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Senate Everything you always wanted to know about economics*

Discussion in 'Community' started by 3sm1r, Aug 14, 2019.

  1. VadersLaMent

    VadersLaMent Chosen One star 10

    Registered:
    Apr 3, 2002
    Basically, if I understand this now, most money is not backed by currency. Money exists as an IOU or a record. Given enough time everyone could withdraw their cash from the banks, but if they did so too fast the banks would not be able to give everyone their money because all that physical currency does not exist. Right now most currency just winds up in another bank as after you spend the currency in a store the store just deposits it in another bank that day.
     
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  2. Darth Punk

    Darth Punk JCC Manager star 6 Staff Member Manager

    Registered:
    Nov 25, 2013
    Money was initially backed by gold reserves. America came away from the “Gold Standard” in the 1930’s. By the mid 40’s global currency was back instead by US dollars. This enabled America to print dollars to meet demand, and not be required to hold reserves of physical gold.

    If you put all the world’s gold in one pile it wouldn’t fill an Olympic size swimming pool - lol.

    Fiat (or faith based) currency is the system we currently have, and we’re fast moving towards cashless. Banks only have to hold a fraction of all the money it has lent out.

    If you really want to scare yourself about how flimsy a position we are in financially, google Shadow Banking, or Rehypothecation
     
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  3. SateleNovelist11

    SateleNovelist11 Force Ghost star 6

    Registered:
    Jan 10, 2015
  4. Darth Punk

    Darth Punk JCC Manager star 6 Staff Member Manager

    Registered:
    Nov 25, 2013
    +1 Americentrism
     
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  5. 3sm1r

    3sm1r Force Ghost star 5

    Registered:
    Dec 27, 2017
    Is there a good website providing statistics about economic and political indicators, like percentage of people working in agriculture in US in 2020, unemployment rate by years, etc. etc. ?
     
  6. LAJ_FETT

    LAJ_FETT Tech Admin and Collecting/Lucasfilm Ltd Mod star 10 Staff Member Administrator

    Registered:
    May 25, 2002
  7. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

    Registered:
    Nov 8, 2001
    Uneployment

    https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm (.gov)
    https://tradingeconomics.com/united-states/unemployment-rate (non-.gov)

    The Fed also tracks a lot of data, including unemployment and I believe employment by sector:

    https://fred.stlouisfed.org/categories/32267

    Looks like a lot of the sector-based items are discontinued as of 2012, but should give some ideas. I think this may be replaced here: https://www.bls.gov/ooh/home.htm
     
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  8. Ghost

    Ghost Chosen One star 7

    Registered:
    Oct 13, 2003
    I would guess the Bureau of Labor Statistics
    https://www.bls.gov/mobile/
     
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  9. blackmyron

    blackmyron Chosen One star 6

    Registered:
    Oct 29, 2005
    Individual states, if their websites are worth a damn, should have statistics as well.
     
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  10. 3sm1r

    3sm1r Force Ghost star 5

    Registered:
    Dec 27, 2017
    Why have the interest rates been kept so low, with respect to the past ?

    (see graph)
    [​IMG]


    Is this the main reason why the market capitalization is so high with respect to the GDP with respect to other periods ?

    (see graph)
    [​IMG]
     
  11. Darth Punk

    Darth Punk JCC Manager star 6 Staff Member Manager

    Registered:
    Nov 25, 2013
    Uggh. I’ll take the first question, but I can’t be arsed to answer the second.

    Think of interest rates as the rental price of money When a country pumps liquidity into the economy it issues Government Bonds. Bonds have yields that go lower as the bond price goes higher because of investors looking for the “safe haven” Gov Bonds provide.

    There’s also an increase in population over the decades in the first chart, and with that, also a longer life expectancy.

    People need to save more, to fund longer retirements. This keeps a downward pressure on interest rates.

    There are other lesser contributory factors, but that’s pretty much the broad strokes
     
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  12. Princess_Tina

    Princess_Tina Chosen One star 7

    Registered:
    May 10, 2001
  13. Princess_Tina

    Princess_Tina Chosen One star 7

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    May 10, 2001
    Last edited: Aug 10, 2020
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  14. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    Nov 8, 2001
    On top of this, when there are recessions and significant downturns -- people tend to hoard money. When the government wants people to spend money. The primary driver is employment, which is largely (but not solely) driven by lending -- commercial and corporate. The lower the rates, the more people will tend to borrow (the riskier the client, the higher the rate on top of prime, etc.) -- so this stimulates economic drivers.
     
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  15. 3sm1r

    3sm1r Force Ghost star 5

    Registered:
    Dec 27, 2017
    The Fed will keep interest rates low for several years. This makes some people believe that a larger inflation with respect to what we are used to have will follow.

    What I wonder is why there hasn't been a significant inflation during all this time in which the interest rates were already very low.

    Is it because most of the money that were not used to buy bonds were put into the stock market rather than in material goods?

    https://www.bloomberg.com/news/arti...plus-in-new-policy?srnd=premium&sref=SvTJfB6y