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It seems to me that, just like just-in-time inventory control, we've chosen an economic model that maximizes growth but also incurs significant risks to stabili
by macintux 4y ago
It seems to me that, just like just-in-time inventory control, we've chosen an economic model that maximizes growth but also incurs significant risks to stability.
And with a global economy, and global Internet, and social media giving everyone around the world an opportunity to escalate internal dissension, those risks are escalating.
I have no idea what the right answer is.
- tome 4y agoThat's a complete misunderstanding of JIT. If SVB were running according to JIT principles it would have matched the duration of liabilities (deposits) to the duration of assets (the bonds it held). In fact it held long-dated bonds, which is analogous to keeping a lot of inventory on hand for a high-throughput manufacturing process: the complete opposite of JIT.
- kazen44 4y ago> we've chosen an economic model that maximizes growth but also incurs significant risks to stability. You mean the same economic system that has been in place since the industrial revolution? Sure, the US tried softening it a bit during the aftermath of the great depression, but in the end, this is just a free market economic behaving as expected? The one thing that keeps surprising me is the belief that the US seems to have in self regulation, which has failed time and time again?