To a large degree the economy is unknowable. That's why you can get two economists in a room and receive seven opinions. Don't get me wrong; there's good value there. It's just that economics is an odd mix of philosophy and math. On my more cranky days I call it astrology for people who know calculus.
If the economy were knowable to the degree that some economists claim to know it, they'd all be billionaires. So my advice is to scope down your question to something a bit more workable.
I listened to the National Association of Business Economists webinar yesterday presenting survey expectations for Q2. To say there was difference in opinions is an understatement. Opinion ranged from barely any impact to 50% GDP loss (annualized, so 1/4 of that for a quarter).
You hear economists say things like "guns and butter do well in recessions." The same idea applies here: what do people need during this time? That is what creates the market.
Outside of that, my only thought is don't pay attention to the short run volatility of the stock market as an indicator for long run economic outcomes.
I thought his point was great. There's some well-trodden ground in economics. If you learn nothing more but where the alligators are, you're probably going to do a lot better on that trip through the swamp you plan on taking. If nothing else, it tends to elevate the conversation.
Economics is really just accounting, statistics and psychology. But mostly accounting. I think people get really worked up about the “unknowable” parts and fail to see that accounting can open up tremendous insights if we only take the time to understand it well.
If you want to learn about economics for some specific money-making purpose, you’ll probably end up with an incomplete view that frustratingly fails to describe reality most of the time. On the other hand, if you approach the subject simply with an open mind seeking understanding, you will be richly rewarded with deep insights about the structure of society and the human condition.
Sure, people being certain about what's going to happen and when is akin to snake oil, but using good insight and tools to try and control how people are affected by something like a pandemic seems to me to be the role that economists need to play.
You can make the case that as a columnist, he's encouraged to make predictions but most Keynesians believe in direct cause -> effect of policy decisions based on a handful of metrics that properly describe the economy as a whole.
The number of professional economists who focus on investing, or even "the economy", is much smaller than most people imagine.
With our current crisis trying to discern what worldview policy is trying to force the economy to serve helps me understand decisions, especially with regard to things like inflation, consumer confidence, greed/fear, etc.
Similarly, say all you care about is predicting a recession since that's going to risk your job/business/personal finances etc. As far as I know, there's no way to predict a recession until after you're already in one. Sure, a yield curve inversion has preceded every recession in the past ~50 years, but (1) that's only ~5 recessions (2) the inversion has taken place up to 33 months prior to recession and (3) as the Great Recession taught us once again, just because something has been true for many years in the past (housing prices always going up) doesn't mean it'll hold true in the future.
Macroeconomic forecasting is by and large nonsense. The PhD chief (macro)economists from big banks you see on CNBC will, at best, identify some recent trends that could cause the economy to change if said trends continue and, at worst, prognosticate. I wouldn't describe myself as an "economist" since I only hold a bachelor's of science in economics, but the prognosticators do a tremendous disservice to themselves and to the practice of economics.
So should you ignore all economic news and analysis?. No. You might be able to make some vague, general, long-term forecasts, like how I believe that the US economy will remain a major economic power 20 years from now (hence why I'm comfortable squirreling away cash into S&P 500 Vanguard index funds) and that Amazon will probably be a major company for most or all of that period, but I don't pretend to know whether inflation will be below 2% for any fraction of that period, if self-driving cars will replace Uber drivers, or if China's per-capita GDP will exceed that of the US.
You have to be careful to identify what's not knowable even when everyone else believes that something is knowable. When I did debate in high school (circa mid-late 2000s), we had a topic on whether the US government should increase investment in alternative fuels. Many arguments in favor relied on the assumption that oil prices would continue to rise. Some experts debaters cited even suggested the world had already reached "peak oil." Judges were receptive since they were paying $4.00/gallon for gas. Now, of course, if oil is a finite resource and our consumption/drive habits remain the same, oil prices will have to rise eventually without alternative fuels. But few people, including me, (at least few people who got media attention) realized that the then-high oil prices were both (1) inducing previously cost-prohibitive US oil extraction and (2) weakening the incentive of OPEC's members to keep production low. That was a lesson to me: conventional wisdom about the economy, even "wisdom" from "experts" in a segment of the economy, can be wildly inaccurate.
P.S. hot take: while it's clear that humans can and have changed the climate, it's not clear what the tangible effects will be... so while some investment in mitigation may be warranted (especially with respect to obvious pollutants), we should be careful not to incur massive costs today on the assumption that say, Miami will definitely be underwater in 50 years.
Conventional wisdom is wrong about all kinds of things, all the time. "Forecasts have been wrong, therefore forecasting is pointless" is the wrong lesson to take.
It's just that economics is an odd mix of philosophy and math.
On my more cranky days I call it astrology for people who know calculus.
Read his insights and watch his interviews. That's a good basic start. Everything more then that: Nobody really knows.
I have read countless of books, but one thing you have to know:
It is a market - period. Something has value just because another person wants to buy it (at a given price). That's basically all there is. If you think that some asset is worth more in 10 years then it is now - buy it.
The "markets" go heavily up and down currently. That's just because different people price in the current health crisis in different ways.
Ha Joon Chang, Economics: the Users Guide and 23 Things They Don't Tell You About Capitalism (don't dismiss it as an anti-capitalist treatise, it's not) are also good, lighter weight (unlike Hill & Myatt no maths) but give an overview of the different schools of economics and what can be drawn from each.
William Ackman: Everything You Need to Know About Finance and Investing in Under an Hour | Big Think [0]
Covers the money making, Wall Street side
Was having a slow morning here so your comment led me on an hour and a half of checking out that video and some of his other content.
His videos seem a lot more approachable than the book.
It's free
If it means "What 10-15 stocks are poised to give me great returns in the next 5 years", the reading will be different (this would be sector reports, 10-Ks etc)
If it means "how can I ensure that another economic shock won't destroy my wealth or plans for FIRE", the reading will be different.
FWIW, I am finishing up a book called "Contagion" [0] (not the fiction one ) and should start reading "Pale Rider" [1] about the 1918 pandemic. I've found that history offers guidance and opens your mind to possibilities thus offering solace.
[0] https://www.amazon.in/Rules-Contagion-Outbreaks-Infectious-D...
[1] https://www.amazon.in/Pale-Rider-Spanish-Changed-World-ebook...
Also recommend Marketplace's podcast Make Me Smart [1], which is an informal deep dive on a single subject. It's nominally a weekly podcast, but they're now releasing a 10-minute daily version.
Finally, NPR's Planet Money [2] and their daily podcast The Indicator [3] are entertaining and education as well.
[0] https://www.marketplace.org/ [1] https://www.marketplace.org/shows/make-me-smart-with-kai-and... [2] https://www.npr.org/podcasts/510289/planet-money/ [3] https://www.npr.org/podcasts/510325/the-indicator-from-plane...
Look at the non-COVID Make Me Smart topics as an example:
- Housing policy - Corporate social responsibility - food policy to fight global poverty - the equal rights act - facebook and US elections - regulating the internet with section 230 - an interview with a senior politico editor about the school-skills-jobs pipeline - why private equity needs to be regulated
That said, I do appreciate the Marketplace interviews with 'regular small business owners' Marketplace has been doing lately. Ranchers, Mississippi freighters, factory operators, etc.
In terms of other podcasts, Bloomberg's Odd Lots podcast[1] is a nice long form podcast with subject matter experts. Their guests also likely have a political agenda, but you at least get exposed to the inner workings of a market. A recent pair of podcasts provides a good example: a few months ago they talked with a guest about an unusual feature of Korean retail banking, the structured note. They provide investors--primarily retirees--a fixed 7.8 percent return if the market doesn't drop by a huge margin. Otherwise, investors are stuck with the return of the underlying benchmark (which is down a huge margin). Well, last month exactly that exact tail risk scenario triggered, and they brought the guest back on to further discuss how this compares with previous bank crisis episodes.
In particular, they collect and graph enormous amounts of data to augment their articles. It's much better than random posts found on the internet.
I had been an avid reader for 30 years, cancelled my subscription around 2015-2016, and I was not even aware of the new ownership at the time, I just sensed the change of their ideological orientation and did not like it one bit.
