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So, in other words... you agree with me. We cannot absorb "near infinite" demand. Rather, it's the opposite: demand might even have a finite upper bound! But t

So, in other words... you agree with me. We cannot absorb "near infinite" demand. Rather, it's the opposite: demand might even have a finite upper bound! But this is neither true, nor does it need to be. Economics is all about marginal curves. And I think what we are finding is that demand does increase, but that we can adapt to increased demand for most goods and services without increased demand on labor. So, inflation is not a threat, because wages don't go up. But it means ever-increasing return on capital... which is precisely what we've been seeing for decades.

toomuchtodo 10y ago
Maybe we agree? I think for all intents and purposes, "infinite" does not mean "need additional pylons for remaining segments of Dyson sphere in order to power interplanetary colonial fleet Mark I via laser tether". Maybe we call it "per capita demand maximum"? But labor isn't alone in not being necessary to satiate additional demand; note the trillions of dollars in capital struggling to find "acceptable" returns. Investors are even willing to invest in negative return bonds in parts of the first world to protect cash holdings of portfolios. http://money.cnn.com/2016/04/14/news/tax-us-companies-offshore-cash/ http://money.cnn.com/2016/04/14/news/tax-us-companies-offsho... "Top 50 U.S. companies hold $1.4 trillion in cash offshore" Assume these companies brought that cash back to the US. What would they do with it? Where is there to grow?
- jganetsk 10y ago
  Yes, there's a massive savings glut. But a big part of that is due to central banks. If they tightened up monetary policy, interest rates go up, and investors would start getting better returns. But central banks are afraid to raise interest rates because they worry about the possibility of deflation. If companies repatriated their cash, the main thing they would do with it is pay a hefty tax bill to Uncle Sam. This would be a good thing to do when the central banks do increase interest rates.
  - toomuchtodo 10y ago
    Interesting comment. I had not considered central bank monetary policy was holding back corporate profit repatriation, which would realize significant revenues for the federal government, which could be spent on infrastructure.
  - internaut 10y ago
    Can you explain the fear of deflation? I don't understand the reticence of central banks. Why not have a shot of deflation?
    - pixl97 10y ago
      Everyone with debt now has more debt (even though the number is the same). We are at the highest debt levels ever.
      - forgetsusername 10y ago
        >We are at the highest debt levels ever We also have the highest population levels ever, the most assets ever, and the most wealth ever. Debt to GDP has fallen, drastically: https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N
      - internaut 10y ago
        I understand that people with debt don't want to pay more. But they took a risk taking on that debt and perhaps they should go bankrupt. Seems like I've triggered a nerve!
  - thaumasiotes 10y ago
    > If they tightened up monetary policy, interest rates go up That causation is backwards. Raising interest rates makes money tighter. But tight money causes low interest rates.
    - jganetsk 10y ago

toomuchtodo 10y ago

Maybe we agree? I think for all intents and purposes, "infinite" does not mean "need additional pylons for remaining segments of Dyson sphere in order to power interplanetary colonial fleet Mark I via laser tether". Maybe we call it "per capita demand maximum"? But labor isn't alone in not being necessary to satiate additional demand; note the trillions of dollars in capital struggling to find "acceptable" returns. Investors are even willing to invest in negative return bonds in parts of the first world to protect cash holdings of portfolios. http://money.cnn.com/2016/04/14/news/tax-us-companies-offshore-cash/ http://money.cnn.com/2016/04/14/news/tax-us-companies-offsho... "Top 50 U.S. companies hold $1.4 trillion in cash offshore" Assume these companies brought that cash back to the US. What would they do with it? Where is there to grow?

jganetsk 10y ago
Yes, there's a massive savings glut. But a big part of that is due to central banks. If they tightened up monetary policy, interest rates go up, and investors would start getting better returns. But central banks are afraid to raise interest rates because they worry about the possibility of deflation. If companies repatriated their cash, the main thing they would do with it is pay a hefty tax bill to Uncle Sam. This would be a good thing to do when the central banks do increase interest rates.
- toomuchtodo 10y ago
  Interesting comment. I had not considered central bank monetary policy was holding back corporate profit repatriation, which would realize significant revenues for the federal government, which could be spent on infrastructure.
- internaut 10y ago
  Can you explain the fear of deflation? I don't understand the reticence of central banks. Why not have a shot of deflation?
  - pixl97 10y ago
    Everyone with debt now has more debt (even though the number is the same). We are at the highest debt levels ever.
    - forgetsusername 10y ago
      >We are at the highest debt levels ever We also have the highest population levels ever, the most assets ever, and the most wealth ever. Debt to GDP has fallen, drastically: https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N
    - internaut 10y ago
      I understand that people with debt don't want to pay more. But they took a risk taking on that debt and perhaps they should go bankrupt. Seems like I've triggered a nerve!
- thaumasiotes 10y ago
  > If they tightened up monetary policy, interest rates go up That causation is backwards. Raising interest rates makes money tighter. But tight money causes low interest rates.
  - jganetsk 10y ago