It’s mostly a demand shock, not a supply shock, and it’s everywhere • Hacker News Board

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

#471

Post by kovacs » Wed, Nov 10, 2021, 11:28 PM UTC

PaulDavisThe1st wrote: post #177

kovacs wrote: post #142

Earlier quoted context omitted.

Organic demand growth is what we want, not this Frankenstein economy that's been created since at least 2008 if not earlier. Demand doesn't boost GDP, producing real goods and services boosts GDP. You can't spend your way to prosperity despite what any of the insane MMT economists might say. I agree that wage growth is good but not in the manner it's happening right now, through insanely easy money policies creating…

> Demand doesn't boost GDP, producing real goods and services boosts GDP. You can't spend your way to prosperity despite what any of the insane MMT economists might say. I appreciate that you feel strongly on this matter. However, the strength of your feelings are less relevant than the fact that different people (who all know quite a lot about this sort of thing) do not agree with you (or with each other). Calling M…

Your comment added nothing of value to this discussion. Replying and telling someone that you appreciate their "feelings" while ignoring the points made may make you feel good, but it neither refutes their arguments nor substantiates yours... if you'd even care to make any.

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

#472

Post by naveen99 » Thu, Nov 11, 2021, 12:34 PM UTC

hogFeast wrote: post #39

pishpash wrote: post #28

Earlier quoted context omitted.

The metric you want is the breakeven rate, the difference between nominal Treasury yields and TIPS yields (which are indeed very negative). https://fred.stlouisfed.org/series/T10YIE The Fed is artificially holding real yields negative on the short end for years at a time to enable money-losing ventures to "prosper" in order to "stimulate" the economy. It gets people working and society running but the long-term misal…

There is actually a parallel effect of QE that no-one really wrote about: it causes a shortage of risk-free assets, and makes it harder for savers to fund liabilities. I can believe that QE had a positive portfolio effect in the early 2010s. But no-one really acknowledged the downsides (it took them most of the 2010s to work out why QE "worked"). So we have the amazing situation where you will get funding for a proje…

> shortage of risk-free assets

Risk free assets don’t exist. So by definition, they are always in short (0) supply. Even treasuries are at currency, inflation, and interest rate risk. If you are using risk free as a synonym for us treasuries , that’s what qe has been pumping into the system. Are you saying you want even more qe ?

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

#473

Post by wing-_-nuts » Thu, Nov 11, 2021, 3:50 PM UTC

asdff wrote: post #447

wing-_-nuts wrote: post #406

Earlier quoted context omitted.

My good man, stock prices have reached a permanently high plateau!

They have been saying this every single year since 2010. If you bought into that mentality you'd be broke. If you ignored it you'd be up hundreds of percentage points today.

I was riffing off of irving fisher's quote right before the great depression :^)

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

#474

Post by ODILON_SATER » Thu, Nov 11, 2021, 3:52 PM UTC

jolux wrote: post #151

ODILON_SATER wrote: post #144

Earlier quoted context omitted.

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.

That's a fair take actually

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

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Post by dang » Thu, Nov 11, 2021, 5:06 PM UTC

rsj_hn wrote: post #241

nuerow wrote: post #224

Earlier quoted context omitted.

> The above makes oil and gas more costly to extract and to ship, which raises the price. I'm not sure if you're just expressing your personal concerns over what you believe can hypothetically happen, or whether you're grossly misinformed. Meanwhile, even though gas prices are breaking records all over the world, in the US they are still below the prices from 2010, back in the days no one in the US was concerned abou…

> I'm not sure if you're just expressing your personal concerns over what you believe can hypothetically happen, or whether you're grossly misinformed. So do you have an argument to make, or just a stream of ad hominem followed by smoke and mirrors? You point out that oil and gas prices are high all over the world with a price gap between gas prices in the US and the rest of the world -- because gas is shipped overse…

Please stop posting flamewar comments to HN and breaking the site guidelines. You've done it repeatedly lately, it's not what this site is for, and it destroys what it is for. That means we have to ban such accounts. I don't want to ban you, so if you'd please review https://news.ycombinator.com/newsguidelines.html and stick to posting in the intended spirit, we'd appreciate it.

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

#476

Post by dang » Thu, Nov 11, 2021, 5:07 PM UTC

RC_ITR wrote: post #209

rsj_hn wrote: post #153

Earlier quoted context omitted.

> 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 rall…

Flamewar comments like this will get you banned on HN. You've been breaking the site guidelines in other places too, unfortunately. That's not cool. (Edit: and we've already had to ask you more than once to stop doing it:

https://news.ycombinator.com/item?id=28378481

https://news.ycombinator.com/item?id=22198190)

If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules, we'd appreciate it.

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

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Post by bezalmighty » Fri, Nov 12, 2021, 3:05 AM UTC

neilwilson wrote: post #413

RhodesianHunter wrote: post #384

Earlier quoted context omitted.

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-...

1) It appears to me that the document you provided actually refutes what you are saying. It supports fractional reserve banking. Here is a quote from the conclusion: "Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves: banks create money whenever they lend to someone in the economy or buy an asset from consumers. "

2) "infinite money" without a legal limit to reserve ratios would only occur if every single bank actually had exactly 0% reserves, and it would take infinite time and infinite transactions for that to occur.

FYI using the observed absence of 'infinity' as a proof is generally poor logic as there is lots of mechanisms blocking infinity from occurring in reality.

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

#478

Post by oarabbus_ » Fri, Nov 12, 2021, 7:23 AM UTC

the-dude wrote: post #267

lemax wrote: post #213

Earlier quoted context omitted.

Most companies like Airbnb, Turo, Boatsetter (airbnb for boats) offer some insurance they negotiate with an underwriter like Geico. Getting this sort of insurance individually is much more costly or next to impossible, which is why we don't see people short-term renting expensive assets to each other on Craigslist. I imagine negotiating the ability to dole out these sorts of policies at scale with Lloyd's of London o…

Isn't the crux of insuring anything 'doing it at scale'? If you are AirBNB, why would you need an insurer at all?

Could you clarify what you mean here? I'm not sure I follow.

Say someone rents an AirBNB and absolutely trash the house, racking up thousands or tens of thousands of dollars of damages. Or steals valuables that are in the house. Or on the flipside, perhaps the property has not been repaired and the Airbnb renter is injured on the property. Surely AirBNB would require insurance for such types of incidents.

Why would they not require insurance when they are in the business of rentals? Most jurisdictions would allow a property owner to include AirBNB in a lawsuit against a renter conducting criminal activity or a renter suffering damages from criminal negligence of the property owner.