One of the most basic concepts that I learned in first-year engineering was the first law of thermodynamics: energy can be neither created nor destroyed, only transferred. During the course of my research, I have seen how this concept applies equally to wealth, for wealth is neither created nor destroyed, only transferred. Depending on the [...]
As I stated in my previous article Will There be a QE 3?, weak market data coupled with negative market sentiment is being reflected in the stock market. 2011 was a dismal year for most stock investors. The chart below depicts the 2011 rate-of-returns for different asset classes. Furthermore, our governments may decide to create [...]
Economic Reasoning: A Two-Faced Coin What benefits a ‘part’ but devastates the ‘whole’ is ultimately detrimental to all components of the entity. A government policy that benefits one group of society while undermining the economy as a whole is destined for failure. To understand economics all interactions among all groups must be accounted for; the [...]
This entertaining video focuses on the views of well know economist Hayek on the Boom and Bust cycles.
Quantitative easing. The irony of such a concept is that to the uninitiated in economics, quantitative easing would be perceived as something good for our system, when in reality it undermines our economy by preventing it to function as a free market. A quantitative easing program is but a more sophisticated way of saying “money [...]