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Zero Equilibrium Profile picture
Zero Equilibrium
@Zero_Analyticz
Macroeconomics || Markets || Fixed Income || Commodities. Views are Independent and Intellectually Genuine. DM for Academic & Non-Academic Research Assistance
Jan 17 • 13 tweets • 3 min read
Ludwig Von Mises The Quantity Theory 🧵 1:

The value of money originates partly (or chiefly) from its monetary function. In this he attacks Laughlin's theory which failed to account for the special characteristics of money.

Laughlin treated money as a paper that...
1/13 ...has value (especially the Rupee (between 1893 and 1899), and the Russian Rouble as token money convertible into gold and having it's value based on that possibility.

In this way he compares paper money to shares of concern, not currently paying any dividends...
2/13
Jan 16 • 8 tweets • 2 min read
Chapter II 🧵 3: The Applicability of Marginal-Utility Theory to Money:

Here Mises assesses the subjective valuation theory of money absent it's objective exchange-value.

A subjective valuation of money has not to do with its function as a medium of exchange,...
1/8 ...and all to do with its other properties and functions. Until the time of the work, there hadn't been a successful attempt at this.
2/8
Jan 16 • 13 tweets • 3 min read
Chapter II 🧵 2 The Determinants of the Objective Exchange-value or Purchasing Power of Money (The starting point for Money Valuation based on Objective Exchange-value):

Money's objective exchange-value must always be linked with its pre-existing...
1/13 ...market exchange-ratio with other economic goods. So a commodity cannot be used as money, unless prior to that it already "possesses an objective exchange-value based on some other use".

This would constitute the starting point of valuation based on...
2/13
Jan 16 • 12 tweets • 2 min read
Ludwig Von Mises Theory of Money and Credit (Chapter II: The Determinants of the Objective Exchange-value or Purchasing Power of Money 🧵 1):

The chapter starts of with an establishment of "the dependence of Money's Subjective Valuation...
1/12 ...on the Existence of Objective Exchange-value"

Price according to Mises Value Theory, is "a result of market interactions between commodities and price-goods."
Hence,l reiterating the subjective valuation of goods. My stance on this is clear by now...
2/12
Jan 15 • 14 tweets • 3 min read
Ludwig Von Mises Theory of Money and Credit (The Theory of the value of Money Part 2: Money's Use-value in early and Modern Monetary Systems):

Commodity money ceases to circulate in the hands of the final buyer who consumed it, so there were, in the early...
1/14 ...stages of money, "commodities which served as money, whose natural qualities precluded their employment as money for more than a short time".

In more modern times, Fiat, and credit money or even Commodities of which large quantities remains in circulation...
2/14
Jan 15 • 13 tweets • 3 min read
Ludwig Von Mises Theory of Money and Credit 2 (Chapter 1 [Part 1]: Theory of the Value of Money):

Mises begins by identifying the theory of the problems of money, and then differentiates between the Use value, if all forms of money. The former forms the first of a 2-part ).
1/12 The Problems involved in the Theory of the Value of Money:

Mises asserts that that theory of the value of money must account for the fundamental difference between the principles that govern the value of money and those which govern the value of commodities."

2/12
Jan 14 • 18 tweets • 4 min read
Ludwig Von Mises Theory of Money and Credit Chapter 6 - The Enemies of Money:

Mises begins with the establishment of the inevitably of indirect exchanges stating that, "as division of labor and differentiation of wants are extended,...
1/8 Image ..indirect exchange.becomes inevitable" the evolution of indirect exchanges then leads to the employment of a few or even one particular commodity asas a media of exchange.
But when there is no exchange of any sort (eg an isolated household) the media of exchange is unknown.
2/18
Jan 12 • 16 tweets • 3 min read
Ludwig Von Mises Theory of Money and Credit Chapter 5- 'Money as an Economic Good' (Part 1).

Here economic goods are characterized in two broad forms; consumption goods and production goods. Money according to Mises is neither a consumption or production good.
1/16 And "if we regard the two-fold division of money as exhaustive, we shall have to rest content to putting money in one group or the other". This is the position of economists who put money as a production good.

2/16
Jan 11 • 7 tweets • 2 min read
Money and the State (Part 2: Influence of State on Monetary Systems):

"State activity in the monetary sphere was originally restricted to the manufacture of coins", however the influence of the state gradually extended beyond just controller, legislator and judge.
1/7 Image The state, Mises reiterated , can only supply money but cannot force it's acceptance into commercial practice. However he conceded that the states influence on commercial usage has increased because of the states importance as an economic agent has also increased.
2/7
Jan 9 • 13 tweets • 3 min read
Commodity Money, Fiat Money and Credit Money (Ludwig Von Mises):

Mises' argues that it is mistake to deal economic problems according to legal criteria" stating that; "economics must construct it's own terminology from other objects that are not money".

1/13 Image "A piece of paper that is specially characterised as money by the imprint of some authority is in no way different from another piece of paper that has received a similar imprint from an unauthorized person".

By this he meant that the only difference between...
2/13
Jan 3 • 4 tweets • 1 min read
Ludwig's rejection of Money as a store of value is weird to me. And his definition as just another commodity whilst stating that the utility of said commodity as a medium of exchange increases it's price beyond the perceived use-value essentially appreciates its uniqueness.
1/4 The value of the chosen media of exchange is indeed a store of value, which is first objective, (how do others value this?) before being "subjective". By observation the more marketable commodities are identified according to popular demand, which the informs the...
2/4
Jan 1 • 10 tweets • 2 min read
Austrian School vs. Post-Keynesian Economics (Part 1 Austrian Proposition):

Austrian Economics: Emphasizes individual choice, subjective value, and spontaneous market processes. It critiques government intervention and central planning.
#macro #econtwitter #Economics
1/10 Image 1. Subjective Value Theory: Prices are determined by individual preferences, not intrinsic value (Mises, Rothbard).

