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It’s mostly a demand shock, not a supply shock, and it’s everywhere

bridgewater.com

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Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#151

Post by jolux »

ODILON_SATER wrote: post #144
jolux wrote: post #137

Earlier quoted context omitted.

Nobody thinks inflation is a good thing ceteris paribus. The main questions are whether it’s better than the alternative, and whether it will be transient or not. “Any inflation at all is bad” is not a view held by any serious economist these days, especially not after the Fed has been below target for so long. I described Sahm and Krugman as dovish and I think that’s more than fair to people who disagree about what…

What evidence do you need? It's been already spelled out. High demand coupled with lagging supply, which does not have the capacity to adjust to new behaviors in the short and medium run. Especially if you consider the regulatory barriers, such as ramping up energy production. What little evidence do you speak of?

It’s clear that demand is up. What’s not clear is the argument at the end of this article, that this will lead to an inflationary cycle with no clear way out in the long run. This is what they claim is their opinion. It is not widely accepted, and I find it insufficiently supported. It’s mostly just tucked away at the end.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#152

Post by TheBobinator »

arthur5005 wrote: post #68

What this doesn’t really address is the why? Yeah there’s more money floating around, so perhaps more people want to spend it, but why? Most people aren’t getting materially more stuff or even need that much more stuff, consumption’s already god damn conspicuous. Maybe everyone can afford a jet ski all of a sudden? No, the stims didn’t really do /that/ kind of wealth expansion. To me, this still looks like the bullwh…

[flagged]

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#153

Post by rsj_hn »

RC_ITR wrote: post #85
arthur5005 wrote: post #68

What this doesn’t really address is the why? Yeah there’s more money floating around, so perhaps more people want to spend it, but why? Most people aren’t getting materially more stuff or even need that much more stuff, consumption’s already god damn conspicuous. Maybe everyone can afford a jet ski all of a sudden? No, the stims didn’t really do /that/ kind of wealth expansion. To me, this still looks like the bullwh…

What everyone is going to have a real hard time wrapping their head around for the next few years: We built a highly efficient economy for a set of behaviors. A shock happened that caused a lot people to change their behaviors (probably for a long time, since they've had 2 years of 'practice'). Our economy, which was built for those old behaviors (living in cities, riding public transit, eating at restaurants, travel…

> Natural gas extremely expensive? Let me introduce you to renewables, which btw are getting better and better every year.

Shutting down a natural gas pipeline that people depend upon just before winter, and then lecturing them about solar panels is not a good look. Artificially increasing the price of natural gas causes famines, it causes food and fertilizer to be more expensive, and it makes it hard for people to heat their homes.

But one thing it doesn't do is increase reliable renewable energy sources. Solar is not a replacement for home heating oil during the Michigan winters. And renewables do not spring instantly into existence out of suffering. Another thing it doesn't do is help the air, because instead of this pipeline, we will need to run 5000 trucks per day from Canada to the Midwest to deliver that natural gas in time for winter. So it's a good thing we don't have a shortage of truck drivers or any supply chain issues.

This idea that we should be punishing end users who need to heat their homes and buy fertilizer instead of actually deploying reliable alternatives is a form of scolding eco-sadism. It may be fine for you to absorb an increase in home heating oil prices, but other people really suffer. It's pure mismanagement and very much has a "let them eat cake" vibe.

> It may be a painful few years to navigate that transition

The pain inflicted on households in the midwest will be returned with interest in the next election. The next time you wonder why it's 2050 and the US hasn't raised any gas taxes or instituted carbon credits, or really done much to reduce CO2 emissions, then remember that to pass a green agenda you need to win battleground states like Michigan, and then remember back to this moment and the kinds of finger wagging lectures that were being delivered all over the country to people worried about how they will heat their homes in the winter.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#154

Post by epgui »

asdff wrote: post #140
300bps wrote: post #113

Earlier quoted context omitted.

It isn’t just direct stimulus to private citizens. It’s the near zero interest rate policy, the literally illegal purchasing of mortgage and corporate bonds by the fed and so much more that is flushing the entire economy with trillions of dollars.

So what exactly happens in between the fed purchasing mortgage bonds and allegedly consumer driven supply runs on everything from toilet paper to golf clubs?

