Monday, December 12, 2011

12/12

Interest isn't the price of money, interest is the price of paying for something today that you don't have the money for today.

Economic profits are different than accounting profits. A profit or loss (a PRICE) tells us about where resources are going.

Losses are a VIRTUE of the system. Losses tells you that you are failing at what you're doing, you're inefficient at doing what you're doing.

If you don't have prices you get massive resource misallocation because you don't know how to be efficient, there are no cues to what the right way to allocate costs is.

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