economics

I use two measures here - the Bloomberg financial conditions index in blue, which takes the place of the GS measure that Bill Dudley built and took to the Fed, and the Chicago Fed national financial conditions index, inverted here, in green. Both measures suggest financial conditions are very easy, not just 2021 easy, but as easy as they have been

The German “Octopus” and Processing Chokepoints

Yet geology wasn’t everything. Processing mattered too. And processing, the allied powers discovered in World War I, was disproportionately concentrated in Germany. Before the war, Germany’s geological deficits had driven its traders to scour the world for supply. They’d bought mines across the world

It was inserted partly in the hope of boosting the worker’s weekly income, and partly in the hope that, by discouraging the employer from taking on anyone regularly for more than forty hours a week, it would force him to employ additional workers instead.

Notice that these new jobs force up the total amount of goods and services produced, so that ordinary workers will see their income increase even as income inequality increases. The rich will do very well, but the rest will do pretty well too. This process, in short, is the essence of “trickle-down” theory.

In just one year, two key pillars of international cooperation and economic stability had collapsed: the global system of fixed exchange rates, and the reliable supply of oil at a fixed price. It created a huge vulnerability for the U.S., which was by far the largest economy in the world and the largest consumer of oil. Domestic production peaked

Before the war, the European tungsten market resided in Hamburg, where more than 2000 tons of concentrated ore was sold annually. This was remarkable, considering Germany produced, at best, one percent of the world’s tungsten ore. Indeed, most of the world’s tungsten ore was being mined in parts of the British Empire, but more than half of global

Now we get to the second part of the law: Business models need distribution. Without the ability to reach an audience, a business model cannot unlock demand and therefore fizzles out. There’s survivorship bias here; the only content that we know about and can pay for is that which has managed to reach us as consumers. Business models needs

Myself and many others would argue that a major currency devaluation is a type of default. In that sense, the US government defaulted on bondholders in the 1930s by devaluating the dollar vs gold, and then again in the 1970s by decoupling the dollar from gold entirely. The 2020-2021 period was also a type of default, in the sense that the broad