You can see my reply at this post.
One of the things I wrote: But we learn things along the way. It seems that Krugman and Buffett are distinguishing between debt that is "owed to others" and debt that is "owed to ourselves." That may be something to explore later on.
I estimate that I know less than 1% of all that is going on with crude oil in the Bakken. With regard to natural gas, I know even less. And with regard to macro- and micro-economics, I know even less than what I know about natural gas. LOL.
If I recall correctly, I struggled with Economics 101 in college, and it should have been an incredibly easy course compared to some of the other courses I took. But I struggled with the concepts. I remember elastic demand and all the various curves and graphs. It seemed experts in economics made things more difficult to understand than necessary, but then again what did I know?
Back to distinguishing between debt that is "owed to others" and debt that is "owed to ourselves."
I was going to wait, look at that later, but curiosity got the better of me.
The internet is amazing. Who would have thought google would have returned 6,900 hits to a this search:
"debt owed to others" vs "debt owed to ourselves"
This is the screenshot:
From coursehero (subscription; which I don't have): Debts owed to others are referred to as liabilities while a debt owed to ourselves is referred to as capital. An asset therefore can legally be acquired in three ...
Why did the phrase "Ponzi scheme" just flash in front of my eyes?
So, now I begin to understand how Buffett and Krugman look at different kinds of debt.
This reminds me of double-entry bookkeeping, something I never understood until recently (again, because of the blog and reader feedback):
Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. The double entry has two equal and corresponding sides known as debit and credit.I will come back to this. Time to move on. But it does look interesting to see how Krugman and Buffett must think.
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The Word Page
ESL: English as a second language.
Up above I had a link for ESL-readers regarding "bs."
That reminded me of another challenge for all of us, not just ESL-folks.
When are insects with "fly" in their names spelled as one word, and when are they spelled at two words.
It's very, very simple.
The insect is spelled as one word if it is not a true fly.
The insect is spelled as two words if it is a true fly.
Example: the fly that that bites horses (and if it bites you, ouch) is a true fly and is spelled: horse fly.
Example: the gossamer-winged insect ubiquitous in swamps is not a true fly and is spelled as one word: dragonfly.
There may be exceptions buy my authority on this suggests there are no exceptions. We'll see, I'm sure.
By the way, for ESL readers, the insects spelled as one word are neither of the two words in its name: the dragonfly is neither a fly nor a dragon.
A butterfly is neither a true fly nor a dairy product.
The only thing I remember from my Accounting and Economics classes is "Figures don't lie but liars figure".
ReplyDeleteThat's about all I remember, but those elastic/inelastic curves killed me.
Deletewhy doesn't quantitative easing by central banks cause hyper inflation by now. Japan started this.
ReplyDeleteFor us the fed buys debt (MBS and treasuries) but it does not effect the money supply. Fed banks get enough interest income to keep it on their books. It stays within the banking system. In a fractional banking system it usually gets lent out to non-banks.
I started the Bakken blog to help me understand shale oil. I might have to start a "money" blog to help me understand the Fed. LOL. Thank you for taking time to write. A quick look at the headline articles in the WSJ yesterday (Friday) and the weekend edition suggest the US economy is doing fine. At least for the time-being.
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