Don't worry guys, the government can turn this lead into gold.
There have been countless headlines from the last week or so declaring that Crypto is dead, the bubble is popping, etc.
As someone who has a mathematics and finance background, in my view it's quite obvious what is happening here -
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In the past few years, crypto has become much more mainstream. Consequently, a lot of the big players in the space are also major investors in broader equity markets
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Consequently, movements in crypto have become more and more in line with the stock market
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We can think of crypto as a class as a high positive beta asset - essentially, crypto is viewed as riskier than the market overall (I agree), which means it tends to swing in the same direction as the overall market but at bigger magnitudes. All else equal, if the stock market goes up 2%, Bitcoin might go up 10% (completely made up numbers).
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There have been a huge amount of macroeconomic policy changes in the past month that have spooked the equity markets. Consequently, the S&P500 has been on a downswing the entire month.
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Because crypto is a high-beta asset, it has followed suit. Since Jan 1st, the S&P 500 is down about 8%, Bitcoin is down ~27%
Nothing has changed in the past month about the fundamentals of cryptocurrencies - if, for example, there had been a security flaw found in Bitcoin, or an extremely strict regulation introduction, then that microeconomic influence would explain a decoupling of performance between the S&P500 and Bitcoin.
Does anyone else share this viewpoint?
TL;DR: Stocks go down, Bitcoin go down more.
MOE's and Macro Economics 101
Bear with me, this explanation will help to justify the points following. Currency throughout the history of mankind used to be based on an agreed-upon source of limited value. Say the U.S dollar, up until recently the U.S dollar was backed by gold. Meaning you could take 1,5,10, or 100 dollars to the U.S treasury and exchange it for your portion of gold. Unfortunately, the U.S dollar and in-game gold aren’t backed by any limited object, therefore there is no form of scarcity, this is called a FIAT currency.
Fiat currency both in real life and in-game are risky propositions when one source can create infinite amounts of this currency and adjusts the rate at which it is created. In practice this works out fine, the U.S for example attempts to increase the supply of American dollars by roughly 2% per year, since there are more Americans, this levels out. Meaning, IN THEORY 5 dollars today can buy roughly the same amount of goods (say 2 loaves of bread) as 5 dollars would 5 years ago.
Let's translate this concept of FIAT currency into SMMO and relate it to mushrooms. Gold is infinitely created by a number of activities, stepping, questing, etc. Now, with more gold coming into the economy on a daily basis this will over time inflate the currency and devalue the gold. For instance, back in mid-2020, a BIS items such as a Volcanic Blade could be obtained for roughly 2 billion gold. In October of 2021, the price of a BIS item such as the Felfire blade had risen to closer to 3-5 billion (depending on when you purchased on). This roughly means your gold has been devalued by a factor of 2. Meaning 2 gold today is worth roughly what 1 gold was around a year ago.
In the real world this happens too, dollars are lost, destroyed, and removed from the economy via the FED (in the US) by a variety of methods. However, in-game this removal is significantly below the rate at which gold is introduced into the economy. This was drastically perpetuated by the spending of a certain member of the catholic church of Dakota who through the purchasing of multiple qp farms for multiple people drastically increased the rate that new gold is flowing into the economy. Meaning the inflation that SHOULD have taken an entire year to occur, happened in the space of mere months. So, just like the FED in real life in times of inflation, Mike needs to curb gold inflation in-game to keep gold as a viable currency. We’ve seen two major forms of this occurring: QP
... keep reading on reddit ➡
I already have the review books for both, Barron’s for statistics, and Princeton for Marco
Hey I have to take my macroeconomics exam online in Feb and would like someone to take it for me. I will send the question paper as soon as I receive it and would like answers then. I would of course pay for the service. Please contact me asap.
hey, I was wondering if anyone had any knowledge If taking the CLEP Exam is valid for internal transfer into mccombs? If yes, does that make my application less competitive, because I didn’t take the full course? I’m also considering taking the self pace course with Helen Schneider at UT Extension if that’s a better option, but I do not know if it’s worth coughing up almost 1 grand. Thank you in advance!
Hello, I am currently taking a Macroeconomics course, and would like a tutor who is an *expert* in the subject to help me all semester long. Such as learning new concepts, helping with tricky test questions and more. I am really interested in the subject and actually wish to learn the content (not just have someone do it for me), which is why I want a tutor who I can trust and depend on for a while.