First: accounting. I got an MBA five years ago and accounting was my favorite subject because it is behind everything that a business does. Accounting is the instrumentation that allows humans to organize their activity across tremendous scale and complexity and still be confident that they are producing value (making a profit). In the modern economy, accounting is everything. Try reading Jerome Levy’s “Where Profits Come From” to check your accounting chops: https://www.levyforecast.com/assets/Profits.pdf
There is a common fiction to money matters that everyone has to share- whether or not they know it- and the language in which that fiction is written is accounting.
Poetic.
It's a fairly detailed book but it's worth the time. If you're too busy to read a whole book, you might want to take a look at "Economics in One Lesson" [2] by Herny Hazlitt.
The foundation for economic education[3] has some great articles too about economics and public choice.
[1]https://www.amazon.com/Basic-Economics-Thomas-Sowel/dp/04650... [2] https://fee.org/media/14946/economicsinonelesson.pdf [3] https://fee.org
Mises and Hayek wrote big and hard to read books about it, but two that explain this to the layman are "Meltdown" by Tom Woods[0] and "How An Economy Grows And Why It Crashes" by Peter Schiff[1]. The first is an explanation using the 2008 crisis, and the second is a very amusing yet educating economy lesson told as a kids' story.
Another book that can help grasp this, although I wouldn't read it first, is "The Forgotten Depression: 1921: The Crash That Cured Itself" by James Grant.
If you're interested in the actual business cycle theory, Tom Woods explained it briefly while promoting Meltdown. Explanation starts 14:03:
https://youtu.be/NBwJm68FkMc?t=844
[0] https://www.amazon.com/Meltdown-Economy-Tanked-Government-Ba...
[1] https://www.amazon.com/How-Economy-Grows-Why-Crashes/dp/B004...
Also, current consensus, of course among mainstream economists, is that countries that more believe the Austrian school, like Germany, has caused unneeded pain on themselves/their neighbors by advocating of austerity versus stimulus during downturns. If you want the mainstream steelman against the Austrian school, you can search Paul Krugman's take on them.
You are right, there is very little inflation in the consumer price index (at least nominally), but there is a significant amount of inflation in assets and other parts of the economy that are relatively close to the central bank/printing press. Inflated Silicon Valley salaries, maintained by an influx of VC money bidding up the price of labour, are a great example of this.
Similarly, things like housing, healthcare costs, schooling costs, etc. are not well captured by the inflation metric, but have grown wildly in the last few decades.
The purchasing power of the average person is probably worse now than it was in 2007 if you look at what people actually have to spend money on versus the artificial basket of quality adjusted goods used to measure inflation.
But you gotta understand that we export a great deal of our inflation. One day those dollars will come home to roost, but until then, Germany's balance sheet looks a hell of a lot better than the U.S.'s. going into this recession. Our deficit is already $3 trillion this year and climbing rapidly, with debt levels reaching their highest in relative terms since World War 2. And we haven't even scratched the surface of this deep recession yet.
There's plenty of actual mainstream economists that can give you steelman responses to Austrian Economics. Don't go get them from Krugman. You won't get good steel from him; it will have too much straw in it.
As a german, this is news to me. Austrian school stands mostly for a free market without or as little as possible state interventions and regulations: a idea very frowned upon here generally and usually rather associated with the US
A prediction without timing is no prediction at all.
1. The establishment encourages making credit widely available in order to pacify the less well off who would otherwise demand a better deal out of the social contract.
2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back.
3. Eventually this comes to a head as people begin to default, causes a cascading chain through the economy as people are unable to meet their obligations, leading to crash.
4. At which point, governments step in and debt is forgiven, correcting the imbalance created in step 1.
Seemed to make a lot of sense to me. And the interesting thing is that it suggests a solution: replace widely available credit with direct wealth redistribution and you end up with the same net effect (as the debts are being forgiven in the end anyway), but without the destructive boom-bust cycles.
People borrow for much more than basic needs and they do so voluntarily without anyone forcing them. This does not substantially affect your logic, but I think lots of the blame for mismanaging debt lies at the people in debt themselves.
The biggest thing I find incomprehensible is this belief that when a recession or crisis hits, you have to let pretty much everything go to shit so the bad firms can get wiped away and better, more innovative firms can take their place. On the face of it, that is very reasonable, and I certainly worry about the moral hazard of bailout after bailout.
