1/n I’ve read this nonsense enough now that it merits illumination. Bridgewater’s theory of inflation is making the rounds. I agree it’s mostly a demand shock, but for a global macro firm it’s remarkably provincial bridgewater.com/its-mostly-a-d…
2/n the “knockout” theory everyone keeps repeating is “supply is HIGHER” so it must be outrageous demand. This is NOT what the paper shows. Note carefully “goods for US demand” 
3/n The demand shock has been for goods, especially durable goods, consumed by US households given a transition to homes as 24/7 resorts. Fire pits, hot tubs, etc. And yes, China ran flat out producing these goods alongside bat 🦠. We appreciate the hard work and lack of ‘tude 🙄
4/n But if China is running flat out producing for US, that’s an outward shift in their aggregate demand curve reflecting the foreign sector and should manifest in higher prices in China… hmm
5/n As others have noted, there’s a bit of a decline in fiscal impulse ahead… at the same time that the ending of the eviction moratorium suggests this will be the last warm Xmas for many lower income families (spending intentions down 22% yoy for bottom quintile)
https://twitter.com/profplum99/status/1460035573335265286
6/6 Which leaves me with two questions.. 1) THIS is the work of the CIO of a $140B AUM hedge fund? (Reminder, I wrote this on my phone) and 2) Why are you reading this now? (🇨🇳)
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