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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

#291

Post by fallingknife »

neilwilson wrote: post #274
fallingknife wrote: post #235

Earlier quoted context omitted.

MMT does sound like those radio commercials they had back in the 90s saying they would teach you how to "borrow your way out of debt" though.

Only because you haven't taken the time to understand what is being said - just the twisted version that isn't actually the case. Every financial debt has a corresponding financial asset. Why follow the 'debt' and not the 'asset'? Because you have a psychological anchor on the word 'debt' that causes an emotional reaction? All money is somebody's debt. That's how the accounting works. Rather than looking at the books…

When you go to the casino and change your cash for chips you are in credit with the casino. If that casino started handing out more chips without taking in cash, those people would be in credit with the casino too. Would you want to be in credit with that casino? You can create an accounting "asset" with the stroke of a pen but not a real one.

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

#292

Post by ur-whale »

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…

> or even need that much more stuff,

That's a fairly rich-world centric view of things. I suspect the majority of humanity hasn't reached the point where "they don't need much more stuff".

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

#293

Post by jjeaff »

GoOnThenDoTell wrote: post #114
tharkun__ wrote: post #70

Earlier quoted context omitted.

If 10000 people buy bitcoin at 60k per coin as an investment and later have to sell at 10k per coin to make ends meet, I somehow doubt that the guy that pocketed the difference will contribute to inflation as much as the 10000 guys trying to put up a meal for tomorrow. It feels like saying Elon Musk will make make your next stop at the grocer's more expensive, because selling his 10% of shares for $20 billion will co…

Unlike most billionaires, we have a fair idea of what he’s going to buy with it: more employee wages in companies like SpaceX I wonder about the price of real estate in Brownsville though

I don't think Elon has actually spent or loaned any of his own money to Tesla or space x. Maybe in the very early days, but not now.

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

#294

Post by mellavora »

clavicat wrote: post #232
anm89 wrote: post #65

Earlier quoted context omitted.

Bridge water is very much on the record saying what they think comes next. Inflation, low rates, poor performance for bonds, poor performance for many assets.

That was my thesis all summer long, but bond yields have remained stubbornly low and the stock market just had a blowout October even as inflationary pressures picked up amidst the Evergrande crisis and the debt-ceiling crisis. I’ve given up thinking that there is anything that can bring down this market and will no longer fight the trend.

well, maybe the capitulation of the bears could bring it down...

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

#295

Post by jjeaff »

01100011 wrote: post #171
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…

First off you have to define 'transient'. Fed supporters seem to define it as the level of inflation going up for a while and then reverting to a historical norm, leading to permanently higher prices. Fed critics define it as a temporary rise in prices followed by deflation back to pre-inflation prices. Fed critics like that definition because it lets them more easily paint the fed in a bad light. They claim the fed…

No need to guess. Fed officials have openly stated that by transient, they mean they will go up a bit, then stabilize.

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

#296

Post by makomk »

throwawaygh wrote: post #61
hammock wrote: post #55

Earlier quoted context omitted.

That's not the opposite.

GP quote suggests on-time retirement (65+) while OP suggests not just not-retirement-age but actually prime-earning-age. Those seem pretty opposite to me? Anyways, raising a kid with two earners is too damn hard. That's what's really going on.

They're talking about two different things - one is about people leaving the labor force entirely, whilst the other is about people quitting their current jobs. Now, there might be some overlap but there doesn't necessarily have to be all that much because a bunch of people were made redundant earlier in the pandemic and some of them aren't going to return to working again.

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

#297

Post by watwut »

ajsnigrutin wrote: post #281
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…

Covid lockdowns have a a lot to do with that too. People used to spent their money in restaurants, bars, cinemas, theaters, parties, festivals, massages, hairdressers, and a bunch of other services. If you add lockdowns, many things happen: * people have leftover money, that they instead spend on "things"... and since they're used to using less services, this is also true for some time after the lockdowns * If you're…

I can confirm that lockdowns made our family save a lot more money then usual - despite us buying quite a lot of new stuff do to lifestyle changes.

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

#298

Post by JumpCrisscross »

Ozzie_osman wrote: post #130
human wrote: post #100

Earlier quoted context omitted.

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.

It's a little more complicated than that. You buy 1 BTC from me for 60k. Now let's say I want to buy BTC again, but you want to sell it for 120k, so now I buy 0.5 BTC from you for 60k, and if everyone agrees that 120k should be the fair price, we've just bid up the market cap and value of BTC without really increasing the fiat. Now imagine that with different crypto, stocks, other financial instruments, real estate,…

> we've just bid up the market cap and value of BTC without really increasing the fiat

If anyone in their chain borrows against their inflated crypto, that creates new fiat.

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

#299

Post by throaway46546 »

ajsnigrutin wrote: post #281
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…

Covid lockdowns have a a lot to do with that too. People used to spent their money in restaurants, bars, cinemas, theaters, parties, festivals, massages, hairdressers, and a bunch of other services. If you add lockdowns, many things happen: * people have leftover money, that they instead spend on "things"... and since they're used to using less services, this is also true for some time after the lockdowns * If you're…

>Some lockdown policies directly affect your 'need for stuff'

I think this was the root cause of the toilet paper shortage. People who normally spend a large portion of the day at the office were now spending that time at home. There was a popular viral video at the time of a man driving around on a forklift in a warehouse full of toilet paper laughing about the shortage, but it was all commercial toilet paper not what you would use at home. Anecdotally I noticed a correlation between the level of traffic on the freeway and the amount of toilet paper on store shelves. When the freeways were empty the shelves were bare and as traffic started picking back up the shelves started replenishing.

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

#300

Post by consp »

throaway46546 wrote: post #299
ajsnigrutin wrote: post #281

Earlier quoted context omitted.

Covid lockdowns have a a lot to do with that too. People used to spent their money in restaurants, bars, cinemas, theaters, parties, festivals, massages, hairdressers, and a bunch of other services. If you add lockdowns, many things happen: * people have leftover money, that they instead spend on "things"... and since they're used to using less services, this is also true for some time after the lockdowns * If you're…

>Some lockdown policies directly affect your 'need for stuff' I think this was the root cause of the toilet paper shortage. People who normally spend a large portion of the day at the office were now spending that time at home. There was a popular viral video at the time of a man driving around on a forklift in a warehouse full of toilet paper laughing about the shortage, but it was all commercial toilet paper not wh…

After the panic buy I've never seen a toilet paper shortage anymore. I therefore doubt your theory of correlation. Maybe it was so in the us but it definitely does not correlate for everyone.
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