But at the same time, Schiff seems to incomprehensibly believe that our political systems live in a world separate from our economic ones. There is just no way the populace at large in a liberal democracy would stand for a deep recession/depression without demanding the government do something to soften the blow. There is even less of a chance of that happening with a command-control/fascist type economy. This fantasy that he believes that people would just stand idly by thinking "thank God the free market is clearing out the detritus!" while they lose their jobs is laughable at this point.
As you say Modern Monetary Theory models predict Japan and, also, the missing depressions in Australia.
That's very true. People will read and decide for themselves.
As an example where ABC will go off the rails, our current crisis is not one build up due to overage in inventory, a favored ideal rationale for ABC to explain the business cycle. Much more explanatory, surprisingly, is Keynesian animal spirits.
I do believe that the Keynesian economics that has been practiced for the last few decades has left the global economy woefully unprepared and venerable. Low interest rates have fuelled massive asset price inflation and encouraged governments, businesses, and individuals to take on far more debt than is prudent.
If you are talking about the QE programs, that's what Keynesian economics would call "pushing a string". Keynesian would be fiscal policies, not monetary policies.
After about 12 months in average from when the inversion stars, the recession will start itself. >"All the recessions in the US since 1970 (up through 2018) have been preceded by an inverted yield curve (10-year vs 3-month). Over the same time frame, every occurrence of an inverted yield curve has been followed by recession as declared by the NBER business cycle dating committee.[12] The yield curve became inverted in the first half of 2019, for the first time since 2007." https://en.wikipedia.org/wiki/Yield_curve
What does this mean?
FWIW, Richard D. Wolff doesn't accept crashes as a given. He advocates worker self-directed enterprises as a mitigation. Having done some workplace democracy (am a huge fan), I regard his effort as more aspirational than prescriptive, but it's nice to have people floating new ideas.
Mises is a big joke. Never made it past assistant professor. Never worked a day of his live in private enterprise. His theories describe barter economies in the middle ages; alas this quite well. Due to his lack of understanding of the principal nature of capitalism he offer no insights into economics.
"Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump."
Ludwig von Mises
Von an outstanding an deep insight, not. While not explicit mentioning it, he suggests that this is a bad thing. Trick question: What kind of boom does not bring a credit expansion with it? His quote is just a tautology and offers no insight. Yes, the boom/bust cycle is an inherent feature of capitalism.
If you are referencing to the fallout from covid, it's essentially the effect of global commerce coming to screeching halt.
As CEO of GS said, no one has a clue on what's going to happen in Q2 and beyond, and if they say they do, they are BS'g.
It's a Black swan event. Most forecasting models are ineffective. Whether it would be a V, U, L recession is anyone's guess. As it all depends on how politicians react, ie. How late they are to lockdown and how long they will be in that state. Which perhaps is outside the realm of traditional economics. Hence my suggestion.
Yeah, one could say that things could have been better prepared (I'm in that camp), but one can never truly prepare for half of the working population being put on indeterminate leave on such great a scale.
Beyond that, if you want something kind of fringe but real time, ZeroHedge is interesting. Lots of chaff, but some of the wheat is insightful.
Real vision[0] has some really good content. It's not super easily digestable for someone not in professional finance but I think finance is just too complicated to simplify and not lose a lot of nuance. I'm trying to learn and have to look up a lot of stuff but it has been fun. I think they have 1 month trial for $1. I recommend Raoul Pal's recent video "The Unfolding" as a starting point.
I also think Macro Voices[1] podcasts are very solid. Again not very easy content but experts in various fields help to make sense of the bigger picture. You can choose a bit depending on what you're interested in (gold, bitcoin, bonds etc).
It's worth noting that NOBODY knows what is really going to happen, all you can do is try to get informed opinions and set probabilities. If you're looking for investment advice trying to time the market or sectors, I would stop looking. The uncertainty does not favour amateurs in my opinion.
The downside to arrogance is that it will tank your reputation if you fail. This may be too early in History, and too politically charged to use as an example, but think Trump.
[^] on personal interactions, though, I find arrogance a repellent trait.
Summary: you better of learning more about human behavior, and how we operate on a daily basis then reading every book on economy.
