$this->bbcode_second_pass_quote('MrBill', '
')Keep in mind that according to Doly, my maths are nineteenth century at best, so if there is a mistake, I apologize in advance.
PeakOil is You
Is it cheaper for the €U to buy oil than for the U$?
Re: Is it cheaper for the €U to buy oil than for the U$?
by Doly » Mon 24 Apr 2006, 10:58:22
Simple arithmetic looks fine to me in this case. My rant against economics is only when people use ancient math for problems that can't be solved with ancient math.
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Doly - Expert
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Re: Is it cheaper for the €U to buy oil than for the U$?
by MrBill » Mon 24 Apr 2006, 12:13:57
$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('MrBill', '
')Keep in mind that according to Doly, my maths are nineteenth century at best, so if there is a mistake, I apologize in advance.
')Keep in mind that according to Doly, my maths are nineteenth century at best, so if there is a mistake, I apologize in advance.
Simple arithmetic looks fine to me in this case. My rant against economics is only when people use ancient math for problems that can't be solved with ancient math.
Yes, I agree, the economics of building pyramids only paid off after 4000 years, but who knows what kind of discount rate they used? ; - )
I used to get annoyed with finance and economics professors who insisted no one could beat the market because those who did could not distill their knowledge down into a simple quadratic equation that any idiot graduate student could understand.
For example, my finance prof was/is one of the 4-7 most quoted finance authors depending on which journals you include (specialist or generalist) and there is not doubt he was/is clever. However, he disliked bankers (probably because they earn more than finance professors). His specialty was corporate finance, but he knew less than I did about foreign exchange and capital markets. On my final exam he or his grad student marked three questions wrong because they did not understand my answer. Even though I knew my answer was 100% right.
My point? No one can be an expert in more than a narrow field. As someone else pointed out, real economics is taking hundreds of thousands of variables and distilling them down into a few variables under the mantra of, all things being equal, this will or will likely happen when....that is our double blind experiment. But of course we cannot stop the world and re-test each assumption. Still, the empirical and anecdotal evidence is that we understand more than you think we do. The problem is getting people to take bitter medicine before it is too late.
No economist is going to get Americans out of their cars and out of their McMansions in the suburbs before the world around them collapses and it is absolutely necessary. By that time, it will be too late. Who's fault is that?
If you do not believe in supply and demand and the role of pricing in allocating resources, then I invite you to go to an all you can eat buffet sometime. That is an experiment you can carry-out again and again with near scientific prescision. On average people eat more than they normally would. And on average they waste more than they eat. The flat price acts as a price barrier, but once paid, there is no cost associated with eating as much as you can. Far more than you might if you had say the same food at home.
It would be fascinating if it was not so repulsive. I lose my appetite. Plus it reminds me of people's dark side, their greed and wastefulness, so it leaves me full of despair that they will not react rationally to any normal price signals, so the price will have to go too high or the supply fall too short before they change their self-destructive behaviors.
By the way, we call that inelastic demand or sticky pricing. Big price change = small change in demand.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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MrBill - Expert
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Re: Is it cheaper for the €U to buy oil than for the U$?
by MrBill » Mon 24 Apr 2006, 12:21:39
$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('MrBill', '
')Keep in mind that according to Doly, my maths are nineteenth century at best, so if there is a mistake, I apologize in advance.
')Keep in mind that according to Doly, my maths are nineteenth century at best, so if there is a mistake, I apologize in advance.
Simple arithmetic looks fine to me in this case. My rant against economics is only when people use ancient math for problems that can't be solved with ancient math.
Yes, I agree, the economics of building pyramids only paid off after 4000 years, but who knows what kind of discount rate they used? ; - )
I used to get annoyed with finance and economics professors who insisted no one could beat the market because those who did could not distill their knowledge down into a simple quadratic equation that any idiot graduate student could understand.
For example, my finance prof was/is one of the 4-7 most quoted finance authors depending on which journals you include (specialist or generalist) and there is not doubt he was/is clever. However, he disliked bankers (probably because they earn more than finance professors). His specialty was corporate finance, but he knew less than I did about foreign exchange and capital markets. On my final exam he or his grad student marked three questions wrong because they did not understand my answer. Even though I knew my answer was 100% right.
My point? No one can be an expert in more than a narrow field. As someone else pointed out, real economics is taking hundreds of thousands of variables and distilling them down into a few variables under the mantra of, all things being equal, this will or will likely happen when....that is our double blind experiment. But of course we cannot stop the world and re-test each assumption. Still, the empirical and anecdotal evidence is that we understand more than you think we do. The problem is getting people to take bitter medicine before it is too late.
No economist is going to get Americans out of their cars and out of their McMansions in the suburbs before the world around them collapses and it is absolutely necessary. By that time, it will be too late. Who's fault is that?
If you do not believe in supply and demand and the role of pricing in allocating resources, then I invite you to go to an all you can eat buffet sometime. That is an experiment you can carry-out again and again with near scientific prescision. On average people eat more than they normally would. And on average they waste more than they eat. The flat price acts as a price barrier, but once paid, there is no cost associated with eating as much as you can. Far more than they might if they had say the same food at home, but had to prepare it themselves (a cost or tax on consumption).
It would be fascinating if it was not so repulsive. I lose my appetite. Plus it reminds me of people's dark side, their greed and wastefulness, so it leaves me full of despair that they will not react rationally to any normal price signals, so the price will have to go too high or the supply fall too short before they change their self-destructive behaviors.
By the way, we call that inelastic demand or sticky pricing. Big price change = small change in demand.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
-
MrBill - Expert
- Posts: 5630
- Joined: Thu 15 Sep 2005, 03:00:00
- Location: Eurasia
