Pandenomics

Some random thoughts on economics in the event bugzilla mounts a heavy winter campaign. [Backyard economics, for thought exercise only, two part series.]

Liquidity
  • Immediate danger is a sudden and domino-like freeze in liquidity.
  • Liquidity is like water (or oxygen), many stuff can't do without it for long even if everything else is in OK. Example, a car won't run long without water in the radiator even if every other component is fine.
  • Liquidity is availability of currency (money). Currency implements hard counting (vs imaginary or conceptual).
  • Say, you wish to sell widgets. You price the widget, determine the labour, material and overhead costs. As numbers, these are just concepts. Currency makes the numbers real, do real work, allows one to trade with other parties.

Money Printing
  • Money printing is in itself not necessarily bad.
  • It's like adding water or adding to the water supply.
  • The key is a suitable amount and what is done with the extra water.
  • Is it used to quench thirst, plant crops or fill a swimming pool?
  • If it quenches thirst and irrigates crops, the water may turn into apples, berries, grapes, wheat, barley (even an impossible burger).
  • This is when the water turns into real stuff, real currency. A currency that was previously merely printed is now backed by real produce