Homie
Anti-Lefty
Alright, thanks. I don't fully understand these arguments, but I'm not gonna pester you with additional questions. Maybe I'll have a better understanding of this stuff after International Trade class this semester.
Ask an Economist (Post #1005 and counting)
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JerichoHill
Bedrock of Knowledge
You're not pestering, you're learning
What would you say would be the best way to stimulate an economy or prevent it from overheating?
Homie
Anti-Lefty
This may be a policy question more than an economic question:
Do you think the US Gov't will open up the building of new nuclear power plants?
Apparently the energy is clean and the process very effective for producing large quantities of energy. Of course if something goes wrong, it goes very wrong.
Do you think the US Gov't will open up the building of new nuclear power plants?
Apparently the energy is clean and the process very effective for producing large quantities of energy. Of course if something goes wrong, it goes very wrong.
JerichoHill
Bedrock of Knowledge
Well, I think business cycles do occur, so in a way its unpreventable. How do you moderate the business cycle? Inflation-targeting on the monetary side and sound fiscal policy side on the other.Know anyone hiring in Minneapolis after May?
What would you say would be the best way to stimulate an economy or prevent it from overheating?
JerichoHill
Bedrock of Knowledge
Three Mile Island was a testament to how good American engineering was. Something went wrong and it was contained. That's the problem with the myth of Nuclear Power...American Nuclear Power was quite safe. Chernobyl was caused because the Russians built it without any failsafes, backups.
I used to work in the power industry helping to plan power supply. Nuclear power plants take a very long time to build, and there's a question about waste. It might be a smart idea to take an uninhabited part of the Rockies and build a bank of nuke plants there, but then we'd have to change how our grid works and get better transmission lines (but waste disposal would be simpler). But that would take time. And then of course, there is the NIMBY effect, and the popularization of false myths that keeps folks from wanting them (despite that those who do live near a nuclear plant stand a much greater chance of dying in a car crash than from a nuclear meltdown)
It is probably likely that by the time we created enough new nuclear plants to impact America's energy needs, we'd have progressed far enough in solar / wind power (Dyson sphere?) that it would not be necessary.
ravensfire
Member of the Opposition
Considering what a Dyson sphere is, I don't think I'm worried about the US (or any other current nation) ever building one! The construction of an object that completely englobes a sun is rather daunting ...
Back on topic ...
I'm reading that most alternative energy sources cost more than the current energy sources. I've seen both the carrot approach (here's a tax credit if you use alternative energy sources!) and the stick approach (PUC's requiring their utility supply X% of energy from a renewable source by year Y). Do either of these approaches make sense economically?
My personal view is that without some incentives, the development pace of alternative energy sources would be slower. They do cost more to research, design the plants and determine the best way to locate and run a plant. The ability of a country to be self-reliant for energy help keep more money in that country, plus provide exportable technologies. That, however, is something that's more long term. I think theory does suggest that companies will eventually shift to alternative sources, but only when the benefit exceeds the costs. Incentives (and regulations) can help push that decision point up.
And btw - how's the new job? I've read recently that there's a rather large investigation into the mortgage industry - are you involved in that?
Thanks!
-- Ravensfire
Back on topic ...
I'm reading that most alternative energy sources cost more than the current energy sources. I've seen both the carrot approach (here's a tax credit if you use alternative energy sources!) and the stick approach (PUC's requiring their utility supply X% of energy from a renewable source by year Y). Do either of these approaches make sense economically?
My personal view is that without some incentives, the development pace of alternative energy sources would be slower. They do cost more to research, design the plants and determine the best way to locate and run a plant. The ability of a country to be self-reliant for energy help keep more money in that country, plus provide exportable technologies. That, however, is something that's more long term. I think theory does suggest that companies will eventually shift to alternative sources, but only when the benefit exceeds the costs. Incentives (and regulations) can help push that decision point up.
And btw - how's the new job? I've read recently that there's a rather large investigation into the mortgage industry - are you involved in that?
Thanks!
-- Ravensfire
Homie
Anti-Lefty
I believe this is an outdated way of thinking. A country should produce whatever it is best at producing (comparative and absolute advantage, and all that jazz) and then just trade it; everyone's better off.
