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It's because they wrongfully believed that they can manage the expectations of reality to the extent that they can change reality. They are of course wrong, but
by engineeringwoke 5y ago
It's because they wrongfully believed that they can manage the expectations of reality to the extent that they can change reality. They are of course wrong, but economics is an ideological backwater farce of a science (I am trained in it). It was a convenient belief, because it allowed central bankers to blame their own citizens, rather than interest rate policy.
- jonathan-adly 5y agoCan’t upvote this enough. Curious on what your thoughts on getting ahead of it for a pleb? TIPS? House in the suburbs to rent? Bitcoin? Gold?
- engineeringwoke 5y agoProbably shorting high yield. Not investment advice
- mym1990 5y agoPatience. Trying to get ahead of the market will most likely just put you in a bigger hole. There is really no safe haven right now, treasuries pay nothing, inflation is eating savings for breakfast, housing is the worst of all. Your best bet would be to pick 5-15 uncorrelated assets and spread you investment over those assets and just wait. This would simply be to reduce risk.
- engineeringwoke 5y agoThe efficient market hypothesis is as dumb and made up as the price/wage spiral
- 300bps 5y agoThe person you’re responding to specifically mentioned TIPS. Your response seems to imply you don’t know what they are because they’re explicitly linked to inflation with a factor linked to CPI. So if inflation goes up 7.5% in a year then your principal invested in a TIPS bond goes up 7.5% even before you get the “nothing” coupon payment.
- engineeringwoke 5y ago> Weeeeellll, tips monocle, you must be uninformed of what TIPS mean, so I will take it upon myself to inform you, lest a know-nothing like yourself gets confused. TIPS are overpriced because of fixed income fund mandates, moron. I worked in bond sales. You don't have to be such a prick, you know.
- 300bps 5y agoYou seem a bit sensitive.
- engineeringwoke 5y agoI think you might have an anxiety disorder.
- mym1990 5y agoI do know what TIPS are, I even own a bit. One problem is that there is a yearly cap to how much you can buy, and its 10,000$. For some people that is all they have, but for others with more assets, it will only be a small piece of the bucket. Edit: TIPS and other treasury bonds are distinctly different.
- mym1990 5y agoYour username checks out. Economics is hardly an ideological backwater of science, but politics might definitely be. Economics simply comes down to cause and effects of different decisions...how those are actually applied in the real work is policy related, and that part is littered with trash.
- engineeringwoke 5y agoIf the "people" part of economics invalidates all of its assumptions and models, then how useful is it really? Everything beyond intro micro and macro is as pie in the sky as string theory, and motivated academics are also similarly keen to keep that PhD research money hole absorbing all the resources it possibly can.
- mym1990 5y agoThe 'people' part of economics has evolved into what is called behavioral economics. Traditional economics assumes that people will make the ration choice, but that can be a pretty limiting view of the world since people obviously are not always rational. I don't disagree that traditional models and assumptions are not that useful when applied to the real world.
- dragonwriter 5y ago> Everything beyond intro micro and macro is as pie in the sky as string theory, That's kind of backward: intro micro and intro macro are the areas of economics most tied to abstract assumptions which are neither grounded in nor consistent with empirical observation (excluding, of course, both work addressing things like hypothetical optimizations and work in overtly ideological rather than empirical approaches to economics, like that of the Austrian school, but neither of those even aspire to describing status quo reality.)
- deleted 5y ago[deleted]