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Business & Finance Economic Fallout: Pandemic, Brandon, Money Printer Go Brr, Ukraine.

Agent23

Evrogopnik MRA ant-SJW
Err with hyper inflation you actually would want to max out your debts as they will be wiped out by the inflation. And I am I have enough ammo to equip a Russian/Ukrainian rifle platoon, and a good deal of food and hard assets.
IMO the situation will be more akin to that of the 1970s, but I am skeptical of a broader, apocalyptic collapse.

Financial repression and inflation will grow, though, and the Fed and the ECB will be forced to crash the stock markets to keep the inflation from overheating.

Hey, @LTR I made a thread for the mother of all fire sales financial apocalypse that shall befall us all.

Let us all post there about this stuff, h/t @Floridaman
 
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Agent23

Evrogopnik MRA ant-SJW
Since we are talking a lot about the probably impending stagflation/lost decade/economic fallout of the Coof lockdowns and Brandon's stupidity, here is a nice thread to combine our economic doomsaying.
party like it is 1929/1969/2000/2007, people.

And remember!

The four most expensive word in the English language are "This time it's different.”
 

Abhorsen

Local Degenerate
Moderator
Staff Member
Comrade
Osaul
The inflation damage has already been done with the "infrastructure" package and other spending. It's a (then somewhat, now entirely) supply side shock, which is the kind of recession one can't spend their way out of.

And so, oddly enough, the blow is right for once, just not in any positive way:
"This time it's different.”
Because the correct response to a supply shock is different than a demand shock.

A very loose talk about how this works:

For why you can't spend your way out of a supply shock problem, it's useful to loo at why government spending does help (at least short term, not arguing with Austrian Econ right now) during demand recessions.

A demand recession is largely just in everybody's head: "Oh, we're in a recession, so money's tight, so I better not spend." Obviously, this train of thought makes logical sense, but it also creates a self fulfilling prophecy because if consumers don't spend, then there isn't enough demand, so companies lower production, so there aren't enough jobs, making money tight, etc.

But government can basically step in and spend oodles of cash, which jumpstarts the system of consumption back to production capacity, which means that the production now needs people to work, which means consumer money isn't tight, and they can consume instead. Now government can leave again (usually it doesn't, but lets ignore that for now).


But a supply shock is 'real'. For whatever reason, companies across the board now cannot produce enough (Gas, war, disease, stupid government regulations, all can cause this). And the usual bad stuff from this occurs. But the difference is if the government increases demand by buying stuff, that doesn't solve the underlying problem. So just as much stuff is produced, just at a higher price. This is inflation.
 
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Arlos

Sad Monarchist
Ah, I’ll have to ask if I can work from home to save on gas, urgh, fucking escalating morons…
 

Sobek

Disgusting Scalie
Amazing how it took literally less than a year for the economy to grind to a halt and start plummeting. I love seeing the cope coming from establishment supporters about how this is not that bad or shit like this


Which is starting to make it's way around. I am pretty sure it's a mangled form of the 5 stages of grief going on. First the economy wasn't bad at all, it was amazing and the best ever. Then it was transitory inflation only. Then the high gas price was a "donation for freedom" and the "price of democracy". Now we are seeing attacks on the people who are complaining that they aren't just shutting up and taking it.

I, for one, wanna see the circus catch fire. At this point I am pretty much done being optimistic. I am waiting for the 6 a gallon nationwide in the USA real soon, it is already the case in Commiefornia. I wanna see the fucking "let them eat cake" elites shilling for Uber and telling the masses to tighten their belts "for Our Democracy" watch as their little bubbles of "civilization" start to collapse into anarchy.

Accelerate, just fuck my shit up already. Rip the bandaid off all at once.
 

Agent23

Evrogopnik MRA ant-SJW
The inflation damage has already been done with the "infrastructure" package and other spending. It's a (then somewhat, now entirely) supply side shock, which is the kind of recession one can't spend their way out of.

And so, oddly enough, the blow is right for once, just not in any positive way:

Because the correct response to a supply shock is different than a demand shock.

A very loose talk about how this works:

For why you can't spend your way out of a supply shock problem, it's useful to loo at why government spending does help (at least short term, not arguing with Austrian Econ right now) during demand recessions.

A demand recession is largely just in everybody's head: "Oh, we're in a recession, so money's tight, so I better not spend." Obviously, this train of thought makes logical sense, but it also creates a self fulfilling prophecy because if consumers don't spend, then there isn't enough demand, so companies lower production, so there aren't enough jobs, making money tight, etc.

But government can basically step in and spend oodles of cash, which jumpstarts the system of consumption back to production capacity, which means that the production now needs people to work, which means consumer money isn't tight, and they can consume instead. Now government can leave again (usually it doesn't, but lets ignore that for now).


But a supply shock is 'real'. For whatever reason, companies across the board now cannot produce enough (Gas, war, disease, stupid government regulations, all can cause this). And the usual bad stuff from this occurs. But the difference is if the government increases demand by buying stuff, that doesn't solve the underlying problem. So just as much stuff is produced, just at a higher price. This is inflation.
We actually have both, since the Fed hasn';t tightened and is still propping up the markets with bond purchases, and then we have the very rear supply chain issues, great resignation and now the situation with Russia.
The recession we got when covid and the lockdowns started was, IMO both a demand and a supply side one.
People were scared to spend or lacked liquidity, so moneyprinter go burr.

The disruption to actual production and shipping and the panic buying made things even worse.

Also, money printer go brrr is far from the only way to increase the money supply, artificially low interest rates disincentivise saving, stimulate excessive risk taking and purcahses and create a huge asset bubble, then when people see their purchasing power getting eroded and their neighbors getting rich they join in and further inflate the bubble.

Soros called that type of behavior a virtuous circle, and that was IMO the only decent bit of advice in his whole book.

This, IMHO all happened in the 1960s -1970s, when first the US government spent massive amounts of money on wars, social programs and literal moonshots.


Then, the Arab oil embargo acted as icing on the cake.

I think we are seeing the same situation as the one in the late 60s/early 70s.

Money supply expansion inflation is IMHO something that echoes through the whole system over and over, it does not double the prices right away, but moves through the system and increases demand for the inflated currency as it does.

First you give one set of people the money, they might spend it immediately, or they might do it more gradually, then it goes in the economy, increasing salary demands, first the people with the lowest wages will have to demand more, then those above, and so on and so forth, with IMO the effect working through the whole economy a few times if everything else is stable.

Of course a boom might force a bust depending on timing, money ammount, and where the bulk of the money ends up, but it is not a spigot or a switch.
 

Carrot of Truth

O'doyle rules!
6$ gallon gas and likely 7$ diesel will be the US nearing societal collapse, There will be food riots and when you reach that point even the police and most other civil services will stop showing up to work.
 

Agent23

Evrogopnik MRA ant-SJW
6$ gallon gas and likely 7$ diesel will be the US nearing societal collapse, There will be food riots and when you reach that point even the police and most other civil services will stop showing up to work.
In Europe, we are literally at around 8$/gallon.
 

Carrot of Truth

O'doyle rules!
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