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19 September
From one piece Better Debt 2 beliefs · grumpy-economist.com
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Their words
In QE, the Treasury issued long-term bonds. The Fed bought up the long bonds, issued overnight debt, and passed the interest difference back to the Treasury. In the end, it is just as if the Treasury issued overnight debt in the first place.
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Their words
The tradeoff between cost of borrowing and how much interest rate risk taxpayers shoulder should be squarely on the shoulders of the politically-accountable Treasury not the independent Fed.
18 September
17 September
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Their words
The current problem with prices might be one part AI construction boom, but it is one part Trump's tariffs and one part Trump's war in Iran as well.
16 September
14 September
13 September
12 September
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korrents.com
Higher real interest rates reflect a more optimistic collective view of future economic abundance.Their words
Higher real rates mean that the average view of the future is more abundant, and that it's worth sacrificing more to get to that future sooner.
11 September
10 September
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korrents.com
The simplest explanation for rising long-term interest rates is a surge in demand for funds from the AI boom.Their words
The simplest story consistent with the facts is that we’re seeing a surge in demand for funds as a result of the AI boom.
8 September
7 September
6 September
4 September
3 September
2 September
1 September
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korrents.com
A broken criminal justice institution survives precisely because it serves the people who run it.Their words
The old system stubbornly defied reform because it served the people in power.
29 August
28 August
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Their words
But I think there have been enough studies now isolating those variables that show that AI is directly responsible for a lot of this job loss.
21 August
From one piece How Countries Go Broke: The Dynamic Behind What is Happening Now 2 beliefs · raydalio.substack.com
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Their words
The debt dynamics work the same for a central government as they do for a person or a company, except that a central government has a central bank that can print money (which devalues it) and it can take money away from people via taxes.
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Their words
Early in the final stage of the Big Debt Cycle, the market action reflects this dynamic via interest rates rising led by long-term rates, the currency declining especially relative to gold, and the central government’s treasury department shortening the maturities of its debt offerings because of a shortage of the demand for long-term debt.
20 August
7 August
4 August
3 August
1 August
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korrents.com
China's real exchange rate should appreciate through higher domestic inflation, not currency revaluation.Their words
My view is that an appreciation of China's REER is very much to be desired, but the real (haha) way to get there is through higher inflation domestically, and that means different macro policies.
29 July
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Their words
So, it's hard to tell how much of like the loss of the past few years was AI versus the end of like zero interest rate policy and like the post-COVID crash. And I think it's more the latter, but like again, LLMs are still getting better.
12 July
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Their words
Just like Hollywood once compared Netflix to the Albanian Army, the US establishment doesn’t yet understand how much better Satoshi Nakamoto or Vitalik Buterin is than every apparatchik they have in the Federal Reserve system.
10 July
28 June
25 June
10 June
5 June
4 June
From one piece The better AI gets, the smaller its share of the economy might get – Alex Imas and Phil Trammell 2 beliefs, in the piece's order there
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Their words
things have to go really wrong for us to like just get over the threshold of uh you know, capital being productive enough to automate lots of work, but not be productive enough that that the interest rate is high and or the price of capital produced goods is falling a lot, okay? So, even without redistribution, a little bit of savings will save a lot of people.
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Their words
It might be that every robot now can turn into, you know, 100 robots next year, right? So, in units of robots the interest rate is 10,000%.
29 May
15 May
From one piece Fed Board Members: Stay In Your Seats 3 beliefs, in the piece's order there
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korrents.com
Waging political war on a central bank does not serve a president's own political interests.Their words
A war on the Fed has not served Trump's political interests and generally does not serve any president's interests.
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korrents.com
Federal Reserve Board members have historically often resigned before completing their full terms.Their words
Federal Reserve Board members have often resigned their positions well before their 14-year terms expired, since that's quite a long time to spend in one position in government.
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korrents.com
The Federal Reserve will need to raise interest rates rather than cut them to bring down inflation.Their words
I will be surprised if there are any votes for rate cuts, even from Warsh himself. The Fed may need to hike rates this year to tame inflation.
23 April
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Their words
Construction costs tend to rise at, or above, the level of overall inflation, and it rarely (if ever) gets cheaper to build houses, offices, or other buildings.
1 April
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Their words
we have a very clear definition and expectation of what it is at the staff engineer level because we benchmark ourselves to all the great company out there Google, Facebook and all that
11 March
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Their words
There were booms and busts, and cumulative price inflation was zero, and the United States went from a new-world emerging backwater in the late 1700s to being the world's largest economy by the late 1800s.
9 March
25 December 2025
10 October 2025
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inflationdata centersenergyAmerica
Their words
This is the first conclusion of my deep dive: Data centers have (so far) not affected national average household electricity bills.
16 July 2025
From one piece The Jamie Dimon Interview: How JP Morgan Became an $800 Billion Bank 2 beliefs, in the piece's order there
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Their words
And the interest rate exposure was hidden by accounting. It was called held to maturity, where you don't have to mark even treasuries to market.