Many Thanks
Hi there, I wanted to get a good handle on market changes. This would include
- Interest rates, market changes, recession, inflation. What moves prices in real estate, and various sectors.
Any recommendations?
I'm far from a economist and I know my fair share about stocks and the economy in general, but what is the outlook and/or what could have a big impact on the US/CAD rate in the next year or two seeing the current situation?
Majority of holdings are in US companies and the US/CAD rate can affect returns for the best or the worst.
I received a copy already!
I took microeconomics in the fall and found the concepts fairly straightforward.
How easier/difficult is macroeconomics compared to microeconomics?
Also, how similar is macro compared to micro? Is it more of supply, demand, opportunity costs ect. Trying to see what I should expect.
Title^ Any advice on how to study for it?? Thanks!
I am currently a first year and am seeking a tutor (undergrad/grad student) who is familiar with Sanderson's curriculum and assessments. Any guidance or references would be greatly appreciated. Hourly rate is negotiable.
GDP measures the degree of economic activity or "flow" of goods and services. Intuitively, it seems to make sense of it as one component of the derivative of a "stock" variable that one could call Wealth. Something like, very roughly
Wealth(t) "=" integral [GDP(t) - depreciation(t)] dt
Has something like this been attempted? Is there a better approach to the question?
I imagine it would be complex to decide what goes into wealth. Industrial capital? Natural resources? Nonrenewables? Is the population part of a country's wealth? Population times years spent in education/training perhaps?
Seems important but hard to tackle. Help me think about this more clearly!
It just says “Achieve - 2 Term Access Economics” what is this book or access card about?
Just wondering if I can get it anywhere for cheaper to not spend over 100$ on this.
It’s 5th Edition and the Author is Krugman with ISBN 9781319435851
Need it for C term macro and don't wanna pay 100$
I have read through many opinions, and while let's be clear I'm not an expert or anything, I don't get it.
People say things like people are going to save and that's good. Okay. But what does that even mean for startups and productive investment?
The economy runs on risk management. If the currency used is deflationary, any randomly picked investment would be inherently riskier than just holding the currency itself. There could exist some investments that are just exceptionally spectacular, but economic growth cannot be left to wait for such opportunities. If people are not incentivized to lend their money to borrowers who use it to create economic value via stocks, bonds, savings accounts or loans then the economy will come to a standstill. It's actually a good thing that the only option for any substantial real long term returns is stocks or bonds.
And even if banks were somehow encouraged to lend, we'd still have the problem of contracting supply. The interest paid for loans has to come from somewhere. This would mean that with each loan given and each repayment made the issue would grow exponentially.
From a fundamental perspective, deflation is inherently incompatible with a system that creates more and more value with each second. Value and newly generated wealth that didn't exist before. How is a deflationary currency like Bitcoin going to readjust itself to reflect this newly generated value?
Hello
I need a postgraduate who can help me with a 6 hour exam in Social Science (Macroeconomics). You’ve to be good at statistics and very experienced with Excel - I need to see proof of work before paying. The exam language is in danish but can be translated into english. However, the topics & questions in the exam are mainly focused on Social Economics associated with Denmark.
Basically the title, our school only offers semester-long classes, and I took AP Calculus AB during the fall. This semester, both AP Calc BC and AP Macro are offered during the first period. I'm not sure what I want to major in, but I've been thinking about veterinary sciences, Asian language studies, or business. (All very different, I know...)
My friend has the same question, and she's interested in business and marketing.
What class would you suggest my friend and I take this semester and why?
Thanks :)
I could not cross post this from the mmt economics subreddit but u/hgomersall found this model
It gives an interesting perspective of how the macroeconomic models that are used by governments are working. For example here is a documentation about estimating foreign shocks in a VAR model
The documentations are very interesting but I don't know anything about python. Perhaps someone in this subreddit with more technical knowledge could dive deeper into this model.
I’m gonna be senior next year and I’ve started planning my classes. So I don’t know which of the three classes looks better for colleges. I’m going to take 5 AP classes next year and I’ve heard AP macroeconomics is the easiest of the three. Is that true? But even if it is, I want to take the class that looks better to colleges. Advice?
