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'With real estate composing 30% of the economy, domestic spillage into other areas of the economy is inevitable. In the end, it boils down to one thing that has

'With real estate composing 30% of the economy, domestic spillage into other areas of the economy is inevitable. In the end, it boils down to one thing that has been a long time coming for a decade, crisis.' With the power and inflation crises in the west, my concern is superpowers war.

simonh 5y ago
Inflation crisis? For the first half of my life inflation was very rarely below 5%.
- hugi 5y ago
  So you think third world levels of inflation are normal?
  - wbsss4412 5y ago
    Is it your assertion that at 5-10% inflation, the US economy would fall to third world status? I’m not sure what your intended connotation is here, but it would seem that the equation of mildly elevated inflation with “third world levels” is that these numbers foretell some sort of impending doom rather than some mild challenges for investors and supply chain managers.
wbsss4412 5y ago
Sub 10% per annum inflation is hardly a crisis. Note that traditionally hyper inflation (which people often seem to conflate with our current status) is defined by economists to be 50% per month. The west is a long, long way from any sort of real crisis caused by inflation.
- cableshaft 5y ago
  That's the thing when you deal with exponents. Everything seems low until suddenly it isn't anymore. That's part of the reason why we handled the Covid pandemic so badly also, humans tend to be shit at exponential thinking[1][2]. Hyperinflation tends to work in an exponential fashion. Perhaps we aren't at the bottom of an exponential curve for this period of inflation, perhaps it can be prevented from going too high like it has in the past for the US (I still want to believe that's the case, but I'm converting my fiat into assets just in case that's wrong). But it's far from a guarantee. There's many countries suffering from hyperinflation out there in the world today that probably acted similarly when they were at the same stage as we are right now. [1]: https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Proving-Lethal/ https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Pr... [2]: https://purposefocuscommitment.medium.com/the-rice-and-the-chess-board-story-the-power-of-exponential-growth-b1f7bd70aaca https://purposefocuscommitment.medium.com/the-rice-and-the-c...
  - wbsss4412 5y ago
    There is nothing less exponential about a 2% inflation target than there is about a 5% rate or even a 10% rate of inflation. All discussions about inflation are exponential in nature. The differences between 2,5,10 percent per annum vs almost 13000% inflation per annum are just categorically different, and you don’t get there by accident.
    - cableshaft 5y ago
      I never claimed we are getting there by accident. There's plenty of unprecedented shit the past couple of years coupled with policy decisions that have accumulated over time that's put us in a potentially precarious position. And sure, they're a different category (as I said, the US has had high inflation but not hyperinflation in the past and we've recovered from it, like in the 70s). But just because the US hasn't shifted from one category to the other in the past, doesn't mean it couldn't this time. You are right about all inflation itself being exponential, but I think you mean prices, whereas I'm talking about the percentages. You can't be talking about percentages because you're saying it's only going up 2, 5, 10% at the most (roughly). Just take Venezuela. In less than 2 years (from 2018 to 2019), their inflation percentage jumped from 9% to 10,000,000%. I.e. they went from your first category to an exponential increase in the inflation percentage. It can happen very quickly once the ball gets rolling enough. https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-mi...
      - wbsss4412 5y ago
        Plenty of things are possible, but just because something could happen, does not mean that it is likely. The west is not on the brink of runaway inflation by any means. It wasn’t in the 1970s either. Hyperinflation has historically only occurred under very specific circumstances, typically after widespread devastation due to war or outright government collapse. Edit: to add a response to the case of Venezuela, the 9% inflation rate had nothing to do with the ensuing hyperinflation. It’s not as if people’s expectations got out of control. They relied heavily on oil exports and oil production collapsed due to state mismanagement. They could’ve had 0% inflation to begin with and still would have been in this situation.
thomascgalvin 5y ago
> With the power and inflation crises in the west, my concern is superpowers war. One of the biggest benefits of so thoroughly intertwining our economies is that this is exceptionally unlikely. China can't war its way out of a debt crisis, because that war would be against its biggest customers, and biggest sources of cash flow.
- rvbissell 5y ago
  "By the grace of God almighty, and the pressures of the marketplace, the human race has civilized itself" -- Roger Waters, /It's A Miracle/, _Amused_To_Death_
- deleted 5y ago
  [deleted]
imtringued 5y ago
I would be worried about the 30% real estate part. That doesn't sound healthy when you consider that China is a manufacturing powerhouse. Meanwhile some western nations just see some mild inflation that was very common 30 years ago. If you want to see a "horror story" look at the UK and the effects of Brexit.

