Even if prices drop 50% they are not affordable to 95% of the Mumbaikars. Other cities like Chennai, Bangalore,Pune, Hyderabad are still affordable to most of their residents. If only I could move I would do so in a heartbeat. Unless someone has pots of money, white or black it makes no sense to buy in Mumbai. However if someone has to sell, this couldn't be a better time.
Indian Express reports
In Mumbai, the average cost of a roof over one’s head is now at an all-time high of Rs 1.91 cr.
Raghav N. Bhatnagar
With property prices soaring to dizzying heights in the country's financial capital, aspiring home-buyers have to be much more than a crorepati to buy a flat in Mumbai, where the average cost of a roof over one’s head is now at an all-time high of Rs 1.91 crore.
According to figures put together by the real estate research agency Liases Foras, the weighted average cost of a flat in Mumbai at 1.91 crore has leapt by 49 percent over the last one year. The weighted average cost is the total capital value of all flats divided by the total inventory in each city. In comparison, five other cities like Bangalore, Hyderabad, Chennai, Pune and the National Capital Region (NCR) have witnessed either a drop in rates or a negligible increase. An average flat in these places is relatively affordable at Rs 35 to Rs 50 lakh.
76 comments:
One more hogwash from Government to appoint committee to eat and spend time eating biscuit and tea and who knows full course meals in 5star as well. I told you almost month back that there is no end to this and with my experience I don’t think so price will come down anytime as this is in control of congress and RBI together may be underworld money also who in turn holds the congress by ball$#$
@ Bachera Indian
Price cannot keep increasing, simply not possible. With that theory Rs 1.91 crore should be 2.20 crores (15% increase) by next year and next to next year: 2.53 crores (15% increase) by next to next year.
These numbers are just for 15% increase and for average flat price. Think what happens to flat prices that are on higher end of spectrum?
If prices remain flat, it is a loss!
Do you not see all this is heading towards a dead end.
jai ho!
"
According to a 2009 Task Force report prepared by a central government appointed committee, affordable housing has been defined as when the cost of a house doesn’t exceed five times the household gross annual income.
"
So if your gross is 40L, you should be able to afford a flat at 2 CR Rs according to Indian Govt. Now assuming that in a city like Mumbai, there are 10,000 such flats for sale, you think there wont be 10,000 buyers at this price?
Anonymous 10:17 AM
So if your gross is 40L, you should be able to afford a flat at 2 CR Rs according to Indian Govt. Now assuming that in a city like Mumbai, there are 10,000 such flats for sale, you think there wont be 10,000 buyers at this price?
No there won't be. I know that is not the answer you were expecting. Uh!
What are the percentage of people with gross income of 40L+ ?
#1 - Whatever percentage they are, by now they must already have own flats or properties, and I don't think they are that interested in buying a whole lot more.
#2 - To pay the price of 2crores someone has to generate 2 crores, future buyers need to have much more than 2 crores, in other way future buyers need to have much more earnings than 40lacs.
Now the question is how many will have much more earnings in excess of 40Lacs in future, do you think there will be 10,000 future buyers at this price with 40 lacs? REALLY?
If so, inflation has already taken hit, your previous 40lacs are no more worth 40lacs!
sure - Jai ho !
assuming there are 10,000 buyers of 2 crores in Mumbai and they buy these flats now let the 1.499 crore mumbai kars get the remaining flats at the same multiple. So 20L should get 1Cr, 10L should get 50L and so on.
10,000 is a fraction and there are atleast 100k flats under construction which are costing 2 crores.
How does it matter, even GOI has defined so many things as affordable housing, right of education, right of food but its just a vote bank politics, no meaning at the end. with the income of average indian, lets say GDP per capital of USD 1400 p.a. the house should have priced in median at INR 300000 to 400000, not i dont think even in the mizoram or in in middle of desert in rajashthan you with get the house with that price
I dont agree with desi batman, as price will keep on increasing as more printing machines are deployed to print more money world wide and its a global effect, USA did now its UK and PIGS economies, India is also following in smaller way so money will find somewhere to go and prices will keep on increasing at least for next decade or so
Bechara Indian:
dont agree with desi batman, as price will keep on increasing as more printing machines are deployed to print more money world wide and its a global effect, USA did now its UK and PIGS economies, India is also following in smaller way so money will find somewhere to go and prices will keep on increasing at least for next decade or so
I appreciate you don't agree with me and put forth your arguments. This gives me more room to express. But believe me I agree with you and like to complete the big picture.
Country can print money as much as they want/need, but that has side effects of inflation. One can say hey today inflation has come down because of prices of commodities have come down, but something had to give away that no one talks about it. Quality! For example: If I goto mall in Mumbai, there are play areas for kids. There are kiddie rides for Rs. 20 a two mins. Soon this will be either Rs. 40 for two mins OR Rs. 20 for one minute. Did you notice many kids have just enjoying stationary unit rather than putting coins in!
Sameway if RE today costing 1 crore, is tomorrow 2 crores, something has to give away - like what? 'Quality' a.k.a. 'Value'. You will see lots and lots people living shanty lifestyle - 6 or more people in one bedroom flats. Buying the cheapest product possible, refraining from comforts and living to only bare wants. This is coming believe it or not.
oh forgot to talk about USA. Yes, money is printed and deficit is rising. Someone is holding the key.
Regarding inflation. Today in USA you can get cereal box at same price with lesser quantity. That holds true for many items. Also, outsource to China and India and many other countries is to keep cost and therefore prices low. Basically outsourcing inflation.
Enjoy !
Folks, stock markets are booming again...new highs would be reached..lots of funds to play around..and hence RE prices would keep on rising...least they would not fall for a long time to come...
More crorepatis in India..Jai Ho!
So in short you are saying that quality of living conditions will go down right? I am sure that with negative interest asset bubble always grow as people will put money in asset look at japan even after deflation one bedroom cost you USD4000 per month so its one of the costly place to stay and you will fine in 50 sq ft place two people are staying or more with partition, India have a ample place but politicians are crook so as rbi and builders and they will squeeze middle class to get more rich its easy otherwise you tell me one project in mumbai pune etc remains empty after one day of launch
State urges pvt developers to undertake affordable housing
With the demand for affordable housing in Maharashtra increasing, State Finance Minister Sunil Tatkare has urged private developers to come forward to undertake affordable housing development, either through a public private partnership or private development models.
Govt can make housing affordable by doing quite a few things,
1. Remove/reduce speculators - Ask buyers to pay 50% stamp duty upfront and 50% at delivery.
2. Increase land supply - There is perception created by builders that we are going to run out of land. Remove that perception. Just free large chunk of land in MMR region for residential and commercial purpose.
3. Improved Infrastructure - There is lot of land surrounding Mumbai, but it lacks roads, bus and train. Just give large FSI if plan includes roads, bus and path for metro.
4. Clear titles - Publish all transactions on website.
Housing can be affordable only if earnings can afford it! Simple.
I feel free market should let price be decided. Hoarders and investors are creating artificial demand, so be it. Just don't buy into them if you can't afford.
If you can't afford to buy, move, get more productive to earn more, increase your worth by your efforts to make 'affordable earnings'.
Instead I see people make it more affordable by living compromised lifestyle, descreased quality of daily life to make RE affordable. At same time politicians let poor immigrants let in to make things affordable. Seen photos of workers in CWG sites?
