Most people understand the basics of economics. Recently there has been a worldwide glut of oil and so there was competition among producers that led to the oil price falling to below $50 a barrel which meant many producers were selling at a loss. Supply and demand largely dictate prices but in the case of oil, we also had to look at how much oil was stored. It will take a while before those stocks are deleted. When oil stocks are low then the oil price could soar to new heights again.
Basic economics tell us that supply and demand dictate prices. The current over-supply of oil has reduced the price to under $50 a barrel but is this rule always true and what drives demand? If everyone gets a pay rise, demand is increased but where does the money come from? All money comes from central banks, of course, and so it is the central banks that create demand by printing money.
If you ask 100 people what colour the grass is , they will probably all say green. There can be variations depending on what language they speak and their culture. We all live in the same world, but our view of it, our reality; can be different. Institutions affect our view of reality and shape our view of the world.
I have some qualifications in electrical science, but you don’t really need to understand electricity to switch a light on. Press the switch and the light comes on. You don’t even think about what’s happening inside the switch, cables or power station. You take all that for granted. We take too much for granted in economics and that’s why we don’t understand it. (more…)
by Fairy Dharawat
As global brands market their brands in new locations with customized marketing strategies in different retail formats to reiterate their strong brand equity, there is a lot of learning for the ones starting out a new business venture these brands can provide which uses economics.
but I know a bit about relativity…
If I’m driving down the the motorway doing 70 and someone whizzes past me; I know he’s going relatively faster than I am! Faster, slower; bigger, smaller; higher, lower; it’s all relative. Einstein understood that. He probably understood economics too. Economics is relative; some prices are high, some low…
In the UK, the Chancellor made his Autumn economic statement yesterday. Will the economy get better or worse as a result? It seems we are going to see more austerity and so it will probably get worse. People will have less money to spend and that will be lower sales for retailers and service providers.
Imagine living in an English country village, surrounded by farms where all the fresh food comes from. You can go to the local farm market in the village and buy fresh food from lots of different farmers. You would probably shop around to get the cheapest meat and vegetables. You might eat whatever is in season and take advantage of availability and low prices. When there was a glut of apples, because of a good harvest. You would be able to buy lots to make chutney and apple pies.
In Victorian England, children tended to have a much more practical education. They did mathematics, but it had practical implications. They had to calculate the yield on government bonds for example, so it was as much a financial education as a mathematical one. It was during the industrial revolution and they also needed to be educated to understand things that were relevant at the time.
I had an email the other day, with the above TalkTalk logo at the top and asking me to log in and update my credit/debit card password. It was an obvious scam, but because I use TalkTalk, it got my attention. When you look at the webpage, you are actually downloading it and the picture; but that picture isn’t on my server. I’ve linked to the same server as the scammers did. It’s that easy to do a scam email. I have also had the usual scam emails trying to get my bank details this week.
I went to Aldi in search of bargains again this week. I usually go there first but went on the way home forgetting they closed early. You really need plenty of time to search for bargains and 10 minutes wasn’t enough. I still got chicken and eggs at a better price than the larger supermarkets.