This neglect cost considerations as all producers are assumed to be price takers in all markets—here price elasticity doesn't matter.

2/10
Dec 24, 2024 • 11 tweets • 2 min read
Global Financial Markets Outlook (Per Asset Class) 2025 (Part 2: Key Macroeconomic Influences)

Here we present the implications of developments in the US and China for global assets discussed in part one.

1/10 Image United States:

The Federal Reserve’s emphasis on inflation control remains pivotal. As stronger-than-expected year-end growth and higher 2025 projections signal more #USD strenght.

This introduces challenges for markets reliant on weaker currency dynamics.
2/10
Dec 14, 2024 • 8 tweets • 2 min read
It would seem you'd not been following my monetary policy threads or understanding them- it is expected, economics is complex and one has to be if a certain IQ to grasp it.This is probably why you are...
1/8 ...confused. Again I'd be more than happy to lecture you and the public.

In a an economy absent structural inefficiencies in the industrial and financial sector (where the risk premium priced into yields is low), MPR is the major tool for stabilizing prices.
2/8
Dec 14, 2024 • 11 tweets • 3 min read
DEAR, ARINZE

Thank you so much for this feedback!
I ALWAYS relish a teachable opportunity, as always. As this handle exists to share knowledge and I know if not you someone else would benefit

Lets Kick-off the lecture:

1. Nigeria need to focus "POLICY" on FDI,...
1/11 Image ...not "MONETARY" Policy, as it is ineffectual & not effective at drawing in Fixed Capital investments (besides it's role of enhancing exchange rate and price stability.)

Now this is why your line of thought is theoretically flawed by ALL Schools of thought.

2/11
#EconLecture
Dec 14, 2024 • 10 tweets • 2 min read
RE-EVALUATING @cenbank 's MONETARY EASING PROSPECTS: AN INNOVATIVE STRATEGY

After a deeper reflection in the quote thread from our last article on the above, we recognize a possible need to ease benchmark rates to reduce the cost of much needed FPIs into government...
1/10 securities and stabilize FX inflows in the long-run —and by extension Exchange rates.

MPR as a Debt & FX Management Strategy:

Recall our view that based on the the unique characteristics of the Nigerian economy, CRR is the main instrument to address tight...
2/10
Dec 11, 2024 • 10 tweets • 3 min read
Following @cenbank Governors hinted at the possibilities of an end to monetary tightening measures, stating in his keynote address at the Chartered Institute of Bankers of Nigeria (CIBN) dinner,...
1/10

#Naira #CBN #MonetaryPolicy201 ....that interest rates may soon decrease sighting expected easing inflationary pressures.

Given that the core fundamentals driving inflation are yet to be fully addressed (food & energy prices and FX Supply), the statement seems overly optimistic. As Eve though...
2/10
Dec 8, 2024 • 10 tweets • 3 min read
NAIRA WATCH: ZERO EQUILIBRIUM TAKE ON #USDNGN AND WHY YOU SHOULD HOLD. 🧵

RECALL the quote post of Naira strengthening against the Greenback (and Sterling as well) in divergence to a relatively stronger #USD v major reserve currencies.

This we see as a correction...
1/10 Image ....as opposed to strength as the #Naira is just getting around it's "fair value" of N1500/$1 (+/- 20%).

#USDNGN closed at N1,495.51/$1 on the NAFEM on Friday December 6 and currently trades at approximately N1,516.62/$1 at BDC Rate.

The spread has also narrowed...
2/10
Dec 7, 2024 • 8 tweets • 1 min read
NAIRA GAINS V USD TO N1500/$ RANGE:

From the Nigerian Apex Bank exchange rate portal data, the #USD crashed to N1,567 in the Nigerian Foreign Exchange Market (NFEM) window on Thursday, November 5.

Thursday's exchange rate represents a 2.5% or N41 appreciation from...
1/7 ...Wednesday's close of N1,608/$1.

Effects:

This has also led to the Apex Bank crashing dollar rate as Naira recorded gains in the last 24 from Wednesday through Thursday. Translating to an immediate cut reduction for importers.

2/7
Nov 22, 2024 • 7 tweets • 3 min read
CRUDE AT THE US OPEN.

Crude has increased further contrary to our expectations of a mid-day bearish movement on the Open.

BRENT: $74.31 (Frame 1)|$71.37 (3)
WTI: $70.08 (2) | $67.20 (4)
AVG: $72.11 |$69.28
SPREAD: $4.05 | $4.17
1/6 Image
Image
Image
Image From the above we can see a stronger bid for oil 🛢️ relative to last week.

- The Spread widening from last weeks close represents a larger rise in BRENT (+4.17) relative to WTI (+3.87%). However spreads have stayed above $4 resistance.

- The average of both benchmarks...
2/6
Nov 21, 2024 • 7 tweets • 2 min read
A CRYPTOCURRENCY TO GUARD AGAINST NAIRA DEVALUATION & INFLATION:

We barely talk about crypto, and instead of doing a full paper, we make observations on a #USDollar linked crypto — #USDC .

What is USDC?
Is a stable coin that is pegged to the value of the US Dollar.
1/7 Image Each #USDC is backed by reserves which comprise of #USD and Short-term USD bonds. It is also used for payments.

With a ratio is 1:1 reserves assets backing crypto, #USDC moves with the USD. As such, it is not expected to rise exponentially against the dollar or fall below.
2/7