Also, laws should be made stringent for people who default on debts. Currently corruption gives way to defaulters.
Welcome to Dharavi or likewize
To those who have been lamenting on the affordability, I ask them not to despair as all is not lost . Zopdas are available from 5 lakhs to 30 lakhs depending on the area. Adjust to desi standard of living and soon you will be a happy person.
At this rate only prices go up and not buyers. Keep up the crazy rate, at least on paper we can call ourselves as super rich in terms of GDP.
Decrease of buyers will increase the RE prices quoted by builder. Builders are shrewed businessmen. They HAVE to make profits per month / per year, it does not have to be same profit every transaction. Therefore if there are less transaction, their profit for month/quarter/year decreases. They will increase the prices as number of buyers reduces.
In a way this is very good news. Why? because they have landed themselves into catch22 situations. More they increase the price less the buyers, less the buyers more the price.
Only thing that will break this circle is to investors to take the hit.
Welcome to last innings. Where is my friend Bhindas Bhai?
Housing affects us all. Why is the government silent in this regard. Why are those butcher investors allowed to make life miserable for all of us? why is property market totally unregulated. why is there no action to camp down on those rowdy builders who demand exorbitant prices? Roti, Kapda, ummmmm, what was that third item again?
Abbas bhai:
Housing affects us all. Why is the government silent in this regard.
What do you want Govnt should do? give away for free. If you cannot afford, just don't buy. This is how free market works. No matter what govnt or investors do, things will return to normal.
Why are those butcher investors allowed to make life miserable for all of us?
-- investors are people like you and me. They are not here to make money, ride bubbles, make profit. They are risking their time with the bubble and loopholes they see fit to their business model or their earning model.
why is property market totally unregulated.
-- this is a loophole. Read more on answer on previous question.
why is there no action to camp down on those rowdy builders who demand exorbitant prices?
-- GOI also earns money, where do money come from to build these metro trains, host CWG, fat earnings for babus, etc..
Roti, Kapda, ummmmm, what was that third item again?
You know the answer to this one. It is housing. But that has become investors asset now.
Speaking of investors, have you guys looked at the recent appreciation in rupee with respect to all major currencies? In the last month alone, the appreciation has been close to 10%. This means:
1) NRIs' buying capability in India will be 10% less.
2) Revenues of IT companies will fall by 10%, which will translate to bigger job cuts than 10%.
3) Rupee appreciation has been triggered by RBI raising rates. Since inflation does not seem to be under control, this monetary policy is expected to continue.
Ram
Surprise surprise, the Times group paper Mumbai Mirror boldly claims that the property market is in a bubble!
here is the link to the article
http://www.mumbaimirror.com/article/2/20101002201010020314037744992b5a7/A-house-in-Mumbai-Do-you-make-40-lakh-a-yr.html
have the rats jumped the ship ?
To all that try to compare the United States to India and China, you have to realize this...what is called a huge bubble in home prices in the USA is basically prices doubling in 5-7 years in the earlier part of the decade in SOME parts of the USA. The median home price in Los Angeles, for example, went from USD 300,000 in the year 2000to USD 600,000 in the year 2007. It is now back to under USD 400,000. However, this median price in Los Angeles was about USD 240,000 in the late 1980s. So the bottomline is that home prices are NOT EVEN double of what they were over 20 years ago. This is the case even in the so called bubble areas like Los Angeles. In the majority of the country, home prices have not even doubled in the last 30 years. Median home prices stay within 2 to 6 times the median income in the United States. Now compare that to India, where home prices have gone up several hundred to a THOUSAND times in the past 30 years. Yes, there is more inflation, income growth etc, but the appreciation in home prices in India is pure absurdity. Do not compare India/China with the United States again.
Re: Wealth in previous post:
Wealth is not gold. Wealth is not Rupees.
Wealth is human effort - working hard to make each other's life better.
Indians are poor because they are illiterate and unable to be productive. They have a useless parasite govt. Much effort is wasted makings things over and over again because they were not done right the first time
Americans, Japanese, Europeans etc are wealthy because they are highly capable and are highly productive - and because, unlike Indians they understand what wealth means.
Please read Adam Smith
Prices in India are absurd when compared with rest of the world. Life is India is way too expensive when compared to rest of the world. India has a unique problem, lesser land mass and huge population with diverse culture. The worldwide solution would not work for India. If the problem is unique solution has to be unique. If you feel that the general mass is feeling uneasy about the current lifestyle, and its stresses, it has not reached breaking point yet...how soon that breaking point can come ... no one would know..but with the Indian culture of adjusting till death...I wonder if the breaking point would come at all...
Wealth is not gold. Wealth is not Rupees.
Wealth is human effort - working hard to make each other's life better.
You have hit a home run with that statement. But in India wealth is ONLY Rupees, Dollar, Gold, RE or as such. For many Indians People with highest amount are considered successful, rest all are losers.
Someone was introducing to one of the 'tapori' illitrate guy who made tons of money by bhaigiri and now he is RE builder/construction business!!
We have 1.2 billion population, we self proclaim to be future super power. We don't have any innovations, all we do is hype, talk and do trading business and earn money.
Mind you this is not problem with Indians, many Indians abroad have touched the sky in their acommpolishments. It is problem with India and it's work culture, system.
Again - many should give deep and focused thought as what is real wealth. It is definately not money, or gold.
Wealth is not gold. Wealth is not Rupees.
Wealth is human effort - working hard to make each other's life better.
Wow, you're kidding, right? Way to go man, muddle the issue up further.
Philosophically, even sleeping well at night is wealth. Haven't you heard the saying "Health is Wealth"? Children are surely wealth, as are loving parents.
In terms of economics, anything that has value (in the minds of a majority of people) and is tradable can be thought of as wealth.
So while labor can be thought of as wealth, gold and in today's time, even rupees are both forms of wealth.
Meanwhile, there is another concept called money, which is distinct from wealth.
Wealth is human effort - working hard to make each other's life better.
Yeah, right. Medieval communist thinkers thought so. The problem with these communists is that they felt that the collective is superior to the individual, and they drew up distinctions and laws based on this false notion.
In truth, the definitions don't change because of scale. Now tell me, at the individual level, do you consider your potential to have your life made better by all the rest of mankind your wealth?
If not, then at the collective level a definition such as "working hard to make each other's life better" is not wealth either.
Dhiman, you are so wrong.
Wealth is human effort. Period.
Money is a currency to make it tradable.
Wealth is just a state of mind. Even health or sleeping is wealth.
But assuming wealth is standard of living, then yes, it is determined by cooperative effort. Capitalism and markets are the best way to harness this co-operation.
It has nothing to do with communism, this is the bed rock of capitalism.
If you do not understand the basic fundamentals of economics, all your verbiage is just .......
Please read more. Including Adam Smith's wealth of nations, which you obviously havent read - the foundation of capitalism.
Anon above so much for praising the western ass, do you know that recently respected American banks like JPMorgan, Bank of American were caught foreclosing on peoples property illegally and fraudulently ?
It is not the Americans are any better then Indians, If you have the sole right to print a currency that the world wants by hook or by crook, then my friend you do have a unfair advantage.
People need to understand this, to provide quality healthcare, education, social security a effective army what does a country like America have to invest ?
