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The anti-inflation pivot of 2022

adamtooze.substack.com

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Re: The anti-inflation pivot of 2022

#261

Post by Balgair »

nie100sowny wrote: post #34

> A generation of young people whose education was blighted by COVID lockdowns, will face a closed labour market. But shortly after, when all inefficient companies bankrupt, they'll wake up in the booming economy, finding places in perspective businesses. Crisis is good for the economy in the long term. I only worry that governments won't allow young trees to grow after the forest's fire.

Whenever I see takes on the long term status, I'm reminded of the casino scene in The Big Short. Though it may be good in the long term, the short term can be pretty grim for a lot of people.

https://www.youtube.com/watch?v=II4Ct2n5FiE

The pertinent part is at ~2 minutes.

Re: The anti-inflation pivot of 2022

#262

Post by jelling »

spywaregorilla wrote: post #30

I think the US (and Canada) just needs to ride the tide and let all the other boats sink. Pretty much everyone else is screwed. I think people are underestimating the second order effects of the US still having stable energy and farming capabilities. We'll see more stuff get done here and less stuff done elsewhere. Unemployment will be great here no matter what we do really. It will suffer in other countries. Though…

Re: lowering interest rates, China has the largest foreign currency reserves in the world at over 3 trillion USD. So where most sovereign currency issuers can’t print money without reducing the value of their currency - or increasing interest rates to compensate - China can defend the value of their currency by purchasing with it foreign reserves.

I’m not an economist so I can’t tell you how far they can go with this. But they have an atypical margin for error correction re: interest rates / money creation.

Re: The anti-inflation pivot of 2022

#263

Post by ketralnis »

spookthesunset wrote: post #221
ketralnis wrote: post #169

Earlier quoted context omitted.

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

“If we did it right you’ll never even notice we did a thing” also happens to be an excellent way for any sleazy politician or “expert” to deflect any questioning.

It could be but does that happen often? I almost never see sleazy politicians claiming that, it's almost always taking credit for a great economy (that was on a trajectory before they took office) or promising some amazing future thing (that they don't actually do). I can't think of hearing a single "we prepared for this so it wasn't a problem", true or not

Re: The anti-inflation pivot of 2022

#264

Post by throwawaymaths »

chernevik wrote: post #172
throwawaymaths wrote: post #161

Earlier quoted context omitted.

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.

I suspect the point of "oceanic shipping lanes they have no ability to control or secure without the US Navy" is "shipping lanes they cannot secure FROM the US Navy". There is no way for a cargo ship to arm itself against submarines.

I think the outcome of the US navy torpedoing civilian ships of a national adversary is highly unlikely, unless 1) we were actually at war with them or 2) they are doing something generally accepted to be illegal -- like Chinese fishing boats turning off transponders and fishing in us territory. or 3) sanctions running

The only way I see the landscape changing meaningfully in the direction you suggest (cargo ships going up against seafarers they are not able to defend themselves from) is if letters of marque were reinstated. At least one proposal has been floated -- and when we all stop laughing about it I grant that it might become a thing

Re: The anti-inflation pivot of 2022

#265

Post by ethbr0 »

throwawaymaths wrote: post #264
chernevik wrote: post #172

Earlier quoted context omitted.

I suspect the point of "oceanic shipping lanes they have no ability to control or secure without the US Navy" is "shipping lanes they cannot secure FROM the US Navy". There is no way for a cargo ship to arm itself against submarines.

I think the outcome of the US navy torpedoing civilian ships of a national adversary is highly unlikely, unless 1) we were actually at war with them or 2) they are doing something generally accepted to be illegal -- like Chinese fishing boats turning off transponders and fishing in us territory. or 3) sanctions running The only way I see the landscape changing meaningfully in the direction you suggest (cargo ships go…

Given today's low cargo crew counts, it isn't crazy to think about the calculus of sinking cargo ships vs fighting an actual war, in order to prove ones seriousness.

Say, because Taiwan was being invaded?

And in the form of a blockade, of course.

Re: The anti-inflation pivot of 2022

#266

Post by elcritch »

seibelj wrote: post #142
howmayiannoyyou wrote: post #62

Earlier quoted context omitted.

