Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (248)	1/23/2004 7:59:10 AM
From: Ilaine	Read Replies (1) \| Respond to of 621

Hi Mq - the virtue of being able to understand math while thinking about economics is that it acts as a check on one's theories. Some things are easy - a pie can only be cut into so many shares and then you run out of pie. In a sense, I suppose we're always talking about how many slices of pie there are to go around, but when you start throwing in exchange rates and interest rates and the time value of money, it becomes more of a moving target, at least for me. But the best ideas can be expressed using only words, you're absolutely right. A basic economic theory doesn't need interest rates and time value of money to be expressed in a simple, thoroughly comprehensible fashion. The real problem is that a lot of people only believe the words they want to hear. This is an almost universal problem. It helps if you understand their inherent biases, so you can fill in the bits they've left off. Hume explained exchange rate theory perfectly circa 1750, but a lot of people don't want to believe it, so they don't. It's as inexorable as the sun rising in the morning, but not as obvious. I suppose another explanation is that most people spout nonsense all the time, so it's hard to know whether someone knows what they're talking about. So that's another incentive not to believe what you don't want to believe anyway. They'd rather believe in Karl Marx or the Easter Bunny or that money grows on trees, so they do.