Its printing press, all that America wants to procure for these programs can be procured by printing those dollars and every country in the world will die to supply them with the goods and services required to rev the system up.
For a country like India, you first have to earn those dollars, that is where the west have a advantage.
I am not trying to justify the rut that has set in , in the Indian system.
But what do you do when your government is actively debasing the currency that you get paid in ?
Everyday the cost of your living is increasing and your salary is the same, nay rather decreasing due to structural inflation ?
do you feel that in such a system people are gonna be magnanimous, honest, upright and will not try to fleece each other given a chance ?
A average government employee earns around 40K as salary per month, do you think this is enough to survive in Mumbai ?
Even if you are unfortunate enough to visit the hospital for a week you will end up paying a lak rupees, what does the common man do ?
What do you do if your family or business is hit by a disaster, there is no support from anyone, Its a man eat man world out here.
I think we are being too harsh on the Indian people and demanding too much from them, and returning too little.
Sorry to distract from the debate, but I found this really interesting story on how a BMC engineer doing his PhD at IIT-B
is working on a cool technology to fix potholes.
http://www.mumbaimirror.com/index.aspx?page=article§id=2&contentid=20101002201010020314297434fd369b1
Bharat
Samix, do you not know that deficit of USA is record high and increasing. they have high unemployment, they have financial crisis. By your theory USA can print currency at will and should get away with all that. Really? I don't see all this happening in USA.
Bharat,
Your link throws up an error.
-Meghana
www.MoneyAdvice4U.info
Well Desi Batman, we are diverting from our discussion however to share my thought on US printing notes, I am 1000% sure that they will get away with that because you, me and all this hedge fund, FII etc don’t have choice to then to accept the assets which are in USD. If US goes for spin than whole world goes for a toss because all the assets are in USD, take china, japan or Singapore or GCC countries any country you take all are in USD!
On the other hand, assuming this cycle goes for one more year, look at what is happening in Indian market with this speed we will overtake china market this month, the way the money is coming and now retail investors are more careful they will sell the shares and buy physical assets such as gold, real asset and welcome to one more round of share rally on these assets which you all call BUBBLE
Wealth is human effort. Period.
Wow! Period!
In whose definition? Which supreme overlord deemed it so? In a free market, anything that has value and is tradable is wealth.
If one were to go by that definition of wealth, it precludes gold or silver or diamonds from being wealth. That is, to put it mildly, simply retarded.
Wikipedia defines wealth thus "Wealth is the abundance of valuable resources or material possessions or the control of such assets." In the mind of a free market economist, even this is too narrow a definition.
Further, according to Wikipedia, "Adam Smith, in his seminal work The Wealth of Nations, described wealth as "the annual produce of the land and labour of the society".
Produce is a good, an end product of labor, not labor itself.
Don't pin your argument on your mistaken understanding of one book, which incidentally, I have read and which is sitting on my bookshelf at this very moment.
Money is a currency to make it tradable.
Spoken like one with no understanding of either.
Wealth is just a state of mind. Even health or sleeping is wealth.
Like I said, philosophically so. Not in terms of economics. Not even in Adam Smith's mind.
But assuming wealth is standard of living, then yes, it is determined by cooperative effort.
Quite the contrary. It is individual effort that matters. Individual, rational self-interest works the miracle that no co-operative "effort" can.
Capitalism and markets are the best way to harness this co-operation.
Free markets are, but "Capitalism and markets" are a different beast altogether.
It has nothing to do with communism, this is the bed rock of capitalism.
Who died and made capitalism the next Holy of Holies?
If you knew capitalism in depth, you'd know that capitalism and communism are two sides of the same coin. Heck, even Karl Marx's book was called "Das Kapital" or "Capital".
If you do not understand the basic fundamentals of economics, all your verbiage is just .......
Skip the cheap ad hominem attacks. You know what you know and I know what I know. This is a debate, not WWW. Prove your worth on the battlefield of knowledge, not the gutter of personal insults.
Please read more. Including Adam Smith's wealth of nations, which you obviously havent read - the foundation of capitalism.
Like I said, you talk as if "capitalism" is the end to all ills, and is the holy grail of economics. Look at how capitalism has worked out for the west.
As for reading lists, I strongly recommend you read Hayek's "The Road to Serfdom", and von Mises' "Human Action".
And while you are still struggling with the definition of wealth, you might also try "Arthashastra" to get a less, shall we say, Eurocentric perspective.
In a free market, anything that has value and is tradable is wealth.
R: Agreed. But it is not finite - as many of you said in the previous thread, which prompted my response. It is infinite, limited only by the capacity of humans to generate it. Many things which do not have value but are tradable (like art etc) are also wealth. (Note, that also requires human effort.) Name one item which is wealth but does not require human effort. Resources are finite. Wealth is infinite, limited only by human effort
If one were to go by that definition of wealth, it precludes gold or silver or diamonds from being wealth. That is, to put it mildly, simply retarded.
R:And do you think gold comes out of the ground without human effort? There is a cost to extraction of gold which is currently some 4-500 dollars. The price over and above that for gold is just a nominal tradable premium. If by using your brains, you figure out a cheaper way to take gold out of the ground, you have made yourself wealthier using the same resources. This use of brains is human effort. As for retarded, why not apply that word to yourself rather than to others?
Wikipedia defines wealth thus "Wealth is the abundance of valuable resources or material possessions or the control of such assets." In the mind of a free market economist, even this is too narrow a definition.
R:In the past, India was the wealthiest nation in the world per capita, because God had bestowed the maximum of all resources on India. Human effort was hardly necessary to be wealthy. All other nations became wealthier than us by their human effort - by working hard, being more inventive, fighting harder than us, being more productive. We, being already blessed, continued in our laziness and have become one of the poorest countries in the world. Because of lack of human effort.
Further, according to Wikipedia, "Adam Smith, in his seminal work The Wealth of Nations, described wealth as "the annual produce of the land and labour of the society".
Produce is a good, an end product of labor, not labor itself.
R: Without labour, there is no produce.India is a good example of labour without produce. We build bridges which fall down, we make roads which wash away. These are examples of capital destruction i.e. waste of human effort. Because it does not generate wealth.
Don't pin your argument on your mistaken understanding of one book, which incidentally, I have read and which is sitting on my bookshelf at this very moment.
R:Read it again, try to understand it this time
Money is a currency to make it tradable.
Spoken like one with no understanding of either.
R: Or have you spoken like one with no understanding of either???
Wealth is just a state of mind. Even health or sleeping is wealth.
Like I said, philosophically so. Not in terms of economics. Not even in Adam Smith's mind.
R:This was in response to your 'sleeping is wealth' comment. You were not wrong there.
But assuming wealth is standard of living, then yes, it is determined by cooperative effort.
Quite the contrary. It is individual effort that matters. Individual, rational self-interest works the miracle that no co-operative "effort" can.
R: Whole of society is co-operative effort. Because Indians do not co-operate, we are poor. Obviously individual effort is needed and self interest is also needed. You wont be very wealthy living in a forest alone. You may not even sleep well, given the dangers. Here, wretched examples of laziness exist. India, Sri Lanka, some African and South American countries come to mind. People despite their self interest being against it, live in laziness. These countries are not wealthy - despite the abundance of resources - because human effort is lacking.
