AboutWarren D. Miller, CFA, ASA, CMA, CPA Expertise My in-depth knowledge of economics is confined to three sub-disciplines: Austrian economics, industrial organization, and evolutionary economics. Other questions dealing with macroeconomics, the traditional neoclassical paradigm, labor economics, environmental economics, agricultural economics, health economics, and so on should go to those who have the appropriate expertise.
N.B.: I DO NOT ANSWER QUESTIONS MARKED 'PRIVATE' because I believe that knowledge should be shared, not hoarded. I also believe that such questions are likely to come those trying to cheat. Similarly, as one who was a full-time academic for half a decade, I can recognize test and homework questions several time zones away. Therefore, please do not demean yourself by submitting such questions to me. Those who do so are cheating, pure and simple, and I WILL call you out publicly if I believe you are doing so. I have a zero-tolerance policy where cheating and dishonesty are concerned.
In addition, please don't imitate the businessman who posted a request for help in August 2008. He expressly denied that he was seeking "investment advice" and said that his query was for, and I quote, "educational and informational purposes." Later, he allowed as how his questions related to the possible purchase of a $500K piece of equipment. I said I thought he had misrepresented himself. Bottom line: high-end business consulting is how I make my living. I am the sole support for my family. Please respect that fact and don't try to get for free what our clients pay for. If your company is big enough to have a sophisticated problem, it's big enough to pay for the kind of expert advice we provide. Beckmill Research, LLC, is a 95-octane firm. We're small, but we've been at this for nearly 18 years. We know what we're doing.
Finally, please DO NOT ask for investment advice. I am not licensed to provide such advice. If you want such advice, check with your financial planner or other financial adviser.
Experience I work with Austrian economics (which is different in major respects from the traditional neoclassical model), industrial organization (which is about industry structure, conduct, and performance), and evolutionary economics (almost, but not quite, the economic analog of its biological counterpart) everyday in my work. I appraise closely-held businesses, provide exit-planning services, and offer high-level strategic analysis, advice, and clients to CEOs and owners of mid-sized businesses. Understanding, applying, and writing about these disciplines is an essential part of how I have made my living since 1993.
Organizations CFA Institute, Strategic Management Society, American Society of Appraisers, Institute of Management Accountants, Academy of Management, Culver Legion
Publications CFA Magazine, Strategic Finance, Valuation Strategies, Value Examiner, Journal of Advanced Property Economics, Harvard Business Review, American Fly Fisher, CFA Digest, CPA Expert, and Business Valuation Review, among others
Education/Credentials MBA - Oklahoma State (1991)
BBA - U. of Oklahoma (1975)
Chartered Financial Analyst designation (2006)
Accredited Senior Appraiser (2006)
Certified Management Accountant (1992)
Certified Public Accountant (1992)
Question When people earn money in other countries and bring them back to their own country does it fuel inflation? If no how this 'surplus' money is taken care of?
Answer Thank you for a most interesting couple of questions, Swapnil. Please allow me to make an assumption: the money they bring back to their own country is in cash.
If that is the case, then there is no impact on inflation because there is no effect on the money supply in the 'home' country (the one where they took the money to). If, for instance, a Mexican national takes U.S. dollars to Mexico, the money must be exchanged for pesos. That is like 'making change' - swapping a 100-peso bill for five 20-peso bills. There is no change in the Mexican money supply, so there is no inflationary impact.
I don't know what you mean by 'surplus money,' but I assume you're referring to money that the Mexican central bank did not have a hand in creating. I think 'surplus money' is a not-great phrase because it implies, at least to me, that the central bank can do no wrong and that if it is 'in control' of the money supply, everything will be fine. Well, I think the last years of the U.S. Federal Reserve System under Chairman Alan Greenspan provide ample evidence that central banks can do plenty of wrong. In fact, I can make a pretty good argument for the abolition of central banking. The problem with it is that central bankers ALWAYS miss their target. They either keep interest rates too low for too long (which is what Greenspan did, thus enabling the housing bust in the U.S. that has triggered 'The Great Recession' worldwide) or they prop them up for too long (resulting in slower economic growth, higher unemployment, and more misery for everyone). That's no reflection on Greenspan, per se. It is just a truism about the human condition: no single body can predict markets perfectly.
That is why markets should be left alone to function as only markets can. The more government intervention there is in markets, the greater is the uncertainty in those markets. They either stop functioning altogether or function poorly. We have seen first-hand examples of that in the U.S. this year with credit markets and banking. No one knows what on earth this nutty new Administration with its crooked Secretary of the Treasury ("TurboTax Tim" Geithner) will do next, so banks make few loans, despite being awash in unused cash. It's crazy.
That's probably more than you ever wanted to know, but that's my take on it. I hope I've been responsive to the questions you've raised. Please do me the favor of completing the rate-the-expert email you'll receive on the heels of this one. Your ratings and comments help me do a better job of helping folks like you who ask such interesting questions.
