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Questions tagged [economics]

To be used for general economics questions that are in some way related to personal finance, the subject of this site. Avoid asking questions that are speculative in nature, academic, or unrelated to personal finance.

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20 views

What happened to the CDNJPY exchange rate in 2005-2008? [on hold]

(Reposted from Politics SE) According to this picture (source), it looks like from roughly 2005-2008, the Canadian dollar was at or above par (Y100/$1) with the Japanese Yen, with the CAD reaching a ...
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0answers
49 views

Why is inflation preferable to tariffs? [closed]

I have read that devaluing currency (increasing inflation) makes the industry more competitive and the reasoning is that it makes the country's exports less expensive abroad and thus more desirable. ...
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1answer
153 views

On a statement of Harry Browne [closed]

I am reading a book on an investment strategy proposed by Harry Browne (1999, Fail-Safe Investing: Lifelong Financial Security in 30 minutes, pp. 39–40) known as the "permanent portfolio". He makes ...
30
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4answers
6k views

How exactly are exchange rates determined? [closed]

I was reading about how the exchange rates are fixed. I understand that demand and supply decide the exchange rate but how exactly is it done and by whom? For example, consider US and India. (https:/...
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1answer
61 views

Does the severity of a market downturn seem to be correlated with the length of the bull market that proceeded it? [closed]

There is a lot of talk on the net, in the WSJ, etc. about how we're in the longest bull market in recent memory, that "this can't last forever", and so on. Does history suggest that when things ...
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2answers
100 views

Why do public companies give guidance in quarterly reports? [closed]

Warren Buffet and James Dimon recently published an article in the WSJ saying public companies shouldn't give guidance in quarterly reports. From what I understand, they're saying that if a company ...
2
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0answers
206 views

How can we tell if Blockchain and Cryptocurrencies are Bubbles? And If they are, what can we do about it? [closed]

Lately I have been influenced by some sour sentiments regarding Blockchain and cryptocurrencies from individuals who believe that cryptocurrencies and their whole infrastructure is currently in a ...
17
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3answers
691 views

How can I survive the economic crisis I see will hit Argentina soon?

I'm from Argentina, where the shit is about to hit the fan just like 2001. We are going to have a crisis similar to Greece in recent times (or us 17 years ago): all debt related. I'm not an economic ...
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1answer
86 views

Qatar is richest country but not largest economic country [closed]

What is the difference between world largest economic countries and richest countries?
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3answers
912 views

The proper term for a third party economy [closed]

A friend of mine asked me whether something odd was going on, including the following picture: Basically, the companies listed (Bitcoin, Uber, Facebook, Alibaba and Airbnb) sell a service in a market ...
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1answer
101 views

Do credit card balance transfer offers dry up during economic downturns? (USA)

I have great credit and occasionally take advantage of low-fee, 0% interest balance transfers offers on existing or new credit cards, always reading the fine print and paying it off without paying a ...
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2answers
95 views

How to pick from several products/services to maximize utility considering the cost of each option?

What is the proper way to consider the utility of a product/service versus its cost in order to make the best rational decision to get the "most for my dollar" if there are several choices for me to ...
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1answer
306 views

I have a million dollars of disposable income. What should I do to best benefit the economy? [closed]

Let's say we have a million dollars currently invested in an index fund with which we can do pretty much anything without affecting our eventual financial outcome. We live well within my means, while ...
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6answers
7k views

At what point do index funds become unreliable?

Passively investing in exchange-traded funds that track some broad index is often recommended for private investors that don't have the time or expertise for active investment. In particular, index ...
2
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3answers
379 views

S&P is consistently beating inflation?

