More wise macro words from William White: “Whether the future holds depression and deflation, or high and lasting inflation, or both in one order or another, remains to be determined.”

I’ve shared some of his work; here’s more from a recent AEI panel:

And here are his speaker notes, some excerpts below:

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during the “Great Moderation” the Fed and others attributed low and stable inflation to their own, wise policies of demand management. In reality, it reflected positive supply shocks (globalisation and demographics).

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While many are used to the word “stagflation’, implying that demand falls automatically when prices rise due to a supply shock (terms of trade losses in Advanced Market Economies in the 1970’s), it seems to me that many of these new shocks imply rising investment and demand going forward.

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If the Fed has to tighten much further, and then has to maintain that tightness, it seems to me to be very likely that something will come unstuck in the financial markets of AMEs. As well, the associated strength of the US dollar raises all sorts of problems for EMEs, especially those that have borrowed heavily in US dollars.

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All by way of saying, there are many reasons to believe consumption will have to be reduced to help avoid enduring inflation and that both monetary and fiscal policy have a role to play. Evidently, none of this will be politically popular.

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My Personal Bible – some recent additions (Wences’s bitcoin PDF, Rafa Nadal’s memoir)

Here’s an updated version of my personal bible which is a collection of excerpts and highlights and quotes from my favorite writings.

Recently I added two sources, one is Wences Casares’s bitcoin PDF (original post), some snippets:

If Bitcoin succeeds it may be a global non-political standard of value and settlement. The world already has a global non-political standard of length in the meter, and a global non-political standard of weight in the kilo. Could you imagine a world in which we changed the length of the meter or the weight of the kilo regularly according to political considerations? Yet that is what we are doing with our standard of value.

To illustrate the power of these qualities, consider that today the only standard of value and settlement that the United States of America can be certain that The People’s Republic of China (PRC) will not discriminate access to, censor transactions from or dilute the value of is the Bitcoin Blockchain.

I’m not half done with Rafa Nadal’s 2011 memoir (Amazon link) which is AMAZING, felt compelled to begin adding it to my bible already. Some snippets:

To illustrate the power of these qualities, consider that today the only standard of value and settlement that the United States of America can be certain that The People’s Republic of China (PRC) will not discriminate access to, censor transactions from or dilute the value of is the Bitcoin Blockchain.

Nadal’s mother, Ana María Parera, does not disagree. “He’s on top in the tennis world but, deep down, he is a super-sensitive human being full of fears and insecurities that people who don’t know him would scarcely imagine,” she says. “He doesn’t like the dark, for example, and he prefers to sleep with the light, or the TV, on. He is not comfortable with thunder and lightning either. When he was a child he’d hide under a cushion when that happened and, even now, when there’s a storm and you need to go outside to fetch something, he won’t let you. And then there are his eating habits, his loathing of cheese and tomato, and of ham, the national dish of Spain. I’m not as mad about ham myself as most people seem to be, but cheese? It is a bit peculiar.”

After all he’s accomplished since then — can’t wait for an update.

Some recent reads and my brief commentary (Shein, Areopagus, Do Kwon, Mr Beast)

Great weekly newsletter, a sort of Western cultural history buffet:
https://culturaltutor.com/areopagus

Mr. Beast is the new Disney. Attention = money and Beast is the king of YouTube attention and has proven people will attentively follow him into other products even if it’s as dumb and unrelated as chocolate bars
https://www.axios.com/2022/10/25/mrbeast-youtube-fundraising-merch-restaurants

Surprise — that opaque Chinese company with the insanely cheap clothing is opaque for a reason and pays its workers insanely cheap(ly)
https://www.thecut.com/2022/10/shein-is-treating-workers-even-worse-than-you-thought.html

I also took notes on this interview and…yes. Impressive levels of self-denial
https://www.coindesk.com/layer2/2022/10/19/do-kwons-beautiful-dark-twisted-fantasy-world
my notes: https://kevinhabits.com/podcast-notes-do-kwon-on-unchained-even-to-this-day-im-proud-of-work-we-didvalues-we-tried-to-defend/

What do words like “capitalism” and “free market” even mean anymore (aware that I sound like a libertarian purist curmudgeon here)
https://www.zerohedge.com/markets/one-bank-makes-stunning-discovery-bank-japans-ycc-broken-and-soon-entire-jgb-market-will

“Interest is the price of time”

Good interview with author Edward Chancellor on the macro environment and interest rates. I just started reading his book “The Price of Time” which explores the history of interest rates. Interest rates are like water – we just assume it’s there and it works – but when it’s manipulated, it can poison the global economy, which is what we’re seeing now.

Source: https://themarket.ch/interview/edward-chancellor-central-banks-delayed-the-day-of-reckoning-ld.7051

Book: https://www.amazon.com/Price-Time-Real-Story-Interest/dp/0802160069

Some excerpts from the interview:

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Interest is the price of time. Time is valuable, or as Ben Franklin would say, time is money. And if you don’t place a proper price on time, then the world will turn upside down.

By aggressively pursuing an inflation target of 2% and constantly living in horror of even the mildest form of deflation, they not only gave us the ultra-low interest rates with their unintended consequences in terms of the Everything Bubble. They also facilitated a misallocation of capital of epic proportions, they created an over-financialization of the economy and a rise in indebtedness. Putting all this together, they created and abetted an environment of low productivity growth.

Going forward, we’ll have more inflation in the stop-go fashion that I described, we’ll have rising interest rates and a lot more volatility in financial markets

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Chancellor also mentions Bill White who I’ve shared previously.

How Filipinos got their Spanish last names, from the book Seeing like a State

Direct quotes:

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Nowhere is this better illustrated than in the Philippines under the Spanish. Filipinos were instructed by the decree of November 21, 1849, to take on permanent Hispanic surnames. The author of the decree was Governor (and Lieutenant General) Narciso Claveria y Zaldua, a meticulous administrator as determined to rationalize names as he had been determined to rationalize existing law, provincial boundaries, and the calendar. He had observed, as his decree states, that Filipinos generally lacked individual surnames, which might “distinguish them by families,” and that their practice of adopting baptismal names drawn from a small group of saints names resulted in great “confusion.” The remedy was the catalogo, a compendium not only of personal names but also of nouns and adjectives drawn from flora, fauna, minerals, geography, and the arts and intended to be used by the authorities in assigning permanent, inherited surnames.

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“In view of the extreme usefulness and practicality of this measure, the time has come to issue a directive for the formation of a civil register [formerly a clerical function], which may not only fulfill and ensure the said objectives, but may also serve as a basis for the statistics of the country, guarantee the collection of taxes, the regular performance of personal services, and the receipt of payment for exemptions. It likewise provides exact information of the movement of the population, thus avoiding unauthorized migrations, hiding taxpayers, and other abuses.”

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The book is a bit of a slog, with its older and more technical bureaucrat-speak, but the concepts are fascinating.

Amazon: https://www.amazon.com/Seeing-like-State-Certain-Condition/dp/0300078153