I'm not sure how you can belief this terrible cliche to be true.
Without even bringing up money or inflation:
Oil and other products are in much higher demand compared to the supply than the current system can handle right this moment. You can get less of what you used to get and its obvious for everyone.
This has immediate consequences, but also compounding when slower/lower trade directly effects the ability for people to earn enough to stimulate more trade.
The immediate stuff would cause a recession in itself. Period. Nothing about economic beliefs. ( except if you include a desire to nationalize certain parts of the economy ). The compounding stuff can be mitigated in many ways. Personally I don't think its prudent to mitigate it with consumer debt. i.e. the only way I'm able to interpret your suggestion to not belief in a recession.
"Oil and other products are in much higher demand compared to the supply"
You mean when you arbitrarily cut off supply to satisfy a fringe element it has repercussions?
Who knew?!?
The Fed is hitting the breaks on demand in order to slow down inflation. If they slow the demand side too fast then we enter a recession, if they manage to do a soft landing the pull back demand enough that supply can catch up bringing inflation back down to a 2% range with many a small downturn or short recession.
The goal is too slow down the aggregate demand in the market - whether or not we believe that it is a recession is irrelevant. Money will get more expensive, companies will be more shrewd on their spend & hiring. Whether the economy contracts and enters a technical recession - doesn't really matter - there are actual physical realities to the world and we can't just will our way into a bull or out of a bear market as nice as that sounds.
> The Fed is hitting the breaks on demand in order to slow down inflation.
Are we watching the same news?
The measure to slow down demand is to increase the VAT
https://en.wikipedia.org/wiki/Value-added_tax
I don't remember what the Fed/SEC did the last months but it was a measure that had for effect to reduce investment in stocks (would appreciate if you could point out the name of the tax fee)
Deincentivizing/diminishing investment in companies result in what? In a reduction not of demand but of production.. Enterprises will downscale their productions and are subject to auto amplifying panic hysteria. The panic sentiment do reduce demand from people (non linearly).
The gap between demand and production, which is an absurd inertia that should have been anticipated during covid, is mild and most importantly is reducing quickly as time passe, unless of course media hysteria induce panic buys.
most importantly, the salient absurdity of the thing is the non-locality of the discourse and of the measures. Only a limited set of companies have a deficient offer/demand ratio, e.g. a company can distribute 1 billion software copies just fine. However the panic mediatic fear of market subinvestment affect even the enterprises that have no issues matching demand, which are in fact the majorities of companies (although yes some key fundamental companies might be limited), moreover the FED/SEC measures affect them equally, and therefore the VAT measure I propose to reduce demand ( which seems incredibly more logical) should be applied locally and proportionately to how much a specific company demand/offer ratio is affected.
either I'm wrong either the system is just doing absurd suboptimalities and I'm betting more on the latter than the former but please share your thoughts.
FED / SEC are completely different entities with completely different roles and market functions. It's like apples and oranges. And has nothing to do with a VAT tax.
I am sorry, but your comment is almost incoherent - so my response is more of a broad general definition of what the Federal Reserve is doing to help you understand the macro context a bit more. As the Fed actions are intentionally moving the markets / economy at this point.
Short form - the Federal Reserve increasing the cost of money slows down demand in the entire economy as a function of the cost of money goes up. I am not talking only hard goods - we are talking services, investments etc. They want to slow down the demand side of the economy by increasing the cost of money. It's a blunt tool but it works - if it works to well we enter into a recession which is why they are in the hot seat right now. Very challenging as they have a simple lever where there is a considerable amount of factors (geopolitics, other countries central banks etc).
You are not addressing the fact that their lever deincentivize investment and therefore production, an argument worsening inflation and you are not addressing my point saying that VAT is obviously a direct measure to reduce demand, without impacting investment as directly, finally my VAT locality on the most critically underproducing sector yet non affecting the unaffected companies that produce just fine, is a third argument.
This is pretty basic.
The answer is more likely to be that the U.S never had a VAT and creating one has tragic political inertia and hence the FED use the wrong tool but the one it dispose.
I didn't respond to you argument because it was incoherent and unrelated:
Why are you even discussing VATs? Politically infeasible and not a tool at the disposal of the Fed - its at the disposal of the legislature. Also it doesn't solve the problem that the Fed has - which is reducing money supply / offloading its balance sheet and reducing inflation without tanking the labor market.
No, recessions happens when the economy is out of balance and corrects. Look at this graph for example, there was a huge correction happening in 2008. Currently the graph is much more out of line than it was in 2008, so it would make sense that we would need another recession to turn it back again.
you can certainly destroy money by stopping consumming as a group, which will make enterprises downscale or even go bankrupt, resulting in net losses and autoamplifying effects. Why do I even have to explain that..
Yes, we were told there was not going to be any consequence of shutting down the entire economy followed by massive QE artificially bringing markets to ATH. And now we are in a QT environment with a few rate hike scheduled, while awaiting a demand crush ... all is fine, there shall not be any recession :-)
Fact is, these last few years have been entirely emotionally and panic driven by old people caring mostly about themselves
the base reasons do not matter much, the effect we will observe is order of magnitudes higher than the original reasons, because of the self fulfilling prophethy of autoreinforcing feedback and mediatic echo chambers. Every media that amplify the fear is responsible for an amount of suffering on earth. The 2008 crisis was mostly an absurdity that hurts the brain in retrospect.
