4 ms·

As someone who has called 9 of the last 2 recessions I do t know where to go with this sort of prediction- even if (I do) I agree with it. There is "too much e

As someone who has called 9 of the last 2 recessions I do t know where to go with this sort of prediction- even if (I do) I agree with it. There is "too much easy money". Well not in my pocket, and despite my privileged position both professionally and as an HNer I cannot easily see how to raise a series A to grab some. And when we do see Treasury bills reach 2%, then what will I do - close down my startup ? resign my job? Winter is coming. Keep farming, build a grain store perhaps, but we will keep farming.

icedchai 6y ago
I'm guessing we won't see 2% for at least 6 to 8 years. Look how long it took for rates to get to 2% after the Great Recession.
- lumost 6y ago
  at current trajectories could the govt afford 2% in 8 years? we seem to have reached a point where the system requires the money printer.
  - z3ugma 6y ago
    Modern monetary theory is an interesting look at this that says “print money to pay for the things you need; you only raise taxes to pull money back out of the economy so that inflation doesn’t skyrocket”
    - TrispusAttucks 6y ago
      Sure, but this punishes good actors to pay for the government's mismanagement. A republic grows weak when you keep whipping the horse pulling the hardest. When the horse dies. The republic dies.
    - AngrySkillzz 6y ago
      MMT is dumb, it's isomorphic to the current situation only it moves the responsibility for "cooling off" an overheating economy from the central bank (interest rates) to the legislature (taxes). And there is no way the legislature will have the wherewithal to actually raise taxes when it needs to to regulate that system.
    - lumost 6y ago
      This presumes that the government can tax and print money equally amongst market participants, and that the economy doesn't re-arrange itself to capture the money printer. As a counter point one could imagine a hypothetical implementation of MMT where money was printed in a particular room at particular times of day, and those in the room were able to capture the money. This would of course help the government offload distribution of printed currency and avoid direct corruption. Given the room can only hold so many people those in the room will have had to wheel, deal, and bribe to get make their way in. As its impossible to have a taxation room as everyone would simply avoid the money pit, the government would of course need to still tax all market participants according to some taxation scheme, presumably the government would tax investments less than income to keep the money velocity from falling. We'd be left with a hypothetical economy where ~100 individuals/corporations get dollars printed at them and a taxation system which taxes what those individuals happen to spend in the rest of the economy. Creating a natural monopoly for those with a spot in the room.
- throw0101a 6y ago
  Japan's 10Y bonds haven't seen 2% since 1999: * https://fred.stlouisfed.org/series/IRLTLT01JPM156N https://fred.stlouisfed.org/series/IRLTLT01JPM156N Their bonds are negative going out to 7Y: * https://ca.investing.com/rates-bonds/japan-government-bonds https://ca.investing.com/rates-bonds/japan-government-bonds At those rates why wouldn't one borrow?
xwdv 6y ago
Start with a seed round, this is pretty easy to get if you have a decent application and a sound business plan. After about a year as long as you have revenues that are growing each month you can get a Series A. Series B and beyond will be harder but by that point you’ll bring all the right consultants on board for how to do it.
- maxrobot 6y ago
  Easy is maybe overstating it... Unless can you fund my startup? (Seriously if anyone is a VC dm me and I'll send you my pitch deck)
  - xwdv 6y ago
    I could fund a startup's seed round, yes. Maybe several. Would I? Probably not. My ROI would be crap and take too long, compared to just buying stocks. But if I had maybe 5 times more money? Absolutely, wouldn't even care. And best of all, because of the social circles I frequent, I could name at least three others who could do the same.
    - maxrobot 6y ago
      Care to intro me?

icedchai 6y ago

I'm guessing we won't see 2% for at least 6 to 8 years. Look how long it took for rates to get to 2% after the Great Recession.

lumost 6y ago
at current trajectories could the govt afford 2% in 8 years? we seem to have reached a point where the system requires the money printer.
- z3ugma 6y ago
  Modern monetary theory is an interesting look at this that says “print money to pay for the things you need; you only raise taxes to pull money back out of the economy so that inflation doesn’t skyrocket”
  - TrispusAttucks 6y ago
    Sure, but this punishes good actors to pay for the government's mismanagement. A republic grows weak when you keep whipping the horse pulling the hardest. When the horse dies. The republic dies.
  - AngrySkillzz 6y ago
    MMT is dumb, it's isomorphic to the current situation only it moves the responsibility for "cooling off" an overheating economy from the central bank (interest rates) to the legislature (taxes). And there is no way the legislature will have the wherewithal to actually raise taxes when it needs to to regulate that system.
  - lumost 6y ago
    This presumes that the government can tax and print money equally amongst market participants, and that the economy doesn't re-arrange itself to capture the money printer. As a counter point one could imagine a hypothetical implementation of MMT where money was printed in a particular room at particular times of day, and those in the room were able to capture the money. This would of course help the government offload distribution of printed currency and avoid direct corruption. Given the room can only hold so many people those in the room will have had to wheel, deal, and bribe to get make their way in. As its impossible to have a taxation room as everyone would simply avoid the money pit, the government would of course need to still tax all market participants according to some taxation scheme, presumably the government would tax investments less than income to keep the money velocity from falling. We'd be left with a hypothetical economy where ~100 individuals/corporations get dollars printed at them and a taxation system which taxes what those individuals happen to spend in the rest of the economy. Creating a natural monopoly for those with a spot in the room.
throw0101a 6y ago
Japan's 10Y bonds haven't seen 2% since 1999: * https://fred.stlouisfed.org/series/IRLTLT01JPM156N https://fred.stlouisfed.org/series/IRLTLT01JPM156N Their bonds are negative going out to 7Y: * https://ca.investing.com/rates-bonds/japan-government-bonds https://ca.investing.com/rates-bonds/japan-government-bonds At those rates why wouldn't one borrow?

xwdv 6y ago

Start with a seed round, this is pretty easy to get if you have a decent application and a sound business plan. After about a year as long as you have revenues that are growing each month you can get a Series A. Series B and beyond will be harder but by that point you’ll bring all the right consultants on board for how to do it.

maxrobot 6y ago
Easy is maybe overstating it... Unless can you fund my startup? (Seriously if anyone is a VC dm me and I'll send you my pitch deck)
- xwdv 6y ago
  I could fund a startup's seed round, yes. Maybe several. Would I? Probably not. My ROI would be crap and take too long, compared to just buying stocks. But if I had maybe 5 times more money? Absolutely, wouldn't even care. And best of all, because of the social circles I frequent, I could name at least three others who could do the same.
  - maxrobot 6y ago
    Care to intro me?