patrick.net

True but it will always be natural that those who had their riches taken away and redistributed to states where fat bureaucrats live like kings while throwing table scraps to everyone else, will just end back up with all of the wealth.
That is why most social revolutions start with the murder of all of the people capable of economic growth. It is also why Russia can't seem to get a leg in capitalism. They killed off all of their homegrown titans, and they haven't trusted nor allowed much foreign influence as much as China has over the last 50 years.
China definitely would not have gotten no where near they are today if not for Europe and America business men going over there exploiting them, while they took note and learned for them selves, then copied those models them selves.

Countries like Russia and Cuba will provide a much needed underground black market to provide the sell and buying of goods, and the jobs that goes along with making those goods and getting them to market.

It's the only capitalism they know is black market economies.

People that are good at the natural science of economics will always have money no matter how many times it is taken away from them. That is why I respect the hell out of Donald Trump over all of the other rich socialist hypocrites.

CaptainShuddup says

That is why I respect the hell out of Donald Trump over all of the other rich socialist hypocrites.

If that is true then you certainly have to hold Warren Buffet in higher esteem?

indigenous says

Therefore you cannot use empiricism to validate economic law

Economic law is based upon deduction, if your logic is correct then your conclusion will be correct

Paraphrased from Patrick Barron

Now you know why economists are always wrong.

CaptainShuddup says

People that are good at the natural science of economics will always have money no matter how many times it is taken away from them. That is why I respect the hell out of Donald Trump over all of the other rich socialist hypocrites.

The ego maniac who never stops bragging.

indigenous says

CaptainShuddup says

That is why I respect the hell out of Donald Trump over all of the other rich socialist hypocrites.

If that is true then you certainly have to hold Warren Buffet in higher esteem?

I never heard him brag like Trump.

Strategist says

I never heard him brag like Trump.

Yes but Buffet if more of hypocrite. He has benefited more from public larges than any million welfare queens. All the while saying that taxes should be higher.

Strategist says

Now you know why economists are always wrong.

The ones who use empiricism anyway.

I'm saying I respect guys that can go belly up and bankrupt on numerous occasions and yet rise back to the top time and time again. There aren't many today who can claim that. Just look at all of the titans that fell after 2006 never to be heard from again.

CaptainShuddup says

I'm saying I respect guys that can go belly up and bankrupt on numerous occasions and yet rise back to the top time and time again.

What about the ones who never go BK because of the Fed put on all cronies?

indigenous says

He has benefited more from public larges than any million welfare queens. All the while saying that taxes should be higher.

Explain how this is hypocrisy.

indigenous says

it is a social science

Oxymoron.

Heraclitusstudent says

Explain how this is hypocrisy.

Claiming that other do not contribute enough while he contributes less through taxes as most of his income is tax exempt. And his companies would have either gotten smaller (think emaciated) or gone away if not for the bailouts.

Heraclitusstudent says

Oxymoron.

Sort of but Austrian economics that the Wogster practices is actually a priori which is also true of math. Is math an oxymoron with science?

CaptainShuddup says

I'm saying I respect guys that can go belly up and bankrupt on numerous occasions and yet rise back to the top time and time again. There aren't many today who can claim that. Just look at all of the titans that fell after 2006 never to be heard from again.

Trump does have a way of rising from the ashes. He should retire and play golf when he reaches a new high. Maybe he should run for Mayor or something.

indigenous says

Claiming that other do not contribute enough while he contributes less through taxes as most of his income is tax exempt.

Let me clarify this for you: an hypocrite is someone who really does something different than what he claims he believes.
In this case, it would be hypocrisy if paying less taxes was his choice, which it isn't.

There is absolutely no contradiction between claiming the environment should be different, and at the same time profiting from this environment you see as wrong.

Heraclitusstudent says

In this case, it would be hypocrisy if paying less taxes was his choice, which it isn't.

BULLSHIT, the IRS will gladly except any donations.

indigenous says

Economic law is based upon deduction, if your logic is correct then your conclusion will be correct

If something cannot be falsified then it is not science. Science must be falsifiable.

Example: Austrians predict hyperinflation. It doesn't happen for many years after the predictions are made based on their logical assumptions, and this inflation still has not happened.

That is an empirical observation.

Since Austrianism rejects that empirical observations are valid, Austrianism cannot be falsified and is therefore not a science.

thunderlips11 says

Example: Austrians predict hyperinflation.

While the example stands, this is not what Austrians predict, some do, some don't. The camps range from deflation, through stagflation all the way to hyperinflation. At least for the modern pundits. Stagflation has been happening for a while now and can be verified. 2% inflation is brutal if your wages go down or stagnate.

thunderlips11 says

If something cannot be falsified then it is not science. Science must be falsifiable.

