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The anti-inflation pivot of 2022

adamtooze.substack.com

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Re: The anti-inflation pivot of 2022

#161

Post by throwawaymaths »

JPKab wrote: post #145
adamc wrote: post #128

Earlier quoted context omitted.

He has a book out I'm reading. Good so far: https://www.audible.com/pd/The-End-of-the-World-Is-Just-the-...

Great book. I used to work in the Pentagon, and while we never took Zeihan's talks without a grain of salt, directionally he tends to be very accurate. Nations like China which lack a culture of immigration have extremely predictable demographic booms and busts, and Zeihan is spot on with those. He also hits on the reality of how dependent most nations, especially China, are on imports that pass through oceanic shipp…

To be fair the us navy hasn't completely detached in the way that he expects... Yet. Shipping harassment hasn't appreciably gone up... Yet. It's also possible that cargo ships will arm themselves against pirates, which will increase the cost of shipping but maybe not as much as the most dire predictions.

Re: The anti-inflation pivot of 2022

#162

Post by Bombthecat »

UncleOxidant wrote: post #90
spywaregorilla wrote: post #78

Earlier quoted context omitted.

Pretty much. I think he's too eager to write off certain things to paint a wholly American picture, but he's generally got it right. The China story is not as clear. But the Europe picture is pretty plain. America is gonna eat it's lunch.

I'm not sure we want to (or intend to) eat Europe's lunch - we'd like a fairly strong Europe. But yeah, for now Europe's lunch will be eaten.

Europe missed the train and train doesn't reverse when missing the station..

Energy and infrastructure are the venes of Europe which clocked and overstretched to the max. Something will need to give and it already begins by small bakeries closing and more to follow..

It wont end well. I don't believe we will have any growth in Europe for the next 3 years.

Who is going to invest in Europe if energy is literally unpredictable and expensive?

Re: The anti-inflation pivot of 2022

#163

Post by AnimalMuppet »

A4ET8a8uTh0 wrote: post #68
jmyeet wrote: post #8

Here's the lesson I want people to learn: we had 40+ years of stagnant real wages (overall; there are exceptions). What happened in the pandemic was: 1. People realized going into an officce to work was unncessary and even anachronistic for many jobs; 2. Employers like employees in the office as a form of control; 3. Employers made short-term decisions to lay off huge amounts of people (even after taking PPP loans fo…

I will admit that to me this pandemic was eye opening in several different ways. One thing that surprised me is how lazy both management and propaganda machine in US is these days. They ( management ) have gotten so used to the idea that all they have to do is to hint at layoffs and people will immediately be motivated to do the work that they forgot how to do anything else ( the phrase I heard used to describe the s…

> And now policy makers are openly discussing saying "Lets crash the economy so that companies can keep their leverage."

Where have you seen policy makers openly discussing this? So far, it hasn't been open enough for me to see it...

Re: The anti-inflation pivot of 2022

#164

Post by conductr »

groby_b wrote: post #138
spookthesunset wrote: post #120

Earlier quoted context omitted.

> rumors of the end of the pandemic are greatly exaggerated. Only if people are stupid enough to repeat the last two years of nonsense. Take away all the fear mongering and testing and you probably wouldn't even notice covid was a thing. You'd get sick like you always do and just shrug it off as "that thing that was going around" like we all did in 2019...

It is the (#2/#3/#4 depending on study) leading cause of death. We're currently at around ~150K dead/year - about 5 times the average rate of flu, about 3 times a really bad flu year. It has significantly affected workforce participation, with a large disability burden. You'd notice. Unless you're somewhat dense.

Not that I like it but, I happen to think it's just a new normal as well and if everyone starts behaving as if it's normal then the impact on global economics when compared to a similar period should be rather normal. Continuing lockdowns and other things that impact supply chains/production are examples of behaving like it's not normal. They will likely continue to some degree despite my opinions.

Re: The anti-inflation pivot of 2022

#165

Post by eli_gottlieb »

dragontamer wrote: post #35
ch4s3 wrote: post #23

Earlier quoted context omitted.

