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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2answers
157 views

What is the US subprime crisis of 2008? [closed]

I have heard that after the US subprime crisis of 2008,particularly a lot of people were pointing fingers at the Economic policymakers. I am not really familiar with why it is so, a detailed ...
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2answers
183 views

Will home prices ever stop rising or go down? [closed]

I'm from EU and home prices in my city went up by 10% each year before pandemic, when pandemic started everyone said that home prices will go down, but it didn't, quite opposite it keeps rising. Stock ...
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1answer
83 views

How much does taking a Macroeconomics course help you understand the field of investing? [closed]

I want to ask the macroeconomics version of https://money.stackexchange.com/a/12852. I know macroeconomics isn't finance and investing, but I think currencies are macroeconomics. Investors like ...
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4answers
378 views

Why don't companies just print more of valuable items?

I just had somebody show off her Pokémon card collection. One of the cards is worth a lot of money now for some reason. Why doesn't Pokémon, Inc. just print more of that particular card? Do they have ...
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4answers
4k views

Why is so much focus put on the Dow Jones Industrial Average?

The Dow Jones Industrial Average is derived from the sum of the stock prices of 30 large-cap companies, divided by the Dow Divisor which, at the moment is actually a multiplier. It's mostly NYSE ...
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1answer
65 views

Why did the Baltic Dry Index rise by 65% (YTD)? [closed]

The global economy is (almost) stopped and the price of crude oil is very low, so why did the Baltic Dry Index — an index that shows the cost per unit time of transportation in principal routes around ...
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3answers
168 views

What is Real versus Nominal value?

The last version of the Wikipedian article "Real versus nominal value (economics)" has this definition of the subject: In economics, nominal value is measured in terms of money, whereas ...
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1answer
71 views

At what % about the stock price should I sell and take my profits? [closed]

at what percentage above the cost price should you walk? prices fluctuate therefore? what should the end point be?
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2answers
528 views

What is the safest asset to hold if you think a longterm depression is coming?

I'm obviously not a financial advisor, nor do I have a crystal ball. But the more I read/think about the global macro-level outlook the more I believe a long and deep correction is coming. Anyone with ...
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2answers
121 views

What determined the “cost of borrowing money” or the interest rate in a gold-based economy [closed]

In the modern economy, the central bank decides the cost of borrowing money using interest rates along with other several tools and technic. But I was wondering, in a gold-based economy (not the gold ...
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0answers
163 views

How much value has the US Dollar lost or gained in 2020, compared to the US Dollar in 2019?

There's a lot of news about the Federal Reserve printing money. I have a hard time imagining the relative change in value of the USD. (or EURO for that matter) I tried to calculate but it's hard: ...
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36 views

Assumptions in Conventional Finance

These are the 3 main assumptions used in Conventional Finance: Price of assets are correct, ie equal to it's intrinsic value Resources are allocated effectively World is fair and so are the market (...
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1answer
140 views

How likely is a total economic collapse due to the potential coronavirus impact? [closed]

Most signs show that lockdown could easily stretch through the summer. A freeze in consumer spending would cause multiple industries to fail causing a ripple effect. To be specific, if lockdown lasts ...
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1answer
171 views

Shall we expect high inflation when government provides financial aid during covid-19?

I am not clear about the source of money when UK and US announced the COVID-19 financial help. For example, in the UK an employee may be eligible for 80% of the wage, capped at £2500, given their job ...
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11answers
10k views

Should I ask the seller of a house for a price reduction given a recession is almost certain?

I've gone sale agreed (note: "sale agreed" means the sale has been agreed in principle - no contracts have been signed, no non-refundable deposits have been made etc.) on a house. The market I'm ...
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3answers
280 views

Am I less likely to get approved for credit during the COVID-19 pandemic?

I've been thinking about applying for a new credit card or two, as I've been building up credit for awhile and basically all my hard pulls have fallen off of my credit report. Given that COVID-19 is ...
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3answers
3k views

Where does the money from the US $2T stimulus package come from? [closed]

The US Senate announced to $2T stimulus package to help keep the economy up and running. Where does the government come up with that type of money? Surely they don't have that much cash available?
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3answers
382 views

Are Social Security payments threatened by the Coronavirus crisis?