I read this on a forbes article. From September 1967 to September 2007, the S&P 500 produced an annualized return of 7.14%, compared to the annualized gain of 4.67% in the CPI over the same ...
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1answer
127 views

How to get a grip on finance? [closed]

I hope this is not too off-topic (theoretical but not necessarily off-topic), but I am just starting to understand the financial world and I am a bit confused while reading publications and books ...
1
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1answer
198 views

Why is gold price falling in late 2016 given that it has historically rose when there are fears of inflation? [closed]

Since Trump got elected as president, gold price fall has accelerated. At the same time, fears of inflation heightened given expectation of Trump's fiscal stimulus. The dramatic fall in bond prices is ...
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5answers
12k views

Is the stock market a zero-sum game? [closed]

In the stock market, over both the short and long-term, does someone necessary need to lose in order for someone else to make a profit? If not, then more fundamentally does something — in the most ...
4
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2answers
133 views

What is the ratio of homes for sale vs homes occupied

I've been shopping for a home in Alberta and I've noticed a small town of approximately 240 homes, where about 12 of those are currently on the market. That's 5% of the homes currently up for sale. Is ...
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3answers
1k views

Do governments support their own bonds when their value goes down?

I'm far from expert in finance, so please bear with me. It's my understanding that a company who issued stock typically support it when the stock price go down. Does the same thing happen with ...
2
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1answer
56 views

Is there a financial benefit for buyers from using community currencies?

My city is introducing its own local currency, so I've been reading about similar established projects like the Brixton Pound. I understand that local businesses will benefit from it thanks to the ...
2
votes
1answer
121 views

How does trade generate profits for all parties? [closed]

Stupid question, i know, but I'm not financially literate enough and couldn't find proper keywords for Google search on my question. The question arises from the logic that all traders whether in ...
8
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4answers
1k views

How are the best way to make and save money at 22 years old

I am currently 22 years old, I work as an insurance biller and make about 800-900 dollars every two weeks cash. I have no expenses because I still live with my parents but I'm trying to branch out on ...
1
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1answer
82 views

How does the debt:GDP ratio affect the country's economy? [closed]

I was surpriced when I saw the debt of USA has raised to more than 100% of its GDP. But I saw other countries like Japan having over 250% of its GDP. And a lot of countries have debt near 100% of GDP. ...
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1answer
341 views

perpetual bond that yields 0%

As far as I understand perpetual bonds are endless and don't mature. So why would anybody invest in one that does not yield? You don't know when/if they are going to pay.
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2answers
98 views

Brent crude vs. USD market value [closed]

correlation != causation, but Brent crude and the USD are completely on twinkie paths Brent Crude USD exchange rate Why is it that when the price of oil drops, not only do you have more money to ...
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2answers
72 views

How do I calculate Future value adding fund charges?

Here is the statement on the NEST website. "We take a small percentage of the money going into your pot known as a contribution charge. This amount is 1.8 per cent." They then also charge £15 ...
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2answers
150 views

How does the world - in aggregate - generate a non-zero return? [closed]

Given the sum of two entities' wealth remains the same after any given transaction, how do these entities grow in value as a whole? For example, if I grew some corn in China and sold it to the US for ...
1
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1answer
539 views

Why can't poor countries just print more money? [closed]

I know this is a really silly question that is really obvious, but what's stopping a country from just printing out a few more billion of their own currency and then using that money to buy goods from ...
7
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1answer
231 views

Why adjust for inflation annually, as opposed to realising it after the holding period?

Why do investors offset their annual returns against inflation, when inflation isn't realised until the end of the holding period (when the investor is actually spending the money)? An example: ...
6
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4answers
2k views

What exactly is a “derivative”?

I haven't been able to find exactly what a derivative means. It seems to be some sort of cross of insurance, stock, and lay-a-way. When I try to look it up, all I find is all the problems not ...
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2answers
113 views

What are the “perfect” conditions for selling a small private business?

As the title says. What the general opinion seems to be is that now is the best time ever to sell a small business because of low: interest rates, tax rates, and inflation, plus many large M&A ...
3
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0answers
69 views

What is the economically rational way to fund leasehold property management?