Ok and it must be predictable to be science as well.

Math by definition is predictable and it is a priori.

thunderlips11 says

Example: Austrians predict hyperinflation. It doesn't happen for many years after the predictions are made based on their logical assumptions, and this inflation still has not happened.

That was Austrians who did not follow the logic. Hyperinflation never occurs without war. Even with 4 trillion added to the balance sheet it is still 4/72 or 6% of the money supply. IOW not enough to create hyperinflation especially when it has not found it's way into the main stream economy.

Anyway it would be error to conflate these assertions with Austrian economics.

But that is the trouble with empiricism. Especially when you consider that economics is not a controlled experiment there are always many contributing factors in a situation.

ALL economics is a social science. This is the fundamental problem with the Ks and the Ms, you cannot use a posteriori methods in this science. You HAVE to use a priori deductive logic to reconcile it.

indigenous says

ALL economics is a social science. This is the fundamental problem with the Ks and the Ms, you cannot use a posteriori methods in this science. You HAVE to use a priori deductive logic to reconcile it.

Agree to a great degree, but there are ways to see and measure social mood according to Robert Prechter. As an Elliott Wave Theory proponent I am a believer in what Prechter calls Socionomics. It is a theory of social causality that runs contrary to contemporary thinking. That is, events don't create the mood of the herd, the mood of the herd creates the conditions that cause events.

Watch the video here to get a better understanding.

http://www.globaldeflationnews.com/robert-prechter-on-hedge-funds-and-herding-a-video-from-the-socionomics-institute/

darlag says

Agree to a great degree

So you agree to a great degree with Austrian economics.

I have found the premise to be true, it reminds me of Thomism and causality.
I believe it is the very definition of reality.

He uses a word that I cannot find a definition for at 1:05 in the video it sounds like indogenous, what does that mean?

Austrian economics IS a science but picking the when part is hard. The Elliot wave does not appear to be 100% predictable in the when part. And very tedious to learn with mistakes by even the skilled users. I suppose similiar to Austrian economics, but at least better than the Ks or the Ms.

indigenous says

He uses a word that I cannot find a definition for at 1:05 in the video it sounds like indogenous, what does that mean?

I think he said "endogenous"

Strategist says

I think he said "endogenous"

Thanks

What is astrology then?

Economics is two notches below that.

Peter P says

Economics is two notches below that.

And where does options trading fit into the scheme of things? I.E. without looking at the bigger picture?

indigenous says

So you agree to a great degree with Austrian economics.

Yes, the difference between me and, say, Peter Schiff, is that I have a near-term deflationist outlook. I am convinced that the dollar will skyrocket in value and gold will decline before it devolves in any hyper-inflation scenario. I believe that because most of the world's debt is denominated in dollars and a deflationary scenario would cause a run on dollars for both saving and debt repayment.

A hyper-inflated currency, which is what Mises always talked about, is a distinct possibility eventually. It is probably too late to avoid it. As Mises warned:

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

indigenous says

He uses a word that I cannot find a definition for at 1:05 in the video it sounds like indogenous, what does that mean?

The word is endogenous.

1. proceeding from within; derived internally.
2. Biology. growing or developing from within; originating within.
3. Pathology. (of a disease) resulting from conditions within the organism rather than externally caused.

Definition #3 is more to what Prechter is alluding. Endogenous, in the way he likes to use it, implies subconscious behavior as opposed to behavior as a result of external stimulus.

In other words, people don't generally think about their mood. But their actions are reflective of the mood they are in. For example, if you are in a good mood, a
crying baby may not bother you. In fact you may feel sympathy or empathy for the child... "Poor little guy, he's probably hungry". On the other hand, ina bad mood, you may find the crying annoying, even blaming the baby for your bad mood... "Somebody should shut that little urchin up, he's driving me crazy.'

Prechter's point is that the herd's mood is endogenously regulated as opposed to being controlled by exogenous events. It's a contrary opinion which basically says Fama's Efficient Market Hypothesis is erroneous. That concept is hard for most people to swallow.

darlag says

The word is endogenous.

Interesting idea, especially since it is in the opposite direction of the herd.

Is it worth the trouble?

indigenous says

Interesting idea, especially since it is in the opposite direction of the herd.

Is it worth the trouble?