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korrents.com
A bank should be managed against the fat tails it can imagine, not against the stress test its regulator hands it.Their words
And so, I always look what I call the fat tails and manage that we can handle all the all the fat tails. And not the stress test the Fed gives us, but all the fat tails.
6 July 2025
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Their words
If a new monetary network with its own unit (i.e. not pegged to an existing currency as a credit rail on top of it, but rather a fully parallel system to central banks) is going to bootstrap from zero to massive, it requires upward volatility.
14 April 2025
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Their words
But the spike in interest rates require to do this would be huge. And the trade shock will cause a sharp recession, or worse, putting even more stress on the budget. A debt crisis is likely along the way as the US finds it impossible to roll over debt.
31 March 2025
19 February 2025
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Their words
Since signaling, not building human capital, is the main function of education, the main effect of government subsidies is credential inflation.
20 January 2025
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korrents.com
The inflation of the early 2020s was caused by government overspending and rising energy prices.Their words
The inflation crisis was caused by massive overspending and escalating energy prices, and that is why today I will also declare a national energy emergency.
19 January 2025
From one piece Jennifer Burns: Milton Friedman, Ayn Rand, Economics, Capitalism, Freedom | Lex Fridman Podcast #457 3 beliefs, in the piece's order there
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Their words
Friedman and Schwartz becomes the playbook for the Federal Reserve. We have lived through this, the financial crisis. The Federal Reserve is ready to loan. Covid, the Federal Reserve does all kinds of new things, because no Federal Reserve chair wants to be in Friedman-Schwartz 2.0 that somebody writes, where they're the bad guy who let the economy meltdown.
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inflationimmigrationgovernment
Their words
And so my argument is, that has now opened the door to the presidency of Donald Trump, which is potentially a deeply transformative moment that will change the size and shape of government, that may change our foreign policy profoundly, that may change our immigration policy, that may change the demographics of our country, all of that, and my thesis is that that's all been made possible by inflation.
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Their words
And so the great mistake of the past years was to forget how fundamental inflation was to the rise of the last political order and to profoundly underestimate how much inflation would change the current political order.
8 January 2025
From one piece Full Steam Ahead: All Aboard Fiscal Dominance 2 beliefs, in the piece's order there
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Their words
Since inflation is not primarily driven by private-sector lending in the current environment, making borrowing more expensive will not significantly cool the economy.
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Their words
Structural fiscal deficits have surpassed private sector lending and monetary policy as the primary drivers of economic activity and inflation, marking a fundamental shift in the economy's liquidity dynamics.
20 August 2024
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Their words
We got inflation, but we did not get the devastation that would have been caused by price controls and rationing.
6 November 2023
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Their words, before
If the future is like the past, this implies that debt rollovers—that is, the issuance of debt without a subsequent increase in taxes—may well be feasible. Put bluntly, public debt may have no fiscal cost.
Their words now
Across advanced economies, the celebrated ( r - g ), i.e., the difference between the interest rate and the growth rate, appears to have durably changed sign or, at a minimum, to have gone from a substantially negative number to a number closer to zero.
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Their words
It is fair to say that, while economists expected the short end of the yield curve to reflect the higher rates needed to win the fight against inflation, the sharply steeper long end of the yield curve in the last few months has come as a surprise. I shall freely admit that I did not predict it.
1 October 2023
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korrents.com
Interest rates have little effect on investment, and central banks have limited control over real interest rates.Their words
In the actual data, interest rates don’t seem to drive investment that much, and furthermore central bank influence over the real rate of interest typically is limited.
4 September 2023
30 April 2023
14 January 2023
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Their words, before
The Fed needs PCE inflation to average 1.96% for the remainder of the decade in order to hit their AIT target.
Their words now
I assumed they intended inflation to average roughly 2% during the 2020s.
22 June 2022
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Dislikedrcmnd.app
End the FedTheir words
It's a book by a politician, about what you expect. Some interesting tid bits on the history of the Fed but you could get it from Wikipedia.
1 June 2022
From one piece Fiscal Policy under Low Interest Rates 4 beliefs, in the piece's order there
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Their words
The proposition is that the cancellation of the bonds held by the central bank would decrease the amount of interest payments and thus the debt service of governments. And indeed, it would. But it would have another effect—namely, to decrease the revenues of the central bank and thus the profits that the central bank turns in to the government. This second effect would be exactly of the same size as the first, and the net effect on the government budget constraint would be equal to zero.
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Their words
A longer maturity of debt protects the government from a temporary increase in the short run interest rate, and it gives it more time to adjust to a permanent increase.
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Their words
If a fiscal expansion takes place when output is already at potential, monetary policy is likely to tighten, leading to higher interest rates and thus a smaller effect or even no effect of the fiscal expansion on output.
+ 1 more
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korrents.com
There is no tight relation between growth rates and interest rates, either theoretically or empirically.Their words
while the growth rate may well affect saving and investment, there is no tight relation between growth rates and interest rates, either on theoretical or empirical grounds.
1 March 2022
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