Capitalism and markets are the best way to harness this co-operation.
Free markets are, but "Capitalism and markets" are a different beast altogether.
R: Agreed, but "free" markets are also not entirely "free" or desirable. Essentially, efficient allocation of capital is better achieved through markets than through govt fiat. Sometimes it fails - and we get a bubble. India is poor because it allocates too much capital through govt. Soviet Russia collapsed for the same reason. That is why China is trying hard to embrace market economics and so far has exeeded the original capitalist countries in its abilities.
It has nothing to do with communism, this is the bed rock of capitalism.
Who died and made capitalism the next Holy of Holies?
????
If you knew capitalism in depth, you'd know that capitalism and communism are two sides of the same coin. Heck, even Karl Marx's book was called "Das Kapital" or "Capital".
R: They were two sides of the same coin in the 19th century.
If you do not understand the basic fundamentals of economics, all your verbiage is just .......
Skip the cheap ad hominem attacks. You know what you know and I know what I know. This is a debate, not WWW. Prove your worth on the battlefield of knowledge, not the gutter of personal insults.
R: This coming after you called me retarded?
Please read more. Including Adam Smith's wealth of nations, which you obviously havent read - the foundation of capitalism.
Like I said, you talk as if "capitalism" is the end to all ills, and is the holy grail of economics. Look at how capitalism has worked out for the west.
R: It has worked out exceptionally well for last 400 years. We are the ones who are in the gutter. However, there are different types and phases through which they have gone through
As for reading lists, I strongly recommend you read Hayek's "The Road to Serfdom", and von Mises' "Human Action".
And while you are still struggling with the definition of wealth, you might also try "Arthashastra" to get a less, shall we say, Eurocentric perspective.
R: Hey, you (and another person) were the one who said wealth is finite and rich are becoming richer therefore poor have to become poorer. With such thinking, try re-reading your own reading lists.
Don't pin your argument on your mistaken understanding of one book, which incidentally, I have read and which is sitting on my bookshelf at this very moment.
R:Read it again, try to understand it this time R
Money is a currency to make it tradable.
Spoken like one with no understanding of either.
R: Or have you spoken like one with no understanding of either???R
Wealth is just a state of mind. Even health or sleeping is wealth.
Like I said, philosophically so. Not in terms of economics. Not even in Adam Smith's mind.
R:This was in response to your 'sleeping is wealth' comment. You were not wrong there. R
But assuming wealth is standard of living, then yes, it is determined by cooperative effort.
Quite the contrary. It is individual effort that matters. Individual, rational self-interest works the miracle that no co-operative "effort" can.
R: Whole of society is co-operative effort. Because Indians do not co-operate, we are poor. Obviously individual effort is needed and self interest is also needed. You wont be very wealthy living in a forest alone. You may not even sleep well, given the dangers. Here, wretched examples of laziness exist. India, Sri Lanka, some African and South American countries come to mind. People despite their self interest being against it, live in laziness. These countries are not wealthy - despite the abundance of resources - because human effort is lacking.R
Capitalism and markets are the best way to harness this co-operation.
Free markets are, but "Capitalism and markets" are a different beast altogether.
R: Agreed, but "free" markets are also not entirely "free" or desirable. Essentially, efficient allocation of capital is better achieved through markets than through govt fiat. Sometimes it fails - and we get a bubble. India is poor because it allocates too much capital through govt. Soviet Russia collapsed for the same reason. That is why China is trying hard to embrace market economics and so far has exeeded the original capitalist countries in its abilities. R
It has nothing to do with communism, this is the bed rock of capitalism.
Who died and made capitalism the next Holy of Holies?
R:???? The comment was prompted by you thinking I was talking about communism R
If you knew capitalism in depth, you'd know that capitalism and communism are two sides of the same coin. Heck, even Karl Marx's book was called "Das Kapital" or "Capital".
R: They were two sides of the same coin in the 19th century. R
If you do not understand the basic fundamentals of economics, all your verbiage is just .......
Skip the cheap ad hominem attacks. You know what you know and I know what I know. This is a debate, not WWW. Prove your worth on the battlefield of knowledge, not the gutter of personal insults.
R: This coming after you called me retarded? R
Please read more. Including Adam Smith's wealth of nations, which you obviously havent read - the foundation of capitalism.
Like I said, you talk as if "capitalism" is the end to all ills, and is the holy grail of economics. Look at how capitalism has worked out for the west.
R: It has worked out exceptionally well for last 400 years. We are the ones who are in the gutter. However, there are different types and phases through which they have gone through R
As for reading lists, I strongly recommend you read Hayek's "The Road to Serfdom", and von Mises' "Human Action".
And while you are still struggling with the definition of wealth, you might also try "Arthashastra" to get a less, shall we say, Eurocentric perspective.
R: Hey, you (and another person) were the one who said wealth is finite and rich are becoming richer therefore poor have to become poorer. With such thinking, try re-reading your own reading lists. R
Don't pin your argument on your mistaken understanding of one book, which incidentally, I have read and which is sitting on my bookshelf at this very moment.
R: Read it again, try to understand it this time R
Money is a currency to make it tradable.
Spoken like one with no understanding of either.
R: Or have you spoken like one with no understanding of either? R
Wealth is just a state of mind. Even health or sleeping is wealth.
Like I said, philosophically so. Not in terms of economics. Not even in Adam Smith's mind.
R: This was in response to your 'sleeping is wealth' comment. You were not wrong there R
But assuming wealth is standard of living, then yes, it is determined by cooperative effort.
Quite the contrary. It is individual effort that matters. Individual, rational self-interest works the miracle that no co-operative "effort" can.
R: Whole of society is co-operative effort. Because Indians do not co-operate, we are poor. Obviously individual effort is needed and self interest is also needed. You wont be very wealthy living in a forest alone. You may not even sleep well, given the dangers. Here, wretched examples of laziness exist. India, Sri Lanka, some African and South American countries come to mind. People despite their self interest being against it, live in laziness. These countries are not wealthy - despite the abundance of resources - because human effort is lacking.R
Capitalism and markets are the best way to harness this co-operation.
Free markets are, but "Capitalism and markets" are a different beast altogether.
R: Agreed, but "free" markets are also not entirely "free" or desirable. Essentially, efficient allocation of capital is better achieved through markets than through govt fiat. Sometimes it fails - and we get a bubble. India is poor because it allocates too much capital through govt. Soviet Russia collapsed for the same reason. That is why China is trying hard to embrace market economics and so far has exeeded the original capitalist countries in its abilities R
It has nothing to do with communism, this is the bed rock of capitalism.
Who died and made capitalism the next Holy of Holies?
R: ????. The comment was in response to you thinking I was talking about communism R
If you knew capitalism in depth, you'd know that capitalism and communism are two sides of the same coin. Heck, even Karl Marx's book was called "Das Kapital" or "Capital".
R: They were two sides of the same coin in the 19th century.R
If you do not understand the basic fundamentals of economics, all your verbiage is just .......
Skip the cheap ad hominem attacks. You know what you know and I know what I know. This is a debate, not WWW. Prove your worth on the battlefield of knowledge, not the gutter of personal insults.
R: This coming after you called me retarded? R
Please read more. Including Adam Smith's wealth of nations, which you obviously havent read - the foundation of capitalism.
