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

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

#411

Post by BenoitEssiambre »

Jensson wrote: post #189
BenoitEssiambre wrote: post #160

Earlier quoted context omitted.

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.

You are wrong, 2010 wasn't enough, and now it is back to worse than 2007, USA is currently consuming goods from other countries and doesn't produce enough to sustain it, and it hasn't produced enough to sustain its consumption for 50 years now. USA is just continuing to borrow from the rest of the world (printing a reserve currency is the same thing as borrowing/taking), shipment after shipment of goods gets sent to…

>little is sent back.

The rest of the world gets US stocks and other assets. The US as been better than average at producing them. It's true that this might not continue forever and there might be corrections at some points but this does not mean a crash.

I'll give it to you that it's probably not an optimal time for more government debt right now but the monetary stimulation and slightly above average inflation had been desperately needed for a long time. Undershooting inflation was causing gridlocks in private markets everywhere.

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

#412

Post by neilwilson »

slv77 wrote: post #350
neilwilson wrote: post #274

Earlier quoted context omitted.

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…

Because at some point the credits and the debits need to be settled with real goods and services and when they can’t be someone has to take a loss. The loss either comes through default or inflation but allocating those costs are extremely painful politically. In many cases those costs end up being paid in blood.

Money and stuff are inductively connected, like reactive power and active power in electrical engineering.

Assuming the 'power factor' of the economy is one is a category mistake.

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

#413

Post by neilwilson »

RhodesianHunter wrote: post #384
neilwilson wrote: post #273

Earlier quoted context omitted.

There's no such thing as fractional reserve banking. It's an urban myth that has been debunked by QE for over a decade. Lord only knows why people still believe it. Banks create money on demand by discounting collateral. Government creates money on demand by discounting the power to tax. Fiat money disappears by the drain to taxation, to repaying loans and to 'rainy day funds'.

This is easily verified as nonsense. Fractional reserve banking absolutely exists. QE is so thinly related I can hardly imagine how you could contort it to have "disproved" something which is codified in law and taught in basic finance and economics courses.

Is it.

The reserve ratio in the UK and Canada is zero. Which means we should have infinite money in the banking system according to your beliefs.

Yet demonstrably we do not.

You have the line of causality backward, as the Bank of England helpfully explains in detail here: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

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

#414

Post by neilwilson »

baking wrote: post #367
neilwilson wrote: post #273

Earlier quoted context omitted.

There's no such thing as fractional reserve banking. It's an urban myth that has been debunked by QE for over a decade. Lord only knows why people still believe it. Banks create money on demand by discounting collateral. Government creates money on demand by discounting the power to tax. Fiat money disappears by the drain to taxation, to repaying loans and to 'rainy day funds'.

Queen Elizabeth?

That would be HMQ.

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

#415

Post by neilwilson »

fallingknife wrote: post #291
neilwilson wrote: post #274

Earlier quoted context omitted.

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.

And when the country requires that you pay the taxes in casino chips - and only those casino chips - what then?

And when the banks decide to peg their liabilities to casino chips to leverage that drive from taxation, what then?

Once you are required to get casino chips, or else, you will offer up real goods and services to get them.

Cash isn't real. It's an accounting fiction.

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

#417

Post by wexler88 »

adrianN wrote: post #402
throwtheacctawy wrote: post #358

Earlier quoted context omitted.

I live in Michigan. I have a 5.9kwh solar array. Spring/fall, I can produce over 40kwh/day. Summer heat lowers my production to upper 30-40kwh. January 2021, I produced 197kwh the entire month. I know this discussion is focused on heating. But from an electric vehicle perspective; 197kwh is not that much. In the winter, I don't think it would be enough electricity for a homes electric needs + EV or electric heat. I c…

It's not that hard to store solar power as Hydrogen and turn that back into electricity. The end-to-end efficiency is not as good as for batteries, but building something that can hold Hydrogen for a few months is cheaper than building the equivalent amount of batteries.

It's true that hydrogen is more practical for storing energy for months, but I think that storing energy for a few hours each day between daytime and nighttime (and transporting it from hot, sunny states to freezing, dark ones) is the important problem to solve.

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

#418

Post by qorrect »

craigds wrote: post #74
throwaway2331 wrote: post #6

For anyone scratching their head on what "MP3" is: monetary policy 3, i.e. "helicopter money," i.e. "the government be handin out them stimmies," i.e. the government injected COVID-19 relief funds into the economy, giving an across-the-board increase in demand for goods & services, but there aren't enough "goods & services" to keep up with this demand.

Thanks, I was scratching my head wondering why an old music format was related to recent events!

Using acronyms before defining them is really unforgiveable.

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

#419

Post by wexler88 »

dang wrote: post #407
wexler88 wrote: post #352

Earlier quoted context omitted.

This is not how money works.

Please don't post shallow dismissals to HN. We're trying for a different quality of discussion here, to the extent possible. If you wouldn't mind reviewing the rules and sticking to the intended spirit, we'd appreciate it. They're here: https://news.ycombinator.com/newsguidelines.html . If you know more than someone else, it would be great to share some of what you know so the rest of us can learn. If you don't want…

The implication is that one needs to contribute a detailed response to any statement, no matter how shallow and foolish, or else accept it to the discussion as though it had some validity.

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

#420

Post by adrianN »

wexler88 wrote: post #417
adrianN wrote: post #402

Earlier quoted context omitted.

It's not that hard to store solar power as Hydrogen and turn that back into electricity. The end-to-end efficiency is not as good as for batteries, but building something that can hold Hydrogen for a few months is cheaper than building the equivalent amount of batteries.

It's true that hydrogen is more practical for storing energy for months, but I think that storing energy for a few hours each day between daytime and nighttime (and transporting it from hot, sunny states to freezing, dark ones) is the important problem to solve.

You need to solve both problems to reach 100% renewables, but doing in the order of demand side improvements, short term storage and then long term storage is probably the cheapest way to proceed.
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