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606 sats \ 10 replies \ @siggy47 18 Nov 2023 \ on: Meta Econ Takeover Day 32 meta
I have been reading doomsday faux economic books as cheap entertainment for a very long time. In the 1980s it was all about how Japan would overtake the U.S. and become the world economic superpower. It seems funny now.
That's why I never buy doomsday scenarios anyway, though I love imagining them.
I'm not convinced this time is different. The U.S. must avoid deflation at all costs, since the debt load would really be apocalyptic at that point. The logical path is to attempt to gradually increase inflation, while continuing to create overly optimistic gauges (CPI) that downplay reality. The average american won't realize they are getting boiled in the pot. That will enable the U.S. to inflate away its debt service. Bitcoin will benefit, as will inflationary assets like stocks and real estate.
I think this scenario is more likely than a dramatic worldwide disaster.
That tends to be my take, but people are still really sensitive about price inflation. I don't know if quietly boiling them is on the table right now.
The wildcard is this rapid escalation towards WWIII. I don't know how effective any particular wartime measures might be, but people have certainly put up with a lot during wartime. I could imagine some kind of rationing program being used to stifle consumer demand signals.
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I know that's a common suspicion, but it seems to me that intentionally reducing demand will exacerbate the deflationary trends that may already exist.
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You're forgetting about all the government deficit spending that will be happening to fund the military.
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I think about Occam's Razor. It seems far simpler and more likely for the U.S. to reduce rates, causing more paper gains for the asset owners and hope some wealth trickles down to the have nots, while inflation settles in a few points higher than it is now. In essence, kicking the can down the road a little longer. If wealth inequality starts causing social unrest, then they break out the heavy artillery, like a war or another pandemic.
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That certainly might be what happens. However, rulers seem to be aware that inflation can cause severe civil unrest, which makes it the most existential threat to their hold on power. Generally, when they play around with high inflation, it's after the populace has had some time to recover from the last round of high inflation.
It seems like we differ a little on where we are on the path towards major unrest.
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I'm by no means certain. I have believed the end is near so many times in my lifetime, and there always is another can to kick.
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That's fair. What do you think about the whole "never let a crisis go to waste" angle?
They must be looking at this Israel/Palestine situation as an opportunity to get away with something.
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Very possible. I actually had a conversation with a socialist friend who is convinced the Israel situation is a false flag. He never thinks anything is a false flag.