Thankfully I will make some money by buying now, afterall under those circumstances, economy is an intelligence market.
>the base reasons do not matter much, the effect we will observe is order of magnitudes higher than the original reasons, because of the self fulfilling prophethy of autoreinforcing feedback and mediatic echo chambers
Ah... but this goes both ways. That's why we're in a bubble to begin with. Those same base reasons didn't matter as much because prices were way higher than you could really justify without those feedback loops on the positive side.
The base reasons matter a lot. Inflation could mean the government won't be able to provide more liquidity in a downturn so the downturn will be more severe. Vs 2008 where at least the cause of the recession didn't preclude the govt from providing liquidity.
While stated like fact, you're espousing a relatively radical philosophical perspective about reality. It might drive radical social change (or desire to), but most people don't think like this.
I fail to see how it's anything other than a logical consequence -- much less radical.
I know from first-hand experience that if a team don't believe they have a particular person as their manager, that person is, in fact, not their manager. It's impossible for that person to be their manager.
I also know from first-hand experience that once a group of people no longer believe themselves to be a soccer team, they stop being a soccer team. (Well, actually, this is not about a soccer team but the real example is too fresh and personal to be detailed about so let's pretend it's about a soccer team.)
Similarly, I know from second hand experience that once people don't believe a person is part of a family, that person is, in effect, not part of that family anymore.
I have third hand experience of people not believing a grocery store to be such, and indeed it ceased to be such very quickly and tragically to its former owner.
And so on. I can't think of any social construct that does not require buy-in from the affected parties.
This is essentially nonsensical though. You can internally reject social consensus or even objective measurement, but you cannot choose the frame in which you are evaluated by others.
> I can't think of any social construct that does not require buy-in from the affected parties.
"Prisoner", "slave", and "taxpayer" spring to mind (but I repeat myself). These are artifacts of social consensus, enforced by people with stronger-than-usual opinions about the correctness of their evaluations.
Viktor Frankl, Nat Turner, and Warren Buffett, as exceptions, do not disprove the larger point.
I think I see where the misunderstanding comes from!
I did not mean to say that you, as an individual, can disappear the grocery store by ceasing to believe in it, any less than you can wish away a recession by choosing not to believe in it.
These social constructions (recession, manager, grocery store) are the product of the belief of a majority of the relevant people. One person believing this way or that way changes nothing. Only when most people stop believing do we see change.
Slavery is a great example of a type of social relationship that ends when people stop believing in it.
This goes for the recession just as well as the other examples I gave.
wtf you are totally 100% missing my point, the current recession is a self-fulfilling prophety that is auto-amplified in mediatic echo chambers and by sell feedback mechanism on stock values.
this is those kinds of mob behaviours that induce crisises, the self-fulfilling cause of a crash of consumption that will then actually make you need to tighten spending. The first initiators are the most responsible.
Well if you actually convince them you solve the crisis. Since this mindset is not taught in public education it is left as an individual responsibility. I would promote autocratic censorship/tamming down of hysteric/fear mongering mediatic reporting on this specific topic but our government are not ready for that.
It might be the case that I just haven't communicated my point clearly enough. To a surprising extent, "self-fulfilling prophety that is auto-amplified in mediatic echo chambers and by feedback mechanism on X, Y and Z" describes a large portion of the human social condition.
off-topic: Since you made idealmedtech, you should be interested in publicising the effect of ALCAR on glycemia/insulin. Since it nudge the mitochondria to increase the ratio of lipids/fatty acid consumption and reduce the consumption of glucose, it is very positive for the protection of both kinds of diabetes, in a side effect free manner. The number of lives/quality of life that could be saved if this information was more widespread is astonishing, especially since your website help to measure the impact.
We're not really in the business of drugs/supplements, so unfortunately I can't comment on the efficacy of ALCAR and other drugs on the treatment of diabetes. If you have any papers on the topic, feel free to email me (linked on my profile) and I would be happy to discuss when there's time!
Also, as much as I wish we had any sort of platform through idealmedtech.com, our traffic is quite low, mostly from investors and people pitching SaaS products
That's fascinating! Insulin sensitivity is an incredibly complex mechanism, and is always in flux. Hyperinsulemic clamps are one way to measure the boundaries of insulin sensitivity, but doesn't really help you understand the day to day individual dynamics very well. Like I said, drugs are _not_ our area of expertise, so I can't comment much more than that.
State of the art treatment these days (at least in artificial pancreas land, where I spend all of my time) is more focused on sensitivity-agnostic treatment; figuring out the insulin sensitivity dynamically rather than trying to control the sensitivity itself (it's much more multifaceted than a few hormones, we're talking hundreds of possible ways it can change).
Also, and I'm sure the authors would acknowledge this, n=32 is enough to demonstrate a possible effect, but not nearly enough to show this effect in the population at large. You usually need n~5000 or more for such effects to be shown generally, though the actual number depends a lot on the drug and what you're trying to treat.
We're conducting our first human study at a world renowned US diabetes center soon, I'll see what our PI thinks of this work. Thanks for sharing.