Like I said, you talk as if "capitalism" is the end to all ills, and is the holy grail of economics. Look at how capitalism has worked out for the west.
R: It has worked out exceptionally well for last 400 years. We are the ones who are in the gutter. However, there are different types and phases through which they have gone through. If Indians dont change our ways, we will continue to be poor. R
As for reading lists, I strongly recommend you read Hayek's "The Road to Serfdom", and von Mises' "Human Action".
And while you are still struggling with the definition of wealth, you might also try "Arthashastra" to get a less, shall we say, Eurocentric perspective.
R: Hey , you (and another person) were the one who said wealth is finite and rich are becoming richer therefore poor have to become poorer. With such thinking, try re-reading your own reading lists.R
Don't pin your argument on your mistaken understanding of one book, which incidentally, I have read and which is sitting on my bookshelf at this very moment.
R: Read it again, try to understand it this time R
Money is a currency to make it tradable.
Spoken like one with no understanding of either.
R: Or have you spoken like one with no understanding of either? R
Wealth is just a state of mind. Even health or sleeping is wealth.
Like I said, philosophically so. Not in terms of economics. Not even in Adam Smith's mind.
R: This was in response to your 'sleeping is wealth' comment. You were not wrong there R
But assuming wealth is standard of living, then yes, it is determined by cooperative effort.
Quite the contrary. It is individual effort that matters. Individual, rational self-interest works the miracle that no co-operative "effort" can.
R: Whole of society is co-operative effort. Because Indians do not co-operate, we are poor. Obviously individual effort is needed and self interest is also needed. You wont be very wealthy living in a forest alone. You may not even sleep well, given the dangers. Here, wretched examples of laziness exist. India, Sri Lanka, some African and South American countries come to mind. People despite their self interest being against it, live in laziness. These countries are not wealthy - despite the abundance of resources - because human effort is lacking.R
Capitalism and markets are the best way to harness this co-operation.
Free markets are, but "Capitalism and markets" are a different beast altogether.
R: Agreed, but "free" markets are also not entirely "free" or desirable. Essentially, efficient allocation of capital is better achieved through markets than through govt fiat. Sometimes it fails - and we get a bubble. India is poor because it allocates too much capital through govt. Soviet Russia collapsed for the same reason. That is why China is trying hard to embrace market economics and so far has exeeded the original capitalist countries in its abilities R
It has nothing to do with communism, this is the bed rock of capitalism.
Who died and made capitalism the next Holy of Holies?
R: ????. The comment was in response to you thinking I was talking about communism R
If you knew capitalism in depth, you'd know that capitalism and communism are two sides of the same coin. Heck, even Karl Marx's book was called "Das Kapital" or "Capital".
R: They were two sides of the same coin in the 19th century.R
If you do not understand the basic fundamentals of economics, all your verbiage is just .......
Skip the cheap ad hominem attacks. You know what you know and I know what I know. This is a debate, not WWW. Prove your worth on the battlefield of knowledge, not the gutter of personal insults.
R: This coming after you called me retarded? R
Please read more. Including Adam Smith's wealth of nations, which you obviously havent read - the foundation of capitalism.
Like I said, you talk as if "capitalism" is the end to all ills, and is the holy grail of economics. Look at how capitalism has worked out for the west.
R: It has worked out exceptionally well for last 400 years. We are the ones who are in the gutter. However, there are different types and phases through which they have gone through. If Indians dont change our ways, we will continue to be poor. R
As for reading lists, I strongly recommend you read Hayek's "The Road to Serfdom", and von Mises' "Human Action".
And while you are still struggling with the definition of wealth, you might also try "Arthashastra" to get a less, shall we say, Eurocentric perspective.
R: Hey , you (and another person) were the one who said wealth is finite and rich are becoming richer therefore poor have to become poorer. With such thinking, try re-reading your own reading lists.R
1. I said "In a free market, anything that has value and is tradable is wealth."
R: Agreed.
So you agree, then I have nothing to argue against.
2. It appears that you think wealth is infinite and I and Batman put forth that it is finite. It further appears that this is the only point we disagree upon.
For all intents and purposes, the mass of the earth is a constant, barring some slight increase because of meteorites.
Take your argument to a limiting case - what if we applied an infinite amount of human effort to harnessing all the wealth of this planet with finite mass?
If wealth is a tangible good, then your argument in the limiting case implies creating something from nothing.
This is absurd. Per the reductio-ad-absurdum proof, your premise must therefore be wrong.
Therefore wealth has to be finite.
Secondly, and this is another way to analyze the issue - assume that the planet were indeed infinite, or we figured out a way to harness wealth from every corner of the universe.
You still have a finite number of humans (or humans and machines) doing the work. Unless productivity is infinite, they can't actually get that infinite wealth out and into the hands of people.
In short, even if we took your argument at face value, wealth would still be limited to an upper bound.
Thus, in a finite wealth world, the game becomes zero sum.
You can argue (and I anticipate you might) that population and productivity are constantly changing, and for arguments sake, we say they are changing favorably.
Thus, we are constantly generating new wealth at some rate.
However this doesn't change the nature of the game. If the new wealth gets distributed evenly, i.e., in proportion to what each individual already has, the status quo was maintained.
Still zero sum, see. The total changes, the distributions may change, but the game still remains zero sum.
Think of it this way - water sloshing around in a moving tub. Add more to it, it still sloshes around, some places higher than others, but adding more and more water doesn't equalize the level.
Depending on the motion and size of the tub, the wave height could increase or decrease; but changing the mass of water does nothing to it.
This is what you aren't getting. Changing the nature of money or interest rates affects the delta between rich and poor. Not adding more wealth or money, that has no effect.
Contd...
Contd...
3. As for retarded, why not apply that word to yourself rather than to others?
Sorry, the word "retarded" has become a figure of speech these days in America, kinda like "dumb".
Anyway, what I meant was the conclusion "gold, silver or diamonds are not wealth" is stupid and erroneous, and I used a poorly chosen word, "retarded".
Didn't mean you. Apologies if you took it that way.
4. Money is a currency to make it tradable.
R: Or have you spoken like one with no understanding of either???R
Umm, bad comeback. Anyway dude, just google "money vs. currency". They are quite different, I assure you. Money is certainly not a currency to make wealth tradable.
For instance my labor is one of my wealths. I do work at home, such as cleaning the dishes and so on, in exchange for which my wife cooks for me, which is her wealth. (Just a contrived example.) Wealth was created and even changed hands, but neither money nor currency was needed.
Meanwhile, my friend saves in gold coins. These are certainly not currency, because you can't take them to the grocery store and get vegetables for them.
But these are money, nevertheless. They are the most marketable good, one that has the least spread between bid and ask and a huge and constant stocks to flows ratio (all requirements for a money).
I take rupee and dollar notes and go buy my dal, chawal and atta. Surely these are currency otherwise I'd be going hungry.
5. Whole of society is co-operative effort. Because Indians do not co-operate, we are poor.
Where do you get these collectivist ideas?
We are not poor because of a corrupt and illogical legal system? We are not poor because there is no incentive for the intelligent and productive to do anything?
What about Indians outside India? How come they are not poor? I've lived for a very long time in the US, and Indians here co-operate no more or no less than Indians in India or Indians in general or for that matter, people anywhere.