When I heard in 2008 as a kid, that the world is in a financial crisis because the investors are scared, I had no idea what is going in. I was like, those people are grown man, how come they fear something they do all the time? And why does investors mood correlates to financials? How can a grown man have a fear of investing as an investor, it was odd at a time for me. Then I went ahead and played outside like nothing is happening.
I've read a lot of books just about everything, like on every topics i could get my hands on. Some of em are: Thinking, Fast and Slow, The power of habbit, Deep Simplicity, Intelligent Investor and much more, not exclusively from hackernewsbooks.com.[0]
I always arrived at the conclusion of the market is eventually run by people(no shit). At some point in time people come up with the idea of having a stock exchange or whatever you want to call it. Without people it would be non-functional, non-existent. So if you want to know about the working of market, you better of reading about humans, human mind. What drives us, why we do things, fears, and so much more. And the best thing about this is that you can see for yourself, it feels I am doing a research, but on myself. There is not a single silver bullet in this topics of course, but one book I most often hear is Thinking, Fast and Slow, mentioned before, its really worth to read it!
Sometimes its driven by fear, like right now. In 2008 it was greed (yeah its usually not just one thing, but you get the idea). So at the why and how, I usually end up with human behavior. And since you cant determine what someone is going to do, feel or think, you cant really tell what is going to happened next, or in the future. But after reading more and more about humans, it gets a little bit clearer as you read more books and connect the dots. And you are going to experience everything for yourself. You can be your own research subject. The past couple of years I've been doing that and I really enjoying it.
[0]: https://hackernewsbooks.com/book/thinking-fast-and-slow/8e66...
For me, personally, after trying to make sense for a while using the mainstream narrative, the only thing that worked was Modern Monetary Theory. Their explanation of the banking system is based in how it really works (mainstream textbooks don't), the sectoral balances framework (1) gives you a tool to think in terms of aggregate demand and their theory explain things that mainstream have problems with (like public debt ratios and inflation and interest rates relationships). There is a textbook available(2).
1.- https://en.wikipedia.org/wiki/Sectoral_balances 2.- http://bilbo.economicoutlook.net/blog/?page_id=33139
very approachable for an intimidatingly huge book
So a shift away form outsourcing, at least outsourcing out of country in full as has been the case in many area's of production alone.
Equally, resource/asset stripping may well be rife in the fallout with the ability to buy up companies cheaper and be instances in which those value of assets changing quicker than the company values them. They may own some unused warehouses that on the books been almost written off and yet perfect venue for manufacturing boom.
But so many things so high up in the air, you can never see a true picture of tomorrow, but can get some idea's and those ideas will change and flesh out in the long-run. But it's the overall trends and psychology is probably as useful a skill in predicting the markets than maths in today's times. Which kinda shows how up in the air everything is.
Only thing for sure, soon as one company comes up with a cure, you will see a jump in that companies share price, even if they was to do it all for free.
https://www.reddit.com/r/Frugal/
https://www.reddit.com/r/personalfinance/
https://www.reddit.com/r/financialindependence/
https://www.reddit.com/r/investing/
https://www.reddit.com/r/stocks/
Oh, this was the article https://qz.com/1707479/reddit-has-become-a-guide-to-personal... (https://news.ycombinator.com/item?id=22478854).
Then there are the recent HN posts to Lyn Alden’s work: https://news.ycombinator.com/from?site=lynalden.com .
Nick Rowe: https://worthwhile.typepad.com/worthwhile_canadian_initi/nic... , https://twitter.com/MacRoweNick
Scott Sumner: https://www.econlib.org/author/ssumner/ https://twitter.com/MoneyIllusion
Maybe, Antonios Fatas: https://twitter.com/AntonioFatas
And Also Maybe Sam Bell: https://twitter.com/sam_a_bell
Have been scanning HN a lot for anything related to the economy and found little except for this post.
Read Debt the first 5000 years from David Graeber.
Read Money in the Modern Economy from the Bank of England. https://www.google.com/url?q=https://www.bankofengland.co.uk...
Why these? You have to understand money and credit. Economics ignores money and credit which would be like physics ignoring atoms and gravity.
Yesterday they disavowed economists who are apologists for price-gouging on life-essential goods, such as masks, whose production cannot quickly respond to pricing signals.
