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Public Stiky Notes

Tarmo Toikkanen on 2008-09-03

To keep the economy going, new loans need to be drawn constantly to pay the existing loans and their interest. This cannot be stopped unless the whole banking system collapses.
Tarmo Toikkanen on 2008-09-03

However, since all the money in the world (5% of which is in cash notes and coins) is loaned from banks, with interest, to pay back that loan, one would have to loan more money to pay back the interest.
Tarmo Toikkanen on 2008-09-03

Money is no longer based on gold or silver, but on debt drawn from banks. If all debts were paid off, no money would exist.
Tarmo Toikkanen on 2008-09-03

The US citizens used to save about 10% of their income, but in the last decades have stopped doing that. Europeans do still save 10%.
Tarmo Toikkanen on 2008-09-03

Hedonics: When calculating the GNP, added improvements on devices mean they will be valued higher than their selling price.
Tarmo Toikkanen on 2008-09-03

Hedonics: Values of products in the inflation basket are changed based on improvement - if a device has a better feature than before, its price will be lowered, as one can now by a better device than before. This of course does not affect actual prices.
Tarmo Toikkanen on 2008-09-03

Weighting: if a product's price increases, its effect on inflation calculations will be weighted down, on the basis that people will by less of it.
Tarmo Toikkanen on 2008-09-03

Substitution: if a product's price in the inflation calculation "shopping basket" rises significantly, it will be replaced by a cheaper alternative.
Tarmo Toikkanen on 2008-09-03

The reported inflation rate for US is "core inflation", which does not include the price increases of food or fuel.
Tarmo Toikkanen on 2008-09-03

As the world economy needs to grow (to be able to pay the interest on the debt of existing money), the energy output of citizens needs to increase (so they produce more work force). However, the leading provider of increases in energy output has been oil. And oil production isn't increasing anymore, rather it seems to be declining.
Tarmo Toikkanen on 2008-09-03

The daily production of oil has not grown for the last four years (2004-2008). The exact date of "peak oil" is an academic exercise, as we've already lived on the peak for four years.

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