[Classical Liberal]

(Original post by KentaKobashi)
I think I just told you that I did know the answer. Come on, at least ask me something harder.

If you have done an economics degree, there is very good chance you have got the wrong answer. You have probably been taught the commodity theory of money and the role of banks as intermediares between savers and spenders.

This theory is very nice. The problem is that it is a complete fantasy.

But then again, you are a fan of Ayn Rand. Ayn Rand is a kook, nothing more. She has some good points like objectivism which sound utopian in theory but the reality is is that they just don't work in practise. I think my suspicions about you were correct in that you read or watch something and are completely influenced by it, without any questioning of your own. You do realise that Ayn Rand's economic ideals of Liassez Faire economics and the video you posted in your first post in this thread are completely at odds with each other?

Umm perhaps because I actually have a flexible brain. Perhaps it is because I am not a ****ing moron who just ignores ideas from different people. Perhaps it is because I take the bits I like from other peoples ideas.

I think it's a bit insulting that you ask an economics graduate "where does money come from?" just because I questioned the video you posted. Somehow I doubt that you would be doing the same to an economics lecturer. You can look in a textbook, it's there in black and white.

I know that the people who understand money the least, are economics graduates. Or economists in general. Which is why I asked the question. It was a trap. Just because you read something in the textbook, does not make it true. Money does not work like it your textbooks say it does.

Giving money to the wider population doesn't work. Do you honestly think you are smarter than a central bank?

Actually sometimes I wonder. It is pretty ****ing funny that the BoE in their minutes never had house price data leading up to the credit crunch. Is it any wonder they completely missed it?

The Chinese central bank seems pretty clued up I guess. On the other hand they did get to witness the debt driven house price boom and bust in the West.

Do you not think that if this was the solution that after 3 years we wouldn't have already tried it?

No. Because the orthodox position that actually influences policy, poeple like you, think it is a bad idea. Ofcourse the orthodox position has got us into this mess, so I makes you wonder why the orthodox position is still the orthodox position.

It irks me too because I know that Economics is a science but the answers to questions such as yours are clouded in a sea of opinion.
Physics doesn't have this problem.

Actually it does. All disciplines have this problem.

[Classical Liberal]

(Original post by KentaKobashi)
Since graduating, I feel the same way. Economics teaches you the theory, but there are so many assumptions and constraints put in place that it just doesn't apply to real world scenarios.

Did you ever notice how time was almost never included in the models.....

Seems pretty insane when you consider that the most basic variable is time. Yet mainstram economists very often pretend time does not exist and instead use comparative statics. No wonder they cannot understand the real world.

Atleast Austrians take the concept of time seriously.

[CandyFlipper]

(Original post by Marcuse)
There's been plenty of QE before and inflation is never as high as the neo-liberals predict afterwards.

You are aware of Hayeks theory that inflation is like honey being poured onto a table, right?

[CandyFlipper]

(Original post by KentaKobashi)
EDIT: Oh, it's even worse. You are a libertarian. Seriously dude, I'm trying to help you out. When you go to uni, and if you do study economics, you will learn in your 1st year that Austrian school of economics and libertarianism is a load of baloney.

I'm honestly surprised they would mention Austrian economics at University, especially in the first year. Perhaps they'd do second or third year modules on it if you go out of your way to find it ...

What University did you go to that taught you about Austrian economics in the first year?

[KentaKobashi]

(Original post by D.R.E)
But there are more fundamental questions than that. You and I look at economics in very different ways, and this has very little to do with me being a libertarian: it's about how we think about the methodology of economics. Statistical evidence is useful to an economist, but only use in context. It only gives you a glimpse of one particular time-frame with certain conditions, incentives and economic actors in play. There is very little that can be extrapolated from that snapshot to other scenarios. And this is specifically why economics will never resemble physics no matter how much econometricians like to lie to themselves.

In physics, the models work because they are working with very basic actors which have very limited behavioural patterns, and can be manipulated in a variety of ways by the physicist. It's very is to say, ceretis paribus, we can expect the same results because the same conditions can be replicated: an example being the recent 'discovery' of the Higgs-Boson particle. None of this is possible in economics because the actors are far more complex and it is impossible for the observer to replicate conditions in any meaningful sense. Which means the models created from this are pretty much all useless.

The only similarity between physics and economics is that both use a lot of mathematics, but in one it's just not doing very much.

I'm kind of tired so I'll leave the Keynesian, depression era talk for tomorrow at least but I will say here from what I quoted that whilst you make a good point (a point I felt up until last year), we as economists have ways of working around that problem. Notably, quasi-experiments and the Monte Carlo method. We can also simulate very accurately certain scenarios where we can remove external elements which would affect the results and re-enact them to find out the true effect it has.

Goodnight!

[KentaKobashi]

(Original post by CandyFlipper)
I'm honestly surprised they would mention Austrian economics at University, especially in the first year. Perhaps they'd do second or third year modules on it if you go out of your way to find it ...

What University did you go to that taught you about Austrian economics in the first year?

All University of London colleges are given an overview of it in "Principles of Economics" in the first year.

[D.R.E]

(Original post by KentaKobashi)
I'm kind of tired so I'll leave the Keynesian, depression era talk for tomorrow at least but I will say here from what I quoted that whilst you make a good point (a point I felt up until last year), we as economists have ways of working around that problem. Notably, quasi-experiments and the Monte Carlo method. We can also simulate very accurately certain scenarios where we can remove external elements which would affect the results and re-enact them to find out the true effect it has.

Goodnight!

Cool beans!

[jesusandtequila]

(Original post by Smerdyakov)
Yes. And I don't care even if that is true. Money has no inherent value and we shouldn't treat it like a set of religious tokens. Its merely a system we built to serve our interests, we can do what we want to it in order to achieve those ends; so let's stop worshipping it.

This is true, but figuring out the process by which how we change money affects the ends is the issue here. Not whether we should be able to reform money.

[TheSophist]

(Original post by Recon1424)
Tax the super rich (like 90-95%) and segregate banks into investment and deposit.

The problem is that there is too much of a gap between the 1% and the 99%. The 1% cant do much to stop the 99% so just tax them really high and invest this into things like infrastructure, military, industry and education and the economy will boom. Then split the banks into investment banks and deposit banks where customers are aware of where there money is going. Its history - just look up what Roosevelt did to end the depression in the USA and this is it.

We dont need QE we need to rise up against the elite 1% and even out the table again.

simply redistrebuting wealth does not increase the amount of products on the market. I.e. you will simply cause inflation. Your extra money will not go very far.