Time Value of Money

[Japher]

Naw, Ogie... there's no value in it.

[Shogun Gunner]

I've wasted time on this thread.
I've put labor into this thread.

Labor = waste

Is there value in my wasted labor?

[Ogie Oglethorpe]

Did you learn not to particpate in a Kidicious thread? If so much value.

[Kidlicious]

Originally posted by David Floyd


But that's the inherent nature of value! Overall, it's about what the majority believe. Granted, individuals can have different beliefs about value, and those beliefs can have influence, but overall, value is determined by what the majority thinks.

If 80% of the population decided that US currency no longer had value (hypothetically), then it, simply put, wouldn't. No one would work for money, and no one would accept money in exchange for goods and services.

If you all believe that if you drop a rock it will fall up does that make it true?

[Japher]

the laws of physics aren't governed by popular opinion

thus, plastic surgeons

[Myrddin]

Originally posted by Kidicious




If you all believe that if you drop a rock it will fall up does that make it true?

Yes

Because up will mean what we want it to

[Whaleboy]

Oh yeh, and value is a function of supply and demand.

[Kidlicious]

Originally posted by aneeshm
I'm not talking about a central bank , but about a group of mutual funds , under a common leadership . If they had not invested money , then the quantum of money would have remained almost constant ( money owned by the economy + capital k owned by mutual funds ) .

Yeah, I know your not, but the central bank does the same thing basically. They buy bonds. They inject capital into the economy.

I hope we both agree that the supply of capital caused the growth of the quantum of wealth .

It increased the level of spending in the economy which encouraged people to work. The work created the value. If I tell you 'hey come over and help me move' did I move anything? Hell no. How would you like it if I told you that I did all the work because I asked you to help me?

That is actually how the capital k created the money ( the growth of 4 % ) , because the people were working the same amount before and after , but the capital invested caused the same work to give higher returns .

How is that , you ask ? It's like this . A producer has no capital , thus is working for a wage . Now , this same producer , getting the necessary capital , starts production , and causes a increase in the quantum of wealth . The work he did both times was the same , but the capital caused the same work to give higher returns . This is why the availability of capital can exponentially increase the growth potential of an economy , given the same amount of work , like in my example of the fledgeling economy . Everything else remaining constant , capital availability tends to create wealth proportional to the amount available .






Ultimately , this is how wealth creates more wealth . If you disagree , please tell me why and how .

Absurd. Your talking about a control mechanism to get people to work and collect the proceeds of there work. If I own a slave and I whip him did the whip create value? Ridiculous.

[Kidlicious]

Originally posted by Japher
the laws of physics aren't governed by popular opinion

thus, plastic surgeons

I know. That's my point. Just because most of you believe that you can create value without working doesn't mean it's so.

[Kidlicious]

Originally posted by aneeshm
@ Kidicious
And I can appreciate your viewpoint , because I , too , was once a communist/socialist . I was later convinced of the correctness of the other side . That is why I can debate with you non-confrontationally .

Yeah well I used to be a capitalist. All through my college years as an economics student. It made perfect sense in the textbook. Then I went out in the real world and holy ****, I saw the smoke and mirrors.

[Kidlicious]

Originally posted by DanS


Not US government bonds.

The return on govt bonds is a premium for holding less liquid assets. When the fed sells bonds they do so to absorb liquidity in the economy. They have to offer a premium for that.

I guess you learn something in my threads. Maybe you shouldn't be so critical.

[FredKarno]

not all commies are equal

Dear Kidicious,
It seems your are outnumbered a great deal and manfully you fight on. I reckon this is a nice forum.
Any fool can see that we live in highly imperfect world, putting it politely. Human beings have much evil in them no matter what they believe. Existence is infinitely unequal. Your religion denies this. Don't you think that reality trancends all?
Drop all Marxist/socialist thought, and become a (relative - for everything rubs off) free thinker. Many men in your plight have managed to do this. Go for it!

[Berzerker]

Money can not create value. Only work creates value. It's nothing but smoke and mirrors.

How will I buy a television without money? Lotta good that television will be without someone with money to buy it...

[David Floyd]

If you all believe that if you drop a rock it will fall up does that make it true?

Depending on the definition of "drop" and "up"

But seriously, laws of physics aren't based on perceptions. Physics doesn't change due to things such as supply and demand, profit margins, etc. Value does, and this has been adequately pointed out to you many times.

If everyone believes that a rock will fall up, that belief doesn't change a thing. However, if everyone believes one day that the value of a ditch digger is $10/hour, then that is the value of a ditch digger in terms of labor. The next week, if there is high unemployment all of a sudden, and tons of prospective ditch diggers, then the value of their labor will go down. Law of supply and demand, it's simple economics

Now, if you want to assert that the definition of value is a law of nature, similar to physics, then come out and say it. Everyone will laugh at you, though, and that assertion is demonstrably not true.

[David Floyd]

It made perfect sense in the textbook. Then I went out in the real world and holy ****, I saw the smoke and mirrors.

Kid, it's the other way around! Capitalism works great in the real world. Communism is what fails outside the classroom.

If you are concerned about the real world, then you need to be concerned about how the perceptions of individuals affect reality. If those perceptions were irrelevant, then why the need for advertising or salesmen?