Because judging a subject based on it's faculty classification is oh-so-scientific. Economics is a scientific study of social phenomenon; where else would you like it to be placed?
You’ll likely be surprised at what facilities are at the disposal of this pseudo public institution, and it’s certainly interesting. The Fed collects inordinate amounts of data from each of its branches, and in times of crisis, as the books elaborate on, it seems they mostly go off the cuff with custom solutions to large scale solutions. Anyways, it helped me understand the US economy better. Greenspan’s book has more info on global policies.
[0] https://www.macrovoices.com/ [1] https://www.realvision.com/
Capital and Ideology by by Thomas Piketty
Spoiler alert Since way back inequality was baked-in as a featue.
https://twitter.com/LukeGromen
https://twitter.com/LynAldenContact
blog:
Common thread is topics around currency dynamics, and US Dollar reserve currency affecting..many things: trade, markets, geopolitics.
Anyone who claims to know for certain what the impact will be, is a fool or a liar. We are in unprecedented monetary policy times.
Maybe USD is cementing it's position as the global currency standard, maybe this will spell the demise of the USD and the US' economic collapse, or maybe not much will change at all. There are arguments for all three to be true.
Why do you need to know for certain?
If you're trying to make money, or even just "get by", you look at probabilities of possible outcomes and make your best guess on how to approach the problem. A mentality of "no one knows for sure, so it's pointless" is oddly unscientific. You only need to be "right" some of the time.
I try to write a blog post once or twice a week as well, but this is more for myself -- just to actually force myself to synthesize everything going on. Happy to share if anyone is interested.
[1] https://www.coursera.org/lecture/money-banking/a-money-view-...
Central banks inject money into the economy, inflating the economy, reducing costs across the board. This acts as a wealth transfer from wealth holders to wealth producers, by that I mean businesses.
Normal inflation happens in a healthy economy, in an unhealthy one like this one, they dust off the lever known as QE. In a QE environment, the central bank injects money directly into the economy by buying up government bonds and other financial instruments.
This coupled with fractional reserve banking means that the banks can make a whole lot more loans, flooding the system with liquidity so that money can start moving again.
I had implied that QE increases the money supply, and so was corrected and told that it was actually the money base that was increased. On to Wikipedia I went to upgrade my knowledge.
There I found out that the concept of money base is referring specifically to the amount of money banks can lend on using fractional reserve banking. So while nominally it's referring to the amount of hard currency in circulation, that 'in circulation' part is key, it's not just the amount of 'real' money out there.
Economics shouldn't be mysterious, one's first stop should be Wikipedia to understand the boring concepts. If you want to know how it got that way, the Wikipedia articles on the history of the banking system are pretty good.
It's dry, boring stuff. But you need to know it if you want to understand how the world works.
That's not how it works.
First, never mind how much money banks can lend, if there is nobody asking for credit. You can't create demand for credit by QE.
Second, private banks are not limited in their capacity for creating credit by the quantity of reserves available. If central banks are going to keep their interest rate target they have to facilitate any demand of reserves by private banks.
It's impossible for a Central Bank to control the quantity of money and the interest rate, they have to choose one, and they choose the interest rate.
As I said in another post, I was totally confused about how it works until I started to read the Modern Money Theory version of all this.
Here, explained by the Bank of England (pdf):
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
Ray Dalio’s talks on YouTube, and his most recent TED talk are great for context around economic downturns.
Real Vision and Anthony Pompliano’s podcast are good for deep dives into what’s going on with a bit of an alternative take.
-Freakonomics (https://freakonomics.com/) has been making some good episodes about different aspects of the current crisis. The latest episode is about the food supply market, the one before is about the $2 trillion aid package.
-Planet Money (https://www.npr.org/sections/money/), which was created in 2008 to help make sense of the finantial crisis, is obviously focused on the crisis. Expect 20-30 minute episodes about economic topics in the news (some of the latest episodes include "The Big Small Business Rescue" and "The Economics Of Hospital Beds")
Dalio runs the world's largest hedge fund and it's entirely focused on predicting what the macroeconomy will do, based on studying the last thousand years or so of economic history.
