A truly multipolar reorientation of geopolitics with few or no globally dominant “great powers.”
A division of the world into “spheres of influence” dominated by authoritarian powers (China, Russia, Iran, for example)
The US will remain globally dominant thanks to King Dollar and its sheer size, even if politically or militarily weaker relative to its turn of the century peak.
The EU will pull itself together, emerge from the US’ shadow, neutralize Russian interests on its doorstep, and Europe will once again carry the torch of the liberal/western world order.
Other (please explain)
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
You've asserted the same thing repeatedly despite the data contradicting you.
This is the money supply, which has expanded considerably.
Spoiler Alert, click show to read:
Yet, the velocity of M2 money stocks has only massively decreased, and has been on a downward trajectory ever since the recession.
Spoiler Alert, click show to read:
Inflation cannot rise in the short term, when people hoard money instead of spending it.
Neither the current CPI trends, nor the historic CPI trends
Spoiler Alert, click show to read:
Nor the current commodity prices as I've linked earlier.
Spoiler Alert, click show to read:
These trends do not suggest cost-push inflation, quite the opposite.
The US economy is facing neither a persistent supply shock large enough to affect the overall economy nor is it likely to suffer from high inflation. In fact, we are much more likely to face the same dilemma Japan has been facing for three decades. Low growth, high debt, and constant threat of deflation.
Last edited by Love Mountain; May 03, 2020 at 11:33 PM.
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To the extent I’ve repeated myself it’s because my point stands in response to the trends that you’ve incorrectly claimed contravene it. I’ve already addressed the assertions you’ve repeated above. Reflexive denials don’t merit further discussion, and I don’t know why you began a discussion on that basis. At this point your charts may as well be appended to my own posts.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
Stagflation in the 70s began with the Energy Crisis, the scarcity of Oil. Nowadays we have the inverse situation, too much Oil on the market, being traded to negative prices, driving suppliers out of the market, filling limited storage space.
Some businesses weren't hit by lack of demand, they were outlawed to conduct business. Lockdowns are arbitrary government interventions which kill parts of the market.
But when the money supply increases, without production/services resuming, then inflation is a inevitable outcome.
A historical example would be Germany's hyperinflation: The people during the Ruhr occupation went on strike and the government paid the wages.
Last edited by Mayer; May 04, 2020 at 02:49 AM.
I don't see how you've addressed these points.
There's "too much" oil because business was shut down around the world. Thus the demand rapidly shrunk. There is also no distinction between being outlawed to do business, and a lack of demand. That is to say, of course there is a difference, but not in the context of a macroeconomic discussion. I'd also avoid from calling the lockdown as "arbitrary". That implies that it was done with no good reason.
Money supply expansion causes inflation in the long-run, not in the short-run. Germany is a good example of the current situation. Because while the government eventually managed to stabilize the economy, Hitler rose on the back of the German austerity and deflation that destabilized the Republic in the 30s. People who cry about inflation today, and in 2008 (where we also had a massive monetary expansion), miss the intricacies of the financial system and of what inflation actually is.But when the money supply increases, without production/services resuming, then inflation is a inevitable outcome.
A historical example would be Germany's hyperinflation: The people during the Ruhr occupation went on strike and the government paid the wages.
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Weimar was turbulent period, the deflation policies were years after the Hyperinflation. And it was money expansion coupled with lack of production, therefore printed paper without material wealth to give it any value.
Lockdown kills both demand and supply, a business which is outlawed to produce or provide services is a removal of supply from the market.
The hyperinflation is much more famous, despite the deflation of the early 30s being much more destructive to Germany.
Not a particularly useful observation. The economy is a cycle. Obviously supply shocks eventually spill over into demand, and demand shocks will do the same, given enough time and left unaddressed. That's not useful knowledge to craft policy. What we need to know, is what the underlying problem is. In this case, it's not the supply curve and it never was post 08.
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Precisely. As discussed earlier, hyperinflation isn’t a threat to the US so much as stagflation. You’re correct to assume some natural recovery in aggregate supply and demand going forward. To assert a “Japanification” or stagnation thesis is to assume supply either will recover more quickly than demand, or that demand simply will not recover to the extent supply will at all.
However, the collapse of world trade and the rise in production costs, actual if not nominal, points to systemic supply constraints that will transcend the corresponding drop in aggregate demand, and weigh on recovery. Low demand doesn’t preclude this. It need only recover faster/more robustly than supply, which is more likely than the opposite scenario under the circumstances, independently of the shape of recovery (U, V, J, etc). Short term deflationary impacts are a given, and I could be wrong in the medium to long term of course. That said, to dismiss potential effects of the increased money supply based on low demand or short term price movement doesn’t logically follow from its own premise.
Last edited by Lord Thesaurian; May 04, 2020 at 07:16 AM.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
Employment will not magically recover to pre-Corona levels. Not even close. As such, aggregate demand will be much slower to pick up than aggregate supply. There is no critical shortage of labor, of goods, or of other commodities. In fact, quite the opposite. Firms will have an easy time hiring in a recession, but a much harder time justifying expanding their production curves if there is no demand. Considering the growing number of overdue renters and homeowners due to growing unemployment, aggregate demand in United States is going to be depressed in the foreseeable future, whereas aggregate supply does not have underlying issues.