Question:
I still got gold on my mind
If you wanna be real safe about not losing your savings to inflation, why not just buy physical gold? Since it has intrinsic value you should be good. I can see several problems with it though:
1. It has risk as well, because it might get stolen.
2. It is not as liquid as money, so if you need money fast - you're out of luck.
3. Unlikely, but: If some new material or something is discovered that renders gold useless, it will be worthless, or at least worth less. (lack of demand)
4. Also unlikely, but: If a massive amount of new gold reserves is found, gold will decrease in value, and your savings with it. (Scarcity concept)
Considering that these problems are unlikely, would it not be a good investment for saving?
It's funny how many people seemed to have forgotten that the cycle is still there. It's just a lot flatter than it used to be. I figured your answer would be pretty much what the leaders are not doing, but it doesn't make it any less disappointing in their performance. Thanks, JH!
JerichoHill
Bedrock of Knowledge
@@ravensfire
Considering what a Dyson sphere is, I don't think I'm worried about the US (or any other current nation) ever building one! The construction of an object that completely englobes a sun is rather daunting ...
--Well, you can do that with orbital solar power plants around the earth that beam back the energy in the form of lasers. and that is being tested...
I've seen both the carrot approach (here's a tax credit if you use alternative energy sources!) and the stick approach (PUC's requiring their utility supply X% of energy from a renewable source by year Y). Do either of these approaches make sense economically?
Over the long run, the tax credit incentives should, or are more likely, to produce the desired outcome.
I've read recently that there's a rather large investigation into the mortgage industry - are you involved in that?
Life's grand. At the moment, I'm not doing anything but my own personal research. I have a conference in March that I would like to present at.
Considering what a Dyson sphere is, I don't think I'm worried about the US (or any other current nation) ever building one! The construction of an object that completely englobes a sun is rather daunting ...
--Well, you can do that with orbital solar power plants around the earth that beam back the energy in the form of lasers. and that is being tested...
I've seen both the carrot approach (here's a tax credit if you use alternative energy sources!) and the stick approach (PUC's requiring their utility supply X% of energy from a renewable source by year Y). Do either of these approaches make sense economically?
Over the long run, the tax credit incentives should, or are more likely, to produce the desired outcome.
I've read recently that there's a rather large investigation into the mortgage industry - are you involved in that?
Life's grand. At the moment, I'm not doing anything but my own personal research. I have a conference in March that I would like to present at.
JerichoHill
Bedrock of Knowledge
What the leaders aren't doing is also a good answer. Yeah, funny times.
JerichoHill
Bedrock of Knowledge
@@Homie
Question:
I still got gold on my mind
If you wanna be real safe about not losing your savings to inflation, why not just buy physical gold?
Over the long run, you're better off in stocks. I can be buying stocks on a discount right now, whereas gold is at a premium. When the economy recovers, gold values will plummet and the stock market will rise. I make more money by being in the market. Gold doesn't protect against inflation any more than any other commodity does. Why does something being a physical resources make you think it does? Let me throw some graphs.
Gold, maybe, is a crisis hedge. It doesn't hedge for inflation as you can tell by that graph.
Three thousand year old traditions of hoarding stores of wealth that are physical, portable and easily devisable are hard to break.
1. It has risk as well, because it might get stolen.
It is also not easily transported
2. It is not as liquid as money, so if you need money fast - you're out of luck.
For everyday transactions, it is quite illiquid
Considering that these problems are unlikely, would it not be a good investment for saving?
Not against investing your long-term savings into a market index fund no. Gold, or commodities in general, are a reasonable purchase for someone with a large portfolio who needs to sufficiently diversify and hedge against risk. For the average person, investing in gold doesn't make sense.
This chart should put a nail in this gold debate. This is from USA Today
http://search.netscape.com/search/redir?src=websearch&requestId=e226c49247702de1&clickedItemRank=4&userQuery=return+of+the+stock+market+vs.+return+to+gold&clickedItemURN=http%3A%2F%2Fwww.usatoday.com%2Fmoney%2Fperfi%2Fcolumnist%2Fkrantz%2F2007-06-28-asset-returns-risk_N.htm&title=Here+are+the+facts+on+risk+%3Cb%3Evs%3C%2Fb%3E.+reward+for+various+assets+%3Cb%3E...%3C%2Fb%3E&moduleId=matchingsites.jsp.M&clickedItemPageRanking=4&clickedItemPage=2&clickedItemDescription=WebResults
This chart was developed by Market research firm Global Financial Data.
Stocks historically return 10%. Gold historically returns 1%. Their risk factor is slightly higher for stocks. Gold is NOT a store of value in that it prevents inflation, when we look at long-term trends.
Question:
I still got gold on my mind
If you wanna be real safe about not losing your savings to inflation, why not just buy physical gold?
Over the long run, you're better off in stocks. I can be buying stocks on a discount right now, whereas gold is at a premium. When the economy recovers, gold values will plummet and the stock market will rise. I make more money by being in the market. Gold doesn't protect against inflation any more than any other commodity does. Why does something being a physical resources make you think it does? Let me throw some graphs.
Gold, maybe, is a crisis hedge. It doesn't hedge for inflation as you can tell by that graph.
Three thousand year old traditions of hoarding stores of wealth that are physical, portable and easily devisable are hard to break.
1. It has risk as well, because it might get stolen.
It is also not easily transported
2. It is not as liquid as money, so if you need money fast - you're out of luck.
For everyday transactions, it is quite illiquid
Considering that these problems are unlikely, would it not be a good investment for saving?
Not against investing your long-term savings into a market index fund no. Gold, or commodities in general, are a reasonable purchase for someone with a large portfolio who needs to sufficiently diversify and hedge against risk. For the average person, investing in gold doesn't make sense.
This chart should put a nail in this gold debate. This is from USA Today
http://search.netscape.com/search/redir?src=websearch&requestId=e226c49247702de1&clickedItemRank=4&userQuery=return+of+the+stock+market+vs.+return+to+gold&clickedItemURN=http%3A%2F%2Fwww.usatoday.com%2Fmoney%2Fperfi%2Fcolumnist%2Fkrantz%2F2007-06-28-asset-returns-risk_N.htm&title=Here+are+the+facts+on+risk+%3Cb%3Evs%3C%2Fb%3E.+reward+for+various+assets+%3Cb%3E...%3C%2Fb%3E&moduleId=matchingsites.jsp.M&clickedItemPageRanking=4&clickedItemPage=2&clickedItemDescription=WebResults
This chart was developed by Market research firm Global Financial Data.
Stocks historically return 10%. Gold historically returns 1%. Their risk factor is slightly higher for stocks. Gold is NOT a store of value in that it prevents inflation, when we look at long-term trends.
The gold play has nothing to do with fear, inflation or the US and everything to do with a cultural demand and a small piece as store of value. The demand picture comes from 60% of the globe's population(#1 and #2 consumer are China and India) and their culture demanding it and secondly the production side which is a nasty environmental business.
Don't look at the history of gold prices since the US was the only engine to the global economy a decade ago. That's changed quite dramatically over the last ten years and rising prosperity.
Don't look at the history of gold prices since the US was the only engine to the global economy a decade ago. That's changed quite dramatically over the last ten years and rising prosperity.
JerichoHill
Bedrock of Knowledge
I still disagree with you in that gold has little investment value for the average person investing or retirement. I also disagree that the most recent gold price rise is explainable by India and China. Have they really been demanding that much gold? I thought they were driving up the price of oil.
JerichoHill
Bedrock of Knowledge
They're bidding more than the book value of Yahoo's asset. That's not smart. They're bidding based on future expectations of a web search company whose market share is slowly slipping away.
Norseone
Emperor
India and China are driving up the price of everything from oil to milk, why not gold as well? There are tons of new consumers there with money suddenly, I would be surprised if they weren't upping demand for gold.
JerichoHill
Bedrock of Knowledge
I cant link to this WSJ article, but one released Jan 8th says:
According to the article, streetTracks Gold Shares ETF (GLD) now holds more gold than the People's Bank of China and the European Central Bank. In fact, there are only seven countries which currently hold more gold than the Gold ETF, and they are the U.S., Germany, France, Italy, Switzerland, Japan and the Netherlands. At the same time, demand from traditional sources has declined. For example, since 2001, worldwide demand for gold to make jewelry has fallen by 13% (so much for the booming new demand from India and China).
So that leads me to believe that its not actual manufacturing demand from India and China, since worldwide demand has fallen
According to the article, streetTracks Gold Shares ETF (GLD) now holds more gold than the People's Bank of China and the European Central Bank. In fact, there are only seven countries which currently hold more gold than the Gold ETF, and they are the U.S., Germany, France, Italy, Switzerland, Japan and the Netherlands. At the same time, demand from traditional sources has declined. For example, since 2001, worldwide demand for gold to make jewelry has fallen by 13% (so much for the booming new demand from India and China).
So that leads me to believe that its not actual manufacturing demand from India and China, since worldwide demand has fallen
SS-18 ICBM
Oscillator
Are the United States' problems with immigration, health care, and foreign policy an offshoot of its economic woes, or vice versa?
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