Time Value of Money

[Kidlicious]

Originally posted by Japher
I was once was able to get 4 candy bars for a dollar... now I am luck if I can get 2. Why?

Did they start putting more or different stuff in the candy bar? Did the manfuacturer or other person down the chain of command just get more greedy? Is the wrapper made of pure gold? Was there some strange candy tax levied on the bar?

Actually, the dollar's purchasing power just became less. I could no more buy the same amount of soda for a dollar than I could candy bars.

In that sense it is a zero sum game? That, however, is the time value of money.

This all has nothing to do with the subject. If you invest the money then you can buy more candy in the future, because you get a return on your investment. Did your money create candy bars? As Shogun has stated, "of course not."

[Shogun Gunner]

I'll give you this Kid. You are amusing in your trolling....

[Shogun Gunner]

Originally posted by Kidicious


This all has nothing to do with the subject. If you invest the money then you can buy more candy in the future, because you get a return on your investment. Did your money create candy bars? As Shogun has stated, "of course not."

stop misconstruing and misquoting me.

[Kidlicious]

Originally posted by Shogun Gunner
Well, in that case I think the FICA tax isn't really a viable economic concept and I'm going to demand that payroll stops the criminal process of removing these funds from my bi-weekly compensation distribution.

Prove to me that FICA tax is a valid economic activity. Oh, you can't, can you. That's all the proof I need....here I go walking down to payroll......

Maybe I should state this again. All value is created by work. Is tax work.

[Kidlicious]

Originally posted by Shogun Gunner


stop misconstruing and misquoting me.

Whatever.

[Japher]

All value is created by work

No it's not.

Why is stock worth $5 one day and 6$ the next? It's not because they worked one more day, else their stock would go up a dollar a day.

[Kidlicious]

Originally posted by Japher


No it's not.

Why is stock worth $5 one day and 6$ the next? It's not because they worked one more day, else their stock would go up a dollar a day.

Was something of value created? The value of the goods and services in the economy is the same, ceterus parabus. The increased price is nothing more than speculative value. It can't be utilized.

[Moral Hazard]

fluidity of capital allows economic activity to occur where it otherwise would not.

The whole point of the market is to efficiently allocate funds to the most profitable projects aka the most value creating projects. Does this facilitation by it's self create value, no. However, it does allow for the greatest creation of value.

[Japher]

Actually, speculative value is what investors use to determine the actual value, or purchase price.

Every stock has a PE, right? Price of a stock vs. Earning of the company, or, Value of the Stock vs. Earnings of the comapny. If work=product=earnings than all companies with the same PE should have the same price, and that is not true. Valuations based of future earning, current capitalization and equity positions, as well as increase/decrease in performance vs. previous quarters all come into play; speculation.

The real determination of price is value, and value is an illusion so far as it is created from perceived worth, not from some actual tangible asset or service.

So, in some sense it is not real, but try and order McDonalds $2 dollars for a $5 dollar meal and see what they say... that, is reality.

[Kidlicious]

Originally posted by Japher
Actually, speculative value is what investors use to determine the actual value, or purchase price.

You're using 'value' and 'price' interchangably. In so doing, making a circular argument.

The real determination of price is value, and value is an illusion so far as it is created from perceived worth, not from some actual tangible asset or service.

Ok you don't do that here, but only actual assets have real value. Speculative value has nothing to do with actual value.

So, in some sense it is not real, but try and order McDonalds $2 dollars for a $5 dollar meal and see what they say... that, is reality.

What does this have to do with anything. I'm not arguing about the value of a McDonalds meal. I'm simply saying that the actual value of that meal was only created by the work involved in producing it, not by what McDonald's creditors get for return.

[Kidlicious]

Originally posted by Moral Hazard

fluidity of capital allows economic activity to occur where it otherwise would not.

The whole point of the market is to efficiently allocate funds to the most profitable projects aka the most value creating projects. Does this facilitation by it's self create value, no. However, it does allow for the greatest creation of value.

Ah, so now we are allowed to create value. Great system, NOT!

[Japher]

You're using 'value' and 'price' interchangably. In so doing, making a circular argument.

I am not using them interchangably, I said they use value to determine price, it is a factor.

Speculative value has nothing to do with actual value.

but it does... perhapse that is where you fail. When determing a worth you must use both technical AND fundamental anaylsis, not one or the other.

Recall the Cabbage Patch Dolls, Tickle Me Elmo, The Pet Rock, Scalped tickets at ball parks, beer on a plane...

[Kidlicious]

Originally posted by Japher
but it does... perhapse that is where you fail. When determing a worth you must use both technical AND fundamental anaylsis, not one or the other.

Recall the Cabbage Patch Dolls, Tickle Me Elmo, The Pet Rock, Scalped tickets at ball parks, beer on a plane...

Aye aye aye. You ARE using price and value interchangably. Selling the good or service for more than is costs to produce it does not create value. It only increases the price.

Selling - not productive

Producing - productive

[Flip McWho]

Did your money create candy bars?

Well technically your money didn't create candy bars, correct. But you desire to have candy bars and your willingness to pay $$ for it means that there is a market for candy bars. So in a way your money did create candy bars but only by acting through your desire. Money is a medium, not a beginning or end in of itself.

[Japher]

Aye aye aye. You ARE using price and value interchangably. Selling the good or service for more than is costs to produce it does not create value. It only increases the price.

Ok