Got around to watching the Jim Rickards talk that @SimpleStacker posted last week: #1330619
He said something I hadn't picked up on before, that by the technical definition the US has been in a depression since 2007, which aligns with sentiment and QOL decreases.
I always thought a depression was defined as de-growth, but it's actually growth that's depressed below organic growth.
Good talk overall, nails most of it as I see it... one thing I'd argue is that the Administration is not pushing weak-dollar policy, he actually contradicts himself on that later citing the shortage of dollars abroad signaling a credit crisis... I see this as part of the design, an intentional dollar wrecking ball.
I'm glad you watched it. I still have it open in another tab.
I don't know if it's even right to say that there's a single technical definition of "depression", but the one used here is aligned with the Real Business Cycle Theory people. It's reasonable enough.
Your point about weak vs strong dollar policy has me thinking that it's a lacking framework in this context. The weak side of it is wanting an expanded supply of dollars, while the strong side of it is wanting an expanded demand. I think your contention is that their goal is to shift both the supply and demand curves to the right, which is price indeterminant in and of itself, but that they want to land in a place with greater dollar purchasing power.
Yea I think the lack of framework is because of everyone using a different yard stick, a strong dollar compared to other fiats is not at odds with a weak dollar to devalue the debt.
Devaluing the debt is also not necessarily inflationary. New dollar issuance can still increase, but increase less in rate compared as a percentage of growth.
If we double the national debt in 10 years, but wages are 3x higher, and deficits are a lower percentage of GDP, apples to apples that's a debt reduction.... which he also gets to saying.
I'm very intrigued by Bessent's talk about the SLR, the money printing and fiscal stimmies we've become accustom to are over, banks being able to treat treasuries as dollars effectively monetizes the debt but also allows it to be destroyed over time rather than with injections of velocity. I can only assume that's being slow-walked as they wring the system dry and adjust interest rates without a big shock.
Bookmarking to watch later.
Its clear to me that today we are still seeing the reprocussions of the global lockdowns and massive fiat printing. Few people even mention this. I remember talking to my sane coworkers about the bill coming due for that obviously terrible policy over the next decade.
One reason the rulers and bankers can get away with it is because of short memories. Others include the overall ignorance of how the fiat/government and crony capitalism systems work. The other is that the blowhards just make it into a personality thing. Trump blames Biden, Biden blames Trump. The masses get focused on the players and not the game. The masses are like fans of pro-wrestling that believe it's all real.
I'm not sure how it breaks but the farse seems unsustainable to me. The problem to me seems that the idea of socialism seems to have more legs with younger people than the real path forward. Reflecting state monopoly and embracing freedom, liberty, and responsibility.
Housing Crash FalloutHousing Crash Fallout
At least in California the supply of homes has never recovered. My friends in the real-estate market tell me that even with a net decrease in migration in California we have a housing shortage which drives prices up. Prices that are already inflated due to monetary policy.
California has insane regulations and oppressive permitting for home builders as well as commercial builders. This is across the state but worse in the large metros. It's a big reason many are leaving the costal cities to live in smaller interior cities in the state. Which is driving up costs there as well.
There is a lot of debate about what will happen if interest rates are cut. It will result in more houses going on the market but it won't magically make more housing appear. But it could help as many people that are empty nesters are sitting on their big houses because it would be stupid to sell now.
Lock downs weren't a cost, but a down payment, so they could paper over the system with a few trillion without the velocity of people going out ... It bought down personal debt and increased household savings over years. Also served to soft launch the China decoupling and install a fake president who could eat the inflation. Completely staged by the national security state... All part of the plan.
Housing is an interesting animal, all the variables of macro and then some because of migration even within the US, local regs, and demographics. Prices have been pretty flat a few years to break the ponzi cycle, building happening, now net-negative migration. I suspect lower rates will go hand in hand with boomers downsizing and it'll remain flat for the foreseeable.
100%
Ahaha, I actually watched it too but now I don't remember too much of what he said.
I do remember he said that the main policy is to keep the deficit under X% of GDP and GDP growth above Y%. A "grow our way out of the debt crisis" kind of approach.
I remember being skeptical as to whether we'd be able to achieve either of the two arms of that policy.
Not easy or quick to be sure, the number of nasty selloffs in markets over recent years are indicative of the restructuring having a bumpy landing. Weeks where decades happen come every few months. Likely still a ways to go.
Yeah..no. The US has had one of the longest runs of economic boom since 2013 when it came out of the 2009 Recession. Not only was a correction well over due by 2019, everything got hijacked by COVID response in 2020 and made things even more off-kilter. The problem is that economic growth is often measured by jobs and average wage increase, which is misleading. You can have significant economic growth without that wealth being shared, ergo "jobless recovery" etc.
The big problem that has occurred is that aside from tech baubles, we really haven't manufactured anything really new to drive American business and manufacturing since the 1970s. Robotics had a lot of problem, but China is now beating us in that regard. So, we're back to tech, which is just moving money around with recycled software and Internet ideas. Again, we are overdue for a correction, but we have not been in a depression at all.
Fiscal stimulus is not an economic boom
Wages declining against cost of living is not coming out of a recession
COVID was a natsec operation to soft-decouple from China and begin re-shoring
You can't have "growth" if you make less stuff
Tech stuff today isn't recycled ad-tech that's consumer stimulative, its efficiency gains thats production stimulative. Supply side vs. Demand side.
We've been wringing out fiscal stimulus since 22, ffs Bitcoin and the Russell are basically flat over the last year. PE's are down. New jobs are being created in the private sector as opposed to public. There's nothing to correct, this is the healing stage.
Globalists hate healing though, I wouldn't rule out a dump caused by another fabricated black swan either in the form of going hot with China or a junkie withdrawal that manifests as a global debt crisis that US ultimately comes out better for it.
So big, so beautiful and so rich, yet under recession for so long!
I think I can totally object this take sitting in India.
Still the cleanest shirt in the dirty laundry pile
This is the Triffin Dilemma at work, US has been sacrificed structurally to keep the global system afloat, which just delays an even bigger catastrophe.
Stands to reason it takes decades for the natsec apparatus to respond and turn it around, amidst powerful globalist forces resisting it.
USA cannot even fight a war now without Chinas nod of approval. China has won the trade war and dominates global trade in manufactured goods and commodities.
The USA and its deluded US Exceptionalists cling to their exceptional privilege ignorant of the fact that all their financial engineering is built upon an edifice that is crumbling. If the GFC did not treach you anything then you need a bigger collapse to wake up.
Meanwhile China is building the Post US hegemony trade payments rails and institutions are such changes are best done incrementally and not suddenly. Saudis, Iran, Russia and all the other BRICS nations are preparing for post SWIFT trade payments on Chinese based protocols like mBridge.
USA cannot any longer enforce its will anymore via sustained military force because it lacks the supply of rare earths essential to modern warfare.
Game over Uncle Sam. Silence.