Definitions
Leverage is… The basic definition of “Leverage” is the mechanical advantage available from using a “lever” this idea has been expanded to apply to other types of advantage such as money, finance and even positional advantage. The Classic Example of Leverage As a child I would often go to the playground and play on the “See-Saw” [...]
Microeconomics vs. Macroeconomics- Economics can be described as the social science that examines how people use limited resources to produce, distribute, and consume goods and services to satisfy their unlimited needs and desires. Although microeconomics and macroeconomics are not the only disciplines and paths of specialization to exist within the broader context of economics, these [...]
Inflation Adjusted Prices What is the inflation adjusted price of common commodities? Historical Oil Prices Chart – This Chart compares Monthly Average Oil Prices with their Inflation Adjusted Oil Price. Historical Crude Oil Prices (Table) – The first table shows Annual Average Crude Oil Prices from 1946 to the present. Prices are adjusted for Inflation [...]
What is the Fiscal Cliff? The fiscal cliff that is the current hot topic in the news is a combination of automatic spending cuts and tax hikes that are scheduled to go into effect at the end of 2012 and the beginning of 2013. The spending cuts were triggered when congress failed to reach a deficit [...]
What is the Money Multiplier? In a fractional reserve system like we have here in the United States money is loaned out by banks and by law they are only required to have a fraction of the amount they loan out. For example they might be required to keep 10% in reserves. In other words, [...]
What is the velocity of money? Simply defined the velocity of money is the turnover in the money supply. A shop owner can measure how fast his inventory is selling by calculating “inventory turnover.” To do that he simply calculates Total Sales ÷ Average Inventory for the period in question. See: Inventory TurnOver for more [...]
Agflation, is a relatively new term coined by analysts at Merrill Lynch in 2007. Back then rising demand for agricultural products started driving up prices. Agflation is simply a combining of the words agriculture as in “agricultural commodities” and the word inflation. Inflation is commonly used to mean an increase in prices (although it originally [...]
How do you define inflation? In some ways it’s a slippery thing, like trying to nail Jell-O to a tree. One common definition amounts to “a general and sustained rise in the price of goods and services.” Another is “a persistent decline in the purchasing power of money.” Others argue that inflation is directly tied [...]
Money, Credit and the Federal Reserve Banking System Conquer the Crash, Chapter 10 By Robert Prechter How the Federal Reserve Has Encouraged the Growth of Credit Congress authorized the Fed not only to create money for the government but also to “smooth out” the economy by manipulating credit (which also happens to be a re-election [...]
By David Galland, Managing Editor, The Casey Report We recently received the following comment in our Q&A Knowledge Base. Investors should be prepared to sell gold as either increased inflation expectations or doubts around debt sustainability force a sharp increase in US Treasury bond yields. Simply put, in an environment of high real interest rates, [...]
