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Confirmation bias Profile picture
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17 Jun, 5 tweets, 2 min read
A quick thought on how to reconcile deflation WHEN there are higher prices in the economy.

1/
A) It may be congestion and not inflation.



2/
B) Debt funded central planning ALWAYS means that future spending goes down and current spending goes up. (Thats how bubbles happen).

If the debt isn't productive, then bubbles eventually pop and people are miserable, but as the bubble forms...

professorwerner.org/blog/

3/5
C) The more debt used to fund central planner activity THE LESS effective each new dollar of debt is.

Diminishing returns are real. (The forces of inefficiency will pull the prices back down AFTER an initial spike).

hoisington.com/pdf/HIM2021Q1N…

4/5
D) Finally, confidence is a huge part of a debt based economy. As long as confidence is flying high, the price bubbles can maintain for a LONG time after the fundamentals try to drag everyone down to earth again.



5/fin

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More from @NathanDallon

Confirmation bias Profile picture
6 May
I had a great time listening to @GeorgeGammon and @SantiagoAuFund most recent conversation regarding the Dollar, Dollar Milkshake, and inflation/deflation.



A few quick thoughts and comments on my part.

1/18
The Dollar Milkshake theory is right. The central idea is the dollar (world reserve currency) will remain strong relative to other currencies for a long time UNTIL it will spike and go REALLY high. This will draw money into US equities and Gold.

2/18
Recently (June 2020 to the present) the dollar has weakened. This has lead some (@HedgeyeTV being the principal voices on twitter lately) to make fun of Brent as being wrong or old or dumb or something.

3/18
Read 18 tweets
Confirmation bias Profile picture
14 Apr
Lets talk about the Hoisington Investment Q1 2021 review and outlook shall we?

hoisington.com/pdf/HIM2021Q1N…

Its deflation people.

1/25
1) Inflation is a lagging indicator.

I believe this is a critical observation to incorporate into policy and commercial decision making. From the report:

"The low in inflation occurred after all of the past four recessions...

2/25
"...The low in inflation occurred after all of the past four recessions, with an average lag of almost fifteen quarters from the end of the recessions."

This is an empirical claim that is either true or false. Other economists like @EconguyRosie have confirmed...

3/25
Read 25 tweets
Confirmation bias Profile picture
2 Apr
@RealVision Decided to terrify me going into this weekend.

Great interview between @vol_christopher and @profplum99

A few terrifying moments in the interview:

1/12

realvision.com/shows/mike-gre…
Mike: 'You alluded to this earlier. We saw high yield and IG CDS, are the spreads between rates and corporate credit, collapse much more quickly than we saw on the equity side...

2/12
...We obviously know the Fed played a direct role in that by stepping forward and as you pointed out, supporting it, but what are the implications of that dynamic? How does that create opportunity, or does that push us further towards the ultimate Minsky moment?"

3/12
Read 12 tweets
Confirmation bias Profile picture
1 Apr
I want to give a huge shout-out to @DiMartinoBooth regarding her recent @RealVision interview with Lacy Hunt.

I wanted to highlight a few new ideas that hadn't gotten into my head before this conversation.

realvision.com/shows/danielle…

1/13
"As a result of the deteriorating increase in our standard of living, we have caused not just in the United States, but globally, a major deterioration in the demographics during this period of high indebtedness."

-Lacy Hunt

2/13
I had never connected Federal Reserve and Treasury policies having a DIRECT effect on demographic deterioration.

"And what effect this would have long term on home
ownership rates, on headship rates, on household formation."

-Danielle DiMartino Booth

3/13
Read 13 tweets
Confirmation bias Profile picture
17 Sep 20
I have listened to this End Game Podcast maybe 5 times. If @MetreSteven is the Bond King, Lacy Hunt is the God Emperor of Bonds.



1/
I have started doing the homework that Lacy Hunt mentions in this conversation. I found (I think) the 1934 Irving Fisher paper on highly indebted nations. Just thought i would drop this little paragraph. ITS SCARY HOW THIS APPLIES RIGHT NOW.

phare.univ-paris1.fr/fileadmin/PHAR…

2/
This quote rocked my world.

"23. The chief interrelations between the nine chief factors may be derived deductively, assuming, to start with, that general economic equilibrium is disturbed by only the one factor of over-indebtedness, and, in particular...

3/
Read 14 tweets
Confirmation bias Profile picture
29 Jul 20
I am trying to learn what MMT is and how it works. From Warren Mosler's website, everything begins with understanding the fundamentals of sovereign currencies.

Namely, modern sovereign nations have a Common Monopoly over currency.

1/n
I have decided to start with the first US national currency and review the history of the US Dollar.

Here is the thread as I learn.

2/n
In 1775 the Continental Congress issued its own currency to pay for the war. These "Continentals" weren't backed by anything. The expectation was that FUTURE revenues would back the currency. Not surprisingly, the currency collapsed by 1779-1780.

investopedia.com/terms/c/contin…

3/n
Read 69 tweets

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