You know high inflation makes it worse to be poor right? Especially core inflation.

Everything is bad for the poor though. Rising rates fixes inflation, but reduces employment. As it turns out, unemployment is bad for the poor. Lowering rates improves employment, but comes with inflation risks. As it turns out, the poor also hate inflation. Screwed if you do, screwed if you don't. Dual mandate says that the Fed aims for as good employment as possible, while also aiming at a targeted 2% to 3% inflati…

>There's no amount of economic policy you can do to predict a war.

You can't predict a war, but you can secure your supplies of basic commodities against it, preferably by producing them domestically.

Re: The anti-inflation pivot of 2022

#166

Post by spywaregorilla »

bryanlarsen wrote: post #136
spywaregorilla wrote: post #123

Earlier quoted context omitted.

Pretty poorly on food security. Energy situation won't be great. I would expect india to supplant China as the bogeyman over the next few decades

Wouldn't that be great? America can't seem to function without a bogeyman. The world would be so much a better place if the bogeyman was a democracy like India instead of China or Russia. Shift that Overton window!

My comment largely comes from India looking more authoritarian by the day, not to mention playing both sides of the Ukraine invasion.

Re: The anti-inflation pivot of 2022

#167

Post by synu »

Analemma_ wrote: post #134
kansface wrote: post #108

Earlier quoted context omitted.

Interesting. Do you know why mortgages in Canada are so different from the US? They seem much more risky on the buyer’s side.

Nobody but the United States has long-term fixed rate mortgages: they're horrible for lenders because the lender has to assume all interest rate risk. The reason they exist in the US is because the government acts as a backstop due to pro-homeownership politics, but it causes a bunch of market distortions that are made invisible to American borrowers.

We have them in the Netherlands.

Re: The anti-inflation pivot of 2022

#168

Post by xxpor »

nus07 wrote: post #107
spywaregorilla wrote: post #78

Earlier quoted context omitted.

Pretty much. I think he's too eager to write off certain things to paint a wholly American picture, but he's generally got it right. The China story is not as clear. But the Europe picture is pretty plain. America is gonna eat it's lunch.

How does India do in all this? Their software development salaries in tier 1 cities are close to 100k or more. Lots of friends going back .

100K USD? That's wild. If you look at the GDP per capita ratios, that's like a dev in the US making $3.3 million

Re: The anti-inflation pivot of 2022

#169

Post by ketralnis »

spookthesunset wrote: post #120
groby_b wrote: post #111

Earlier quoted context omitted.

... assuming there are no further variants, and hand-waving long covid away, sure, it's settled. I think we'll find that just like reports of Mark Twain's death, rumors of the end of the pandemic are greatly exaggerated.

> rumors of the end of the pandemic are greatly exaggerated. Only if people are stupid enough to repeat the last two years of nonsense. Take away all the fear mongering and testing and you probably wouldn't even notice covid was a thing. You'd get sick like you always do and just shrug it off as "that thing that was going around" like we all did in 2019...

This is the problem of mostly successfully preventing fires or preparing for floods. "It wasn't that bad" because it was handled, but since that was handled by somebody else it's invisible to you

Re: The anti-inflation pivot of 2022

#170

Post by xxpor »

sleepdreamy wrote: post #132
myth_drannon wrote: post #88

Earlier quoted context omitted.

It's not only about being underwater on mortgages, but having your morgtage payment double (and maybe tripling soon...). Reddit is full of panicking homeowners who are starting to straggle with payments. This will have a wide effect on the whole economy because any discretionary spending will evaporate.

The allure of home ownership in America is the fixed mortgage rate among other things. (Rent goes up each year, without question). I purchased a home at the start of this mess with an 2.6%. Right now it's hovering around 6%. I would say I MASSIVELY lucked out. Does Canada not fix the rate? I am confused -

No, the US is the outlier with the 30 year fixed rates. Canada not only has variable rate mortgages, but instead of the rate just adjusting, they essentially have 5 year mortgages, with a balloon payment at the end. If you can't roll it over into a new load (say because your debt to income is now too high), you're screwed.
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