economics
Imported tag from Readwise
economics
The fact that a change in the relationship between savings and investment in one country must force an obverse change in the relationship between savings and investment in another country is a very important point.
Michael Pettis • The Great Rebalancing
- The Era of Capital Dominance (1980s Onward): • Political Changes: Bessent notes that the shift favoring capital began around 1980, coinciding with the election of leaders like Margaret Thatcher in the UK and Ronald Reagan in the US. These leaders implemented policies that favored deregulation, privatization, and a free-market economy.
kaustubhs • Shift_from_Capital_to_Labor
The introduction and then subsequent final expiration of these programs are an extremely underdiscussed element of the election results (though since I started working on this piece, some coverage has emerged). Yes, price increases, particularly those for food, energy and rental housing had a crucial- and continuing — impact on many households,
... See moreNotes on the Crises • One Election Takeaway: Voters Hate Temporary Safety Nets
In contrast, during the three decades prior to 2020 (pre-pandemic), Japan never ran a budget deficit larger than 8.3% of GDP. Their deficits were big and persistent, but gradual:
Lyn Alden • Economic Japanification: Not What You Think
As the party sees it, consumption is an individualistic distraction that threatens to divert resources away from China’s core economic strength: its industrial base. According to party orthodoxy, China’s economic advantage derives from its low consumption and high savings rates, which generate capital that the state-controlled banking system can
... See moreZongyuan Zoe Liu • China’s Real Economic Crisis
Q: How does this system emphasise political stability
A: The system emphasizes political stability by ensuring that the business elite remains dependent on state-controlled financing, which binds their interests to those of the Communist Party. This control prevents dissent and individualistic tendencies that could threaten the party’s authority, thereby maintaining a cohesive alignment between economic activity and political objectives.
A: The Chinese government prioritizes industrial investment over consumption because it views consumption as a distraction that diverts resources from its industrial base, which is essential for political stability and economic control.
Q: Why does the Chinese government prioritize industrial investment over consumption in its economic policy?
(Run the prompt again for the answer.)
The party believes that spending too much by individuals is a distraction that can take away resources from what makes China strong: its factories and industries. They think China's strength comes from people saving a lot of money instead of spending it, which helps banks lend money to businesses. This system also keeps the government in control of the economy. Since the factories rely on cheap loans to keep going, the wealthy business people have to follow what the party wants. In Western countries, money often controls politics, but in China, politics controls money.
When commodities are strong, the US Dollar is weak as producer economies outperform the US. Due to this, they set interest rates higher, and strongly attract capital away from the US.
Peter Farac • A New Commodity Bull Market Must Come With a Weak US Dollar
States need money to cover their deficits, and the way they raise this money has changed significantly. In 2005-06, only 17% of their deficit financing came from the market (like bonds). Now, it’s a massive 79%. This shift means states are relying less on traditional sources like the National Small Savings Fund and more on selling bonds—financial
... See moreZerodha • Inside the Finances of Indian States: A Reality Check
So now I want you to imagine what happens if the U.S. and its allies get in a major war with China — as analysts say is increasingly possible. In the first few weeks, much the two countries’ stores of munitions — including drones and the batteries that power drones — will be used up. After that, as in Ukraine, it will come down to who can produce
... See moreNoah Smith • Manufacturing Is a War Now
Second, the decision by countries like China to buy U.S. government obligations is not a discretionary decision that can be made or unmade at will. Remember that the People’s Bank of China does not purchase huge amounts of U.S. government bonds simply because it has a lot of money lying around and doesn’t know what to do with it. Its purchase of
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