Comments on: Should the US Switch from the Dollar to Monopoly Money? http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm We dividend our ad money to you. Thu, 11 Mar 2010 05:51:52 -0800 http://wordpress.org/?v=2.9.1 hourly 1 By: Brian http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48809 Brian Sat, 06 Oct 2007 11:27:53 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48809 Ignatius raises an interesting issue vis-a-vis the value of Monopoly money compared to the US$. I submit, however, that relative to the US$ Monopoly money circa 1950 has actually increased in value. Do a Google for vintage Monopoly money to see what I mean. Ignatius raises an interesting issue vis-a-vis the value of Monopoly money compared to the US$. I submit, however, that relative to the US$ Monopoly money circa 1950 has actually increased in value. Do a Google for vintage Monopoly money to see what I mean.

]]> By: Fred http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48776 Fred Sat, 06 Oct 2007 06:02:57 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48776 The challenge is the initial currency exchange during the changeover. If $100 in Monopoly money in 1950 is worth $100 today, US$100 dollars in 1950 has only US$12.24 in purchasing power today. So US$8.17 dollars needs to be exchanged by the government for every $1 of Monopoly money. As the former is quite nicely printed on special paper by the Federal Reserve while the latter is printed by a toy company, many might object. The challenge is the initial currency exchange during the changeover. If $100 in Monopoly money in 1950 is worth $100 today, US$100 dollars in 1950 has only US$12.24 in purchasing power today. So US$8.17 dollars needs to be exchanged by the government for every $1 of Monopoly money. As the former is quite nicely printed on special paper by the Federal Reserve while the latter is printed by a toy company, many might object.

]]> By: Economics Blog : Secondary Sources: Bail Outs, Europe's Left, Monopoly http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48669 Economics Blog : Secondary Sources: Bail Outs, Europe's Left, Monopoly Fri, 05 Oct 2007 14:25:33 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48669 [...] Should the U.S. Use Monopoly Money: The Long or Short Capital blog asks a humorous question: “Should the US Switch from the Dollar to Monopoly Money?” It notes that price of Boardwalk hasn’t changed in 57 years, while the U.S. dollar has seen an 87% decline in concurrent purchasing power. “Not only would the switch to monopoly provide the US with a more stable currency, but it would also grant the Fed even further control over the economy by enabling them to set the “house rules.” By determining the “Free Parking Rules” and financial outcomes from such events as “rolling snake eyes” and “landing directly on Go”, the Fed could steer the economy with even greater precision.” [...]

]]> By: chris http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48658 chris Fri, 05 Oct 2007 12:42:10 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48658 I don't know if Boardwalk is a good asset to measure whether Monopoly money holds its purchasing power. Although the absolute number of Monopoly dollars required to purcase Boardwalk has not changed, it may be that due to the decline of Atlantic City in the last 57 years, the value of Boardwalk and a Monopoly dollar have simply declined in value at the same rate. Have you walked around Atlantic City lately? I don’t know if Boardwalk is a good asset to measure whether Monopoly money holds its purchasing power. Although the absolute number of Monopoly dollars required to purcase Boardwalk has not changed, it may be that due to the decline of Atlantic City in the last 57 years, the value of Boardwalk and a Monopoly dollar have simply declined in value at the same rate. Have you walked around Atlantic City lately?

]]> By: Arbitrageur http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48565 Arbitrageur Thu, 04 Oct 2007 23:59:08 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48565 Charlie McDanger is onto something. I propose a fixed lap dance price to floating USD/EUR rate swap derivative. Charlie McDanger is onto something.
I propose a fixed lap dance price to floating USD/EUR rate swap derivative.

]]> By: deloitte and toosh http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48388 deloitte and toosh Wed, 03 Oct 2007 17:23:51 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48388 the lemons limes first ever longorshortpost makes a comeback? the lemons limes first ever longorshortpost makes a comeback?

]]> By: TMFDitty http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48383 TMFDitty Wed, 03 Oct 2007 16:11:11 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48383 >>We are still long limes, short lemons >>We are still long limes, short lemons

]]> By: DealBreaker.com http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48250 DealBreaker.com Tue, 02 Oct 2007 21:23:10 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48250 <strong>Write-Offs: 10.02.07...</strong> $$$ Why Blackstone is a buy [Fortune] $$$ Should the US Switch from the Dollar to Monopoly Money? [LoSC] $$$ Morgan Stanley Cuts 600 Jobs in Home-Loan Business [Bloomberg] $$$ Sotheby’s (BID)...... Write-Offs: 10.02.07…

$$$ Why Blackstone is a buy [Fortune] $$$ Should the US Switch from the Dollar to Monopoly Money? [LoSC] $$$ Morgan Stanley Cuts 600 Jobs in Home-Loan Business [Bloomberg] $$$ Sotheby’s (BID)……

]]> By: Sir Gay Federov http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48232 Sir Gay Federov Tue, 02 Oct 2007 19:24:09 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48232 The only way that picture could be any more perfect is if it said "Eracism" underneath. The only way that picture could be any more perfect is if it said “Eracism” underneath.

