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What is going on? Low unemployment. High inflation. High interest rates. These are the hallmarks of an industrialization. Labor is needed to be more produc

What is going on? Low unemployment. High inflation. High interest rates. These are the hallmarks of an industrialization. Labor is needed to be more productive. Business wants capital to do it. Lack of labor and productivity results in supply shortages that raise prices, while labor shortages forces salaries to match. Stocks, looking for dividends, will do poorly because of high pay, labor costs will eat profits and eaten profits will kill stock values, leaving to the appearance of recession. Individuals will barely scrape by neutral because inflation offsets higher pay But a good investment that raises productivity will pay very very handsomely in the future. And those that don't? Will be inflated away to nothing. Order is being restored to the post 2008 insanity. Many tech companies won't survive the jump.

lotsofpulp 4y ago
>Individuals will barely scrape by neutral because inflation offsets higher pay Not if they are selling the type of labor that is experiencing increase in prices, because: >Lack of labor and productivity results in supply shortages that raise prices, while labor shortages forces salaries to match.
- bioemerl 4y ago
  The only way for labor to come out on top is if productivity increases. With war, population shrinking, disruption around the world, I expect productivity (in total) to be somewhat stagnant. Which means the top dogs will be forced to make less while they figure out how to fix things through productivity going up once the disruptions are over. But also that the average Joe will get a larger slice of a smaller pie. Assuming I'm right. Who knows what will actually happen.
bushbaba 4y ago
If you break down the latest jobs report by industry. You’ll see jobs are declining in all sectors but hospitality and transportation.
- bioemerl 4y ago
  Declining but still overall at all time highs. A recession might happen, but we aren't in one right now.
whimsicalism 4y ago
The high rates are not being driven by firms competing for capital, they are being driven by the Fed reducing the money supply and associated expectations of money supply reduction because of high inflation. Your entire story is backwards.
- bioemerl 4y ago
  Rates can't be set by the Fed arbitrary, the market will always bring them back to earth.
  - whimsicalism 4y ago
    Short-term rates can be effectively by set by the Fed arbitrarily. It's only long-term that the real rates are independent of the Fed.
    - bioemerl 4y ago
      I am fairly confident that the rate increases we've seen over the last couple of months are going to be permanent, and we're going to keep seeing inflation for quite a long time. Now I can't prove this for sure, we will see if I'm wrong or not, but I think this is definitely capital shortage territory, not fed screwing with the rate territory.

lotsofpulp 4y ago

>Individuals will barely scrape by neutral because inflation offsets higher pay Not if they are selling the type of labor that is experiencing increase in prices, because: >Lack of labor and productivity results in supply shortages that raise prices, while labor shortages forces salaries to match.

bioemerl 4y ago
The only way for labor to come out on top is if productivity increases. With war, population shrinking, disruption around the world, I expect productivity (in total) to be somewhat stagnant. Which means the top dogs will be forced to make less while they figure out how to fix things through productivity going up once the disruptions are over. But also that the average Joe will get a larger slice of a smaller pie. Assuming I'm right. Who knows what will actually happen.

bushbaba 4y ago

If you break down the latest jobs report by industry. You’ll see jobs are declining in all sectors but hospitality and transportation.

bioemerl 4y ago
Declining but still overall at all time highs. A recession might happen, but we aren't in one right now.

whimsicalism 4y ago

The high rates are not being driven by firms competing for capital, they are being driven by the Fed reducing the money supply and associated expectations of money supply reduction because of high inflation. Your entire story is backwards.

bioemerl 4y ago
Rates can't be set by the Fed arbitrary, the market will always bring them back to earth.
- whimsicalism 4y ago
  Short-term rates can be effectively by set by the Fed arbitrarily. It's only long-term that the real rates are independent of the Fed.
  - bioemerl 4y ago
    I am fairly confident that the rate increases we've seen over the last couple of months are going to be permanent, and we're going to keep seeing inflation for quite a long time. Now I can't prove this for sure, we will see if I'm wrong or not, but I think this is definitely capital shortage territory, not fed screwing with the rate territory.