I would like to know if it is likely that the United States government may have to reduce Social Security payments for the remainder of this year to help fund economic stimulus packages to help bail ...
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4answers
301 views

What is the point of using percentages if you are going to have different “tiers” anyway? [closed]

I often see things like: People who make between "this and that" (range #1) amount of money per month/year must pay 1% in taxes. People who make between "this and that" (range #2) amount of ...
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3answers
2k views

Are lower interest rates bad for the lending perspective of banks?

I know that in times of lower interest rates borrowing from the bank is an easier task at least because its cheaper. However I am not yet convinced why a textbook source is stating that lower interest ...
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1answer
62 views

Repaying with buying common goods

If two people share the expenses and person 'A' pays 20 in a supermarket then that person should receive 10 from person 'B' in cash to be fair If the person 'B' decides to repay instead of cash by ...
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1answer
516 views

Is the assertion 'loans create deposits' true in banking? [duplicate]

I have read that banks don't really need deposits to make loans but rather it is the other way round. I thought that banks could only lend out money that customers deposited. If this is the wrong ...
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1answer
134 views

What does it mean by Global recession? [closed]

I am bit curious to understand what it actually means when I read global recession is coming soon. There are some questions which pop in my mind reading such news. Some of them are: What causes ...
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3answers
177 views

Interest rates and what does “discount” mean?

I was reading an article that says "Interest rates play an essential role in financial markets. Foremost, they represent the rate at which investors discount risk-free as well as risky future cash ...
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0answers
98 views

The Fed Lowered Interest Rates, Are they going to buy Bonds?

The Fed just lowered interest rates yesterday by 0.25%. I haven't heard anyone mentioning a resurgence of quantitative easing (QE). Are they buying bonds in order to influence the interest rate? If ...
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3answers
161 views

Does yield curve inversion refer to the shape of the curve, or just its sign?

Yield curve inversion has recently been talked about as an indicator for recession. Mostly, I've heard this described as "10-year Treasury rates fall below 2-year Treasury rates." I would expect ...
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2answers
137 views

How exactly does redenomination work?

basically I was having a history lesson in school and we were learning about inflation and how countries employed redenomination to save their suffering economies. I don't really understand how simply ...
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2answers
124 views

Why do currency rates have an effect on the value of goods? [closed]

It is common to hear explanation like "Yuan has lost value, this helps Chinese exporters". Why does currency exchange rate have any effect at all on the price of goods? Let's say I own a widget ...
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0answers
52 views

Is credit the principal force behind the business cycle, as claimed on a Dalio youtube video?

The following video https://www.youtube.com/watch?v=PHe0bXAIuk0 seems to argue that credit is the principal force behind the business cycle, as far as I cal tell. Is this considered to be a ...
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1answer
41 views

What condition might cause Equities to rise, and corporate bond spreads to rise as well? [closed]

I was wondering about this earlier and I'm stumped.
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1answer
100 views

What are the dates that the yield curve inverted?

For the purpose of investing, I've been reading about the yield curve inversion and what it might mean about the economy. Unfortunately, all articles that I was able to find by searching on Google ...
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2answers
866 views

Could the US demonetize large bills? If so, how can I protect myself if I rely on holding US dollars in cash?

There was a demonetization in India. I heard that this was difficult for Indian residents to handle. I understand most of the money is in digital forms, but there is still a large amount of actual ...
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13answers
18k views

What (if any) is the reason to buy in small local stores?

Recently I have heard movements from the local stores (say clothes, electronics, foods, etc) and some politicians (of a particular wing) that argue that you should buy in local, small stores. ...
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1answer
255 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". ...
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4answers
7k 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
66 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
162 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 ...
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3answers
802 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
101 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
931 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
251 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
106 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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6answers
8k 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
648 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
180 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 ...
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1answer
204 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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10answers
30k views

Is the stock market a zero-sum game?

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 ...
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2answers
143 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
57 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 ...