The trouble comes in learning the theory well enough to use it effectively. Many have tried and failed to learn it. To trade with it you have to learn to spot shorter-term moves (days and weeks - perhaps months if you do it right). Knowing in 2000 that the market was going to collapse in a catastrophic deflationary depression hasn't helped anyone make money yet in the long term. So the idea that a major topping process can take a decade or more to complete freaks most people out, making them skeptical and dismissive of the whole idea of Elliott Waves.

darlag says

The trouble comes in learning the theory well enough to use it effectively. Many have tried and failed to learn it.

What is the capture rate of the better EW traders?

indigenous says

Peter P says

Economics is two notches below that.

And where does options trading fit into the scheme of things? I.E. without looking at the bigger picture?

Trading has very little to do with economics and even finance.

Just like a Keynesian Beauty Contest has little to do with pretty women.

Peter P says

Trading has very little to do with economics

That does not add up?

indigenous says

What about the ones who never go BK because of the Fed put on all cronies?

Trump seems to be the only person of money and influence who doesn't have the FED reserve's bank vault lock combination committed to memory and and an all access pass.

His catch phrase is "You're FIRED!" not "Put in their tab!"

CaptainShuddup says

Trump

Is no paradigm of anything.

indigenous says

Peter P says

Trading has very little to do with economics

That does not add up?

Not unless you are running a 10B global macro fund.

Short-term price action is a result of crowd psychology.

Also, note that prices affect fundamentals as much as the other way around.

indigenous says

Is no paradigm of anything.

No he has money talent you can't teach talent. Talent is abstract, you have it or you don't. Those that don't constantly needs bailouts, tax breaks and incentives and a shit load of massaging to make sure things keep going their way.

Anticipating central bank reactions to macro changes will be more fruitful than predicting the economic consequences of such changes.

In the end, nobody gives a shit.

Peter P says

Short-term price action is a result of crowd psychology.

Fair enough

Peter P says

Also, note that prices affect fundamentals as much as the other way around.

As it pertains to the herd?

Peter P says

Anticipating central bank reactions to macro changes will be more fruitful than predicting the economic consequences of such changes.

Makes sense, but it is hard to believe that RE or the Stock Market being overvalued is not in the back of everyone's head.

What do you think of the Elliot Wave?

I don't have money talent but I do recognize talent.
I can make money with my talents, but I don't have the talent nor discipline to make more money with the money I've earned.

There's just too many variables in this "Social Economics" there's nothing fundamental, nor constant about it. At least Austrian economics were more predictable than this Keynesian free for all we have today.
Places that would traditionally pay money like saving your money in the bank, now doesn't pay anything, and places that would have traditionally been junk or supported by enthusiasts like IM and file sharing technologies are now Social Networking technology is now Trillions of dollar economies.

For most by time they realize there's a little money in a stock or an index all of the real money has already been made. And the more time they keep those hot stocks, the harder the bull markets will crash. YET, time and time again people keep believing that these stocks and industries can keep climbing for indefinitely. SO much so, that they bet their retirement on it.

Like the fools who have bought Gold over 1200, or even those who bought it at 800 are still hanging on. Believing it will go back to 1600 and beyond.

To really understand this market and play it smart, it has to be something your consumed with 24 hours a day. I would have to stop working and spending my days doing nothing but researching what I'm investing in, and staying vigilant enough to hit the sale button at seconds notice.

Anyone playing long on anything in this economy is a damn fool.

indigenous says

What is the capture rate of the better EW traders?

I don't really know. There are so many ways to trade waves. The most basic is to try to recognize a simple wave 2 a-b-c correction (any time frame - large or small) and wait for wave c to start back up (or down). Place a stop 1 tick under the start of wave 1 and ride the third wave until you can clearly count five waves. If your stop gets taken out you didn't count right and you have some work to do to figure out where you really are. Third waves are generally the most lucrative. When you catch it right you can do quite well in a short period of time.

indigenous says

What do you think of the Elliot Wave?

I personally do not use it. However, it is a personal thing. You want to adopt an approach that is compatible to your beliefs and routines.

There is no "correct" way to analyze the market. Otherwise there will be no market.

Emotions seem to create irrational behavior as with the tulip bulb and housing bubble but both were created by more money being injected into the market.

What ever makes sense is overshadowed by the Fed, they have removed tail risk from the market. Investors act accordingly. Japan pledging to increase the money supply by 750 billion, affects everything, investors will act accordingly.

Eventually gold will skyrocket but not for the foreseeable future. Now we have deflationary pressures because of a century of fractional banking and it's abuses and because of the US abuses of the reserve currency status and because of mercantilism abuses by Japan, Germany, and China, and because of demographics.

What ever trading takes place is against this background.

To say this does not matter seems to me to be a case of not seeing the forest for the trees. That being said I think I get that it still doesn't say when.

I don't see how you could say this does not matter?