Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bridgewater.com

Post reply on HN
Print view View original

201–210 of 478 posts

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

#201

Post by danieltanfh95 »

robocat wrote: post #139
RC_ITR wrote: post #85

Earlier quoted context omitted.

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…

> Our economy ... is doing a bad job of adapting to new behaviors [because] just-in-time I have been astonished at how well the world has responded to the shock. Our first world economies seem to be amazingly resilient (although perhaps I am biased by being in New Zealand so I am unaware of what is going on elsewhere). It seems to me that just-in-time is helping us, and capitalist price signals are working. So far I…

We are doing okay because the Chinese supply chain held on even during the pandemic, which is why their orders have grown so much during 2019-2021

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

#202

Post by ev1 »

asdff wrote: post #109
airstrike wrote: post #2

For anyone else thrown off by the use of "MP3" to refer to anything other than the file format, here's https://medium.com/alpha-beta-blog/the-three-stages-of-monet...

Nitpick but nothing grinds my gears more than people using niche acronyms without first defining them in long form, especially when its something like MP3 that's going to give you a million hits of the wrong result when you try and search for a definition.

In all fairness, the intended readership of that blog would know it. It's like handing a random technical Go or Rust post to a strictly-business non-technical person.

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

#203

Post by [deleted] »

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…

[deleted]

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

#204

Post by Jensson »

rsj_hn wrote: post #199
Jensson wrote: post #185

Earlier quoted context omitted.

But you can't just import goods without exporting anything forever, at some point USA needs to start to deliver value back to the rest of the world. Note that the trade balance includes services like ads etc, that is the entire thing.

> at some point USA needs to start to deliver value back to the rest of the world First they already receive something of value, which is our money. No one forces them to sell their stuff for our money. Nor does selling us $1 of goods entitle them to get anything above and beyond $1 of our money. They have already been paid with sufficient value. Now they must spend that dollar in America somewhere. So they have a ch…

> The moment they stop doing b) and start doing a), the trade deficit will be balanced.

And a rate of a trillion worth of goods per year will stop flowing into USA, that is the current trade deficit, you don't think that will cause some sort of crash?

Your explanation here is like saying "This isn't a bubble, people wanted to pay this much for stocks, if stocks don't deliver people will sell and prices goes down, that is how it should be!". That totally ignores the effect of the economy when that correction happens.

There is a lot of trickery you can do with economics, but other countries will protest sooner or later and stop sending things. I think the economy should take that into account or that crash will be horrible.

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

#205

Post by PaulDavisThe1st »

qPM9l3XJrF wrote: post #184
PaulDavisThe1st wrote: post #174

Earlier quoted context omitted.

> Claudia Sahm? Krugman? I rather listen to the hedge fund guys, at least they have skin in the game, don't they? Claudia Sahm is extremely partisan, and so is Krugman. "Hedge funds guy" are extremely partisan, in that they will fight hard to prevent any kind of legislative or other systemic change that would threaten their rent-seeking. They invariably favor the status quo and/or anything that increases their abilit…

Ray Dalio, billionaire founder of Bridgewater, has recently written a book "Principles for Dealing with the Changing World Order" where he advocates systemic change, including effective government action to address inequality.

Ray Dalio is one of the exceptions that prove the rule, and even then, he's deeply committed to the fundamental "bestness" of capitalism even if he thinks it needs some government tweaking around the edges.

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

#206

Post by grayfaced »

KittenInABox wrote: post #147
grayfaced wrote: post #134

Earlier quoted context omitted.

I would consider consumer electronics to be discretionary purchases. So what I suggested is the opposite of that. If disruptions are an acceptable risk, then you should prioritize efficiency. Consumer complaints are meaningless if they don't have a viable competitor to shift their money to. But we must prioritize resiliency when an economic shock would result in societal instability. I'm willing to pay more for food…

Isn't that why the US government has longstanding agricultural subsidies, guarantees on prices, etc.? Do we really have a shortage of food?

That's the stated purpose. But it has no teeth. Last year we saw aisles empty of meat and lots of news about meat shortages. But during that time domestic pork supplies were down 40% in the same period that pork exports to China quadrupled.

Those subsidies failed in their stated purpose of resiliency. During the bad times, all that mattered is where more profit could be found.

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

#207

Post by Dylan16807 »

bezalmighty wrote: post #48
evergrande wrote: post #29

Earlier quoted context omitted.

Actually, that's a good point. Inflation would be even worse if that cash was going into physical goods and services. The government now has an incentive to leave crypto alone aside from providing clarity.

In the macro economic sense, fiat money isn't 'used up' or 'locked away' when you buy something like crypto, it's transferred from your account to someone else's bank account. Worse, it goes through the process of fractional reserve banking and multiplies about ~10x after changing hands repeatedly.

Minus all the fees to the crypto miners, which end up wasting many hours of labor and causing pollution.

That money will eventually be used again but it's worse than paying someone to dig and fill a hole.

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

#208

Post by seoulmetro »

robocat wrote: post #139
RC_ITR wrote: post #85

Earlier quoted context omitted.

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…

> Our economy ... is doing a bad job of adapting to new behaviors [because] just-in-time I have been astonished at how well the world has responded to the shock. Our first world economies seem to be amazingly resilient (although perhaps I am biased by being in New Zealand so I am unaware of what is going on elsewhere). It seems to me that just-in-time is helping us, and capitalist price signals are working. So far I…

If the entire manufacturing line is essential, why would a pandemic create gaps? It was only over a year or so of higher demands. Nothing dramatic. 5 years would be hard. 1 year just uses a bit of warehouse space for most consumer items. No one ever stopped making stuff, and they started shipping more where they could.

Most people who couldn't get what they wanted would have no way to prove that. Whereas people who got what they think they couldn't, would have that memory strongly planted and even shared.

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

#209

Post by RC_ITR »

rsj_hn wrote: post #153
RC_ITR wrote: post #85

Earlier quoted context omitted.

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 h…

Woah, what are you honestly on about?

You can claim that the US is artificially raising natural gas prices, but the exact opposite is true. By chance of circumstance, we've historically underbuilt LNG processing facilities and that is isolating the US market from the rest of the world, so we have some of the lowest natural gas prices in the world right now.

Please take your uninformed takes and cringey political rallying elsewhere, it's not what this platform is designed for.

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

#210

Post by clavicat »

human wrote: post #100
arthurcolle wrote: post #10

Earlier quoted context omitted.

Thank god we have crypto & NFTs to help people use all this free cash

It doesn’t work like that though. If I buy BTC at 60k then someone is selling BTC at the same price. The fiat is just moving from one account to the next. The people getting cash-rich from crypto are either spending it (on lambos) or putting it back into the stock market.

In all probability, you’re selling to a crypto trader or bot who then uses those funds to make more crypto trades, so the money is in a sense trapped in crypto markets until someone withdraws it from the exchange. The extent to which this money is being absorbed by crypto can be seen by analyzing exchange flows.
Post reply on HN