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Gold/Mining/Energy : Gold Price Monitor

GDXJ 106.70

-0.3%

Dec 5 4:00 PM EST

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To: Alan Whirlwind who wrote (40810)	9/25/1999 5:29:00 PM
From: ahhaha	Read Replies (2) of 116796

The money created by the FED to liquify the system has 0 effect on inflation, interest rates, GNP, or anything else. Economics is an infinite variable theory and so it is extraordinarily difficult to put together causal connections between the variables. It is also extremely difficult to even isolate the main variables. If you get the big ones cooperating so that they act independently, you find a little later that they don't do so at all. The universities and other institutions have spent a great deal of time and effort trying to put together what are known as econometric models. They are attempts to reduce economics to some kind of rigor or measurement, and they have been notoriously failed. If you go to the econometricians, they will will assure you that their models are stable. Then you get an LTCM. In the final analysis economics deals with people and they aren't computable. The equations of econometrics somewhere must reflect the perfectly chaotic state of human emotion. It isn't possible to determine the indeterminate, so all these exercises are doomed to failure. Does that mean that economics is useless? No. It just means that economics is an infinite variable theory and so the principles of economics must be written as classes of variables. As in quantum mechanics when you try to measure a component of the classes the connections between classes become indeterminant. The principles which designate the classes can never be fully known. Specifically, for example, it isn't completely the case that price is determined where marginal supply equals marginal demand. This is independent of the stochastic definition or redefinition of these variables. Attempts to take these principles beyond their intuitive meaning will fail to the degree of the taking. Can it be said that FED's creation of $200 billion in currency to bridge Y2K will have no economic effect? Not in principle but definitely in instantiation.

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