Tuesday, June 23, 2015

Q&A - 23/6

Joseph Stiglitz

It is not money that makes the world go around, but credit.


Two posts - Money and Credit Theory of Money.

Especially recommended is the video at the end of the first post.


Why do people look at growth to judge a company's success? Can't they make do with what they have?

It is a signal

Growth, if not phony, can indicate the company's structure for that point in time is good - otherwise they would not have been able to jump to that next phase, stretching themselves.

Starbucks grows, I see new stores in Germany, and you peer inside you see why - free Wifi, good customer service.. Few years back they would not accept ATM bank cards, I remember bitching about it to the baristas a few times -surely others did as well-, then boom; SB started accepting bank cards in a matter of weeks. There is another coffee store chain here, Einstein Cafe, their Wifi is cumbersome to use - hourly, u enter some user/pass combo, given to customers on a paper card - they nag customers if they don't "buy anything" for a long time, and they ask you to buy something for another hour of Net use. And surprise - Einstein is not growing.

(I do like their rucola cheese baguette though... Mmmmm.. rucola cheese..)

Q&A - 21/5

Question How do you empirically prove interest rates do not cause increase or decrease in GDP growth? There is a test for that Data ,...