The subject this post names, from the same vocabulary
the directory files beliefs under, and the words it uses that this site has seen
least often elsewhere. Posts are matched on those words alone —
nothing here is a summary of this one.
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.
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.
It's hard to escape that economic engine, and easy to mistake its machinations for reality-a supply rising to meet demand, say, rather than a warped supply that whips up demand.
Astra is a remarkable piece of technology. Earlier agents often tried to dampen my ambitions—they’d push me to do “pilots” or “proofs of concept.” Then agents started meeting my ambitions. Astra is the first agent that routinely raises my ambitions. I encourage you to try it!
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.
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.
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.
Software is kind of unique in having the third kind of the practitioner conference where we are just meeting to get better at what we do. We also are really the only kind to really focus heavily on like open source in making our knowledge freely available.
I came to the same conclusions independently before I encountered Krashen's work, and decades of learning across 20+ languages have only reinforced them. The research supports the intuition: input is where acquisition happens.
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.
To meet the global population’s protein needs through factory-produced bacterial protein in 2024 would have used more than the total global electricity generated using renewable (hydro, photovoltaic and wind) energy
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.
it's this nonscalable way to scale your organization and it's through like passing your vampire blood. That's what inside Zinga they called it, Pinkis' vampire blood. What he did that I started to do is you pick someone from the organization who's promising. I usually pick the people who didn't fit in the smart misfits and they become your tech assistant which is not your chief of staff, not your executive assistant.
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.
I think this book is a contemporary masterpiece? A cartoonist at the top of his game, a perfect meeting of subject and medium, and beautiful book design by Drawn and Quarterly.
So Hitler receives this Dolantin injection, and he gets up, he goes into the meeting room, he dominates the meeting room, he feels great. He decides, you know, in front of everybody, no one is able to… no one overpowers him in that meeting. He was very good in the room. And the troops are split up. Like Leningrad is now a target. This weakens the general thrust towards Moscow. This is probably why they didn't take Moscow.
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.
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.
I personally hate meetings because a significant percent of meetings when done poorly don’t serve a clear purpose. But that’s a meeting problem, that’s not a communication problem.
I sometimes also struggle explaining to people, articulating, why I believe meeting in person for world leaders is powerful. It just seems naive to say that, but there is something there in person
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.
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.
Since inflation is not primarily driven by private-sector lending in the current environment, making borrowing more expensive will not significantly cool the economy.
Josh Hardman at Psychedelic Alpha provided a detailed live account of the advisory committee meeting, which I found very helpful in developing a more granular sense of how the meeting unfolded without having to watch it myself.
We think no fundamental research breakthroughs are required for labs to implement safety measures that meet our standard for AI control for early transformatively useful AIs; we think that meeting our standard would substantially reduce the risks posed by intentional subversion.
Quality is not luxury. Quality is not expensive. Quality is not that you love it. Quality is just one thing. It meets spec. So, if I look under an electron microscope at any part of a Lexus, which is by any measure the highest quality car there is, uh under an electron microscope, it's filled with defects. But they're not defects that matter because they're defects that are within spec.
Yes, and that's true inside companies too. And so you want to set up your culture so that the most junior person can overrule the most senior person if they have data. And that really is about trying to... There are little things you can do. So for example, in every meeting that I attend, I always speak last.
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.
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.
A low r is actually a signal that something is wrong with the economy: In effect, if we think of the safe rate as the risk-adjusted rate of return on capital, the low safe rate is sending the signal that, risk adjusted, the return on capital is low.
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.
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.
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.
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.
A korrent is a belief a person has stated in their own words: one
sentence stating the claim, backed by a quote and a source, kept at
korrents.com.
Under a name here, the quoted block is what they actually said.
The korrent beneath it is the claim those words support, in
korrents' wording — tap it to see the record, its source, and who
else holds it.
Nobody here wrote their own korrents. They are compiled from public
statements, and a person can change their mind, which is recorded too.
About the English under a post
Some people here publish in a language other than English. Where they
do, this site shows a machine translation beneath the post, in
this typeface — the site's own, not theirs.
The post itself is never changed, moved or hidden: what is set in the
serif above is exactly what the person published, and it is what to
quote them on. A translation can be wrong in ways that matter,
especially about tone.
Only the post's own words are translated. A quoted post, a linked
article and a belief on korrents.com
are left in their original language.