]]> By: Mr Juggles http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48230 Mr Juggles Tue, 02 Oct 2007 18:54:16 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48230 We are still long limes, short lemons http://longorshortcapital.com/fruitlimelemonpairtrade.htm We are still long limes, short lemons

http://longorshortcapital.com/fruitlimelemonpairtrade.htm

]]> By: Poseidon http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48229 Poseidon Tue, 02 Oct 2007 18:52:27 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48229 CMSD2, Limes definitely have a premium over lemons due to strategic relationship with Corona. CMSD2,
Limes definitely have a premium over lemons due to strategic relationship with Corona.

]]> By: cmsd2 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48225 cmsd2 Tue, 02 Oct 2007 18:19:21 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48225 Are you sure the correct hedging ratio is 2? Anyway I couldn't find much data on the price of tinned tomatoes. But whole tomatoes in december 1980 in the average US city, would have cost you 66 cents per pound, compared with 1.64 dollars in 2006. That's a factor of about 2.48 (see bls.gov) This compares pretty well with the compounded effect of measured inflation in that same range: $2.45 using the Consumer Price Index $2.16 using the GDP deflator $2.40 using the unskilled wage $3.59 using the nominal GDP per capita $4.73 using the relative share of GDP (courtesy of measuringworth.com) Personally I reckon that a basket of fruit is a more appropriate hedging tool. No view on lemons versus limes though. cmsd2. Are you sure the correct hedging ratio is 2?

Anyway I couldn’t find much data on the price of tinned tomatoes.

But whole tomatoes in december 1980 in the average US city, would have cost you 66 cents per pound, compared with 1.64 dollars in 2006. That’s a factor of about 2.48
(see bls.gov)

This compares pretty well with the compounded effect of measured inflation in that same range:

$2.45 using the Consumer Price Index
$2.16 using the GDP deflator
$2.40 using the unskilled wage
$3.59 using the nominal GDP per capita
$4.73 using the relative share of GDP

(courtesy of measuringworth.com)

Personally I reckon that a basket of fruit is a more appropriate hedging tool. No view on lemons versus limes though.

cmsd2.

]]> By: richard roma http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-48193 richard roma Tue, 02 Oct 2007 12:41:26 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-48193 I think the US is aiming for parity with the peso given their hyper phobia of recessions. I'd suggest hedging every $10 in currency with 2 cans of Tomato soup. I think the US is aiming for parity with the peso given their hyper phobia of recessions. I’d suggest hedging every $10 in currency with 2 cans of Tomato soup.

]]> By: Methinks http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-47958 Methinks Mon, 01 Oct 2007 22:49:34 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-47958 I fail to see the problem. The 1970's were a swell time in American economic history. Or, at least that's what Paul Krugman keeps saying. Why wouldn't we want to revisit that idealic time when fewer people had jobs to stress them out so they could spend more time hanging out in short-sleeved, lime green polyester suits? I fail to see the problem. The 1970’s were a swell time in American economic history. Or, at least that’s what Paul Krugman keeps saying. Why wouldn’t we want to revisit that idealic time when fewer people had jobs to stress them out so they could spend more time hanging out in short-sleeved, lime green polyester suits?

]]> By: Charlie McDanger http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-47898 Charlie McDanger Mon, 01 Oct 2007 19:52:55 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-47898 I offer as contrary evidence the lap dance, which has remained steady at US$20 for many years. In fact, in 1980 twenty bucks would buy you a lap dance from a 110-lb. woman; today for that price you can procure a woman at least fifty percent larger. Inflation? Humbug. I offer as contrary evidence the lap dance, which has remained steady at US$20 for many years.

In fact, in 1980 twenty bucks would buy you a lap dance from a 110-lb. woman; today for that price you can procure a woman at least fifty percent larger.

Inflation? Humbug.

]]> By: W.C. Varones http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-47884 W.C. Varones Mon, 01 Oct 2007 19:06:02 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-47884 87% ? It's actually far worse than that. Look at the price of bread, milk, a house, gold. 87% is a bogus government CPI statistic. 87% ?

It’s actually far worse than that. Look at the price of bread, milk, a house, gold.

87% is a bogus government CPI statistic.

]]> By: Ignatius http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-47874 Ignatius Mon, 01 Oct 2007 18:23:31 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-47874 Good lord, imagine my embarrassment at going long Milton Bradley in my original comment. Little did I know. This reminds me of a most unfortunate day in 1998, when I inadvertently entered an order to buy 400 COMS, rather than the intended 400 QCOM. Sell, goddammit! Sell! Good lord, imagine my embarrassment at going long Milton Bradley in my original comment. Little did I know.

This reminds me of a most unfortunate day in 1998, when I inadvertently entered an order to buy 400 COMS, rather than the intended 400 QCOM.

Sell, goddammit! Sell!

]]> By: Poseidon http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm/comment-page-1#comment-47867 Poseidon Mon, 01 Oct 2007 17:53:09 +0000 http://longorshortcapital.com/should-the-us-switch-from-the-dollar-to-monopoly-money.htm#comment-47867 I see some significant leveraged arbitrage opportunities between Monopoly (orig Parker Brothers) and Life (orig Milton Bradley). Now are both rolled up to Hasbro; convergence is likely. However, Monopoly dollar has held value whereas Life dollar has paced with US dollar inflationary tendencies. I see some significant leveraged arbitrage opportunities between Monopoly (orig Parker Brothers) and Life (orig Milton Bradley). Now are both rolled up to Hasbro; convergence is likely. However, Monopoly dollar has held value whereas Life dollar has paced with US dollar inflationary tendencies.

]]>