simonh 5y ago

Inflation crisis? For the first half of my life inflation was very rarely below 5%.

hugi 5y ago
So you think third world levels of inflation are normal?
- wbsss4412 5y ago
  Is it your assertion that at 5-10% inflation, the US economy would fall to third world status? I’m not sure what your intended connotation is here, but it would seem that the equation of mildly elevated inflation with “third world levels” is that these numbers foretell some sort of impending doom rather than some mild challenges for investors and supply chain managers.

wbsss4412 5y ago

Sub 10% per annum inflation is hardly a crisis. Note that traditionally hyper inflation (which people often seem to conflate with our current status) is defined by economists to be 50% per month. The west is a long, long way from any sort of real crisis caused by inflation.

cableshaft 5y ago
That's the thing when you deal with exponents. Everything seems low until suddenly it isn't anymore. That's part of the reason why we handled the Covid pandemic so badly also, humans tend to be shit at exponential thinking[1][2]. Hyperinflation tends to work in an exponential fashion. Perhaps we aren't at the bottom of an exponential curve for this period of inflation, perhaps it can be prevented from going too high like it has in the past for the US (I still want to believe that's the case, but I'm converting my fiat into assets just in case that's wrong). But it's far from a guarantee. There's many countries suffering from hyperinflation out there in the world today that probably acted similarly when they were at the same stage as we are right now. [1]: https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Proving-Lethal/ https://thetyee.ca/Analysis/2020/07/16/Exponential-Growth-Pr... [2]: https://purposefocuscommitment.medium.com/the-rice-and-the-chess-board-story-the-power-of-exponential-growth-b1f7bd70aaca https://purposefocuscommitment.medium.com/the-rice-and-the-c...
- wbsss4412 5y ago
  There is nothing less exponential about a 2% inflation target than there is about a 5% rate or even a 10% rate of inflation. All discussions about inflation are exponential in nature. The differences between 2,5,10 percent per annum vs almost 13000% inflation per annum are just categorically different, and you don’t get there by accident.
  - cableshaft 5y ago
    I never claimed we are getting there by accident. There's plenty of unprecedented shit the past couple of years coupled with policy decisions that have accumulated over time that's put us in a potentially precarious position. And sure, they're a different category (as I said, the US has had high inflation but not hyperinflation in the past and we've recovered from it, like in the 70s). But just because the US hasn't shifted from one category to the other in the past, doesn't mean it couldn't this time. You are right about all inflation itself being exponential, but I think you mean prices, whereas I'm talking about the percentages. You can't be talking about percentages because you're saying it's only going up 2, 5, 10% at the most (roughly). Just take Venezuela. In less than 2 years (from 2018 to 2019), their inflation percentage jumped from 9% to 10,000,000%. I.e. they went from your first category to an exponential increase in the inflation percentage. It can happen very quickly once the ball gets rolling enough. https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-mi...
    - wbsss4412 5y ago
      Plenty of things are possible, but just because something could happen, does not mean that it is likely. The west is not on the brink of runaway inflation by any means. It wasn’t in the 1970s either. Hyperinflation has historically only occurred under very specific circumstances, typically after widespread devastation due to war or outright government collapse. Edit: to add a response to the case of Venezuela, the 9% inflation rate had nothing to do with the ensuing hyperinflation. It’s not as if people’s expectations got out of control. They relied heavily on oil exports and oil production collapsed due to state mismanagement. They could’ve had 0% inflation to begin with and still would have been in this situation.

thomascgalvin 5y ago

> With the power and inflation crises in the west, my concern is superpowers war. One of the biggest benefits of so thoroughly intertwining our economies is that this is exceptionally unlikely. China can't war its way out of a debt crisis, because that war would be against its biggest customers, and biggest sources of cash flow.

rvbissell 5y ago
"By the grace of God almighty, and the pressures of the marketplace, the human race has civilized itself" -- Roger Waters, /It's A Miracle/, _Amused_To_Death_
deleted 5y ago
[deleted]

imtringued 5y ago

I would be worried about the 30% real estate part. That doesn't sound healthy when you consider that China is a manufacturing powerhouse. Meanwhile some western nations just see some mild inflation that was very common 30 years ago. If you want to see a "horror story" look at the UK and the effects of Brexit.