Besides, what do you even mean by co-operate? Is it not enough that a poor Indian has to be crammed like a sardine in a sweaty local train, co-operating with terrible facilities and other people? There are a thousand examples.
Why doesn't the government build decent transportation infrastructure? Because we don't co-operate? With whom? And how?
Americans pride themselves on their individualism; they go to great lengths to not co-operate. Shouldn't they then be dirt poor?
What are you even trying to say?
Contd...
6. Agreed, but "free" markets are also not entirely "free" or desirable. Essentially, efficient allocation of capital is better achieved through markets than through govt fiat.
Don't know what you are trying to say, but you contradict yourself. You imply that having a market that is not free is desirable.
Then you contradict yourself by saying that efficient allocation is better done by the market.
But a market not free to make the best decisions cannot, of necessity allocate capital better.
Non-free markets are either capitalist, or communist - the only difference being degree of lack of freedom.
7. R: ????. The comment was in response to you thinking I was talking about communism R
You seem to be oscillating between the two. FWIW, I couldn't care less about capitalism and about communism. In my mind, they are both bunk.
8. R: They were two sides of the same coin in the 19th century.R
As they are today. There has been no change in the doctrines and the dogmas, or even if there have been a few changes, they are to small to matter.
9. R: This coming after you called me retarded? R
I didn't call you retarded, as I explained before. I therefore did not engage in an ad hominem attack.
10 R: Hey , you (and another person) were the one who said wealth is finite and rich are becoming richer therefore poor have to become poorer. With such thinking, try re-reading your own reading lists.R
Not a very cool comeback. I've already stated the case for the game being zero sum. The onus is on you to prove otherwise.
Desi batman said
Samix, do you not know that deficit of USA is record high and increasing.
Yes, and this is because of the unbridled policy of printing that the USA embarked upon.
Initially it brought the wealth of generations that people around the world envied and hoped for, but now its payback time and American is facing the consequences.
By your theory USA can print currency at will and should get away with all that. Really? I don't see all this happening in USA.
This is what the bailouts that we saw in 2008 and 2009 were all about, they did exactly this, now they are doing it a second time with Quantitative easing round II.
Quantitative Easing = money printing
This is known as papering over your debt, that every government does.
Actually in my last post, I stopped short on my point, The Keynesian think that they can paper over debt by printing money and making inflation structural, but this a fallacy, and thus all fiat systems end in the dustbin, the dollar is headed that way so is the euro so is the rupee, its not a question of if , rather when.
1. I said "In a free market, anything that has value and is tradable is wealth."
R: Agreed.
So you agree, then I have nothing to argue against.
RR: But to put it in a more explicit way, wealth includes a society with law and order, cleanliness, decent human values, entertainment, politeness, just rewards for human endeavour and other similar intangibles - including an internet in which people can discuss things - these are not tradable except in a barter system as you so conveniently explained with regard to your wife and yourself.
Nevertheless, these are a part of our wealth and contribute to out well being. In a dysfunctional society like India, there is no amount of money which can buy it for you. We are poor because we dont have these.RR
2. It appears that you think wealth is infinite and I and Batman put forth that it is finite. It further appears that this is the only point we disagree upon.
RR: No, I said wealth is limited only by human effort. Wealth of societies increase as productivity and efficiency keeps increasing.RR
For all intents and purposes, the mass of the earth is a constant, barring some slight increase because of meteorites.
RR: This is a specious argument without merit. We are talking about the next hundred years. The issue is - if rich become richer, are the poor becoming poorer? The answer is no - because wealth is continuously increasing. People becoming wealthy is not redistribution of wealth. Currently, we are nowhere near the efficiency levels of the USA. So obviously we will be poor. A few in India are becoming better and are reaching the wealth levels close to Americans. Good for them. A few are corrupt and rob millions. It is our fault that we allow them to do so. But despite these evident leakages, poor are becoming richer, just more slowly.RR
Take your argument to a limiting case - what if we applied an infinite amount of human effort to harnessing all the wealth of this planet with finite mass?
RR: While it is not worth responding to this, by the time humans reach these limits, or even after maybe 100-150 years, humans will probably undergo genetic modifications to reach the status of a different species.
But that is science fiction RR.
If wealth is a tangible good, then your argument in the limiting case implies creating something from nothing.
This is absurd. Per the reductio-ad-absurdum proof, your premise must therefore be wrong.
Therefore wealth has to be finite.
RR: Reductio ad-absurdum would make sense if I claim that what I say is true regardless of any conditions. But there are numerous conditions which are self evident.
In fact your arguments have only reduced themselves to absurdity!!!! RR.
Secondly, and this is another way to analyze the issue - assume that the planet were indeed infinite, or we figured out a way to harness wealth from every corner of the universe.
You still have a finite number of humans (or humans and machines) doing the work. Unless productivity is infinite, they can't actually get that infinite wealth out and into the hands of people.
RR. By this time, humans would have evolved many steps and maybe become a single entity which encompasses the entire universe. But that too is science fiction.
What we call wealth would probably cease to be relevant after about 200 years or so, definitely in a 1000 years. But new things will become wealth and there will still be a currency for exchangeRR
In short, even if we took your argument at face value, wealth would still be limited to an upper bound.
RR. Depends what we call wealth. RR
Thus, in a finite wealth world, the game becomes zero sum.
RR. Again. Resources are finite. Wealth is not.RR
If the new wealth gets distributed evenly, i.e., in proportion to what each individual already has, the status quo was maintained.
RR. Population is increasing in India. Productivity is increasing in other countries. Even if it werent, as population increases, there isnt redistribution - people join society as productive members and add (and own) wealth in proportion to their abilities.RR
Still zero sum, see. The total changes, the distributions may change, but the game still remains zero sum.
RR. This is true if you measure wealth as property, which is finite but still enough to sustain 35 billion in comfort. Or if you measure wealth as gold - which is a useless metal. True wealth is improvements in standard of living, which has increased for most countries over the last 100 years to levels where everybody is rich enough. Except a few countries like India.
Think of it this way - water sloshing around in a moving tub. Add more to it, it still sloshes around, some places higher than others, but adding more and more water doesn't equalize the level.
RR. But total quantity of water has increased. So wealth has increased. There will be inequalities.
If you shake the same vessel harder, wave height will increase, but at some point there wont be waves, there will be complete wave disruption. AKA Maoist insurrection. RR.
Depending on the motion and size of the tub, the wave height could increase or decrease; but changing the mass of water does nothing to it.
RR. You have proved my point - if you can add water to the system, average water levels will rise. RR
This is what you aren't getting. Changing the nature of money or interest rates affects the delta between rich and poor. Not adding more wealth or money, that has no effect.
RR. Changing the interest rates will definitely make some people richer and some poorer. But the markets failed and created a property bubble. People's capital got destroyed. The inequalities already exist i.e. Being a real estate agent and playing musical chairs with your house was not adding to our net wealth. All that activity went waste long ago. See, Americans also get things wrong. But less often than us. RR
What about Indians outside India? How come they are not poor? I've lived for a very long time in the US, and Indians here co-operate no more or no less than Indians in India or Indians in general or for that matter, people anywhere.
RR. Disagree. If someone broke a queue in which you were standing in USA, what would you do? Same thing in India, what do you do?