> I think the US (and Canada) just needs to ride the tide and let all the other boats sink. Look at USD FX rates. The US may be able to purchase resources and goods abroad at more favorable exchange, but who can afford to buy US exports as the USD rockets skyward? And what is the logical follow-on to unobtainable USD units of trade? Substitutes that China, for example, are more than delighted to support if it means t…

All the trinkets that could be offshored were done already. What the US manufactures now is high-end (chips) or protected by tariffs (cars). A lot of virtual stuff like software and call centers. I think we've hollowed out so much there isn't really much left to offshore.

Don’t forget the US still excels at high speed pizza delivery. ;)

Odd but that Snowcrash reference seems oddly prescient given the rise of Uber, Instacart, GrubHub, etc. Not quite pizza delivery but similar genres.

Re: The anti-inflation pivot of 2022

#267

Post by ls15 »

spywaregorilla wrote: post #30

I think the US (and Canada) just needs to ride the tide and let all the other boats sink. Pretty much everyone else is screwed. I think people are underestimating the second order effects of the US still having stable energy and farming capabilities. We'll see more stuff get done here and less stuff done elsewhere. Unemployment will be great here no matter what we do really. It will suffer in other countries. Though…

> farming capabilities

Let's just hope that the upcoming megadrought (worst in 1,200 years) in the Western US does not get too dry.

Re: The anti-inflation pivot of 2022

#268

Post by Aerroon »

ethbr0 wrote: post #265
throwawaymaths wrote: post #264

Earlier quoted context omitted.

I think the outcome of the US navy torpedoing civilian ships of a national adversary is highly unlikely, unless 1) we were actually at war with them or 2) they are doing something generally accepted to be illegal -- like Chinese fishing boats turning off transponders and fishing in us territory. or 3) sanctions running The only way I see the landscape changing meaningfully in the direction you suggest (cargo ships go…

Given today's low cargo crew counts, it isn't crazy to think about the calculus of sinking cargo ships vs fighting an actual war, in order to prove ones seriousness. Say, because Taiwan was being invaded? And in the form of a blockade, of course.

But isn't sinking a civilian vessel itself an express path to war? The RMS Lusitania and the US's entry into WW1 spring to mind.

Re: The anti-inflation pivot of 2022

#269

Post by hakfoo »

WalterBright wrote: post #153
PKop wrote: post #139

Earlier quoted context omitted.

Neither does no planning and complete decentralization (no national industrial policy, no trade barriers, letting important supply chains move out of your control or even into the borders of your adversaries).

Actually, the chaos of the free market works very, very well at producing the most prosperous countries ever seen.

Correlation may not imply causality here.

Many of the most successful free market economies embody the concept of "was born on third base and thinks he hit a triple."

The United States and Canada had relatively easy access to territorial expansion, which offered them huge amounts of fertile, temperate land and almost any natural resource needed. They also started with a high-immigrant and relatively educated population.

South Korea got to build their economy late enough to be relatively unburdened by legacy costs. They also had a Western world more than willing to ignore a series of presidents-for-life, domestic crackdowns, and incestuous government-industry relationships as long as they kept Kim Il-Sung up in the attic.

Even Singapore had the advantage of being ideally located for trade purposes.

With those benefits, was the free market necessary to unlock their success?

Conversely, if you dropped (say) the American Founders in 1917 Moscow or 1948 Peking, would they do any better?

Re: The anti-inflation pivot of 2022

#270

Post by edgyquant »

mdcds wrote: post #241
edgyquant wrote: post #230

Earlier quoted context omitted.

Interest rates are risk free premiums. If inflation is less than them they are profitable this people move their capital into “risk free assets” like bonds, loans etc that are based on that rate. If the risk free rate is less than the inflation rate then people move their cash into higher risk assets like stocks otherwise they lose out to inflation in the long run. This is said to kick start the economy etc.

Which people? Def not mom-and-pop investors who use pension funds and wealth managers/advisors to keep their investments in (usually) diversified portfolios.

Those mom an pops own ETFs and index funds which definitely allocate for risk based on interest rates and inflation.
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