It's an impressive aggregation of data and journalism. But boy could their site do with some improvement... Could be some work in it?
There's a comments section under every article, and a motley community of dedicated "common 'taters". Plenty of workers, business owners, property darklords, doomers, prospective first home buyers, trolls, and even a few wise farmers. I find it helpful to guage the vibe of what is happening on the ground. Deep down, I think what's really needed is a forum.
I highly recommend Economics in One Lesson by Henry Hazlitt. It is a very approachable book that can be read in one sitting.
It illustrates the seen and unseen effects of action from Frédéric Bastiat.
So I kept it aside, I bought a piece of land and now I setup hydro and solar pvs, to generate my own power.
I am growing my own food (mostly potatoes, tomatoes, beans, raising few hens for eggs) and I've shelter, that's pretty much all I need.
So now I don't care about economy going down or smth, yes I might lose money which is in economy but it isn't going to affect my livelihood.
It provides a solid overview of different views of what is money, what is banking, and in what ways does the financial system impact the real economy? - These are all contested points in economics.
He goes on to lay out a different design to a monetary system, that he believes resolves the main fragility in our current system - panics on short term debt. It's a good read for someone who enjoys system design as much as they do financial/monetary economics.
What I read here are:
- Newspaper titles (only read the content if something is really interesting)
- Twitter, following a few key people, both with a political and economical background
- Discuss with friends about economy topics
I know there's much noise in all that, but same as with politics, I don't think you'll be able to fully make sense of the economy unless you dive deep into it for many years, and even then you'll only get a partial view on many things.
https://www.amazon.com/Principles-Economics-7th-Gregory-Mank...
I started with vulgarisation but it didn't lead me very far. This is a reference textbook used by economics students around the world. It's surprisingly entertaining and teaches you the basic concepts of macro and micro economics.
[1] https://www.amazon.com/Farewell-Alms-Economic-History-Prince...
Therefore, my best advice for you is to hoard cash (3-12 months expenses), cut expenses and try not to freak the fuck out right now
I know that a lot of it is supposedly not going to make it into the real economy. But if there is one thing for sure, it's that the government is going to behave recklessly and fuck it up.
1. Economics in one Lessons. One of the most powerful books I've read on the economy. Will help you rethink and see deeper 2. Dao of Capital. Book by Mark Spitznagel -- goes into tail risk hedging, and his counter-intuitive investment thesis. He made 4000% over Covid 3. Dalio's essays -- from "The changing world order" to "Debt Crises"
Published ~2005, it (arguably) makes sense of the previous several decades of western economics.
https://www.johnralstonsaul.com/non-fiction-books/the-collap...
It might be an interesting read, but the main thesis seems false? Globalism has done just fine.
> Elsewhere, the world looks for answers to African debt. the AIDS epidemic, the return of fundamentalism and terrorism. all of which perversely refuse to disappear despite the theoretical rise in global prosperity.
Most of these don't look so intractable any more, even if we haven't solved them, yet.
The go to text book to understand the mechanisms and mechanics behind Modern Money Theory.
This blog, and this post in particular.
not in any way affiliated with them, i just find their content sophisticated and interesting.
Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism https://en.wikipedia.org/wiki/Bad_Samaritans:_The_Myth_of_Fr... https://www.youtube.com/watch?v=WU9DgfOMpmo
Economics: The User's Guide https://www.theguardian.com/books/2014/may/29/economics-the-...
Jane Jacobs
Cities and the Wealth of Nations https://www.eyrie.org/~eagle/reviews/books/0-394-72911-0.htm...
He got it completely wrong - for quite some time, Grasshoppers have been routinely bailed out with money stolen from the Ants (through interest rates way below inflation).
Here are some random links that I check from time to time when I have the time.
https://wallstreetonparade.com/
https://www.nakedcapitalism.com/
https://mattstoller.substack.com/
And then many mainstream ones like newspaper sites and the like.
1/ consumer confidence is extremely low as people are afraid of the virus and afraid of losing their jobs
2/ businesses have seen sudden and complete revenue destruction with revenue going down from 50% to 0% of pre-crisis; however their obligations (salaries, servicing debt, paying suppliers) obviously are still there. The natural instinct is to pause projects, new hiring, layoff people, stop buying things, postpone payments to suppliers and be more aggressive in collecting invoices.