People behave differently in India and abroad. Indians were recently taught how to stand in line by UK immigration. Indian areas of most countries are dirtier than surrounding white areas. I can vouch for Singapore, London, Birmingham and Manchester.
Indians are unco-operative and therefore poor is a simple way of writing all this.
Don't know what you are trying to say, but you contradict yourself. You imply that having a market that is not free is desirable.
RR:We can never get completely free or efficient markets because the people who run markets are imperfectRR
Then you contradict yourself by saying that efficient allocation is better done by the market.
RR: No I did not say that. I said markets allocate capital more efficiently than govt fiat. RR.
But a market not free to make the best decisions cannot, of necessity allocate capital better.
RR. Markets are run by innumerable individuals based on their self interest. Markets have proven to be unstable and subject to herd behavious and collective myopia again and again. These are defects with which we have to live - being of human origin.RR
Non-free markets are either capitalist, or communist - the only difference being degree of lack of freedom.
Markets by nature are made up of traders who try to maximise their gain. There are some markets which are zero sum (like stock derivatives) and some markets which are not sero sum (like stock markets, commodity markets, land, commercial or residential real estate). In zero sum markets, for every winner, there has to be a loser. Other markets everyone wins, except when greed gets ahead of fundamentals and "efficiency" decreases.
Re. Quantitative easing, the govt of USA projects itself as a buyer of its own debt. It creates a bond bubble, which is currently on, as bond prices are bid higher and higher in a game of passing the parcel - safe in the knowledge that US govt will be finally left holding the parcel.
The US fed is making an educated gamble that this will stoke economic activity and inflation - at which time, the US bonds can be dumped, deflating the bubble with yields rising again to match inflation levels.
All current indicators point towards this gambit succeeding
The US fed is making an educated gamble that this will stoke economic activity and inflation - at which time, the US bonds can be dumped, deflating the bubble with yields rising again to match inflation levels.
Textbook Keynesian fallacy
USA cannot increase the interest rates on its bonds, their interest payments on the sovereign debt will skyrocket if they do so.
You cannot get out of debt by printing up more debt, the Fed is basically self destructing its currency, once they print up the money and flush the markets with it, they have no control on where its going.
Remember the dollops of money that the fed gave to banks in the 08/09 bailout, it has not even trickled into the market.
Smart money around the world is now moving into Gold and emerging markets, 20000 on the Indian sensex is a indication of this flight of currency from the US shores, no one(smart person) wants to hold US dollars now as they are loosing value faster than before, anyone looked up the dollar index lately ?
RR. Again. Resources are finite. Wealth is not.RR
There you go again, creating something infinite from something finite - i.e., something from nothing.
This is only possible if you treat wealth as something imaginary, i.e., not physical. If so, I advise getting back to the real world.
If you treat wealth as something real, physical and tangible, as one does in the study of economics, then wealth is finite.
True wealth is improvements in standard of living
Once again, you are changing the definition of wealth to suit your argument.
But, even if one were to accept this definition of wealth, do you think that the standard of living has improved for everybody?
You don't see the utter devastation that has happened for poor, rural folk everywhere? For one person whose standard of living has gone up, there are ten whose standard of living has gone down.
RR. You have proved my point - if you can add water to the system, average water levels will rise. RR
Quite the contrary, you just agreed to what I and Batman have said all along.
Increasing the average water level doesn't make anyone richer. Rich and poor is only defined by the delta, i.e., wave height.
Taking your argument to the limiting condition again, one falls into the Keynesian, monetarist trap that printing up an infinite amount of money (drawn against the infinite wealth that you posit, of course) would make everyone rich.
That's not how it works in real life, sorry.
But the markets failed and created a property bubble.
Bubbles are created as a deliberate act to absorb excess creation of money by central banks. If they did not create such bubbles, there would be general inflation in prices of every commodity, which is an undesirable political consequence.
A bubble is just a pump and dump game, no more, no less.
RR: No I did not say that. I said markets allocate capital more efficiently than govt fiat. RR.
Non-free markets are non-free only because of some government fiat, so you did say that.
RR. Markets are run by innumerable individuals based on their self interest. Markets have proven to be unstable and subject to herd behavious and collective myopia again and again. These are defects with which we have to live - being of human origin.RR
The point being?
All current indicators point towards this gambit succeeding
Ha, ha, ha, ha, ha, ha, ho, ho, ho. The only thing possible for me to do in the face of that ridiculous statement is to laugh.
RR: Reductio ad-absurdum would make sense if I claim that what I say is true regardless of any conditions.
Let me remind you what you said: "Wealth is human effort. Period."
That sounds pretty unconditional to me.
So you then agree that what you said is absurd, right?
Let me spell it out for you. Your statements:
A. "Wealth is human effort. Period."
B. "Reductio ad-absurdum would make sense if I said statement 'A'."
Therefore, what you said - either A or B - is absurd.
Worse yet for you, if you disagreed with this, that disagreement would be absurd too; since a statement and its negative can't simultaneously be true.
Dude, you may be educated in economics and everything, but you at least gotta make logical sense.
(P.S. Hope you have a sense of humor.)
While you're waxing eloquent about how gold is a useless metal, I urge that you peruse this article.
Dhiman, you said
Increasing the average water level doesn't make anyone richer. Rich and poor is only defined by the delta, i.e., wave height.
If more water can be added to a system, then the total quantity of water has increased. i.e. the total wealth has increased. Since the average height has increased, the average wealth has increased.
If you go to a deeper ocean viv-a-vis say a great lake, waves are bigger. But since waves are created by wind action, only the superficial 100-200 feet are disturbed. This is insignificant compared to a kilometer or two in depth. Deeper water is hardly disturbed by this.
Same wind in a shallow pool might whip the whole water away.
As wealth of a society increases, it doesnt matter if the rich are super rich, because the so called poor have a rising standard of living. The more the wealth, the more the inequalities will be.
You don't see the utter devastation that has happened for poor, rural folk everywhere? For one person whose standard of living has gone up, there are ten whose standard of living has gone down.
These are temporary phenomenon seen in USA and Europe currently. The graph is rising and as long as the white people are able to maintain a productivity gap with others, they will recover.
The shrill cacaphony of internet chatter about how poor the Americans are getting is out of proportion to the reality and has political rather than true economic undertones. Very different is the situation in India and extrapolating the American situation to India is sure to end in disaster
Taking your argument to the limiting condition again, one falls into the Keynesian, monetarist trap that printing up an infinite amount of money (drawn against the infinite wealth that you posit, of course) would make everyone rich.
Obviously you are mistaking printing of money for creation of wealth. If at a given point you issue the equivalent of a stock split on a currency, the price of everything will adjust accordingly.
Wealth at any given point is finite regardless of the amount of money being printed. Wealth keeps increasing as time passes, as the productivity of people adds to the total quantum of wealth. It cannot be created out of nothing instantaneously by printing money.
Wealth is also continuously destroyed as assets (and even skills) depreciate
RR. Markets are run by innumerable individuals based on their self interest. Markets have proven to be unstable and subject to herd behavious and collective myopia again and again. These are defects with which we have to live - being of human origin.RR
The point being?
Bubbles are created as a deliberate act to absorb excess creation of money by central banks. If they did not create such bubbles, there would be general inflation in prices of every commodity, which is an undesirable political consequence.
A bubble is just a pump and dump game, no more, no less.
