally something that effectively costs a person's annual wage, because there is no production.
« Last Edit: September 29, 2022, 03:40:38 pm by McTraveller »
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MrRoboto75

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Re: Armchair Economics Thread - Resurrection
« Reply #184 on: September 29, 2022, 03:25:49 pm »

Please stick to economics, not politics, thanks!  We have other threads for political discussion. If you can focus on the economic theory behind it - what is different about this economic cycle than previous ones, for example?

It's hard to not be political when the problem is literally macroeconomics/monetary policy at work.
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Great Order

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Re: Armchair Economics Thread - Resurrection
« Reply #185 on: October 01, 2022, 09:36:17 am »

Interesting article about the study that helped prompt Britain's descent into austerity from 9 years ago:

https://www.bbc.co.uk/news/magazine-22223190

Turns out there was a mistake in it. Debt-to-GDP ratio doesn't have anywhere near as much of an impact as the original study predicted.
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I may have wasted all those years
They're not worth their time in tears
I may have spent too long in darkness
In the warmth of my fears

EuchreJack

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Re: Armchair Economics Thread - Resurrection
« Reply #186 on: October 01, 2022, 10:43:01 am »

Interesting article about the study that helped prompt Britain's descent into austerity from 9 years ago:

https://www.bbc.co.uk/news/magazine-22223190

Turns out there was a mistake in it. Debt-to-GDP ratio doesn't have anywhere near as much of an impact as the original study predicted.
Oh, it looks like it's had quite an impact  :P

da_nang

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Re: Armchair Economics Thread - Resurrection
« Reply #187 on: October 03, 2022, 04:31:35 pm »


For context, Lehman Brothers collapsed at approximately 750850.
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Ceterum censeo Unionem Europaeam esse delendam.
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Loud Whispers

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Re: Armchair Economics Thread - Resurrection
« Reply #188 on: October 03, 2022, 05:19:16 pm »

Damn. I didn't turn all my sterling into tinned beans yet

EuchreJack

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Re: Armchair Economics Thread - Resurrection
« Reply #189 on: October 03, 2022, 08:41:12 pm »

I guess this removes one barrier to the UK joining the European Union....

Great Order

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Re: Armchair Economics Thread - Resurrection
« Reply #190 on: Today at 01:06:11 am »

OK, can someone translate that for me? I've no idea what that means.
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I may have wasted all those years
They're not worth their time in tears
I may have spent too long in darkness
In the warmth of my fears

da_nang

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Re: Armchair Economics Thread - Resurrection
« Reply #191 on: Today at 02:40:35 am »

A credit default swap (CDS) is essentially an insurance for investors who fear the company in question may be close to default. If the price for Credit Suisse CDS is going up then that will mean the investors believe there is an increased risk that Credit Suisse goes belly up.
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"Deliver yesterday, code today, think tomorrow."
Ceterum censeo Unionem Europaeam esse delendam.
Future supplanter of humanity.
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