The cost of servicing debt decreases and disposable income increases.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#155

Post by m0zg »

I smell BS. I'm buying a lot less stuff now even though I'm financially very comfortable. Not to mention I rarely go out, as well. People who are struggling financially are now buying a lot less in real terms because of inflation and pandemic-related unemployment and under-employment. We're looking at 75 dollar turkeys this Thanksgiving, folks. A lot of people will not be able to afford the whole thing and gasoline at the same time.

This to me sounds like DNC talking points aimed at absolving the administration from the clusterfuck it single handedly created. _And_ they're thinking of shutting down _another_ pipeline [1]. Guess what that will do to cost of goods, consumer confidence, and purchase volume, and who will absorb the increased costs?

The situation with ports is what happens when you appoint a mayor of a town nobody ever heard of with no experience as a transportation secretary.

[1] https://nypost.com/2021/11/08/biden-might-close-michigan-pip...

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#156

Post by nicoffeine »

TheBobinator wrote: post #152
arthur5005 wrote: post #68

What this doesn’t really address is the why? Yeah there’s more money floating around, so perhaps more people want to spend it, but why? Most people aren’t getting materially more stuff or even need that much more stuff, consumption’s already god damn conspicuous. Maybe everyone can afford a jet ski all of a sudden? No, the stims didn’t really do /that/ kind of wealth expansion. To me, this still looks like the bullwh…

[flagged]

> A CDC Whistleblower leaked they had found over 40k vax-induced deaths in medicare data back in July

I don't know what FaceBook feed you are mainlining, but you should probably stop.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#157

Post by paul7986 »

hooande wrote: post #121
paul7986 wrote: post #58

Earlier quoted context omitted.

Hmmm but I didn't say anything about wages which I'm very happy to pay more and do now .. tipping more then 20 percent, tipping sub makers at Jersey mikes and happy to pay up to $30 for a burger fries and drink at five guys. Going out to eat with a friend or a date is now a $60 to $100 affair at Applebees or places like it with tip. All good to me!

not necessarily disagreeing with you, but odd that you think your tip at applebee's is an argument against a basic income

UBI aka welfare which is what we all had to be offered during covid .... the affects of it is per this article is that demand went way up and supply went down a lot cause of less people weren't working creating the goods and offering services we grew accustom to having readily available.

Until the robots take over to fulfill the supply to meet the demand I think based off what we are seeing now everyone should be working and pay everyone a solid to great wage for contributing to society!

I mentioned tipping and stuff because the OP's comment seem to think since Im not for UBI that I don't want people to receive a fair to great wage for low level jobs which isnt true.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#158

Post by 88913527 »

grayfaced wrote: post #101
Guthur wrote: post #96

Earlier quoted context omitted.

I just don't get why everyone maintains JIT manufacturing is bad, it's one of the many reasons we can have such reasonably low cost goods, its efficient.

Efficiency at a trade-off of resiliency. If you're talking about discretionary purchases, you probably value efficiency over resiliency. If you're talking agriculture, we should value resiliency over efficiency.

If hair clippers become mildly more difficult to procure over a 2-year window of an 80 year lifespan, all-in-all the efficiency seems to be worth it. I get 78 years of low prices for goods are that are useful to my everyday existence, but not critically vital and to which there are reasonable substitutes, if I need something in a pinch.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#159

Post by danjayh »

mhalle wrote: post #71

It would be great if we could somehow turn the growth in discretionary income made possible by these economic policies into greater giving to public serving institutions (libraries, parks, etc) and other charitable contributions. COVID's impacts have not been proportional across the socio-economic spectrum, nor has the benefit of the economic stimulus.

Very true. A family of 5 with 3 toddlers making $50k/yr got $19,300 in stimulus and expanded child tax credit, whereas that same family would have gotten considerably less if they had a $200k/yr income. It would seem that the benefit of the economic stimulus was rather intentionally concentrated at the bottom and middle of the income curve, obviating the need for private charitable contributions. Let's also not forget that those in the top 20% already pay nearly 80% of the taxes, kinda seems like they're already doing more than their share.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#160

Post by BenoitEssiambre »

surrealize wrote: post #37

Demand growth is what we want. Our economy has been largely demand-limited for a while. Demand growth boosts GDP growth. Corporations are sitting on huge piles of cash, so they're not investment-limited. Any labor market tightness raises wages, which have been mostly stagnant for a long time (until very recently). Wage growth is also good. If wage growth squeezes profits, then that's also good from a wealth inequalit…

Exactly, this is what a functional economy that is not crippled by financial logjams looks like. It's possible to overdo it but that is much less damaging than under doing it like in the 2010s.
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