You have exposed yourself as a conspiracy theorist. What is your evidence for the existence of such a conspiracy?
Taking advice from a conspiracy theorist is sure to end in financial ruin. More so for a person from India who is wondering about buying a house.
Markets are inefficient and therefore create bubbles. If the fed states that it will buy its own debt, obviously everyone will try to buy bonds and create a bond bubble, confident in their ability to sell before the bubble bursts. Someone will be left holding the burst balloon, which is the point of what I said earlier. We have to live with it. The hope is that it will be the American taxpayer.
RR: No I did not say that. I said markets allocate capital more efficiently than govt fiat. RR.
Non-free markets are non-free only because of some government fiat, so you did say that.
I dont get you at all.
Are you saying that markets are currently not free?
Are you saying markets should be made more free?
Exactly what are you saying?
You have exposed yourself as a conspiracy theorist.
So everything that governments and central banks is the whole truth and nothing but the truth?
Come on - where there is a smoke, there is a fire. It is simple logic, which you Keynesian types have completely forgotten.
For instance, ask yourself this - What purpose could a central authority have to create money out of nothing? Altruism?
I seek the truth, whatever that may be. If it points to what is called a "conspiracy", then so be it.
Sherlock Holmes said, "We must fall back upon the old axiom that when all other contingencies fail, whatever remains, however improbable, must be the truth."
This is all I do.
What is your evidence for the existence of such a conspiracy?
Critical thinking. Sadly, you have demonstrated that you seem to lack this faculty.
If Sadi Carnot could derive pretty much all of thermodynamics from applying thought experiments, figuring out simple things like this should be trivial.
Taking advice from a conspiracy theorist is sure to end in financial ruin.
You're engaging in a cheap tactic called FUD - stands for fear, uncertainty and doubt.
Take my words as advice, don't take them as advice; I couldn't care less. I am not forcing anyone to do anything.
More so for a person from India who is wondering about buying a house.
Ooops. Did you just expose yourself as a shill for the real estate lobby?
See, two can play this game.
Wealth at any given point is finite regardless of the amount of money being printed.
Thank you. I rest my case.
RR: Reductio ad-absurdum would make sense if I claim that what I say is true regardless of any conditions.
Let me remind you what you said: "Wealth is human effort. Period."
That sounds pretty unconditional to me.
So you then agree that what you said is absurd, right?
Let me spell it out for you. Your statements:
A. "Wealth is human effort. Period."
B. "Reductio ad-absurdum would make sense if I said statement 'A'."
Therefore, what you said - either A or B - is absurd.
Worse yet for you, if you disagreed with this, that disagreement would be absurd too; since a statement and its negative can't simultaneously be true.
Dude, you may be educated in economics and everything, but you at least gotta make logical sense.
(P.S. Hope you have a sense of humor.)
I think I have a fairly good sense of humor but I fail to see any humor here - except that you went to absurd lengths to make what I was saying absurd but ended up making what you were saying totally absurd - now that was hilarious.
I said "Wealth is human effort. Period."
At least stay on the "human" plane to disprove it?
Dont go to levels where humans cease to be humans and leave the planet and occupy the whole universe etc etc - the only necessary condition is that humans should be humans and engage in normal human activities.
(As I indicated, I wouldnt mind these speculations, but that would be science fiction)
I still say that human wealth is derived from the efforts of humans, since planetary resources are finite and are currently well tapped.
What wealth we create from it is limited only by our efforts.
Therefore wealth is human effort.
The last 100 years is a history of our increasing wealth derived from the same finite resources.
I havent heard any credible arguments against this from you.
What purpose could a central authority have to create money out of nothing? Altruism?
Obviously altruism. Since the markets failed and were threatening to create a depression and massive unemployment.
What else could the fed have done? They did nothing for Lehman and realised their folly in time not to repeat it.
Why not call it a duck and be done with it, without thinking up a hundred ways why it may not be a duck.
If you want to blame anybody, blame Greenspan who lowered rates disproportionate to the needs of the economy and forced it into a RE bubble. Why dont you see a conspiracy theory there? Maybe Greenspan had lost money in the dot com bust and wanted to recover it by real estate investment pump and dump.
Why not?
What wealth we create from it is limited only by our efforts.
Therefore wealth is human effort.
Life is limited only by death. Therefore life is death?
I shouldn't even be dignifying such utter lack of logic with a response.
Obviously altruism.
What are you high on? Coz it's obviously some good sh*t.
What is your evidence for the existence of such a conspiracy?
Critical thinking. Sadly, you have demonstrated that you seem to lack this faculty.
And what critical thinking have you demonstrated, pray tell?
Repeating the manic doomsday predictions and conspiracy theories prevalent in marketwatch and fox network related web sites?
Sorry, there is nothing critical in parrotting these all pervading theories cooked up by right wing politicians of USA and repeating them as your own.
A number of them believe Obama to be a Muslim. Are you one of those?
Why not?
What are you high on? Coz it's obviously some good sh*t.
Sorry dude, the sh*t is in your head
I think I have a fairly good sense of humor but I fail to see any humor here - except that you went to absurd lengths to make what I was saying absurd but ended up making what you were saying totally absurd - now that was hilarious.
So you didn't follow the logic.
It's OK to admit that, you don't need to hide behind flat comebacks.
And what critical thinking have you demonstrated, pray tell?
How can I make the blind see? If you had an appreciation for critical thought, you wouldn't be asking the question.
Sorry dude, the sh*t is in your head
Obviously not the potent stuff you're smoking.
Life is limited only by death. Therefore life is death?
I shouldn't even be dignifying such utter lack of logic with a response.
Read Indian philosophy and you will realise that what you said is true.
But if you were capable of comprehension and realisation, you wouldnt be filling this site with your non sense about the "Federal conspiracy."
So you didn't follow the logic.
It's OK to admit that, you don't need to hide behind flat comebacks.
There was none to follow
Anonymous R & RR
yOU SAID
1.All other nations became wealthier than us by their human effort - by working hard, being more inventive, being more productive.
2.Whole of society is co-operative effort. Because Indians do not co-operate, we are poor.
Hey Anonymous, Would you care to explain in a bit more detail, if you dont mind.
It intrigues me to read "cooperation" and "poor" are related.
As also your assertion about productivity and wealth.I was assuming the productivity and efficiency have an effect far lesser than other factors like being inventive, aggression et al.I mean its at the bottom of the pecking order...where would you put it??
OK, that's about enough of this. I don't see the point of continuing this ridiculous debate any more.
It is quite unproductive, and any future reader can make his or her own mind up about these issues.
Dhiman, he who laughs last .....
Let those who may read this draw their own conclusions.
Dhiman, he who laughs last .....
is high on some reeeeally potent stuff?
;-)
Anonymous R & RR
yOU SAID
1.All other nations became wealthier than us by their human effort - by working hard, being more inventive, being more productive.
2.Whole of society is co-operative effort. Because Indians do not co-operate, we are poor.
Hey Anonymous, Would you care to explain in a bit more detail, if you dont mind.
It intrigues me to read "cooperation" and "poor" are related.
As also your assertion about productivity and wealth.I was assuming the productivity and efficiency have an effect far lesser than other factors like being inventive, aggression et al.I mean its at the bottom of the pecking order...where would you put it??
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