We talked about - what else? - #inflation and #centralbanks and whether the #Fed & peers are 'making an historic mistake', in Steve's words.
A few charts & comments for background:-
2/It's trite to say the jump in price indices is *all* attributable to a 'basis effect' when they've accelerated so much THIS year.
3/ #JeromePowell and his merry band may wish to believe that the rise is a mere blip, but all too many businessmen & women (i.e., the people who *really* matter) seem to believe the converse is the case.
4/ The labour market, too, has made great strides and -given that the gov't is still providing both too many incentives to idleness and too many barriers to employment- wages seem to be responding, pace JayPo.
5/ Spending has been on a tear these past several months and industry is doing its best to respond. Compare where we are today to pre-#COVID 2019 and it's hard to see the necessity for a continuation of present policies.
6/ A sure sign of the imbalance between spendable means and available goods is the growing #trade deficit - and with it the associated logistics jam.
7/ Step outside the factory for a moment to take a peek at financial markets and the craziness becomes apparent - as well as the unshakeable sense of building peril. #SPX#MandA#PE#junk#yields
8/ While you *could* argue last year's monetized deficit *replaced* frozen private incomes, there's no such excuse for what's coming down the (soon to be refurbished) turnpike.
From the 80s' "Military Keynesianism" to the 20s' "Ecomilitant Keynesianism"™️ - we're in trouble!
FYI I usually switch off when I read the idea that only the current genius understands what all the great economic thinkers of the past somehow 'overlooked'.
But, FWIW, here's a quick reaction to the usual COiner hyperbole.
What these guys miss is that if only a set amount of BTC comes into existence, but the numbers using it grow, as do the transactions they engage in (whether population growth &/or output, network effects, increased, higher-order complexity of the productive structure...
2/x
...disassociation of worker units from large conglomerates to individual output 'pods'),that "divisibility" is going to become VERY stretched AND we are going to have to try to build in our estimation of this...
3/x
Picture that archetypal sci-fi dystopia where a drastically reduced population survives a devastating pandemic.
With much of human knowledge still accessible & a vast stock of capital in existence, per capita real wealth has potentially greatly increased.
1/x
Of course, networks will need to be rebuilt, specialisations prioritised, exchange restarted, institutions refounded, but the lower headcount will make the call on the most marginal resources redundant, lowering costs & boosting productivity.
2/x
Sound far-fetched? Well, scholars such as Professor James Belich argue, in exhaustive detail, that such a scenario played out in the aftermath of the Black Death, greatly boosting the survivors' well-being & stimulating technical (& even artistic) advance.
3/x
Were I the self-publicising type (viz., distaff-side economists "COUGH!"), my *Cantillon Consulting Rule* would be: Everytime NAPM/#ISM less the 50 break-even loses a cumulative 20+ points in a year, we get a recession. Only false reading in 70 yrs, the '96 auto strike.
#PMI
Yet, even as the sector languishes, as per the #PMI, #manufacturing #construction contines to set new records.
And, this time, we can't even blame super low interest rates or the kind of laxity in providing funding to whcih we've become accustomed of late.
🤔
For illustration, #manufacturing #construction spending versus revenues (shipments).
The point YOU miss is that the US govt (Fed+ State/Local) commandeers $10 trillions' worth of scarce resources each year (BEA Govt GFS), more than HALF of Private Net National Product (BEA 1.7.5 & 1.1.5).
The deficit amounts to $1.8tln pa; 2 1/2 x net private biz investment. 1/x
Of course, to you Double-#MMT Heads, the State's voracity, waste & corruption are doing a vast service to the poor souls whose "savings" are thereby eaten up & whose income & capital formation, both, are diverted to cost-plus mandates, subsidies, nest-feathering & boondoggles 2/x
And how do you justify this utter perversion of economic sense? By pointing to the static accounting tautology that what Leviathan scoffs & issues IOUs against is an equal & opposite boon to the Granny who gets to stack them in place of food in her now emptied cupboard! 3/x #MMT
If there is ONE lesson to be drawn from the past two years of conflict reporting in both the #Ukraine & now #Gaza it is that, even with countless mobile device cameras at hand, it is still impossible to penetrate the lies, deception & propaganda to reach the verity of what-
-is actually taking place; of who is doing what to whom and why. The old, Napoleonic simile, "to lie like a bulletin", still holds true - "citizen journalists", or no.
If there is a second lesson, it is that this proves no impediment to the generation of MSM red-top rage or-
-to the unthinking, onward propagation of fabrications, misinterpretations & rushed judgements by the credulous, the prejudiced & the sensation junkies, here on social media.
A third lesson, perhaps, is that this sad reality extends to all of what we think of as "history"-
A disparate cluster of interests -some venal, some ideological, some quasi-religious- have found common expression in the issue of #Climate™️. Too much, intellectually, financially, emotionally, politically has been sunk into it to allow for honest discussion. 1/x
Even minor scepticism or attempts at technical or economic discussion start by begging the question of whether ANY of this game is worth the candle; all include the Insh’allah of “...while climate change is accelerated and we must (!) address the problem at once...”
2/x
If we start from the false premise that the threat is both pressing and existential, then obviously we narrow the choice to a menu of ‘solutions’ which involve vast expenditure, radical social upheaval, and severe limitations on personal liberty.
3/x