This becomes a self-reinforcing cycle purging non-essential businesses or non-competitive businesses at a very high rate.
This will accelerate until normal people are no longer afraid to go out and then the supply chains will restart with the businesses managed to remain alive.
The best policy response would be to freeze the capitalist system altogether and allow any liability due in the future to be postponed by 3 months when entities can prove significant revenue shortfalls and implement an aggressive government-backed temporary unemployment system for those businesses as well.
To the extent that people haven't lost their job yet, it would fix the impulse of business owners to do this very aggressively in the necessity to balance inbound and outbound cash and post-crisis these businesses would have similar balance sheets as pre-crisis so life can resume quickly.
For normal people nothing would change much to the current situation (stay at home, temporary unemployment, being afraid).
The other good policy response I have seen is to force banks to give businesses a corona-credit and to guarantee those loans. It's less good because it does increase the debt-load of a company which alters their balance sheets and would have to be paid off post-crisis.
How so specifically?
Disclaimer: NC is fairly leftish, but I don't consider that a flaw. I'd be interested in learning about rightish blogs of the same depth and quality.
Yes, the host is a libertarian, but I don’t think he forces it on his listeners. He’ll often have people on who aren’t anything close to libertarian. He’s also quite upfront about his own biases.
I learned a ton from that podcast.
I am only a third of the way through, but it so far seems thoroughly researched, without the dodgy understanding of economics in many (most?) historical nonfiction books. The only potential problem is that I want to believe that the dystopian sounding world ruled by mamluks was an economic disaster waiting to happen, so I am wary of my reading being overly credulous. It could be that irrigation dependent agriculture was more brittle infrastructure, but I haven't yet had time to finish or digest the book yet.
From the introduction
England:
> In spite of the disputes over many significant issues, scholars agree about certain aspects of the outcome in Western Europe, particularly northwestern Europe. In many areas, urban and rural wages rose, land rents declined, grain prices dropped, agricultural output became more diversified, and unemployment levels decreased. Furthermore, the percentage decrease of agrarian and total output was less than that of the population, and per capita incomes rose. Overall economic recovery was largely completed by the year 1500. Landholding systems were transformed, and the manorial system, which was on the wane in some areas, collapsed in many parts of Western Europe, and was replaced by tenant farming or small peasant landholdings. Where these conclusions are accepted, they are often accepted as an axiomatic response to the relative scarcity of labor and the abundance of land that accompanied depopulation. The concessions that landlords made to peasants also seem to be an obvious consequence of the relative scarcity of rural labor.
Egypt:
> Wages dropped precipitously, land rents increased, grain prices rose, agricultural output became less diversified, and unemployment levels increased. The percentage decrease in agrarian and total output was greater than that of the population, and per capita incomes plummeted. The landholding system did not undergo a radical transformation, and the aristocracy was able to successfully contest the demands of scarce rural labor. Furthermore, economic recovery was nowhere in sight by 1500; the agrarian system lay in ruins, and agricultural output had declined by approximately sixty-eight percent.
[1] https://smile.amazon.com/Black-Death-Egypt-England-Comparati...
Mod is a former /r/collapse mod. Pesimistic, but not a loon.
Marx
the Bible
Bogleheads
Newspaper titles (you read that right, not the content, titles)
"nothing, I just bought a piece of land to grow potatoes and beans"
Comparative study of the black death
Raw St. Louis Fed data
Fear and Loathing in Las Vegas
2. A Template For Understanding Big Debt Crises (2018) by Ray Dalio
3. Capitalism: The Unknown Ideal by Ayn Rand
4. Basic Economics: A Citizen's Guide to the Economy by Thomas Sowell
So the governments of the world have been the ones buying. https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
The fed put 4 trillion on the books during the financial crisis and 10 years later they started normalization and barely made a dent. This number should be 0. Now in a few months they've spent 2 trillion buying what nobody on the market is buying.
How do you make sense of the market when the government is basically preventing the crash. It's not possible to make sense right now.
We aren't seeing real market numbers. We aren't seeing real tbill rates. We arent seeing real economic numbers like unemployment because the governments have been hiding % under participation rate.