I am trying to find a company to manage the block of flats (apartment building) I live in. What is the economically rational way to pay for property management services, According to traditional ...
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8answers
5k views

What's an economic explanation for why greeting cards are so expensive? [closed]

Greeting cards sell for about $5-6 per card. For what is basically a piece of paper, that's pretty expensive. Yet, they're not exactly well protected. Anyone with photo editting software could ...
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1answer
204 views

calculation of real inflation rate in india?

How can I figure out the real rate of inflation in india? If I don't believe CPI as real and practical? We get the CPI numbers as inflation rate, but in my views those numbers are not the real one. I ...
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6answers
2k views

What is the opposite of a sunk cost? A “sunk gain”?

Here's an example of the sunk cost fallacy: You decided to buy a solar panel because you heard that you can make money from them over time. Unfortunately, you didn't do enough research and bought an ...
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1answer
111 views

Is there more money in pockets or in banks? [closed]

In America, or the world at large, is there more money in people's pockets---i.e., not within banks or institutions, etc.---or in banks or institutions, etc? Provide evidence and reasoning.
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1answer
93 views

Is there any historical example that a market is shrinking down after competition? [closed]

I heard a story saying that the advertising market shrink down after Google entered. I doubt this strongly because Google is doing so well with its ads, though I never know what's the older days like. ...
3
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2answers
512 views

Is there a reason to buy a 0% yield bond?

Right now I can get a 1yr government bond that yields 0%. Is there any reason to buy such a bond? E.G. If the broker holding my accounts goes out of business is my "perceived low risk portion" of my ...
2
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2answers
150 views

Why are real-term bond yields systematically declining, and what does it mean for investors?

I'm having hard time understanding what is causing the trend below: In theory, since it is inflation adjusted I'd expect the yield to fluctuate with the economic cycle, but not systematically drift ...
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1answer
152 views

Comparing GDP across countries [closed]

I was talking with my friend yesterday and he said that India's GDP per capita is an indication that the country is poor. I thought that this statistic was misleading since the country's cost of ...
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1answer
475 views

Why do both stock and bond seem overvalued in 2014?

The general wisdom is that when stock is overvalued, bond is undervalued, and vice versa. Why are both suggested to be in a bubble in 2014? Also, if one believes in tactical allocation, what asset ...
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3answers
190 views

What is the meaning of “$N industry”?

For example, in the sentence "Semiconductor fabrication is a $100 billion industry.", what exactly is being said?
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1answer
302 views

Why was there a spike in disposable income in December 2012? [closed]

If you go to: http://www.tradingeconomics.com/united-states/disposable-personal-income and look at December 2012, there was a huge spike in disposable income. Does anyone know the reason for this?
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2answers
2k views

Why does the stock market index get affected when a terrorist attack takes place?

The way I see it, the stock exchange is a market where shares of a company are traded. These trades are triggered by individual valuations by participants of what an investment in a company would be ...
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2answers
268 views

What does “basis points” mean in this context?

I read this sentence: Egypt's central bank cut its benchmark overnight deposit rate by another 50 basis points to 8.75 percent, its second rate cut in two months. What does basis points mean ...
5
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1answer
243 views

What are good investments to use as hedges when the Federal Reserve draws down quantitative easing?

Basically I think it is quite obvious that quantitative easing (QE) will be pulled back eventually and countries will start to tighten their monetary policy. When that happens, what kind of assets ...
1
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1answer
98 views

Economics: negative consumer sentiment following failure to upsell

I was recently at a bricks-and-mortar shop selling some equipment. I knew exactly what need I had and had a mental picture of the product I expected to purchase. The store offered two different ...
5
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1answer
353 views

Equity prices during currency devaluation — Mexico 1994 [closed]

If I own a company whose assets are 100 barrels of oil valued at $10,000 in some currency, and the currency's value suddenly drops by a factor of two, I would expect that my company is now suddenly "...
2
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2answers
3k views

Why don't the employment rate and unemployment rate sum up to 1?

According to Turkstat, the Turkish employment rate was 44.9 and the unemployment rate was 10.1 in December 2012. I would expect the unemployment rate to be 1 - employment rate. How are those numbers ...