Neither of the links lend credence to your theory. China isn't a critical lifeline to the American economy, they don't provide a vital commodity that makes us super sensitive to their costs. Likewise, a rise in production costs is unlikely to affect overall prices due to rock-bottom commodity pricing and anemic demand. Apple isn't going to price the next iPhone at 2,000$ because lead times are longer from China. Nobody is dismissing the growth in the money supply, but a growth in the money supply isn't automatically inflationary until it's circulated, nor is velocity of money going to magically pick up "just because".However, the collapse of world trade and the rise in production costs, actual if not nominal, points to systemic supply constraints that will transcend the corresponding drop in aggregate demand, and weigh on recovery. Low demand doesn’t preclude this. It need only recover faster/more robustly than supply, which is more likely than the opposite scenario under the circumstances, independently of the shape of recovery (U, V, J, etc). Short term deflationary impacts are a given, and I could be wrong in the medium to long term of course. That said, to dismiss potential effects of the increased money supply due to low demand or short term price movement doesn’t logically follow from its own premise.
The question is, how likely is inflation? Based on the current trajectory and current factors, it is low. And without a significant chance of high inflation, the entire narrative of stagflation is nonsensical. Just as warnings of high inflation were nonsensical in 2008-2010.
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We’ve been over low demand. Low growth and high unemployment are key components of, not a counter to, stagflation risk.
To reference 2008-10 here further underscores flawed assumptions. As discussed, the 2008-10 trade collapse was due primarily to demand shock, whereas supply was comparatively unscathed by the initial drop in synchronized expectations. By contrast, in addition to demand, we now also have corresponding supply shock and systemic constraints of endemic supply chain disruption. To claim “aggregate supply does not have underlying issues” is simply not true, as cited. At the same time, policy measures are injecting unprecedented, open-ended cash flows that will more directly raise the broader measures of money compared to 2008-10.Neither of the links lend credence to your theory. China isn't a critical lifeline to the American economy, they don't provide a vital commodity that makes us super sensitive to their costs. Likewise, a rise in production costs is unlikely to affect overall prices due to rock-bottom commodity pricing and anemic demand. Apple isn't going to price the next iPhone at 2,000$ because lead times are longer from China. Nobody is dismissing the growth in the money supply, but a growth in the money supply isn't automatically inflationary until it's circulated, nor is velocity of money going to magically pick up "just because".
The question is, how likely is inflation? Based on the current trajectory and current factors, it is low. And without a significant chance of high inflation, the entire narrative of stagflation is nonsensical. Just as warnings of high inflation were nonsensical in 2008-2010.
Last edited by Lord Thesaurian; May 04, 2020 at 09:33 AM.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
Low growth and high unemployment are not necessarily low demand.
Again, it isn’t and the information you’ve cited doesn’t support your point. There is no underlying supply glut. And reality reflects that. This is why commodity prices went down not up. Shipping delays on Amazon are due to Covid 19 safety measuresTo reference 2008-10 here further underscores flawed assumptions. As discussed, the 2008-10 trade collapse was due primarily to demand shock, whereas supply was comparatively unscathed by the initial drop in synchronized expectations. By contrast, in addition to demand, we now also have corresponding supply shock and systemic constraints of endemic supply chain disruption. To claim “aggregate supply does not have underlying issues” is simply not true, as cited. At the same time, policy measures are injecting unprecedented, open-ended cash flows that will more directly raise the broader measures of money compared to 2008-10.
And essential worker shortage, not because railroads deteriorated and people died.
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My position is affirmative and fully sourced in detail, oftentimes verbatim. Your repeated misrepresentations and reflexive denials don’t refute the affirmation. Therefore they aren’t worth discussing further since that is the sole purpose of your argumentation and it has already been addressed.
Last edited by Lord Thesaurian; May 04, 2020 at 10:53 AM.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
I'll take that as a concession. I don't believe I misrepresented anything and I've argued in good faith. If you are unwilling to clarify or substantiate your point because it's too much work or too bothersome, fair enough, but that still leaves my points unaddressed.
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I can’t concede an argument you haven’t made, whether I want to or not. Just because I’ve declined to make your argument for you doesn’t mean I haven’t addressed your points. You set out 22 posts ago with one point: stagflation concerns are absurd, both recent and future. Your point and proceeding points have been addressed post for post, often repeatedly, and in more than sufficient detail. To claim otherwise has got to be your most flagrant denial yet.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
Your refusal to re-address the issue is de-facto concession. I've already said just a post ago. If you're so confident you've addressed my points sufficiently, then repost it because I didn't see it. I saw you talking past me and bringing up rather irrelevant data points, rather than addressing criticisms of your theory.
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Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
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Of course. The reparations were crippling and instead of Germany coming into the Allied fold, it was humiliated, looted, and crippled. Keynes on the Treaty of Versailles in The Economic Consequences of the Peace says the following,
"Apart from other aspects of the transaction, I believe that the campaign for securing out of Germany the general costs of the war was one of the most serious acts of political unwisdom for which our statesmen have ever been responsible"
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Consider taking your own advice. Since you began and ended the discussion as a debate, it follows that my position is affirmative, detailed and fully sourced, whereas you began the discussion from the explicitly negative view in response to my position, rather than in affirmation of long term stagnation concerns. That’s obviously not problematic, but you’ve yet to substantiate anything that is mutually exclusive to my position, as I’ve explained in response to each of your various avenues of ostensible criticism.
For example, your comments about supply and low demand were addressed in post 114, commodity prices and deflation in post 119, the last substantive post in our original discussion. I again summarized my position in post 128, and I addressed your comparison to 2008 directly in post 130, almost verbatim from existing source material.
You may continue to deny all this I suppose, but that is the sum total of your “critique,” which leaves no room for further discussion, as I said in post 123. If you have something new you’d like to address, go ahead. In the interim, I’ve repeated myself as much as any good faith observance of forum rules might allow.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII